9499 2/26/87 CHECK AMOUNT 278.00 DETACH AND RETAIN THIS STATEMENT. THE ATTACHED CHECK IS IN PAYMENT OF THE ITEMS DESCRIBED ABOVE. IF NOT CORRECT, PLEASE NOTIFY PROMPTLY. NO RECEIPT DESIRED. XB631 0978 I've received your September 11 letter recounting our phone 1. You mentioned that you vere virtually finished putting We discussed the scheduling of a meeting among you, ne, and Sincerely, Mike Michael Patriarca Director, Agency Group MP/ca FHLBB-LIN-8932 bce: W. K. Black, C. A. Deardorff, G. Robinson, R. A. Sanchez Record Copy: M. Patriarca, Agency Group 600 California Street Post Office Box 7948 San Francisco, Callumia 94133-7848 Telephone 416-985-1009 TS-D11-0473235 SPECIAL COUNSEL EX. 566 FROM To: DOCHOWD-AIVASHDC TOY CHESUSLR--FHLBSF 09/30/87 09:47:36m FROM: MICHAEL PATRIARCA, DIRECTOR As we proceed to try Separately, I'm told that Lincoln delivered to you yesterday another 70 page FILE: FILE181 OUTPUT C1 F.H.L.B. OF S.F VH/SP4 CMS out the exam process. There is a long history of actions on the part of the institution that has directly affected the amount of time the exam has taken. It's simply unfair to have those actions and our attempts to give them every opportunity to tell their side of the story characterized as deliberate delaying on our part. It is not only unfair, it's untrue. While I welcome any amount of scrutiny of our actions during this exam (or on this case generally), that's not the point of this note. The point is: to do the independent review you've undertaken, you have to undertake the inquiries I outlined in the first paragraph. We will make arrangements for you to meet with the outside experts if you will only give us a date. Our staff can be available any time OTS-D11-0547172 FHLBB-LIN-106728 SPECIAL COUNSEL We have yet another delay in coming to a decision about Lincoln, though I sense a consensus starting to build in favor of a stronger action than simply a Memorandum of Understanding. The meeting began with Jordan Luke explaining why Lincoln did not appear today to give their side of the story. Lincoln strenuously objected to anyone from S. F. being there. In particular, Margery Waxman reported that the officers in Phoenix stated that there had been a "run-in" with Richard Sanchez and Charles Keating, and they were not going to appear if Richard was here. George Barclay then took a very hard line, saying that "somewhere down the line we are going to have to stand up to these people, and I think this may be as good a time as any to do it." He was clearly irritated at the association's attempt to dictate who the ERC could invite to its meeting. Karl Hoyle seconded that theme, saying that just offering them the chance to make a presentation indicated that we have been more than fair. After some discussion about possible options, Darrel, Jordan and George all approved the idea of Rosemary issuing a polite "take it or leave it" letter. As Secretary of the committee, Rosemary would formally invite the association to give a presentation at an ERC meeting on Friday, March 25 at 1:00pm. In the invitation, she would state who would be in attendance, and that would include & representative of the bank, and that list of attendees would not be open for discussion. However, the ERC would allow the association great leeway on what they would like to say. They can spend their time talking about what a wonderful association they are, or they can attack S. F., or they can do both. The subject matter would be entirely up to the association. Effectively. After that discussion, Seattle made its presentation. Seattle said that they wanted nothing to do with the association unless the Board told them to take them. I will give you the memu that Seattle presented. In further discussion, Seattle stated that did not believe they could trust the association, and did not see an, chance that their operations could be turned around. They also stated that if they were asked to take them, they would request the right to "write their own ticket" which would be either a Supervisor. Agreement or a Consent Order that committed the association to submit a business plan that puts them in regulatory compliance within a 3-5 year period of time, and any meterial violations from that plan would SPECIAL COUNSEL |