Problems in Security Savings’ commercial loan underwriting process first started to show up in 2004, when the board discovered that the bank had extended multi-million dollar loans to a powerful and well-connected member of the so-called “religious right,” Pastor Carl Herbster—while Bell was secretly investing in and around land owned by Herbster’s Tri Cities Baptist Church. Church members complained that the church’s land was being converted to speculative commercial land in Missouri. And the bank’s board of directors and senior management team reported this apparent bank violation and other related issues to regulatory supervisor Don Kramer, the district manager in Kansas City’s office of the Office of Thrift Supervision.
Sounds responsible. So, what happened?
A Kansas Republican Party spokesperson told The Implode-o-Meter that Don Bell has been an important contributor to the Republican Party in past elections.
A government filing shows that Bell also chairs the Faith Family & Freedom of Kansas PAC, and donated near $100,000 to the religious Republican-based lobby group—some of those funds were used to get bank CEO Mike Copeland elected, and support the election of the county’s district attorney, Phill Kline, as well. The funds also support the implementation of a “pro-life” agenda and fuel efforts to get creationism taught in Kansas schools.
Bell’s leadership pushed and pulled his bank to over $830 million in assets (as of July 2008) by originating “friendly” loans on commercial projects to those he worships with, sources who have worked on deals with Bell say.
Ruh roh:
When Bell was confronted by the management group, and told of their whistle blowing ways with the OTS, he apparently took action to have the entire team fired.
According to the same banker, the OTS’s Kramer routinely reinforced that the OTS would stand behind the managers in their quest to do the right thing, and promised that neither management nor the board would be displaced for the actions they were taking to rectify the situation at the bank. When push came to shove, however, the OTS did nothing and allowed Bell to get rid of them all, this source says. It’s not clear if Kramer had told his Dallas-based bosses—regional director Fred Casteel, or assistant regional director Gary Scott—about the reported banking infractions.
Free market capitalism. USA! USA! USA!
