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Security Pacific Loan to HAL Smacks of Cronyism

November 11, 1990

It would seem that with all the bad loans to foreign countries, real estate and junk bond/leveraged buyouts, that banks would be very careful about how they lend the funds the public has entrusted to them.

Your article, "Security Pacific Gets Biggest Stake in Hawaiian Air" (Oct. 27), revealed that the bank loaned Peter V. Ueberroth and a business partner $111 million to finance a leveraged buyout of the airline. The financially troubled airline defaulted on the loan six months later.

That does not sound like prudent loan practices; it smacks of the same self-serving cronyism that we are trying to convince the courts warrants jail terms. It is even a bigger insult when the committee that made the original, flagrantly imprudent, decision has the wisdom to decide to loan the firm another $26 million.

This is sending good money after bad, and it is one reason the financial community is on the rocks--they keep trying to bail themselves out with OUR money.

AL FARRELL, Los Angeles

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