A Legal Bank Robbery

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As staff director of the Banking Committee in 1981, Wall drafted the industry's dream deregulation bill, the Garn-St. Germain Act. That law created a new breed of thrift operator. In came highflyers like Keating who shifted their depositors' money (now insured for $100,000 instead of $40,000) from unexciting residential mortgages to potentially more lucrative but indisputably riskier shopping malls, resort developments, energy-generating windmills. The new breed awarded themselves seven-digit salaries, private jets, hunting preserves and yachts on which to entertain members of Congress. Keating and his associates took $21 million from Lincoln even as it was heading into receivership. Named head of the Office of Thrift Supervision in August, Wall now directs the agency established to solve the problems Garn-St. Germain helped create.

Wall will defend himself this week before the House Banking Committee. But its chairman, Henry Gonzalez, has already called for his resignation. Last week even George Bush left Wall to twist in the wind: "If part of the savings and loan problem proves to be management or regulation people that aren't aggressive enough, would ((I)) make a change? . . . The answer is yes."

"Bush is a lawyer, so he knows I'm innocent until proven guilty," Wall replies. He is wrong, of course: Bush is not a lawyer, and Wall, although he seems to lack the venality of other players in the Keating affair, is not innocent. Like a number of other legislators and Government officials, Wall paid more attention to cosseting the people he regulated than to safeguarding the depositors and taxpayers who depended on his vigilance. Although Wall says | he now sees Keating's "half-truths and obfuscations," more than a billion was lost while he dithered over closing the vault.