Monday, April 07, 2008

A Few Submariners in the Thick: Going Around as History Came Around

From 1964 - 1969 - After graduating from Annapolis, John Howard Dalton served in the Navy receiving naval nuclear power training. He served on USS Blueback (SS-581) and USS John C. Calhoun (SSBN-630). He attained the rank of Lieutenant Commander while in the U.S. Naval Reserve.

December, 1979 - Former submariner President Carter nominated Dalton to the Federal Home Loan Bank Board (representing the largest collective source of home mortgage and community credit in the United States), where he served as member and chairman until July 1981.

August 9, 1989 - The Financial Institutions Reform Recovery and Enforcement Act (FIRREA), was adopted in the wake of the savings and loan crisis of the 1980s. It established the Resolution Trust Corporation (RTC) to close hundreds of insolvent thrifts and provided funds pay out insurance to their depositors. It also took over the insurance functions of the former Federal Home Loan Bank Board.

1992 - More than 1,000 savings and loan institutions (S&Ls) failed in what economist John Kenneth Galbraith called 'the largest and costliest venture in public misfeasance, malfeasance and larceny of all time.'[1] The ultimate cost of the crisis is estimated to have totaled around USD$160.1 billion, about $124.6 billion of which was directly paid for by the U.S. government -- that is, the U.S. taxpayer. ... Major causes of Savings and Loan crisis according to United States League of Savings Institutions ... Fraud and insider transaction abuses were the principal cause for some 20% of savings and loan failures the past three years and a greater percentage of the dollar losses borne by the Federal Savings and Loan Insurance Corporation (FSLIC). ... The Lincoln Savings failure led to the Keating five political scandal, in which five U.S. senators were implicated in an influence-peddling scheme named for Charles Keating, head of Lincoln Savings, who made $300,000 political contributions to them. Three of those senators - Alan Cranston, Don Riegle, and Dennis DeConcini - found their political careers cut short as a result. Two others - John Glenn and John McCain (whose dad was a submarine officer) - were rebuked by the Senate Ethics Committee for exercising "poor judgment" for intervening with the federal regulators on behalf of Keating. [11]John McCain, candidate in the 2008 U.S. presidential election, was the only Republican implicated in the Keating Five scandal.

July, 1993 - November, 1998 - John H. Dalton served Bill Clinton as Secretary of the Navy.
July 23, 1994 - The New York Times - Navy Chief Settles Old Debt, $17,900, to Savings and Loan Bailout Agency - John H. Dalton, the Secretary of the Navy, settled an old debt to the agency overseeing the savings and loan bailouts by paying the Federal Government about $17,900 last week, a Navy spokesman said today. ... Mr. Dalton denied in the settlement agreement and again today to the Associated Press that he had acted improperly during his tenure as president and chairman of Seguin. But Seguin's insurance company paid $3.8 million last year to the Federal Deposit Insurance Corporation to settle the civil claims against Mr. Dalton and other officers of Seguin.

Does any of the foregoing sound familiar? Which politicians and submariners will be snared in the latest Home Loan crisis?

Feb. 19, 2008 - - How Bad Will the Mortgage Crisis Get? - Home prices fell about 6% in 2007 and are expected to tumble another 15% in 2008, 10% in 2009 and 5% in 2010. Unemployment, which climbed to its highest level in two years in December at 5%, will hit 5.8% by year end and 6% in 2009, predicts Merrill Lynch economist Kathy Bostjancic.



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