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talen over. without such a cover letter, the association will likely consider an MLS avctory, and continue their murry na. Et a letter signed by the Chairman suggesting a Conservator stiin would be a sobering development that would weigh on their minds. I'm reminded on an old stunt that Leo, OE and I agreed upon for an association that we had recommended a C&D on for violating an Agreement, and the association suggested an amended agreement that gave the SA (me at the time) the right to direct the board of directors to remove the CEO and CFO in the event of a material violation. Obviously, the personalities and histories are different, but I remember Leo's line about the clause. He did not think it was enfor cable, but its presence meant that "every now and then, when the president is thinking about doing something funny, he will likely go into his desk, reread the passage in the agreement, and have lots of second thoughts." In effect, that is the effect that I believe a bluntly worded letter from the Chairman would have on the association, Whenever they were thinking of pulling something over on us, engage in something funny, the presence of that letter would likely force them to have rather sobering second thoughts. For the sake of discussion, I'll draft up something appropriately blunt over the next few days and send it to you for comment.
MSG FROM: CMSSUMJG--HBSF To: CMSSURAS --HBSF
FROM: Monica J. Gawot
Agency Functions.-San Francisco-Ext: 5809 Subject: Lincoln I spoke with Bruc. Ericson sarllor today. After reviewing Mr. Luke's reconnondation to the Bank Board he was quite discourage both by the tone of the document (roforring to the negative comments made against this office) and the ovorall lack of good options. Because of the negativo perceptions about this office, we would have to be extremely careful about any response, lost we look even more confrontational. He ballovos that MP has to make a decision as to whothor ve make our proforence to the Bank Board for the record, which
ci F.H.L.B. OF S.F VM/SP4 CMS
I'm sure we all would agro.. I pontioned that there is ono dangor
cc: CMS SUSLR--HBSF
FROM: MICHAEL PATRIARCA, DIRECTOR
AGENCY GROUP--SAN FRANCISCO-EXT: 1801 I know that with the world talling apart and with the FCA activities you. been dealing with, you haven't had a chance to give me a call on Lincoln following your discussion with the Chm. as we had previously agreed. I was disturbed, however, to hear that you have scheduled a meeting with Lincoli and Litigation to which neither i nor anyone on my statt have been invitei My understanding of this whole exercise was that ORPOS was undertaking an independent review of our findings on Lincoln in response to Lincoln's apparent assertion that they were being harrassed by us. You reported to : that you were satisified that we were correct in our assessment of the ri posed by Lincoln and that you were pleased that our people didn't fit the i mage of irresponsibility being portrayed by Lincoln. I understand, on basis of Al's call to Richard Sanchez, that you have informed the Chm, oi findings and that he is supportive of corrective supervisory action. It seems to me that, having put to rest Lincoln's unfounded claims of bids our part, you would inform them of your findings and the case would be returned
to us for decisions on what kind of supervisory action was appropriate as for execution of that decision. In fact, you previously intor med me that . case would be turned back over to us at the conclusion of your review. I. under stand that you intend not only to tell Lincoln of the conclusions or review, but to proceed to decide and negotiate the corrective action you ! appropriate. It my understanding is correct, I object to this approach in strongest possible terms. Neither you nor OE knows this case nearly as we. as we. Neither you nor OE is a better supervi sor than we. Neither you nor (to the best of my knowledge today, will have ongoing responsibility for Lincoln after the present storm has blown over. Plain and simply, you shou intora Lincoln of the results of your independent review and get out of tri case. We will not lose sight of the sensitivity of the case, nor will we to keep you intor med every step of the way. In tact, I will invite you to one of your staff join our team and participate in all discussions with Lincoln. But we, not you, should be running this case. This matter is important as a matter of principle. It is important for our credibility as supervisors of institutions in this district.
This matter is important as a matter of principle. It is important to credibility as supervisors of institutions in this district.
DOCHOWD AT @WASHDC
SMUZYNSKIA GAI @WASHDC
uts OKA-Vucu 3
PAN BANK BOARD
CER' PART 563
This absolusate must be stopped By
e most negative
migreactor as we
SUMMARY: The Federal Home Loan Bank Board ("Board"), as the operat-