Austin American-Statesman from Austin, Texas • 25

Austin American-Statesman Wednesday, May 16, 1990 B6 Ex-managers are blamed in thrift failure K-98 sold for $5 million pledge a $400,000 certificate of deposit as a condition of the loan, but loan records show the CD was purchased with loan proceeds. By early 1988, the Schlueter loan was in default. In an internal thrift memo in January 1988, Lamar's management recommended that Schlueter not have to pay the loan back and not be penalized for it. The debt was forgiven. At the time the debt was forgiven, the appraised value of the property had fallen to $456,000, according to the Travis Central Appraisal District, the complaint states.

was under heavy scrutiny of stale and federal regulators. Schlueter resigned from the Texas House last fall after reports that he had spent an average of $9,000 a month from political contributions, made largely by lobbyists. Schlueter could not be reached for comment on the Adams allegations, despite repeated phone calls over several days to his office. The criminal complaint filed by Adams' son refers to a $2.5 million loan Schlueter received from Lamar on May 30, 1986. The purpose of the loan has not been disclosed.

The loan was secured by 33 acres of undeveloped land located norths of RR 2222 and east of the 3M plant. The U.S. Attorney's office in Austin had no comment on the complaint. The complaint alleges that: The appraised value of the land at the time of the loan was $629,000, according to the Travis Central Appraisal District. Lamar was in dire financial straits and for the most part, had stopped making speculative real estate-related loans in 1986.

Schlueter was required to Continued from B5 of the proceeds from that loan were used to buy foreclosed property held by Lamar, allowing the to earn $1.9 million. The cost to the government to close Lamar and its sister City Savings of San Angelo, also owned by Stanley Adams, was estimated to be well over $1 billion. Adams supporters acknowledge they want to make their case public and fight what they believe to be erroneous information issued by the government on the reasons for the collapse not only of Lamar but the thrift industry. "It was not Stanley Adams and it was not his associates that brought down Lamar," claimed Entress. "He has the right to plead his case.

He has the right to make the truth known. People may not want to hear that because their perceptions of what happened at Lamar are totally wrong." Adams and his supporters claim the Schlueter loan is an egregious example of bad real estate lending made all the worse because it was extended at a time when Lamar Continued from B5 of Capstar Communications, an Austin radio investment group. "The math alone dictates it's going to be different," Hicks said. "If you had someone who paid $25 million for it, the interest on that would be $2.5 million a year. Now at the $5 million range, there's a lot more financial freedom.

The firmer financial base of the new owner takes the pressure off K-98 for revenue," Hicks said. "It's unique what's happening in Austin in a couple of ways," Hicks said of the radio market. "Back in the heyday of 1986, there were about six stations splitting up approximately $30 million in radio revenue. Today, with all the move-ins, 11 or 12 different entities are splitting up about $20 million. "That drop of radio revenue is one of the most significant in the country, and the number of moved-in stations is the most in America.

Those two things contributed to the erosion of the value of radio properties," Hicks added. In 1986, K-98 was Austin's only contemporary hits station (with a play list of Top 40 pop songs) and a consistent market leader. Shortly after the sale, B-93 (KBTS-FM) moved to Austin from Killeen and, with an advantage in broadcast power, seized the lead in the contemporary hits competition. Michael Thompson, vice president of Signature Broadcasting, another Austin investment company, said the loss may be only the first of other value declines in the national radio market. "We're just seeing the tip of the iceberg," he said.

"It's a nationwide phenomenon. The radio industry right now is in a turmoil from the financial standpoint." Board seeks to stem pullouts "USES Interconnect your personal computers Design Install Maintenance Personal Service Lowest Cost H'ssa- DAMSCO 343-8298 there. We would hope that this kind of policy would be sold in the voluntary market. "The insurance companies wouldn't get involved because of the lower rates. That's what we are hoping to bring to the customers so we can achieve a greater compliance with the mandatory liability law.

Because a lot of people who are having a tough time financially are unable to comply with that law." Panel studies fraud in health benefit plans Continued from B5 ally every company. "There is so much business being put into the market now that the companies that remain are having a difficult time coping with volume. Some have been forced to impose a temporary moratorium on writing new business. It's a very serious problem." Texas has not been a profitable state for companies to write personal lines business for several years, said the HAT. High losses in 1989 from hurricane exposure on the Gulf Coast and wind and hail in West Texas compelled many companies to reduce or end their financial drain.

Doughty said she hopes the meeting Friday won't "just be a reiteration of 'woe is us, we are losing money' but for some specific suggestions of how to address some of the problems other than just throwing more money at them (insurance companies)." A proposal being considered by the Insurance Board is to develop a "very bare bones, and therefore low cost" automobile liability policy that virtually anyone should be able to afford, Doughty said. "We certainly don't even have the beginnings of a document," she said, "but the idea is definitely "They change names of their companies and post office addresses practically overnight." Earlier this year, the state Board of Insurance played a key role in the federal court conviction of Bob Earl Browning in Fort Worth. Under several names, Browning operated a health benefits plans in more than 20 states. Evidence at his trial showed that he converted insurance premiums into purchases of an $800,000 home in Fort Worth, 500 acres of prime farmland in Tennessee, beef cattle and fancy cars. "This kind of personal wealth is an obscene contrast to the impoverishment the promoters of bogus (MEWA) plans may have inflicted on unsuspecting working people who depended upon them to cover their medical expenses," Howard said.

chase of expensive suits and jewelry; construction on the houses of the principals; payment of personal charge cards for their spouses; payment of salaries to housekeepers and mothers-in-law; and numerous other expenses totally unrelated to operation of the trusts." The Texas attorney general's office nearly a year ago sued Rubell, Helm and their business entities in state district court in Austin. But the case has not been resolved. "Frankly, our chances of collecting on any future judgment against Rubell Helm and its principals, and thus affording relief to Mrs. Gonzales and other consumers left with unpaid claims, appear very small," Howard said. Although Texas has aggressively pursued illegal MEWA operators, they are "skilled at staying one jump ahead," Howard said.

Continued from B5 tors from fleecing the public, said Howard and other officials. Raymond Maria, deputy inspector general at the Labor Department, testified that his agency has failed repeatedly to enforce actions against interstate operators of fraudulent health benefits plans, such as California-based Rubell Helm. "Our investigation showed that the MEWA operated by Michael Rubell and James Helm was far more outrageous than we expected," Howard said. "No reserves were maintained for payment of claims, and premiums were routinely siphoned off by the principals for their personal use. "Premiums were used for such things as lease of luxury automobiles for Rubell, Helm, their families and favored employees; pur Q)ocj)w 1 So if you'd like to make the most of your money, call Fidelity Savings al to open your CD by phone.

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