Spooky S&L Stories

By RICHARD ZOGLIN/

Was the CIA implicated in the savings and loan debacle? The House Permanent Select Committee on Intelligence, which is investigating charges of agency involvement in the scandal, will soon produce some answers. Nobody has managed to nail down a charge, aired in a series of articles in the Houston Post, that the CIA used fraudulently obtained S&L money to fund some of its covert operations, including support for the now defunct Nicaraguan contra rebels. But there is more evidence for a second Post allegation: that a Justice Department prosecutor investigating a bank failure in 1985 was warned off by FBI agents because one of his targets had CIA ties. The House committee, which questioned CIA Director William Webster about the matter in a closed-door session in late October, is expected to announce its findings soon.

With reporting by David E. Thigpen