Arizona/IRS filings.

Audit of AMCC corporate return for 1983.

Supervised compliance with IRS regulations regarding company vehicles/aircraft.

- Monitor ESOP for compliance questions and modifications
to its structure, including amendments necessary to
obtain IRS approval.

- Assisted in obtaining the $20,000,000 FRESOP Notes
through Bankers Trust Co. The placement proceeds
were utilized to purchase 2,336,935 of AMCC common
stock, approximately 18.5% of the total.

Nonstatutory Stock Option Plan.

Unocal Tax Benefit: Negotiations regarding availability of dividend treatment for partial redemption of AMCC's holdings of Unocal common stock.

Rocky Mountain Drilling

Associates: file protest over IRS deficiency noties; pending.

B.

Preparation, filing and follow up work for compliance with various FHLB regulatory requirements regarding sale of property from Parent to Lincoln or Lincoln to Subsidiary including H(d)2 applications, payment of loan servicing fees and orginazation fees, liability growth excess, annual reports H(b)-11, current reports H(b)-12, debt budget materials, issuance of subordinated debt, branch exchanges, payment of intercompany fees.

State

Preparation, filing and follow up work for compliance with
various state regulatory requirements related to expansion
of service corporation authority including expansion of
security investments, agency office, authorization of
originate loans, all necessary documentation for authority
for LINFIN, branch office locations, agency office
location, change of names.

2.

3.

C.

Other Significant Regulatory Filings

Preparation of Direct Investment Application and petitions for Rehearing; drafting responses to FHLB regarding operating plan, report of examination, agreement,

solicitation of deposits, dividend declaration, and growth restrictions. Preparation of state and federal filings regarding Arthur Anderson audit.

Legal research and advice regarding following.

ADC regulations, R4lb appraisal, Bank Bribery Act, currency
transaction reporting, "political" contributions, direct
investment grandfathering clause, growth restrictions, Arizona
Interstate Bank and Savings and Loan Act and FHLBB restrictions
on interstate acquisitions, loan underwriting, including loan
documentation, restrictions on earnings-based accounts,
criminal referrals, loans to one borrower, regulation B and
loan application processing, "qualified assets.", "scheduled
items", "slow loans.", "affiliated person", forms of account,
investment in accounts of commercial banks and thrift
institutions, examination procedures, forward commitments and
futures transactions, drafting compliance documents for FHLBB
regulations on interest rate risk management, advertising,
composition of Board of Directors, conflicts of interest and
corporate opportunity, T memoranda regarding fidelity bonds,
unitary and multiple savings and loan holding companies and
diversified and non-diversified savings and loan holding
companies, liquidity, #R28c, #R42 concerning Lincoln
compensation policies, #R's 44 and 45, concerning establishment
and operation of audit committee, reciprocal loan sales,
Teller Yes.

Miscellaneous - Including Operations

Numerous revisions of applications, drafting compliance
documents as well as handling the drafting or assisting in the
preparation of general corporate documents and filings such as
business qualifications, insurance applications to do business,
State Board of Equalization filings, Annual Reports, Statements
of Domestic Stock Corporation, amendments to officer and
director list, etc. Responding to daily branch and customer
inquiries regarding matters such as insurance of accounts,
subpoenas by government authorities and estranged spouses,
claims to decedents' accounts by alleged heirs, effectiveness
of alleged powers of attorney and/or revocation of same,
challenges to certificate of deposit rates and penalty
provisions, branch rights and obligations regarding stop
payment orders, branch obligations regarding issuing notices of
dishonor, and numerous other similar matters.

16

SUBJECT:

BREAKFAST MEETING WITH CHK, DONALD HOVDE, JAMES BUTERA AND
JJG.

I ATTENDED A BREAKFAST MEETING AT THE FOUR SEASONS HOTEL
THIS MORNING WITH THE ABOVE REFERENCED PEOPLE.

TOPICS DISCUSSED INCLUDED, IN RELEVANT FACT, THE CURRENT
REGULATORY ENVIRONMENT CREATED BY THE FHLBB. CHK MADE
SPECIFIC REFERENCE TO THE HARASSING NATURE OF LINCOLN'S
PROLONGED EXAM AND COMPLAINED OF THE CONTINUAL REQUESTS FOR
DOCUMENTS PREVIOUSLY REVIEWED ETC.

MR. HOVDE RESPONDED:

"WELL, WHEN YOUR'RE ON THE BOSS' SHIT

LIST, THAT'S WHAT HAPPENS."

HOVDE CONTINUED THAT, WHILE HE DOES NOT CONSIDER ED GRAY HIS
BOSS, GRAY DOES RUN THE FHLBB AS A DICTATOR, THE PAST THREE
YEARS HAVE BEEN EXTREMELY TRYING AND FRUSTRATING FOR HOVDE,
AND HE SAID GRAY HAS EVEN SUGGESTED THAT AT THE FEDERAL
RESERVE BOARD CHAIRMAN VOLKER DOES NOT PERMIT STAFF TO SPEAK
TO MEMBERS.

HOVDE'S "SHIT LIST" COMMENT PROMPTED ME TO MENTION THAT THE
ON SITE EXAMINERS WERE QUITE GOOD AND ONLY SEEMED CONFUSED
WHEN "SAN FRANCISCO" CONTINUALLY TOLD THEM TO CONTINUE THE
EXAM UNTIL THEY "FOUND SOMETHING." HOVDE STATED THAT GRAY'S
"ATTITUDE REGARDING LINCOLN" WOULD NOT BE COMMUNICATED TO
THE LEVEL OF THE ON SITE EXAMINERS. RATHER, IT WOULD BE IN
WASHINGTON D.C. AND SAN FRANCISCO. HOVDE ALSO STATED THAT
"THE VINDICTIVENESS OF THE CHAIRMAN (GRAY) IS WELL

DOCUMENTED."

SPECIAL COUNSEL
EX. 574

6 x8-34/2

To:

FHLBB LITIGATION FILE

From:

JJG

DATE: 9/13/86

Re:

Breakfast. meeting with CHK, D. Hovde, J. Butera and JJG

I attended a breakfast meeting at the Four Seasons Hotel this morning with the above referenced people.

Topics discussed included, the current regulatory environment created by the FHLBB. CHK made specific reference to the harassing nature of Lincoln's prolonged exam and complained of the continued request for documents previously reviewed etc.

Mr. Hovde responded, "Well, when you're on the Boss' shit list, thats what happens."

Hovde continued that, while he does not consider Ed Gray his boss, Gray has run the FHLBB as a dictator, the past three years have been extremely trying and frustrating for Hovde, and he said Gray has even suggested that at the Federal Reserve Board Chairman Valler does not permit staff to speak to Members. VOLKER

Hovde's "shit list" comment prompted me to mention that the on site examiners were quite good and only seemed confused when "San Francisco" continually told them to continue the exam until they "found something". Hovde stated that Gray's "attitude regarding Lincoln" would not be communicated to the level of the on site examiner, it would be in D.C. and San Francisco. Hovde also stated that "the vindictiveness of the Chairman (Gray) is well documented."

42/86/27063