SEN. MARK HATFIELD (R-OR)
On May 2, 1991, Sen. Hatfield sold between 1,000 and 15,000 dollars worth of stock in James Madison LTD (a bank holding company with two subsidiaries--Madison National Bank (Washington, DC) and Madison National Bank of Virginia (McLean, VA).
One day later (on May 3, 1991), James Madison LTD announced a net loss of 59.0 million dollars for the fourth quarter of 1990; a net loss of 73.9 million dollars for all of 1990; a net loss of 8.7 million dollars for the first quarter of 1991. According to the Washington Post (dated May 4, 1991), these losses left Madison's subsidiary banks broke with liabilities exceeding assets by 12 million dollars.
On May 7, 1991, the Washington Post reported that worried depositors "...crowded Madison National Bank's branches in Downtown Washington to withdraw their funds...."
On May 10, 1991, Federal Regulators declared Madison to be insolvent, seized the banks, and sold them to Richmond-based Signet Banking Corp. for 18 million dollars.
On May 31, 1991, the Washington Times reported that the House Banking Committee was going to grill Federal Regulators on the Madison failure. In particular, the Committee was interested in learning why Federal Reserve made an emergency 127 million dollar loan to Madison just one day before the bank was declared insolvent.
On September 27, 1991, the SEC charged the former Chairman of Madison (John Broumas) with violating market manipulation and antifraud provisions of the federal securities laws from January 1989 through July 1990. The case against Mr. Broumas was "settled" in October 1991.
NOTES: Sen. Hatfield has been the subject of two ethics probes--one in 1987 and another in 1992 for accepting improper gifts related to his position on the Senate Appropriations Committee. Sen. Hatfield is the ranking minority member on the Senate Appropriations Committee.
OTHER NOTES: Sen. DeConcini also owned stock in James Madison LTD. However, he did not get out before the failure. Interesting--The Republicans controlled the Executive branch of government in 1991; Hatfield (a Republican) got out, and Deconcini (a Democrat) did not.