Big Money Crime: Fraud and Politics in the Savings and Loan Crisis

TLDR

The 1980s savings‑and‑loan crisis cost $500 billion to taxpayers, making it the worst financial disaster of the twentieth century and an unprecedented crime, yet most perpetrators remain unprosecuted and receive minimal sentences. The authors draw on over a hundred interviews with officials and industry leaders and declassified documents to show that the crisis was not merely business risk but a deliberate fraud, with bank controls designed to prevent theft that were instead exploited. Their investigation concludes that the crisis was a deliberate, politically colluded fraud, and the criminal justice system was unusually lenient toward the white‑collar criminals involved.

Abstract

At a cost of $500 billion to American taxpayers, the savings and loan debacle of the 1980s was the worst financial crisis of the twentieth century as well as a crime unparalleled in American history. Yet the vast majority of its perpetrators will never be prosecuted, and those who were have received minimal sentences. In the first in-depth scrutiny of the ways and means of this disaster, this groundbreaking book comes to disturbing conclusions about the deliberate nature of this financial fraud, the political collusion involved, and the leniency of the criminal justice system in dealing with these 'Gucci-clad white-collar criminals'. Using material from over one hundred interviews with government officials and industry leaders and recently declassified documents, the authors show how - contrary to previous government and 'expert' explanations that chalked the disaster up to business risks gone awry or adverse economic conditions - SL we have cameras; we have time clocks on the vaults ...all these controls were to protect against somebody stealing the cash. Well, you can steal far more money, and take it out the back door. The best way to rob a bank is to own one' - House Committee on Government Operations, 1988.