President Bush, trying to deflect political damage from the savings and loan scandal, took the offensive Friday by vowing to vigorously prosecute financial fraud cases with an array of new enforcement measures.
In a speech to 88 U.S. attorneys who were ordered to Washington for a special conference on thrift prosecutions, Bush said he would set up a special team of investigators to probe fraud cases and would press for legislation to strengthen enforcement powers.
"These thieves have cost us billions," the president told the prosecutors assembled at the Justice Department. "And they will pay us back with dollars and they will pay us back with years of their lives.
"We will not rest until the cheats, the chiselers and the charlatans spend a large chunk of their lives behind bars in prison," he added.
Bush said the proposed legislation would strengthen the government's weapons by allowing the use of wiretaps in investigating bank fraud.
It also would allow the government to freeze defendants' assets in civil cases -- a tool often used in criminal cases -- and prevent "rip-off artists" from using bankruptcy laws as a shield against recovery of illegally gotten money, he said.
A senior inter-agency group would be established to help target the most significant cases for investigation and investigative task forces similar to one that was established in Dallas, Texas in 1987 will be established in 27 cities across the country, Bush said. The Dallas task force has brought 77 criminal cases and won 52 convictions.
The administration has estimated the government's total cost of the savings and loan crisis at $90 billion to $130 billion, excluding interest on the money it must borrow to pay to close hundreds of failed thrifts across the country.
Bush has come under sharp criticism from Democratic lawmakers who have charged that the Justice Department has not done enough to prosecute thrift fraud and abuse cases.
Regulators believe fraud and negligence are key factors behind many of the thrift failures over the past year.
Some congressional Democrats, who have been pushing for more vigorous prosecutions of thrift fraud cases, criticized the speech saying the president offered nothing new. Sen. Timothy Wirth, D-Colo., said measures announced on Friday already had been unveiled by Attorney General Dick Thornburgh last December.
Rep. Charles Schumer, D-N.Y., a member of the House Banking Committee, said it was "a cheerleading speech that just isn't even close to enough."
Bush made no mention of the allegations leveled against his son Neil, a former director of the failed Denver, Colo.,-based Silverado Banking Savings and Loan Association, who has denied any wrongdoing. The Office of Thrift Supervision has charged that he failed to disclose conflicts of interest during votes on loan approvals.
The political faulting for the savings and loan crisis intensified in recent weeks as the enormity of the cost of the scandal became clearer and lawmakers began hearing from angry constituents. Some of the charges and countercharges between Bush and congressional Democrats have been confusing.
Democrats say they offered $75 million this year for the prosecution of thrift fraud cases and the White House sought only $50 million. But Bush said Democrats were slow to approve the money this year and accused them of failing to provide some $36.8 million in start-up money he sought last year.
Bush, who was joined by Thornburgh and Treasury Secretary Nicholas Brady, said the FBI was investigating the failure of 530 financial institutions. More than 20,000 fraud cases from thrifts have been referred to the Justice Department.