by Ed Berger, Unlimited Hangout:
After Robert Maxwell dropped his bid for Bluebonnet, the S&L was sold to insurance man James Fail under exceedingly strange financial circumstances. His backers ranged from figures tied to George H.W. Bush and Arkansas financier and covert “money shuffler” Jackson Stephens.
“Bluebonnet” was name given to fifteen Texas savings and loan institutions, bundled together and sold-off by federal regulators at the tail-end of the savings and loans crisis that rocked the United States in the late 1980s. For reasons that remain murky, Bluebonnet became the subject of intense interest by a number of intriguing individuals.
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As noted in Part 1 of this two-part article, this may have had something to do with the fact that the multiple thrifts that were consolidated into Bluebonnet had earlier been active in a sprawling “daisy chain” of bad loans, real estate transactions and money laundering. This hot money network was overseen and administered a very unusual coterie of conmen who had ties to powerful political figures in Texas and beyond, as well as to organized crime and the CIA.
When the fifteen S&Ls were on the auction block, among those who attempted to acquire them included figures linked to major nodes in this daisy chain—and they brought with them Robert Maxwell. Maxwell, at the time, was embarking on his effort to build an American business empire. Far from the curious appearance of a ruthless businessman hoping to capitalize on the crisis, Maxwell’s ill-fated attempt to purchase Bluebonnet was dependent on his deep ties to the state of Texas, ties that were intimately connected to the criminal and intelligence-linked underworld in which the controversial media mogul moved.
Maxwell’s departure from the Bluebonnet scene was by no means the end of the intrigue surrounding the thrift. Arriving soon after his exit was an insurance man with a history of fraud, and a revolving cast of suspect backers, all of whom had played supporting roles in a number of clandestine dealings that defined the corruption of the 1980s.
Bluebonnet, Round 2: A Widening Gyre
The man who ultimately secured ownership of Bluebonnet Savings, James M. Fail, got his start in the world of finance working in Alabama’s insurance industry. Among the various entities that he controlled included United Securities Holdings, the parent company of the Public National Life Insurance Company of Birmingham. Public National, in turn, managed numerous insurance concerns, running from life to industrial insurances. By 1971, it boasted over $72 million in assets.
Fail, it seems, was also familiar with fraud. In 1976, he transferred assets from Public National to a shell company, Modern Home Life Insurance. Along the way, he may have overstated the value of these assets to generate cash flow. That same year, Fail pleaded guilty in a securities fraud suit that targeted one of the officers of his companies.
By the late 1970s, Fail consolidated his various holdings together under the auspices of the Lifeshares Group, and began a march across the United States, accumulating along the way more and more companies to bundle under this umbrella. Subsidiaries of Lifeshares sprouted up in Nebraska, Texas, Arizona, Illinois and Maryland. Somewhere along the way, Fail relocated his base of operations to Phoenix, Arizona, and became acquainted with a man whose ties to powerful political forces generated a firestorm of controversy over Bluebonnet: lobbyist and Republican party insider Robert J. Thompson. “It is not clear,” notes the Congressional report on Bluebonnet, “how Fail and Thompson came together.”
Born in Oklahoma, Robert Thompson was the son of Victor Thompson, the longtime president of Utica National Bank. In 1982, Victor was accused by Congressional investigators of “knowingly concealing loan losses and deceiving investors” when it became known that Utica held a number of loans for Penn Square Bank. Penn Square, based in Oklahoma City, had declared bankruptcy that year, which had set off a domino-effect of bank losses across the country. Thompson’s deceptive practices mirrored those of Penn Square: various investment advisors charged that the bank had offered them assurances about the financial institution’s financial footing.
Other, darker things may have been afoot at Thompson’s Utica National Bank. One of the bank’s major borrowers was Global International Airways, a Missouri-based aviation company overseen by Farhad Azima. In 1984, journalists working for the Kansas City Star revealed that Global International had been involved in the transport of arms to conflict hotspots across the globe, presumably with CIA approval. They had also uncovered Global International’s relationship to EATSCO, a shadowy freight forwarding company that was a front utilized by former CIA officers Ted Shackley, Thomas Clines and Edwin Wilson. In the mid-1980s, another Azima company called Race Aviation popped up in the Iran-Contra affair.
Reportedly, one of Global International’s pilots was Heinrich “Harry” Rupp, a confirmed arms broker who was convicted in 1988 for defrauding Colorado’s Aurora Bank (Rupp had been brought to Aurora by a relative of one of Adnan Khashoggi’s employees). Rupp might have also been tied into the Texas crowd discussed in Part 1. Documents drafted by Rebecca Sims, found in the Danny Casolaro papers, reference an allegation made by an unnamed source that Rupp and Robert Corson were hidden owners of a company called Roswell Imported Cars, Inc. Sims noted that one of Roswell’s directors was also the director of a Houston aviation company, Northwest Jet, that Corson was known to use.
Such connections immediately raise questions about potential ties between Robert Thompson and the world of intelligence, and, by extension, his relationship to James Fail’s successful Bluebonnet acquisition. What is certain is that Thompson was politically well-connected. In 1979, he served as chairman of the Tulsa County Republican Party, and for his efforts Thompson was made an aide to George H.W. Bush. Various press reports describe him as the Vice President’s Congressional liaison, and as a “special assistant” to President Ronald Reagan.
In the mid-1980s, Thompson left the White House to embark on a career as a lobbyist. The New York Times reported that “a central selling point of Thompson’s lobbying business was his relationship, including monthly get-togethers with the vice president.” Thompson was also a close friend of Daniel Wall, the nation’s top savings and loan regulator. The relationship between the two was so cozy that Thompson lobbied Wall directly over Fail’s attempts to purchase Bluebonnet, writing him letters beginning with “Dear Danny.”
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