WASHINGTON — President Bush's senior assistants said Thursday that embattled thrift regulator M. Danny Wall has no supporters in the White House--a clear signal that they want him to step down from the government agency charged with supervising the nation's savings and loans.
Although Bush so far has refrained from calling on Wall to resign as chairman of the Office of Thrift Supervision, he has offered no public support for the regulator, and the President's aides have made it clear that they believe Wall's days in the job are numbered.
Wall has been criticized for his handling of the thrift crisis, particularly the problems leading up to the $2-billion collapse of Lincoln Savings & Loan of Irvine. Wall rejected recommendations to seize Lincoln in 1987, delaying a government takeover until last April.
"The life signs are not great," said one senior Administration official. Though the White House does not believe that Wall has "done anything wrong," the official said, "the situation is such a mess, and he's such an integral part of it, it would be best if he stepped aside."
One of Wall's senior aides, Karl T. Hoyle, brushed aside such comments.
"Rumors of our demise are greatly exaggerated," Hoyle said. "The White House has not contacted us. The Treasury has not asked us to leave."
Wall has come under increasing fire in recent weeks. On Monday, Senate Majority Leader George J. Mitchell (D-Me.) called on Bush to replace Wall to enable the Administration to make a "clean break" with regulatory policies that may have contributed to the Lincoln debacle.
On Wednesday, three public interest groups said Wall should be fired because he had handled the savings and loan crisis incompetently. Wall responded that his agency had saved taxpayers $6 billion to $8 billion last year by selling failed thrifts rather than liquidating them.
When he testified last month before the House Banking, Finance and Urban Affairs Committee, Wall had no visible Republican support. Indeed, several Republican members of the panel asked critical questions.
Bush said in an interview in early November that he was considering whether to remove Wall but that he did not want to prejudge him. The President has made no public comments on the matter since then.
The critical comments by the President's aides Thursday clearly turned up the heat on Wall by several degrees, although the advisers stopped short of saying that Bush himself wanted Wall to quit.
Reflecting the frustration that senior officials at the White House say they feel over Wall's refusal to act on what appear to have been the broadest of hints that he step aside, one Bush aide said: "I'm not sure how you solve the situation. If he didn't want to take the revolver from the drawer, it's not clear he'll want to take the revolver placed in front of him on the desk."
Another Administration official commented: "You can huff and puff, and if the guy feels the wind, he gets out. If he doesn't, he stays."
In the face of such pressure, Wall appears to have the support of a key senator on banking issues, Jake Garn (R-Utah). Wall is a former Garn aide who served as staff director of the Senate Banking, Housing and Urban Affairs Committee. Garn was chairman of the committee from 1981 to 1987.
Garn secured Wall's nomination as chairman of the Federal Home Loan Bank Board in July, 1987, and helped him keep the job earlier this year when Congress placed the board under the jurisdiction of the Treasury Department and renamed it the Office of Thrift Supervision.
Last year, Garn refused to support comprehensive legislation to clean up the savings and loan industry unless Wall was allowed to keep his post without facing reconfirmation hearings in the Senate, according to Sen. Alan Cranston (D-Calif.).
Rep. Henry B. Gonzalez (D-Tex.), chairman of the House Banking Committee, recently ended six weeks of hearings into the Lincoln controversy and acknowledged that the sessions were intended in part to force Wall to resign.
Gonzalez has said that the bank board's failure to seize Lincoln in 1987, as recommended by regulators in San Francisco, was responsible for the loss of an estimated $2.3 billion in federally insured deposits.
The hearings yielded evidence that Wall encouraged bank board employees to settle the Lincoln investigation amicably and that he was still resisting federal seizure of the thrift only days before it was put into receivership last April 14.
Wall insisted in his testimony before the House committee that he did not have sufficient evidence to seize Lincoln sooner. He staunchly denied that his reluctance to act was the result of pressure from Charles H. Keating Jr., the Arizona financier who controlled Lincoln's parent firm and who had visited him three times at the bank board during the investigation of Lincoln.
