FDIC Ordered to Pay Financier $72 Million

By Terence O’Hara, Washington Post

A federal judge in Texas, calling the Federal Deposit Insurance Corp. a “corrupt agency with corrupt influences on it,” awarded a Houston financier $72 million to cover his legal fees in a decade-long suit involving a failed savings and loan and the government’s efforts to take control of a stand of endangered California redwood trees in the 1990s.

The FDIC, a regulatory agency that insures deposits at banks and savings and loans, filed suit against Charles E. Hurwitz in 1995, seeking to collect more than $800 million because Hurwitz indirectly controlled a Texas S&L that failed in 1988. The FDIC, after a series of legal setbacks, dropped its suit against Hurwitz in 2002. Hurwitz then asked the U.S. District Court judge overseeing the case, Lynn N. Hughes, to order the FDIC to pay his legal expenses, arguing that the FDIC should never have brought the case in the first place.

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