The Sherlock Holmes mystery the "Silver Blaze" was about the theft of an expensive race horse from its stable. During the investigation, Inspector Gregory of Scotland Yard asked Holmes if there was any particular aspect of the crime calling for additional study. Holmes replied "Yes," and pointed to "the curious incident of the dog in the nighttime." Inspector Gregory replied, "The dog did nothing in the night-time." Holmes said, "That was the curious incident." In this case, the failure of the dog to bark when Silver Blaze was stolen showed the watch dog knew the thief. This was an important material fact; it considerably reduced the number of suspects, and eventually solved the case.

An American living in these last years before the millennium might well ask: "What does a story about a watch dog that did not bark have to do with me?" It may have everything in the world to do with you.

The Mainstream Media as the Public Watch Dog

In a democracy, the primary responsibility of the Mainsteam Media is to provide information for informed decision making. The Mainstream Media may also entertain and it may titillate, but as an institution in a democracy, its fundamental role is to be a vehicle of information. What is done with this information? The people in the democracy use it to make important decisions affecting their daily lives and the other important decisions on the future of the country -- hence the term "a well-informed electorate." As an institution of the democracy, the mainstream media has to be a watch dog over all of the other institutions of the democracy, both public and private. This means the mainstream media is an absolutely essential and integral part of a democratic system.

Without a watch dog media, the democracy will fail.

When the media fails to perform its role as a watchdog, the democracy is threatened. Depending upon the bias of the media, the democracy can fall from the democratic center down into the anti-democratic extremism of the left or the right. This happened in Russia in 1917-1918 when the left-wing authoritarians known as the Bolsheviks gained power over a democratic government and when the left-wing totalitarianism known as Stalinism took hold in the early 1920’s. This happened in Germany in the early 1930’s when during an economic crisis the democratic center of the Weimar Republic gave way to a right-wing authoritarian government governing by decree. From there it was a short step into the right-wing totalitarianism of Adolf Hitler and his Nazi party.

The Political Center

In this country, the media used to adhere closely to the political center of the country at any given time. Although the media corporations were mostly owned aand managed by Republicans those owners and managers knew that the news had to be balanced between left-wing and right-wing views and perspectives. The news, in short, had to be palatable to the political center of the country.

What then, is the political center of the United States? I would argue that the political center consists of the people occupying the political spectrum from the moderate left, through the political center, and continuing to the moderate right. It would also include those to the left or the right of the political moderates, provided they still retained a belief in a democratic republic. The left in the political center includes people who call themselves liberals or progressives or even moderate conservatives, and who usually belong to the Democratic Party. The people in the center are more conservative than those in the left and less conservative than those to their right. They call themselves independents. The right of the political center, and perhaps a part of the center itself, consists of those with liberal or progressive social values and conservative economic values. It also includes those moderate conservatives whose views on both social and economic values are essentially conservative. These people usually belong to the Republican or Libertarian Parties.

The people in the political center, while disagreeing on some issues, do hold a certain set of values in common. They believe in a democratic society and in the rule of law. They are moral people, but they are not moral authoritarians. They believe in the freedom of the individual and they fear the concentration of power, either in the state or in private institutions.

The Change

For short periods of time in our history, the media has tilted away from this political center, or perhaps the political center had shifted for a short time. During the New Deal years of the 1930s, there was a tendency to tilt left. During the anti-Communist days of the 1950s, there was tendency to tilt right. But essentially, the democratic center held.

I believe all of this changed in the aftermath of the Nixon resignation in 1973. I believe that some time in 1974 or 1975, a group of powerful ultra-ring-wing economic conservatives and philosophical conservatives got together and decided to begin a very careful and a very low-key indoctrination of the American people. With the failure of the free-wheeling economic policies of the 1920s resulting in the Great Depression and the growth of government power during the 1930s, the power and the influence of the right had eroded. It now confronted a form of countervailing power in an environment it once controlled in its entirety. How would it be possible to restore things to their previous state. To begin with, a slow and quiet indoctrination of the people through the Mainstream Media. Its basic premise:

All Government is Bad! It interferes with the Principle of Free Enterprise and the "Hidden Natural Law of Competition."

Some of the antipathy of these people to "government" was class-based. They considered themselves the elite of the United States and the only people qualified to rule. They were very concerned during the New Deal years when the government has actually sided with the common people of the country! Instead of turning to their "Natural Leaders" in business and commerce, some bureaucrat in government was going to make the life-and-death decisions of daily life!

All of the private enterprises in this country are the creation of humans and are therefore inherently fallible. They can make mistakes but they can also learn from those mistakes. In the past it was a natural tendency for private enterprises to work towards their own ends and not the ends of the society in which they operated. More and more private enterprises are gradually realizing that actions and policies damaging to the society are ultimately damaging to the private enterprises, for the private enterprises are as much a part of the society as any of its other elements. Other private enterprises continue in the same old way and continue to do damage to the society. This is the distinction between "good" private enterprises in this country and "bad" enterprises.

In the process of meeting their own ends, the private institutions have created problems for the society. These are complex problems and many of them are very difficult to solve. But because it is the instrument of last resource, the problems are dumped on the governments at all levels and are thus effectively dumped on the society as a whole. Those who have profited return home to count their money. The governments at all levels then pass laws and create institutions to solve or ameliorate these problems. As the governments are creations of humans and inherently fallible, the laws, the institutions, and the solutions are fallible, and may create even larger problems.

Many of the private interests then stand on the sidelines criticizing government for its failure to solve or to ameliorate problems they themselves helped cause. After a while, they begin to propose to privatize some government functions they have "cherry-picked" for exploitation. Meanwhile the governments at the various levels in this country are left to confront the intractable problems caused by others. Today, acids and other toxins flow from long-dead mines in the Rocky Mountains. Streams and rivers are polluted, hill and mountain sides are unstable, and precious fresh water cannot be found. Today, we are still paying for the excesses of private greed over one hundred years and thirty years ago.

A New and More Dangerous Era

The United States is now entering into a new era in which our democratic way of life is threatened. At the present time, massive accumulations of power are being concentrated into fewer and fewer hands. The hands are private hands, and for the most part, are not accountable to the people of this democracy. The concentration of power is dangerous. When too much power is concentrated in government, we quickly learn about it and write laws to curb this power. This is as it should be. But when too much power is concentrated in private hands, our only protection is the watchdog media. When the media fails to perform this role, the democracy is in danger.

The watchdog stopped barking during the Reagan administration.

The Reagan administration knew it could get away with anything, they did not call Reagan the Teflon president for nothing . They kept pushing the envelope of Presidential power because they knew, if the American people did not know, that the countervailing power of the people, as expressed through the media, had been nullified. The final result was Iran-Contra. It was only then reporters began asking questions about the abuse of Presidential power. Thanks again to the failure of the Mainstream Media and the gutless wonders in Congress to meet their responsibilities, the President and his men got off with thrown-out convictions and presidential pardons by George Bush. No one served a day in prison for Iran-Contra, and President Reagan was never threatened with impeachment or requests for his resignation.

But at least Iran-Contra received Mainstream Media coverage. Since 1994, I have been researching the looting of American Savings and Loans that began early in the Reagan administration and continued on until the third year of the Clinton administration.

The Savings and Loan Scam was made possible by a media that looked the other way. By my calculation, there were three lootings of the S&Ls and the pockets of the American taxpayer. To date, this one Scam has cost the American taxpayer between $400 BILLION and $500 BILLION dollars.

The First Looting of the Savings and Loans (and the American taxpayer)

Not much is known by the American people about the full extent of the S&L Scam because the media failed to report it while it was going on, and continued its non-reporting afterwards. Too many friends of the media’s owners were involved on both sides of the corrupt deal. To this day, we do not have a list of the failed S&Ls in the United States, listed in order of their cost to the American taxpayer. To this day, we do not have a list of the names of the men and women whose defaulted loans and criminal activities brought about the collapse of the Savings and Loans.

The Second Looting of the Savings and Loans (and the American taxpayer), Part 1

Phase Two of the Looting of the S&Ls began during the last years of the Reagan administration and continued into the Bush administration. Somehow or another, wealthy people (or people who became wealthy) were forgiven most, if not all of the amounts of the defaulted loans that brought down the S&Ls. In Florida, the son of the President of the United States, Jeb Bush, and his real estate partner obtained a $4.65 million dollar loan through a speculator friend from a local S&L. The same day, they bought a $9 million dollar office building, and made a $2 million dollar down payment. ($4.65 million - $2 million = $2.65 million.) They took out a FIRST mortgage for $7 million dollars although the provenance of the money they had used for the down payment was already legally encumbered. The principal and interest payments on the $7 million dollar mortgage came out of the remaining $2.65 million dollar kitty they retained.

In some strange way, they were then able to take out a $4.65 million dollar SECOND mortgage on the money they had originally borrowed. This is the mortgage they defaulted on. The S&L collapsed, and the American taxpayer took over its assets, which included a defaulted second mortgage in the amount of $4.65 million dollars. After months of negotiations with S&L regulators working for the Bush administration, Jeb Bush and his partner got a "forgiveness of the original $4.65 million dollar loan" for a payment of $505,000 dollars (lets see, $2.65 million - $505,000 = $2,145,000). But we have to remember principal and interest payments for several years was also coming out of the kitty. Thanks to the S&L regulators of the Bush administration, Jeb and his partner were able to obtain a large amount of equity in a $9 million dollar office building, and all on the taxpayers dollars. In addition, however, the American taxpayer took a hit for $4,145,000 million dollars (the original $4.65 million minus the $505,000).

In October 1990, President Bush had been president for almost two years. Does any doubt that if the same thing had occurred three years later in the Clinton administration and it involved the Clinton's third cousin, three-times-removed on his mother's side, the Post, the Times, and the other Mainstream Media newspapers would have been on the story like a pack of wild dogs. FAVORITISM TO A CLINTON RELATIVE BY THE ADMINISTRATION would have been one of the headlines.

But the Jeb Bush transaction took place at a time when the Mainstream Media was not out to remove the president and his political party from power. Moreover, the Mainstream Media was not interested the indications of a widespread program of corruption and political favoritism. The Post, the Times, and the other Mainstream Media newspapers had no interest in the RTC’s new policy of the "forgiveness of loans" for well-connected people. There was no investigation of Jeb Bush and the forgiveness of his loan by the media, and the story died.

The Second Looting of the Savings and Loans (and the American taxpayer), Part 2

Another aspect of the second looting of the S&L’s was the disposition of the tangible assets of the failed S&Ls. This included properties purchased with defaulted loans where the title had been transferred to the U.S. government (us taxpayers). Although a number of non-profit agencies attempted to acquire some of this property, much of it was sold to groups of speculators who paid pennies on the dollar for the property they acquired.

The Third Looting of the S&Ls (and the American taxpayer)

The third looting of the S&Ls began in the final years of the Bush administration and continued to the end of 1995 in the Clinton administration. The Republican operatives in the S&L regulatory agencies were able to continue looting the S&Ls through the continued "forgiveness of loans" and with fire sales "for pennies on a dollar," and in other ways. The Resolution Trust Corporation, set up in 1989 by President Bush, had the responsibilty of catching the S&L thieves and of disposing of the S&L assets acquired from the failed S&Ls.

The records of the eighteen failed S&Ls in the state of Arkansas went to the regional RTC office in Kansas City, Kansas. In 1990, investigator L. Jean Lewis at the regional office had prepared a list of the failed S&Ls, sorted by the amount of money they had cost the American taxpayer. At the top of the list were First Federal Savings (a loss of $833 million to the American taxpayer) and Savers Savings (a loss of $645 million). This was followed by Independence Savings at $314 million, and Landmark Savings at $91 million. Fifth on the list of failed S&Ls was Madison Guaranty (a loss of $73 million).

The Untold Story of Madison Guaranty ø

Early in 1984, James McDougal of Madison Guaranty S&L, Sheffield Nelson, a Little Rock attorney, and Jerry Jones, owner of the Dallas Cowboys joined together in a real estate speculation involving the development of a retirement resort on Campobello Island. Nelson and Jones put up a reported $225,000 each for 1/8 shares in the speculation.

Later in 1984, the state Securities Commissioner, a Republican appointee, "approved a risky, speculative real estate development project [Campobello] at a time when the savings and loan was in dire need of capital to support such a project. The savings and loan was not required to first increase its capital base and take steps to meet its minimum net worth requirements before receiving approval to proceed with the development project." (quoted from the text of a letter from the subsequent state Securities Commissioner, appointed by Governor Clinton.)

Nonetheless, the Republican operatives in the RTC (and some say the Bush White House) saw an opportunity in Madison Guaranty to attempt to affect the presidential election of 1992. In the summer of 1992, L.Jean Lewis attempted to push a number of criminal referrals on Madison Guaranty through the system and before the election, citing Bill and Hillary Clinton as material witnesses. She was turned down by the Republican Federal Attorney in Little Rock and by other members of the Bush administration because of the apparent political motives behind her actions. (There are still good Republicans in the political center, but in any case they had nothing to fear if they were afraid the MainstreamMedia would have discovered these political motives.)

But there was concern in the local FBI on the failure of the RTC to return criminal referrals on other Arkansas S&Ls. These were the two top S&Ls in Arkansas in terms of their cost to the American taxpayer. In a memo to FBI headquarters in October 1992, the Little Rock office of the FBI complained about the lack of activity by the Kansas City regional office, pointing out that First Federal Savings and Savers Savings Association were both cases having "significant criminal potential." The memo continued: "It is requested that (FBI Headquarters) contact RTC and request it expeditiously address providing referrals on Savers and First (Savings of Arkansas,) neither of which can have been the subject of investigation or indictments and which are believed to have much greater prosecutive potential than Madison Guaranty Savings and Loan."

The FBI and the RTC took no further action on this memo, suggesting a possible obstruction of justice on the part of some Bush administration officials.

In August 1992, three lawyers from the RTC appeared before a Senate committee, claiming that experienced RTC lawyers and investigators were being removed from the RTC because of complaints from "well-connected" individuals. In a SINGLE story in the Washington Post of August 12, 1992, we read:

Three managers in the Resolution Trust Corp.'s legal division told a Senate committee yesterday that top agency officials have eased up in their pursuit of some former savings and loan directors and official and said they believe political considerations are behind the moves. The three said that in the past several months the RTC has agreed to small financial settlements in some cases and has abandoned some lawsuits altogether, even though they said the suits were justified and potentially lucrative. They said all these actions came since the agency decided to replace many of its most experienced lawyers assigned to pursue fraud and negligence by S&L officials. The trio of lawyers, all of whom are facing forced ouster or demotion, have been on the front lines of the government's effort to recover what it can for taxpayers from former S&L officers, directors, lawyers, accountants and appraisers. Spending to clean up after failed S&Ls since 1989 has reached $88 billion, with tens of billions more to come. So far, the RTC has recovered $93 million from fraud or negligence claims." The bad guys walk -- they get off cheaply or they get off all together because we're not allowed to do our job," Bruce Pederson, until May manager of professional liability suits in the RTC's western region, told members of the Senate Banking Committee. Jacqueline Taylor, another one of the attorneys, said one lawsuit recently slated to be filed was abandoned in favor of settlement negotiations after President Bush met with some of the targets of the suit.

So what did the Mainstream Media do with these stories?

As mentioned above, the Jeb Bush story appeared once in the Washington Post and once in the New York Times. The fact that neither newspaper appeared to be curious about the RTC’s policy of "forgiveness of loans" might be deemed a case of "curious incuriosity."

In March 1992, a New York Times story appearing claiming the the Clinton's Securities Commissioner had favored James McDougal and Madison Guaranty because of the Whitewater association between the Clintons and the McDougals. The reporter working on this story had known Sheffield Nelson for years, and, in fact, was working out of the Nelson law offices in Little Rock. In point of fact, the Commissioner had been actively working with federal regulators to get the Madision S&L closed down or brought under control since early 1986. The Reagan S&L regulators, who had been stripped of much of their enforcement staffs during the Reagan administration, were the only ones who could close Federally-insured S&Ls. The three S&Ls were not closed down until early 1989.

The L.Jean Lewis story has never appeared in the mainstream media. To the Washington Post, the New York Times (and the Republican Party) Lewis is a heroine.

However, an unanswered question with rather profound implications as to the extent of criminal collusion in the Reagan and Bush administrations is the following:

How many Republican operatives were operating in the regional offices of the RTC and in the RTC headquarters in Washington? Did the corruption extend beyond the S&L regulatory agencies into the FBI, the Justice Department, and the Treasury Department? If so, are some of those operatives still active?

Was There Another Reason for the Beginning of the Whitewater Smear Campaign?

One of the first actions of the newly-appointed Independent Counsel was to take over te Lewis investigation and all of the evidence that had been gathered. Nothing has been heard of the investigation or the evidence since that time.

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