Tony Sanchez: the Tosoro (Enron) truth begins to unravel

In response to the following article, I have interlineated my comments below. I 
would like to thank Mr. Slover for his article. I thought it was well researched and 
well written. It was picked up by the AP and printed in all the major state 
newspapers. Now it is time to pull out the rest of the Sanchez stinking laundry.

John WorldPeace
The next governor of Texas

December 17, 2001

For $1 million, Sanchez settled years of scrutiny
FDIC deal in 1994 concerned a proposed lawsuit over failed S&L


By PETE SLOVER / The Dallas Morning News

AUSTIN Democratic candidate for governor Tony Sanchez whose pitch to 
voters leans heavily on his business record paid the government $1 million to settle 
complaints of risky and bad management at his failed Laredo savings and loan.>>
Actually it was a pre-litigation settlement in a civil matter. However, being a lawyer, 
I know how civil matters can lead to criminal indictments and so did Tony Sanchez.

<<The 1994 settlement with Mr. Sanchez and 12 directors and officers concluded 
years of government scrutiny of his Tesoro Savings and Loan, which closed in 
November 1988, in a bailout estimated at $161 million. >>
I would like to know the names of these directors and officers because my 
experience is that these criminals run in packs like mongrul dogs. They are all 
members of interlocking Boards of Directors. It would also be interesting to me as 
to how many of these directors and officers were on other S & L Boards and if 
those S & L's also went under. I would also like to know their links to Enron.

<<"Tesoro's management structure is unstable, and the enforcement of adequate 
controls, policies and procedures is questionable," said a 1988 memorandum from a 
federal supervisory agent, which led to rejection of a rescue plan proposed by Mr. 
Sanchez, the thrift's board chairman and principal shareholder. >>
In a word, he is a terrible businessman. I pray to God that this corrupt buffoon is not 
allowed to work on the state budget as governor.

<< Sanchez answers critics
More politics

Based on thrift examinations, that agent deemed Tesoro's management and board 
"unacceptable," alleging risky lending practices,>> actually the loans were all Mafia 
type scams << reckless growth,>> growth from the deposits of at least $25 million 
of confirmed Mafia drug money laundering. << conflicts of interest,>> As in loans 
to Mafia friends. << questionable expenditures,>> As in unearned high living for the 
executives. << weak internal controls,>> A good way to hide corruption. << and 
noncompliance with regulatory agreements. >> Just like IBOC's failure to report 
political contribution for the last 2 years.

<<In an interview last week, Mr. Sanchez discounted the criticism and defended his 
institution's management.>>
There is no defense only excuses. And if you are a corrupt buffoon trying to manage 
your deceased father's fortune, one excuse for incompetence is as good as another.

<<He said practices at Tesoro were typical of Texas thrifts,>>
I see. They all went broke and Tony is saying "I am just as stupid as the rest of the 
herd. Therefore, elect me governor."

<<which he said were hamstrung by the economy,>>
All the S & L's did not go broke. Just the corrupt ones.

<<boxed in by lending regulations,>>
The Mafia feels boxed in by all regulations. Like the proposed legislation to require 
banks to check into the backgrounds of large depositors and which Sanchez and 
Dennis Nixon of the IBOC fought tooth and nail and eventually killed.

<<and flummoxed by unclear government directives. >>
Well the question is whether Sanchez is too stupid to understand the regulations or 
was he too corrupt to care what the regulations were anyway.

<<And, he said, regulators knew about, approved and even encouraged many of the 
practices they later panned. >>
I see. The government was running the bank not Tony Sanchez the idiot who thinks 
anyone is buying his nonsense.

<<Mr. Sanchez, who is expected to win the Democratic nomination in March>>
Well Pete this is nonsense and you know it. The December Scripps Howard poll 
was sanitized. It took them 12 days to process the numbers as opposed to 7 on the 
May and September polls. John WorldPeace is two to one ahead of Sanchez and 
head to head with Perry. The only thing Sanchez is leading is corruption.

<<and then face GOP Gov. Rick Perry, said voters should measure his most 
noteworthy business flop against a career of banking, oil-and-gas, and other 
successes. >>
He has had no successes. He has only been the straw man for his father's fortune 
and the front man for the Mafia. Reading the many articles about Sanchez shows by 
the words from his own mouth that he doesn't know what is going on in any of his 
businesses. It is always someone else who screwed up. And the Democrats have 
found him to be the most apathetic candidate of all time. I guess they are going to 
take the blame for his campaign.

<<"I am a businessman who has made a number of investments in 30 years, most of 
which worked," he said.>>
Doubtful. He lost $1 million on businesses in 2000 according to his tax returns. Of 
course without the accompanying schedules we do not know if he really lost money 
or just manufactured a $1 million write off.

<< Using a metaphor from the oil and gas trade that has built his fortune to an 
estimated $600 million, he said: "We've drilled over 1,000 wells, all over the country. 
And we have had our share of dry holes." >>
Well consider the one drilled under the Falcon Reservoir on the Mexican border; 
funniest thing, no one drilled from the Mexican side. All that oil and gas under the 
Reservoir and no one drilled from the other side.

<<The Dallas Morning News reviewed thousands of pages of federal, state, and 
internal thrift documents related to Tesoro, including previously confidential thrift 
examinations obtained under open-records laws.

Mr. Sanchez said he didn't profit personally from the operation of the thrift. >>
What he meant was that all his profits were under the table payoffs. You don't lend 
$250 thousand on a $50 thousand piece of property and not get a kick back. But of 
course the actual loans are not part of the public records and so we may never know 
to whom all the taxpayer's money went.

<<"I never took a dividend, I never took a salary.>>
Well maybe if his income was based on his performance he would have paid more 

<<I think they paid me a couple of hundred bucks a meeting," he said.>>
Undeniably, about all he was worth.

<<"And I lost several million dollars" in Tesoro stock that was rendered worthless 
by the thrift's failure. >>
All on paper only. The under the table kick backs were way more than any paper 

<<Regulators criticized the S&L for acquiring two fishing condos used by Tesoro 
officials and for paying or pledging to pay for the use of a hunting lease and a plane 
owned by other Sanchez enterprises >>
Yeah buddy. Nothing like living high on the taxpayer's dollar.

<<Principal stockholders

With 83 percent ownership, Mr. Sanchez and his father were the principal 
stockholders in the thrift, which they founded in 1972.>>
Little Tony being there in name only. But of course 1972 was the year that Ben 
Barnes went down in flames and the same year I believe that Tony Sanchez was 
working with Morris Jaffe the shady Texas businessman who was connected to the 
New Orleans mob, Jim Wright's downfall and monies to Henry Cisneros's 

<<Numerous government documents and interviews conducted by regulators after 
the thrift failed confirmed that Mr. Sanchez took a lead role in management and 
decision-making at Tesoro "treasure," in Spanish. >>
Yes, he was the man. Yes, treasure as in something found as opposed to something 

<<Federal examinations showed Tesoro performing poorly in key categories over 
the three years before it folded.>>
Nothing fails like failure.

<<Compared with all similarly sized thrifts nationwide in mid-1987, Tesoro had less 
profit and more expenses.>>
When you are laundering Mafia money and making bogus loans to your friends and 
taking money under the table for both, you don't need to worry about profit or 

<<Thrift books showed 14 times the national average of loans with slow 
14 times is not just being slow on the uptake, it is being corrupt.

<<nearly six times the number of repossessions,>>
And all those foreclosures were on property where the loans were 4 times more than 
the value of the collateral.

<<and five times the number of loans flagged as overvalued or otherwise flawed. >>
Bogus loans. Bogus loans. Bogus loans. Tony Sanchez. Tony Sanchez. Tony 
Sanchez. Now who were those loans made to? Find that out and it will be like 
lifting a rock to expose all the vermin of Texas. My bet is the same vermin who 
created the Enron disaster.

<<Tony Sanchez

Mr. Sanchez said that those numbers unfairly incorporated thrifts in other regions not 
suffering the fiscal pains of energy and real estate crashes that contributed to loan 
defaults. >>
Nonsense. The comparison with any group of loans will still show Tony's 
corruption. He was a stupid lender. Or he was a corrupt lender. Or he was a 
stupid corrupt lender.

<<"The peer group was not narrow enough. I mean, we were suffering more in 
Texas," he said.>>
What is this "we" crud. Tony was not suffering. He was living high. It was the 
taxpayers who were suffering.

<<"Other parts of the nation were enjoying a pretty good economy. I mean, 
comparatively speaking." >>
Well if things were that bad, why did Tony keep the doors open. The truth is that 
he was taking in corrupt money and every day sending it off to Switzerland, Spain 
and the Bahamas. Tony had no incentive to shut the doors.

<<Three months before Tesoro folded, nearly half of the state's 271 thrifts were 
insolvent. Eventually, more than 80 percent of Texas S&Ls folded at a bailout cost 
of at least $48.1 billion from 1988 to 1995. >>
So there were 20% in Texas that survived. Well Tony, so much for the rest of the 
nation comparison.

<<When Tesoro failed in November 1988, it was $129 million in the red, with 
assets listed at $250.5 million.>>
That means $379.5 million in debts secured by $250.5 million in assets. It takes a 
few years to create these kinds of numbers.

<<Its loan portfolio bulged with speculative land deals and investments in troubled 
business ventures.>>
Just the kind of bogus businesses the Mafia is well known for creating.

<<It took an estimated $160 million bailout to protect insured depositors and 
dispose of loans gone bad. That money came from various federal funds paid for 
with taxpayer money and fees on insured institutions. >>
About which Tony could care less. Now that his current bank, IBOC, is worth $ 6 
billion it would seem that he should pay back some or all of the $161 million to the 

<<The 1994 settlement Mr. Sanchez and 12 other Tesoro officials reached with the 
Federal Deposit Insurance Corp. concerned a civil lawsuit the agency considered 
filing against the men because of their management of the S&L. >>
And had that suit been filed, then all the corruption would have come out and there 
would have undoubtedly been a criminal indictment or two issued against Sanchez 
and company.

<<Mr. Sanchez, who characterized the threatened litigation as "lingering cleanup" 
from the thrift's failure, said he didn't recall the details. >>
Why should he. Like everything else he was the leader in absentia. Now the 
Democratic Party understands his no campaign campaign. Tony Sanchez thought 
that all his lackies were going to do the campaigning for him.

<<"Somebody was handling that.>>
Somebody else is always handling this or that for Tony.

<<And, you know, when they came up with that settlement I said that's fine, let's just 
put the thing behind us," he said. He personally paid the $1 million and was not 
reimbursed by the other Tesoro officials. >>
Steal $100 million and pay a $1 million settlement. Not bad.

<<The deal makes clear that the thrift officials did not admit wrongdoing.>>
Nor stupidity and ignorance.

<<It said both sides were settling the matter after more than four years of wrangling 
"solely in order to avoid the uncertainty, burden, and expense of protracted 
litigation." >>
Bull. Solely to avoid jail.

<<The agreement provides that regulators would not take steps to block Mr. 
Sanchez and the other men from serving on bank or thrift boards.>>
No, let the crooks do it again. Except this time it is ENRON. I will bet that IBOC 
made a loan or two to ENRON. Anyone what to do the research?

<<For years, Mr. Sanchez has been the largest shareholder and a board member of 
International Bank of Commerce in Laredo. >>
Scary isn't it?

<<In many cases, former directors of failed thrifts, especially those accused of 
serious or criminal acts, are barred from future service on such boards.>>
But not Tony.

<<Government lawyers who worked on the matter would not discuss whether that 
provision indicates the potential case against Mr. Sanchez and his colleagues was 
weak. >>
That is because it was not weak.

<<Proposed suit

The pact does not disclose what the FDIC had accused Tesoro officials of doing 
wrong, but the proposed civil suit against them was laid out in a 1989 memo 
obtained by The News, drafted by two outside law firms that investigated Tesoro for 
regulators after the thrift failed. It was common for the agency to hire outside firms 
for such work because it lacked the staff to do so.
None of the lawyers involved in drafting the memo would discuss it, but the 
document recommended that the government file a $10 million lawsuit against Mr. 
Sanchez and the other officers and directors. No suit was ever filed. >>
No. Tony bought out of the suit for $1 million. I can tell you as an attorney the legal 
defense fees would have been that much alone. The bottom line is that Tony 
screwed the taxpayers out of $161 million by transferring money to his friends and it 
only cost him $1 million.

<<The memo reiterated examiners' earlier complaints, including reasons why 
regulators rejected Mr. Sanchez's proposal in 1988 to merge Tesoro with other 
minority-owned thrifts, beefed up with a dose of private investment and federal 

Instead, the Federal Home Loan Bank Board closed the thrift and sold its assets to 
Americity Federal Savings Bank. >>
Meaning Tesoro was FUBAR.

<<The memo said Tesoro executives "were motivated in part by a desire to create 
the appearance of solvency for at least a period of 4 years after Tesoro was 
hopelessly insolvent." >>
Just like ENRON. Falsify records and profits so Tony could continue to steal, steal, 

<<"Sanchez dominated the affairs of Tesoro," it said. "As majority stockholder, 
Sanchez had the most to lose if Tesoro failed and he was directly aware of the loans 
and other measures taken to falsely create the appearance of solvency. " >>
In a word, he is a crook. In a word, he knew that the $25 million in Mafia money 
that was laundered was in fact Mafia drug money.

<<Mr. Sanchez and his advisors dismissed the memo as the overheated rantings of 
law firms lobbying to win themselves further work, a frequent criticism of outside 
lawyers hired to investigate failed thrifts.>>
Yes. Every crook caught screams like a baby. Go to any prison and listen to all the 
tales of innocence.

<<Congress eventually held hearings inquiring into charges that overzealous lawyers 
unfairly targeted former thrift directors. >>
And no one was found guilty of harassing Tony and his co-conspirators.

<<The FDIC would not release internal documents about the proposed Tesoro 
litigation. But Fred Fisch, a senior FDIC lawyer, said in an interview he was told that 
the matter was settled because it was "not too great" a case. >>
Well $161 million vanished. And the burden on the taxpayers was not too great.

<<FDIC spokesman David Barr said that in the months immediately preceding the 
settlement, the Tesoro case and potential lawsuits against other Texas thrift officials 
were undercut by a series of appeals court rulings against the agency. >>
Yelp, when you have a lot of money, you pay millions to your lawyers to stop the 
wheels of progress. And most of the time the crooks are better funded than the 
governmental agencies who are charged with pursuing these matters.

<<FDIC records show that agencies cleaning up the S&L failures opened liability 
investigations against thrift executives and others in thousands of cases. Most were 
closed without action, either because the cases were weak or the chance of 
recovering money was slim. >>
Again, the government budgets are not unlimited. They have to take the worst 
cases. And many times they must leave the better funded crooks alone. Consider 
what happened in the OJ case. Going after OJ ate up the District Attorney's budget 
and they did not get a conviction. Tony Sanchez was too well funded and well 
connected to go after.

<,The majority of cases they pursued were settled before lawsuits were filed, with 
overall recoveries of more than $5 billion. >>
A pittance. Had they jailed a few of these guys, the recovery would have been much 
greater and ENRON probably would not have happened just 12 years later.

<<Political advisers for Mr. Sanchez, who is making his first run for office, have 
expressed concern that campaign rivals will excerpt some of the 1989 memo's 
language out-of-context. >>
You darn Skippy. WorldPeace is going to do everything he can to make the whole 
state aware that Tony is corrupt.

<<In his defense, they have generated lengthy lists of prominent Texans who were 
sued and settled in their capacity as thrift officers and directors, including a number 
Gov. Perry's donors. >>
Again the herd instinct. If we all did it, it is OK. We stole $48 billion from the 
taxpayers but we did it as a group. It is the government's fault they did not catch us 

<<Government's bad advice

Bert Ely, a Washington-area banking consultant widely credited with being one of 
the first to predict the S&L debacle, said the thrifts that survived were those that cut 
costs, limited expansion, and "hunkered down." >>
What all honest hard working businesses do.

<<He said Tesoro was among a crowd of thrifts that apparently followed 
government's bad advice: to "grow" themselves out of their problems through 
aggressive lending. >>
The bad advice from the government was not to blame. Greed was to blame. 
Corruption was to blame.

<<But he said that doesn't make the "go-go" attitude of the day any less problematic.

"As far as I'm concerned, that was risky growth. Maybe he was doing what his 
peers were doing, but they were all just driving of a cliff together, like lemmings," he 
said. "A lot of people did dumb things and learned from it. If he's made a success of 
himself since then, that's a huge mitigating factor." >>
It is not a mitigating factor. He is now part of the ENRON scandal. All he did was 
refine his thieving ways. A crook is a crook. A guy who hangs out with the Mafia is 
just not someone you want to run for governor. He is someone you want the 
governor to put in jail.

<<Adopting that tack, Mr. Sanchez said that since his thrift went bust, he thinks long 
and hard before becoming a partner with anybody who has never failed at business. 
Well the Mafia has failed at a lot of them. Deliberately.

<<"As a result of not only those [enterprises] that worked real well and were 
successful," he said, "but equally important, those that didn't work I learned a lot." 
Yeah. He learned how to steal more efficiently. He avoided jail and that made him 
smarter out of fear. He did not change his ways. He just became more cautious.