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The Dirt on Mr. Clean

Timothy Anderson has sacrificed everything to tell the world about Henry Hyde's role in the S and L scandal. Why isn't the world listening?

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By David Moberg

There were few spectators in the courtroom of federal judge George Marovich on the morning of November 19. As the case of Resolution Trust Corporation v. Lydia Franz, Henry Hyde, Casimir Kaminski, and nine other defendants was called, two dark-suited lawyers, a man and a woman, stepped before the bench. The lawyer for the defense stood by silently while the government attorney tersely announced that a settlement had been reached in their case.

The judge briskly set December 16 for presenting the final, signed agreement in court. Then the lawyers dashed for the doors, dodging the three reporters in the courtroom. That amounted to two or three more reporters than were present at most hearings on this case, which had dragged on since April 1993 without even entering the pretrial stage of discovery of evidence.

There was, however, a spectator present who had rarely missed a hearing during the three and a half years that the case--concerning recovery of part of the cost to taxpayers of a failed savings and loan--had languished in federal court. A plump, balding man of 53 years with a little mustache and a round, jowly face and upturned nose, he was as usual sitting up front, sternly scribbling notes onto his yellow legal pad. Timothy Anderson, a former bank consultant and onetime Republican precinct committeeman, regarded the issue before this court as not merely a lingering reminder of the nation's most costly financial scandal, but as a crusade. His passion for justice had consumed his life for eight years, ruined him financially, and nearly destroyed his family and their once quite comfortable suburban existence.

The collapse and bailout of the savings and loan industry may ultimately cost taxpayers $500 billion (roughly $154 billion in direct payments to insured depositors plus interest on borrowed money). Anderson concluded that in Illinois a web of key figures uniquely responsible for the crisis had never been fully studied. The web included savings and loan industry officials, the U.S. League of Savings Institutions (the national industry lobbying organization, formerly headquartered in Chicago), the regional branch of the Federal Home Loan Bank Board (supposed regulator of the industry, conveniently located directly below the lobbying group at 111 E. Wacker), and politicians of both parties, but especially Republicans.

Anderson was astounded at how few members of this perceived web of irresponsibility were being brought to justice. And though a few lawsuits have been filed and won in Illinois by federal government agencies, he believes the Illinois connection in the savings and loan disaster remains underpublicized and underpunished. In Anderson's eyes, the settlement announced last month in RTC v. Franz was simply another failure to hold to full accountability the individuals in that web, especially Henry Hyde, the prominent conservative Republican congressman from DuPage County. Hyde may believe that this deal closes the door on a case that he has zealously tried to keep out of the public eye, but it won't if Tim Anderson can help it.

From 1981 to July 1984, Hyde was a member of the board of directors of Clyde Federal Savings and Loan Association of North Riverside. In 1990 the federal government's new Office of Thrift Supervision put the institution into receivership. On May 31, 1991, its assets were transferred to the Resolution Trust Corporation--the federal agency established to resolve the S and L debacle. Because of bad loans and bad investment decisions the institution was bankrupt, and taxpayers had to pay out $67 million to cover insured deposits. That's more than it cost to bail out Madison Guaranty Savings and Loan of Arkansas, the thrift at the center of the Whitewater case that Republicans, including Hyde, suggest was protected by then governor Bill Clinton.

In 1993, after an investigation of how Clyde went bankrupt, the Resolution Trust Corporation filed a civil suit in federal court to recover $17.2 million. The suit charged that Hyde and fellow officers and directors "carelessly, negligently and with gross negligence mismanaged Clyde; caused or permitted Clyde to violate federal regulations; and ignored warnings, recommendations and/or directives of federal regulatory agencies."

Hyde is the only member of Congress ever accused of a direct fiduciary role in the failure of a savings and loan; others got into deeper political trouble for the more indirect role of misusing their political influence on behalf of thrift owners. Very few other members of Congress in recent memory--perhaps no more than three--ever served on the boards of savings and loans. Not insignificantly, two of them were Illinois Republican colleagues of Hyde--Edward Madigan and Edward Derwinski, who even briefly remained on his S and L's board while a member of President Bush's cabinet. This anomaly was one of the discoveries that propelled Anderson into his lonely fight.

Hyde insisted from the beginning that he had done nothing wrong, that the case against him would be dropped, that he would be exonerated, and that in any case he would not be party to any deal. He has repeatedly claimed that he served on the board only at the request of a friend (who happened to be a reliable campaign contributor), that he relied on experts, that he served only a short time, and that he resigned long before the thrift was taken over.

Yet the case was not dropped and he was not exonerated. The evidence available, especially minutes of board meetings, shows Hyde involved in major decisions that helped bankrupt Clyde, such as one to make a loan to a Texas luxury condo project--a deal arranged by a broker once charged with fraud--and another to speculate in the futures market. Hyde also sat on the board while federal regulators and outside auditors informed directors of the perilous state of Clyde's finances and its violation of many federal regulations, including overcharging the government--that is, taxpayers--for interest on student loans.

After the years of negotiations in the chambers of judge Brian Duff, who resigned his judgeship recently before the case was concluded, the Federal Deposit Insurance Corporation finally settled the $17.2 million lawsuit for only $850,000. Furthermore, the FDIC let the defendants divide up this cost any way they wanted. Hyde's lawyer, William Harte, insists that Hyde will pay no part of the tab and will not even sign the agreement "because he has not done anything wrong."

Yet the settlement establishes little about who did what wrong. Though Duff dismissed three of the four original counts against the defendants, the government had a strong enough case to withstand repeated motions to dismiss the fourth count--alleging gross negligence--and to warrant pursuing it at great length, a resolve that might have been bolstered by Tim Anderson's efforts to give the case at least some publicity. Ultimately, the FDIC settled for the small amount--which FDIC spokesman Stephen Katsanos admitted "certainly is not a high recovery"--because it estimated that it would not end up with any more at the end of a trial, given the assets of the defendants and the cost of a trial.

The RTC went out of business at the end of 1995 and transferred its authority to the FDIC. The agencies' main objective in these cases has been to recover some of the cost of the S and L bailouts from officers and directors who failed to do their jobs. But ultimately the government has recovered a very small percentage of the cost--just 1 or 2 percent, according to Auburn University professor of finance James Barth--even though most settlements have been more lucrative than Clyde's. Also, few suits have gone to trial, so the public has not learned much about the negligence and incompetence that led to many S and L failures. And when a settlement is reached, there are usually disclaimers about culpability. The whole process, then, has been a failure at recovering money, finding and publicizing the facts, and establishing who was responsible for what.

Anderson argues that the Clyde agreement actually compounds the public grievance and resurrects the fundamental issue: impropriety and conflict of interest when a public official with powers over an industry and its regulators sits on the board of a financial institution or corporation. Hyde had left the House Banking Committee a few months before joining Clyde's board. It was as bad, Anderson argued, as someone stepping down from the House Armed Services Committee and taking a seat on the board of a military contractor involved in improprieties that cost taxpayers tens of millions of dollars. "This settlement means Hyde knew how bad the evidence was against him, other directors knew, and they didn't want to go to trial," Anderson asserted. "It's devastating."

Anderson is convinced that if the case had continued there would have been mounting pressure to bring criminal charges as well. In any case, Anderson raises questions about the ethics of a congressman letting his codefendants pay the full cost of a settlement. "Why does the congressman get a free ride? Will Henry pay them back later in some way? The question should be asked of the congressional ethics committee, 'Should Henry be allowed to accept this gift of $70,000?'"--his "share" if the settlement were divided evenly. "But the real question," Anderson insists, "is, was there a conflict of interest of Henry being on the board in the first place? By having Henry paying nothing, the settlement just shines the light even harder."

Some independent experts agree at least in part with Anderson's characterization of the case. Boston College professor of finance Edward Kane, who's written extensively on the savings and loan crisis, said that the settlement indicates the government clearly thought it had a strong case, and that serious ethical questions are raised if Hyde's codefendants give him the "equivalent of a campaign contribution" by paying his share and letting him escape the taint of signing the deal. "If other people pay and he doesn't," Kane said, "he can suggest he's innocent, but there's nothing to support that inference. There was probably a differential need for him to pay. He could hold out and others didn't want to....The people to whom money is less important pay the money, and they let off the person for whom an adverse determination from the court would be most damaging, even if it didn't cost a penny." But the real issue is not money, Kane said. "The issue is power abuse, and that's not being answered at all."

A participant in the case said other defendants believe Hyde should pay his share of the settlement but won't make an issue of it. These defendants, especially the ones with limited means, are more concerned with getting out from under staggering legal fees. George Kaufman, professor of finance at Loyola University of Chicago, observes that the settlement puts Hyde in debt to his codirectors, several of whom may well have fewer assets than he does. "If you want something to criticize Henry Hyde about, this [settlement] certainly fits the bill," Kaufman said. "It also points out some of the improprieties in the savings and loans," especially having a prominent political figure on a thrift board.

"I serve on a board," Kaufman explained. "If there's a dominant person on a board, such as a congressman, nobody argues with him. Hyde is such a dominant figure that people would naturally defer to him. I'd hate to argue with a congressman." Kaufman's not sure he agrees with everything Anderson claims about an Illinois savings and loan catastrophe, but he does say, "This settlement makes a statement that he's not way off base. There's obviously something there."

Part of that something is Henry Hyde, a powerful, respected, and politically secure 11-term incumbent from a deeply Republican district. He was easily reelected last month, in part because the Democrats made no effort to challenge him despite his possible vulnerability over his legal problems. White-haired, wide-girthed, and charming, the 72-year-old politician first made his mark nationally as an opponent of abortion. Since then he's gained influence in many areas, including foreign affairs. Widely adored on the right, Hyde even basks in respect from some liberals in Congress. They admire his endearing manner and his occasional departures from right-wing orthodoxy--such as his support for banning assault weapons and for providing workers with unpaid leave for family emergencies, and his opposition to term limits.

Nevertheless, he was a central figure in promoting the rest of the Gingrich program in the last Congress and consistently ranks among the most conservative members of the House. During this past Congress Hyde wielded power as chairman of the Judiciary Committee, and when Gingrich lost popularity and accumulated ethical charges against him, Hyde was briefly touted as an alternative to Gingrich as Speaker. There wasn't so much as a mention of Hyde's own ethical problems.

In contrast to the attention Dan Rostenkowski got when scandal brought him down, few people have had even a passing awareness that Hyde was ever sued. The authoritative 1996 Almanac of American Politics biography of Hyde failed to mention the suit. Hyde has escaped full-blown publicity in part because there was little overt activity in court, in part because he vigorously worked to keep the case out of the news. By keeping a small spotlight on the powerful Republican, Anderson has become Hyde's nemesis.

Yet Anderson did not start out on his quest with Hyde in mind, and his target even now is far bigger than the congressman. It is the corruption of political and financial power, in particular corruption that in Illinois he believes greatly increased the scope and cost of the thrift crisis.

It all started by accident in the far northern suburb of Libertyville. Anderson still lives in Libertyville, his childhood hometown, though when he grew up there he used to go hunting in fields that are now vast shopping malls. His father worked as an advertising salesman, but his charm and skill as a squash player gave him entree to the region's social elite. Anderson developed a sense of self-confidence among powerful people simply by hanging out with them.

As a high school student he was an "entrepreneurial hustler," not an especially good student. He chose the marine corps over college, but later went to Southern Illinois University and "studied swimming." During the 1968 Democratic convention he worked as a bellboy at the Drake, where contrasting tipping styles sealed a political sentiment. Liberal presidential aspirant Gene McCarthy's entourage tipped him a dollar for hauling in its luggage; right-wing publisher William F. Buckley gave him two dollars for carrying a briefcase. "So I said, Bill Buckley, one briefcase, two bucks. Eugene McCarthy, half hour, ton of luggage, one buck. Yep, I'm a Republican."

Anderson alternated spells of bellhopping and selling Koala Cocoa Oil, a suntan oil he'd manufactured in Chicago under the name Aussie Tan Ltd. (though the company's Koala T-shirts sold better than the oil). Later he was a razor salesman before stumbling into a job that sent him down his fateful path. At the request of a family friend who ran an employment agency, Anderson went for a job interview at a consulting firm in order to surreptitiously investigate what kinds of employees the firm needed. But Anderson found himself being offered a job. He promptly accepted it. The position was uninspiring: Heading off with his mentor on the first assignment he was told, "Keep your mouth shut. You're only here to justify billing." After eight weeks, just as he began to figure out what he was doing, the job ended.

Anderson and a group of partners, mainly fellow employees at the consulting firm, started their own company. For a name they came up with Nacon--a "bum name," Anderson admits, but one that met his first requirement: it would sound weighty enough to impress bank presidents he wanted appointments with. "I convinced bank presidents that I could solve their problems," he said. "They didn't know they had problems. I knew there were problems I could find. Bankers are not bright people."

There were conflicts within the fledgling firm, and Anderson quit to sell cars. But by 1975, the year he got married, he was back and running the firm. "It was feast and famine," Anderson recalled. In his best years he earned $60,000 and was able to buy a large house in the country. He became involved in the community, serving as a Republican precinct committeeman, volunteering for 15 years as the Lake Forest Easter bunny, and joining a church that teemed with rich business executives and bankers. But Anderson was more willing than his peers to rock the establishment boat. For example, in the early 80s he carried on a five-year battle with the Federal Reserve Board over what he believed was the improper acquisition of the small, local First National Bank of Libertyville by the giant First National Bank of Chicago. The time spent on this challenge didn't help his business, but he had a plan to put things right: selling videotapes of his consulting advice to banks and thrifts. "The idea of being paid for not being there really appealed to me," he said.

But in 1988 he bumped into someone he knew from the staff of the U.S. League of Savings Institutions. "You're from Libertyville," the staffer said. "What's happening to your savings and loan?" Anderson was surprised--he knew of nothing happening to Libertyville Federal Savings and Loan. But soon he heard reports that someone was trying to buy it. How? he wondered. It was a mutual savings and loan, that is, a thrift formally owned by its depositors, who would have to give their permission for any sale.

When he went to the thrift to get what was supposed to be a public "statement of condition," a receptionist told him it was not available. Curious, he demanded to see an officer, who also denied his request. Reminding the officer he could report the S and L to regulators, he insisted on talking with the president. When Anderson finally read the statement of condition, he pointed out that by the institution's own numbers it was failing. The president urged him to keep the news quiet and admitted that the thrift had some problems with loans in Texas. That was a red flag to Anderson.

Typically, savings and loans had financed home construction and sales in their own areas. But after 1979, when the Federal Reserve Board drove interest rates up dramatically, many S and Ls found themselves having to pay high interest rates to attract money while receiving low-interest payments from their long-term home mortgages. Confronted by a temporary crisis, Congress deregulated the thrift industry in 1982 and increased the size of deposits covered by government insurance. With this new freedom, as well as lax supervision from a Reagan administration hostile to government regulation of any type, some savings and loans were taken over by a new breed of entrepreneurs who paid high interest rates and attracted large deposits from around the country. In turn, their S and Ls loaned money for resorts, office complexes, housing developments, and a wide range of speculative enterprises, many of them in the sun belt.

The managers of the thrifts raked in huge profits from fees for making the loans, but when the loans went bad on the ill-conceived and often fraudulently presented projects, the Federal Deposit Insurance Corporation was left holding the bag. The industry wanted to avoid a public crisis and worked to minimize the extent of the problem. Working through the Chicago-based U.S. League of Savings Institutions, the industry was extremely powerful politically, thanks to generous contributions, effective lobbying, and influence on federal regulators. The industry lobby persuaded regulators to use illusory accounting practices to hide losses and to permit risky investments that might restore profits. These devices kept alive thrifts that should have closed. If Congress had acted in 1983 to resolve the emerging crisis and close failed thrifts, a presidential commission would conclude in 1993, the cost to the government would have been only $25 billion.

Loans Libertyville Federal made in Texas and Colorado eventually defaulted and broke the thrift, costing the public an estimated $25 million. Anderson said he eventually heard from industry contacts that Libertyville Savings and Loan chairman Frank Murphy had a reputation as "Leo Blaber's boy." Blaber was president of the Federal Home Loan Bank of Chicago; he was described by Kathleen Day in S&L Hell as someone who in the mid-80s was regarded by the Treasury Department and Congress as "largely controlled" by U.S. League president William O'Connell, a former Chicago Daily News reporter turned public relations lobbyist.

The U.S. League and local thrifts regularly helped relatives and friends of Chicago politicians get jobs. For example, former Democratic congressman Frank Annunzio's son-in-law was a consultant to Skokie Federal, whose chairman was John O'Connell Sr., brother of William O'Connell. To take another example, Henry Hyde's son was a branch manager at Olympic Savings and Loan, where Ed Madigan was a director. While Madigan was a director at Olympic, the thrift filed a crucial lawsuit that delayed the Bush administration's S and L bailout plan for a year, greatly increasing the final cost. Both Skokie and Olympic failed and were bailed out by the public.

"This was like It's a Wonderful Life," the Frank Capra movie about the takeover and betrayal of community spirit at a small town savings and loan, Anderson recalled thinking when the Libertyville thrift failed. "How could they do it? This was my hometown savings and loan"--where his mother kept an account. He contacted the Federal Home Loan Bank Board, not yet realizing the ties the regulators had to the crisis, and urged them to act. "But they told me to mind my own business." He began contacting politicians, including his congressman, John Porter, speaking out at community meetings, and taking his case to the local newspapers and cable TV stations. At one town meeting in the early 90s, Porter promised to escort Anderson to a meeting with U.S. Attorney Fred Foreman. Anderson knew Foreman from their work in Lake County Republican circles, but hours before the meeting was to take place, Porter called Anderson and canceled it. Anderson had intended to demand that Foreman undertake a criminal investigation.

The presidential commission estimated that fraud, insider abuse, and other criminal acts contributed to between 10 and 15 percent of the S and L failures. A General Accounting Office study found fraud and abuse in every case it investigated. An RTC study found criminality in about one-third of all failures. By 1992 the RTC had filed civil suits against directors in 22 percent of the failed S and Ls and had informed the Department of Justice that they suspected criminal actions in 70 percent of those cases. The Justice Department ultimately charged individuals with criminal conduct in one-fourth of all the thrifts under RTC control.

In Illinois the RTC filed suits and made criminal referrals at a rate similar to the national averages. But when it came to actual criminal prosecutions, Illinois veered dramatically from the national pattern. Here criminal charges were filed in only 3 of 48 thrift failures under RTC jurisdiction, about one-fourth the national rate. Anderson grew more and more frustrated with what he saw as inaction by Porter, Foreman, and other politicians. "Finally I decided to investigate every savings and loan in Illinois to figure out why this problem was so big."

Given the scant attention it's received, the Illinois S and L problem is surprisingly large. With 90 failed institutions, the state tied with California among all states in the number of thrift failures from 1980 to 1992, according to the Congressional Budget Office (though Anderson argues that even this figure understates the case, ignoring more than 100 failing S and Ls that regulators quietly arranged to have purchased by other thrifts under its Phoenix program). In terms of estimated costs, Illinois is virtually tied for fifth place with Louisiana and New York after Texas, California, Florida, and Arkansas. Yet in Anderson's view the size of the losses is less significant than the role Illinois played. At the behest of the U.S. League, he argues, federal regulators in Chicago encouraged several key Illinois S and Ls to participate in or buy out loans in Texas, Arkansas, and other sun belt states. These actions, which endangered and ultimately sank many Illinois thrifts, were designed to help bail out those sun belt S and Ls and forestall government action on the growing but still largely concealed national savings and loan crisis. Illinois mutual savings and loans were good instruments, Anderson said, because they could use less strict accounting rules than most stock S and Ls.

"The Federal Home Loan Bank Board deliberately instructed key mutuals to buy up bad loans and bring them to Illinois," Anderson said. "Illinois was a pipeline to try to suck the problems out of Texas so the public wouldn't know about them. By moving the stuff to Illinois, they could put it into the toxic waste dump of Illinois."

In order to further conceal their actions, the industry sought--and found--political protection from investigation, Anderson charges. "In essence what the U.S. League did with Madigan, Hyde, and Derwinski in place was to make sure they weren't investigated." He says the congressmen were part of a "political daisy chain" of officials whose links to the thrift industry or to other politicians discouraged inquiries into Illinois. Those inquiries, Anderson concluded, would reveal that the industry corrupted regulators and politicians and tried to use the Illinois thrift industry to delay the inevitable crackdown on insolvent, mismanaged, and criminally defrauded S and Ls. It is this central story line, not Henry Hyde, that motivates Anderson.

In 1990 he knew from insider reports and published stories that Madigan and Derwinski were on the boards of S and Ls. But he only discovered that Hyde was a director when he was studying the financial disclosure statements of the two other congressmen at the Harold Washington library and accidentally came across Hyde's data. "I don't have a vendetta against [Hyde]," Anderson insisted. "He's just in my way in getting at Leo Blaber and the regulatory people. He's not the story, but he is the way the story will come out. The story is Illinois and the U.S. League. Madigan was the dirtiest, and Henry is dirtier than hell."

Frustrated by and distrustful of politicians and regulators, Anderson increasingly tried to get the story out through the press. Suburban papers and cable TV stations originally carried his message, especially about Libertyville. Then Elaine Hopkins of the Peoria Journal Star picked up the story and added important new research, including details from Clyde board minutes that she obtained through the Freedom of Information Act. Those minutes indicate that Hyde was an active member, making and seconding key motions and attending meetings where outside auditors presented evidence of the bank's impending bankruptcy and regulators called into question many bank practices.

I first met Anderson while working on a story for the Reader in 1992 about the Republican candidate for U.S. Senate, Rich Williamson, who had been chairman of the Federal Home Loan Bank Board in 1991. Later I wrote more extensive articles on Hyde and the Illinois connection to the S and L crisis for In These Times and The New Republic. Once I got on Anderson's list, there was no getting off. In addition to the calls every few weeks, Anderson inundated me--as he did other reporters, Democratic political strategists, and congressional staffers--with articles and documents compiled in binders an inch or more thick. Anderson managed to prod some important financial and legal trade publications to do stories, encouraged an Associated Press reporter to pursue the tale, broke into the Washington, D.C., inner circle with stories in Roll Call and the conservative daily Washington Times, and inspired reporters to do stories in publications ranging from the New York Times to Mother Jones. Locally he got big stories in Crain's and Illinois Legal Times.

By the standards of most watchdogs, Anderson could be proud of his work. But he believed Hyde and Illinois should turn into a mini-Whitewater. Indeed, the Illinois and Arkansas thrift messes have enough in common, including loans and characters from the Clyde affair, to bring the special prosecutor to this state. Yet Illinois never became much of a story. There was low-key coverage in the Chicago dailies, but never enough to provide adequate background or offer a critical perspective on Hyde. Though the Sun-Times regularly runs Molly Ivins columns, for example, it skipped two of great local interest--both critical of Hyde. "This story has never seen the proper light of day," Anderson fumed, suspecting a systematic press blackout to protect Hyde.

It might be more accurate to say that reporters gave a pass to Hyde, who had a clean reputation and charming manner. "A lot of us old political hands just had the feeling of Henry Hyde being one of the good guys," TV commentator Walter Jacobson said. "I never got around to reading all the stuff" that Anderson sent. The story was complex, especially by television's standards, and there was no good video. Citing WTTW's tongue-in-cheek motto, "We get it straight because we get it late," John Callaway said that his show--one of the few on TV willing to tackle complicated stories--lacks the resources to do a major investigation and usually provides follow-up analyses to stories broken elsewhere. The Tribune and particularly the Sun-Times provided small running stories that gave the impression the story was covered but probably left most readers in the dark about what was going on. Finally, because the suit languished in the courts for so long, with all the action behind closed doors, there were not a lot of obvious news hooks despite the gold mine of investigative and analytical possibilities. And the S and L crisis, never well reported in the press, was turning into old news.

Anderson tried to drum up support from Democratic congressmen and party operatives for an investigation, which in turn might have prompted more press coverage. But the Democrats seemed uninterested. Hyde was politically tough to beat, he was a conservative they could talk with and sometimes even gain a vote from, and many Democrats personally liked him.

Bill Goold, a veteran legislative staffer now working with Socialist congressman Bernard Sanders of Vermont, offered several explanations for Democratic reluctance to target Hyde. He believes Democratic House leaders never liked the "scorched earth" attacks on members' ethics exemplified by Newt Gingrich's assault on former speaker Jim Wright. To the extent that there was an ethics target in the House it was Gingrich, who had earned their animus. They were also preoccupied with policy battles. And to compound matters, Hyde was "viewed as one of the protectors of the institution of the whole," Goold said. "There would be a little reluctance from some folks to turn against a 'man of the House.' When he became a chairman, it only enhanced that status....While Anderson's single-minded focus is quite legitimate, it's hard to get members of Congress, unless they feel some personal animus to an individual, to say, 'No, I'm not going to work on that jobs bill. I'm going to be point man on Henry Hyde.'"

From the press corps to the halls of Congress, the personal reaction to Anderson is generally respectful. He's seen as relentless, if sometimes extremely irritating as well. "He's a funny guy," Goold said. "He's done his homework, and he's better prepared than a lot of people who approach members of Congress for a hearing....I've seen ethics complaints filed against members with less material and with fewer questions raised than were raised by Tim's stuff."

Lynn Sweet, the Sun-Times's Washington bureau chief, said, "Tim is dogged. His research is thorough. Whatever he relays as fact checks out, and he is knowledgeable about the savings and loan business." Sweet's Tribune counterpart, James Warren, said, "Some people might be put off by him venting his frustration rather visibly. Some people might not like being accused of taking a dive for Henry Hyde. At times he's been a total jerk. But you deal with jerks all the time, and at times jerks have a great story."

A number of academics and regulatory officials are convinced that Anderson has a great story, one that deserves further investigation. At the behind-the-scenes urging of one high-ranking Justice Department official, Anderson was invited to offer expert testimony to the presidential commission on the causes of the savings and loan collapse. Besides Kane and Kaufman, some of the experts who think Anderson is substantially on the mark include Thomas Lutton, an expert on thrifts who has worked for both the Treasury Department and the Congressional Budget Office; Fred Cedarholm, a former RTC investigator in Chicago; and Walker Todd, a veteran attorney formerly with the Cleveland Federal Reserve Bank. Cedarholm, whose investigation into Illinois S and Ls was cut short when the Bush administration closed the Chicago RTC office and moved it to Kansas City, says that Anderson is "probably about 90 to 95 percent correct, and the other 5 percent, he's close."

If Anderson had set himself up as a nonprofit research institute and issued official-looking reports and press releases, he might have gotten much farther than he has. But he doesn't fit the standard transmission belt for news. He's a lone angry citizen who spends his own money on phone calls and the Xerox machine at the local Office Depot. He's prone to frustrated outbursts of rage, and at times he rambles and digresses as he tells his tale. In other words, he's an average citizen with above-average commitment to the ideal that high-ranking officials should be called to account for their misdeeds. Keeping the financial system honestly regulated and free from political influence is a noble cause in Anderson's eyes, on a par with opposing the war in Vietnam (as his contemporaries, but not he, did in their youth) or saving whales and spotted owls. It's also a matter of patriotic duty. "It's like a question of whether you go off to war to defend your country or stay home to take care of your family," he said. "I feel this is like defending my country."

Often over the past eight years his family has wished he'd stay home and take care of them. "I remember saying to him, 'Let's not get into another big drawn-out thing'"--like his battle in the early 80s with the Federal Reserve over the Libertyville bank buyout--his wife Ann recalled. "He said, 'No, it will be fast.' But it wasn't." As Anderson began attacking prominent North Shore savings and loan executives and Republican politicians, his business dried up and his family income shrank from the $50,000 range to virtually zero. Ann went to work. The family moved into a tiny house in Libertyville that Anderson had inherited from his mother. The phone calls, photocopying, and other costs of his crusade distended the modest family budget.

In March 1993, while Tim Anderson was busy working the phones, his wife's doctor called. Her rash hadn't healed, and he had sent her directly to the hospital. Diagnosis: leukemia. Fortunately, it was early enough for treatment to be effective. Unfortunately, the Andersons had no health insurance--for a while not even Medicaid. Their medical bills mounted to around $300,000. By the end of the year his distressed wife was threatening to leave him if he did not end his campaign and get a job. He stopped. But eventually she relented, and Anderson returned to the warpath. He got a job shuffling cars for a rental agency at $6 an hour. It's an occupation that covers his phone bill most months and leaves his mind free for his main work.

Tim and Ann Anderson have two daughters, one in high school, the other a freshman at Carleton College, who have gotten a first-class lesson in American politics but have also been left feeling cynical about government and business. Ann Anderson is so fed up with politicians that she automatically votes against whoever is in office. "I thought people would be interested," she said. "I get more frustrated than he does. He seems to know everything so logically. He's been the eternal optimist. I'm the one who always says, 'Well, when?' I feel badly for him because it seems like there's more disappointment than success."

She said, "The girls and I do not like this. He's an extremely talented person, and I know from other things before this that he's really a mover and shaker, but this thing he's stuck on costs us money and doesn't bring us money. The girls get frustrated and angry. They're very good girls, but he doesn't have much to show for what he has done in a major part of his life. There are no awards on the wall. Lots of times they know you can't talk about certain topics in front of him because he gets mad and takes a walk. I think he feels guilty he's not giving us what he ought to--that the house isn't painted, that the dryer isn't fixed. Whenever something special happens, there's real financial stress, and the girls say, 'Go do something.' Unfortunately, we measure people in today's society by their bringing home a big paycheck.

"We say, 'Let someone else take up the ball,'" Ann Anderson continued, "but no one else takes up the ball. If somebody would, so it wouldn't be forgotten if he wasn't there, I think he would give it up."

Tim Anderson says he would like to give it up. But he's also thinking about writing a book. There's nobody else on the horizon who seems likely to take over what he has started, even though his academic supporters think the country would benefit from a full official investigation into what happened in Illinois. The thrift business, after all, is not the only industry that has managed to win pervasive influence over the politicians and regulators who are supposed to guarantee the public interest.

"People say, why do I keep doing it?" Anderson said recently during one of his many phone calls. "God, why am I alone on this?"

Art accompanying story in printed newspaper (not available in this archive): photographs/Marc PoKempner.

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