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DEPOSITION OF ROSEMARY STEWART VOL. II

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Upon receiving Lincoln's response,

which was June or July of 1987, the attorneys
that were working on this case, that is Steve
Hershkowitz and Pillsbury, Madison lawyers, who
were being supervised by Bruce Ericson, were
already drafting Notice of Charges and attempting
to support it with evidence from the '86 exan
report and the primary documents that went along
with it.

After receiving Lincoln's response, those attorneys began to make a list of things that they would need to know about whether Lincoln was correct, whether additional evidence needed to be gathered to support or refute things that Lincoln was claining.

And that process was under way in the

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I believe that was November, because there was
sone feeling at the time that Lincoln may be
willing to negotiate for a consent order.

and so

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a draft order was prepared and put together.

This was at the same time that Lincoln

STICKLEY & SCHUTZMAN, INC.

A. During the fall there was a draft consent cease and desist order that was prepared,

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The actual preparation of the cease and desist documents did not stop at all in 1987, but

it clearly got on the slow path when it was sort
of overtaken by other events. And those other
events were that Lincoln and Bank Board

representatives began to talk about a consent

document.

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Whether it was an agreement or an

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order, I'm not sure that was ever clarified.

But

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discussing a consent enforcement document coupled

with a transfer of jurisdiction.

Q.

Committee issued a confidential memorandum

regarding Lincoln, correct?

A. Yes, we did.

MR. GALLAGHER: Would you mark that next in

In April of 1988 Enforcement Review

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appear to be, and I apologize for the quality of

the copy, but does it appear to be a true and

STICKLEY & SCHUTZMAN, INC.

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Q. The matters contained in that document

were true in your judgment when you prepared it?

today?

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Q. (BY MR. GALLAGHER) Are they still true

A. Yes. This document, while I authored it, was also reviewed, and many comments and suggestions were offered to me by other members of the committee.

Counsel, off the record.

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(An off the record discussion ensued.)

Q. (BY MR. GALLAGHER) Who all had input

into Exhibit 52, the report?

A. I drafted it and circulated it to the neabers during April of 1988 and received comments. It was discussed in at least one of

the meetings, formal meetings, about changes that the other committee members desired to make to STICKLEY & SCHUTZMAN, INC.

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DEPOSITION OF ROSEMARY STEWART VOL. II

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the recommendation.

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Q. And that's the final product after people had their chances to make changes?

Yes, it is.

Q. Was that document then basically signed off on by everybody at the Enforcement Review

Committee?

A. It was.

Q.

And in April of '88 was Jordan Luke on

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Q. Anybody else?

That was the committee.

Q. One thing I meant to ask you earlier is: After the Regardies article, somebody told

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you an Inspector General report was going to be

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expanded, is that true?

STICKLEY & SCHUTZMAN, INC.

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THE WITNESS: I believe I said that I was,

I was told that it was either going to be
initiated or expanded; the Inspector General was
going to look into that.

I did not know at the time whether the

Inspector General had completed prior

investigations into leaks.

Q. (BY MR. GALLAGHER) I think that is

what you said.

A. I believe it was Mr. Wall who told me,

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After the MOU agreement and the side letter of April 20th of 1988, that you mentioned,

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were entered into, did in fact Washington take

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over the examination of Lincoln from San

Francisco?

A. Washington began a new examination

under Mr. Dochow's supervision.

Q. Was it your understanding that that meant that San Francisco would no longer be

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