NEW YORK — Sen. Lloyd Bentsen (D-Tex.), Bill Clinton's Treasury secretary-designate, made a profit of at least $500,000 by investing in a new company subsidized by a failing Texas savings and loan, the New York Times reported Sunday.
The Texas Democrat, who will be Clinton's top financial regulator, bought stock in Affiliated Computer Services Inc. in 1988, the newspaper said.
Three years later, his $100,000 investment was worth at least $600,000 and as much as $1.2 million, according to his financial disclosure forms.
Federal regulators later determined that the company had been created mostly with a subsidy from a businessman's failing savings and loan operations, Gibraltar/First Texas Savings Assns., two sister institutions based in Dallas and Houston.
The new company received a $61-million cash subsidy from Gibraltar as well as more than $40 million in equipment and other assets, according to the newspaper.
Jack Devore, Bentsen's press secretary, told the newspaper Bentsen's recollection of his stock purchase in Affiliated Computer "isn't totally clear." But he said Bentsen had been impressed with its management.
Bentsen had met with federal regulators on behalf of the businessman, J. Livingston Kosberg, four months before the senator bought the stock, the news report said.
Bentsen's role in the stock deal violated no laws or ethical strictures, the newspaper said.