Silverado S&L Collapses: Neil Bush Conflict of Interest Costs Taxpayers $1 Billion

Silverado Savings and Loan collapses with losses exceeding $1 billion to taxpayers, exposing serious conflicts of interest involving Neil Bush, son of Vice President-elect George H.W. Bush. Neil Bush served on Silverado’s board of directors from 1985-1988, during which he approved over $130 million in loans to his personal business partners while concealing these relationships from fellow board members. Bush voted to approve a $900,000 line of credit to Good International, which had invested in his oil company JNB Exploration; Good defaulted on $32 million in Silverado loans. He also approved $106 million in loans to Bill Walters, another JNB investor, without disclosing the relationship; Walters defaulted on the entire amount.

Federal regulators accused Neil Bush of breaching his fiduciary duty and gross negligence, documenting that he failed to disclose obvious conflicts of interest and approved risky loans to personal associates that contributed to Silverado’s failure. The FDIC filed suit in September 1990 claiming former officers and directors violated their duties to the institution. While Neil Bush was never charged criminally, he agreed to pay $50,000 in 1992 to settle the civil lawsuit—a tiny fraction of the $1 billion taxpayer bailout cost and a sum his family connections easily covered.

The Silverado scandal epitomizes the S&L crisis: deregulation enabled fraud, politically connected board members looted institutions through self-dealing, and taxpayers absorbed massive losses while perpetrators faced minimal consequences. Neil Bush’s involvement demonstrated that even the vice president’s son could engage in obviously corrupt practices with near-impunity. The case reveals how family connections and political power shield corrupt actors from accountability: while lower-level S&L executives went to prison, Neil Bush paid a nominal fine and continued his business career, later profiting from connections to his brother President George W. Bush’s administration.