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Corrmerce

SEC AND CORPORATE AUDITS

(Part 4)

HEARINGS

BEFORE THE

SUBCOMMITTEE ON
OVERSIGHT AND INVESTIGATIONS

OF THE
COMMITTEE ON
ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES

NINETY-NINTH CONGRESS

FIRST SESSION

ON

NOVEMBER 4, 1985–FAILURE OF ESM GOVERNMENT SECURITIES, INC. NOVEMBER 7 AND DECEMBER 16, 1985—FEDERAL SECURITIES LAWS: PROBLEMS REGARDING BEVERLY HILLS SAVINGS AND

LOAN ASSOCIATION

Serial No. 99-115

Printed for the use of the Committee on Energy and Commerce

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1986

64-271 0

For sale by the Superintendent of Documents, Congressional Sales Office

U.S. Government Printing Office, Washington, DC 20402

[blocks in formation]

COMMITTEE ON ENERGY AND COMMERCE

JOHN D. DINGELL, Michigan, Chairman JAMES H. SCHEUER, New York

JAMES T. BROYHILL, North Carolina HENRY A. WAXMAN, California

NORMAN F. LENT, New York TIMOTHY E. WIRTH, Colorado

EDWARD R. MADIGAN, Illinois PHILIP R. SHARP, Indiana

CARLOS J. MOORHEAD, California JAMES J. FLORIO, New Jersey

MATTHEW J. RINALDO, New Jersey EDWARD J. MARKEY, Massachusetts WILLIAM E. DANNEMEYER, California THOMAS A. LUKEN, Ohio

BOB WHITTAKER, Kansas DOUG WALGREN, Pennsylvania

THOMAS J. TAUKE, Iowa BARBARA A. MIKULSKI, Maryland

DON RITTER, Pennsylvania AL SWIFT, Washington

DAN COATS, Indiana MICKEY LELAND, Texas

THOMAS J. BLILEY, JR., Virginia RICHARD C. SHELBY, Alabama

JACK FIELDS, Texas CARDISS COLLINS, Illinois

MICHAEL G. OXLEY, Ohio MIKE SYNAR, Oklahoma

HOWARD C. NIELSON, Utah W.J. "BILLY" TAUZIN, Louisiana

MICHAEL BILIRAKIS, Florida RON WYDEN, Oregon

DAN SCHAEFER, Colorado
RALPH M. HALL, Texas

FRED J. ECKERT, New York
DENNIS E. ECKART, Ohio
WAYNE DOWDY, Mississippi
BILL RICHARDSON, New Mexico
JIM SLATTERY, Kansas
GERRY SIKORSKI, Minnesota
JOHN BRYANT, Texas
JIM BATES, California

Wm. MICHAEL KITZMILLER, Staff Director

THOMAS M. RYAN, Chief Counsel
ARNOLD I. HAVENS, Minority Counsel

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

JOHN D. DINGELL, Michigan, Chairman RON WYDEN, Oregon

JAMES T. BROYHILL, North Carolina DENNIS E. ECKART, Ohio

BOB WHITTAKER, Kansas JIM SLATTERY, Kansas

THOMAS J. BLILEY, JR., Virginia GERRY SIKORSKI, Minnesota

MICHAEL G. OXLEY, Ohio JAMES H. SCHEUER, New York

MICHAEL BILIRAKIS, Florida JAMES J. FLORIO, New Jersey

DAN SCHAEFER, Colorado
THOMAS A. LUKEN, Ohio

FRED J. ECKERT, New York
JOHN BRYANT, Texas
HENRY A. WAXMAN, California
RICHARD C. SHELBY, Alabama

MICHAEL F. BARRETT, Jr., Chief Counsel/Staff Director

JOHN B. CHESSON, Counsel

ROBERT C. NORWOOD, Counsel
PAUL C. SMITH, Associate Minority Counsel

(II)

54-603038

CONTENTS

Hearings held on:

Page

November 4, 1985.

1

November 7, 1985.

171

December 16, 1985...

389

Testimony of:

Black, William, associate general counsel, Federal Home Loan Bank

Board

143, 242, 399

Briloff, Abraham J., professor of accountancy, Bernard M. Baruch Col-

lege, City University of New York.

174

Christy, Ralph W., deputy general counsel, Federal Home Loan Bank

Board ..

143, 399

Gray, Edwin J., chairman, Federal Home Loan Bank Board...

399
Kamp, Carl O., principal supervisory agent and president, Federal Home
Loan Bank of Atlanta

143, 399

Kirk, Donald J., chairman, Financial Accounting Standards Board.

321

Moore, Robert J., chief accountant, Office of Examination and Supervi-

sion, Federal Home Loan Bank Board ........

242

Neuberger, Brian, deputy director, Federal Savings and Loan Insurance

Corporation .......

242

Passarelli, Francis M., acting director, Office of Examination and Super-

vision, Federal Home Loan Bank Board

242

Tew, Thomas, attorney, Finley, Kumble, Wagner, Heine, Underberg,
Manlay & Casey....

5

Upton, Wayne, practice fellow, Financial Accounting Standards Board. 321

Williams, Julie, associate general counsel, Federal Home Loan Bank

Board

143, 399

Zimmerman, Park T., supervisory agent, Federal Home Loan Bank Board 399

Material submitted for the record by:

Briloff, Abraham J.: Letter to Chairman Dingell, February 18, 1986.......... 236

Federal Home Loan Bank Board:

Letters from Edwin J. Gray to Chairman Dingell:

December 11, 1985.

394

December 16, 1985.

401

Letter from Ralph W. Christy to Chairman Dingell, October 31, 1985,
transmitting report entitled: "Bank Board Securities Jurisdiction
and Oversight" .....

144
Financial Accounting Standards Board:
Letter to Chairman Dingell from James J. Leisenring, chairman,

Emerging Issues Task Force, February 4, 1986, re testimony
of Edwin J. Gray, and Mr. Gray's response thereto, February
14, 1986 ......

645, 647

Memorandums dated November 15 and 20, 1985, re Emerging Issues

Task Force ....

369, 381

Oversight and Investigations Subcommittee:

Correspondence between Hon. Thomas A. Luken and the Federal

Home Loan Bank Board .........

518

Correspondence with the Federal Home Loan Bank Board, the Con-

gressional Research Service, and subcommittee memorandums........ 580

Federal Home Loan Bank Board examination reports and memoran-
dums ...

462, 475
Interview of Peter Stearns, former FSLIC Director, by the Bureau of
National Affairs, Inc.

436

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