Snowe, Brennan back S&L penalties

WASHINGTON — Maine Reps. Olympia J. Snowe and Joseph E. Brennan voted for legislation Tuesday that would create a special prosecutor and national commission to probe the savings and loan scandal, as well as tougher criminal penalties for thrift executives convicted of violating banking regulations.

“My constituents don’t want to hear political squabbling on the S&Ls. They want to make sure the crooks are put away, that it never happens again, and that those responsible in government are investigated,” said Snowe during debate on the legislation.

The measure passed by a 424-4 vote.

The House action came just 24 hours after federal officials overseeing the bailout of bankrupt S&L institutions told members of Congress they would need $100 billion in fiscal 1991 alone to deal with the tidal wave of savings institution insolvencies, and were warned by lawmakers there is little likelihood Congress could come up with that kind of money to deal with the crisis.

The bill would increase the maximum prison terms, with up to life in prison for the worst offenders, and boost fines that could be levied against individuals and institutions convicted of savings and loan crimes.

It also would create new felony categories to close loopholes for those who conceal assets from the government or who try to obstruct government inquiries into financial institutions, and give the government new authority to go after the assets of failed S&Ls.

The bill would authorize adding $153 million to the federal government’s law enforcement efforts, and would create a special counsel within the Justice Department to oversee a new Financial Institutions Fraud Unit.

It also would create a national commission, opposed by President George Bush, to examine the causes of the thrift crisis and to propose steps to prevent its repetition.

The Senate passed its version of a savings and loan crime crackdown as part of an overall crime bill. The two chambers must reconcile their differences before a bill can be sent to the president.

Describing the scope of the proposed investigations by a congressional special prosecutor and national commission, Snowe said, “There will be no blank checks written to address this scandal. A full hearing of everyone’s role and appropriate investigations must be an integral part of this process.”