Credit union failure
Accountant, mother get prison sentence
umaha (AP) - A federal judge
sentenced the former accountant for a
failed Omaha credit union and his 70
year-old mother to prison Monday for
bank fraud and tax evasion.
E. Thomas Harvey Jr. was silent as
U.S. District Judge William Cambr
idge sentenced him to four years and
three months in prison on charges
stemming from the failure of the
Franklin Community Federal Credit
Union.
Mary Jane Harvey, who had been
an officer of a non-profit umbrella
group set up to help reduce Franklin’s
overhead costs so that the credit un
ion could help low-income people,
received a three-year, 10-month sen
tence.
Authorities said $39 million was
missing from Franklin when it was
closed on Nov. 4, 1988. Most of the
deposits were insured but a South
Dakota order of nuns had $2.1 mil
lion in accounts the National Credit
Union Administration did not insure.
When asked if he had any state
ment before being sentenced, the 48
year-old Harvey said, “just again that
I deeply regret my involvement in
this entire matter.”
The sentences were the maximum
Cambridge could impose under fed
eral guidelines in effect at the time of
the crimes. The maximum sentence
guideline was lower for Mrs. Harvey
than for her son because she played a
smaller role in the case, said First
Assistant U.S. Attorney Thomas
Thalken.
^ Mrs. Harvey’s attorney, Timothy
Cuddigan, had argued that sentenc
ing her to the three-year, 10-month
maximum would be like sentencing
her to life because of her poor health.
He said she suffers from hyperten
sion, diabetes and failing eyesight.
But the judge said the seriousness
of the crime merited the full sentence.
Cambridge also sentenced the
Harveys to three years probation once
their prison terms are served.
Defense attorney James Schaefer
argued that Harvey had no prior legal
problems and wasn’t responsible for
the credit union’s failure.
But Thalken said he found it dis
turbing that Harvey felt he bore no
responsibility for the credit union’s
failure.
“He was the mechanic” who made
certain that financial records were
hidden from authorities, Thalken said.
Thalken also said the money miss
ing from the credit union was sub
stantial, the community suffered great
harm from the crimes and Harvey
once gave false testimony to a federal
grand jury investigating the credit
union.
He said Harvey should be sen
tenced to up to 80 months in prison,
well beyond the maximum outlined
by sentencing guidelines.
Cambridge said he wasn’t order
ing restitution because the Harveys
wouldn’t be able to pay it. But Cam
bridge said he may order restitution
in the future if the Harveys show
some ability to pay.
The Harveys had no comment as
they left the courtroom surrounded
by friends and relatives. They were
ordered to report May 13 to begin
serving their sentences.
Their sentencing came 22 months
after they pleaded guilty to embez
zling $1 million from Franklin be
tween October 1984 and November
1988.
The Harveys had entered the pleas
in June 1989 under an agreement w i th
prosecutors and had agreed to coop
erate in the prosecution of Lawrence
King Jr., Franklin manager and treas
urer, and his wife, Alice.
The Harveys’ sentencing had been
delayed while court proceedings were
pending against the Kings, who reached
a plea agreement with prosecutors
last February.
King, a prominent businessman
who sang the national anthem at the
1984 Republican National Conven
tion, pleaded guilty to three of 40
original counts — conspiracy, em
bezzlement and making false state
ments. Mrs. King, who had faced 12
counts charging conspiracy and fraud,
pleaded guilty to one count of filing a
false tax return for 1986.
The Kings are scheduled to be
sentenced June 17.
The NCIJA also has filed lawsuits
against the Kings seeking to recover
some of the money it says was miss
ing from the credit union.
The Sisters of the Presentation of
the Blessed Virgin Mary of Aber
deen, S.D., held $2.46 million in
certificates of deposit in the credit
union.
The religious order has asked an
appeals court to review a NCUA rul
ing that repaid $360,000 of the or
der’s deposits. The NCUA’s board
rejected the order’s request for more
reimbursement.
President Bush’s tax bill down,
decreasing slightly from 1989
WASMIIMU luN (AP) - Losses
suffered by President Bush’s blind
trust, apparently reflecting the reces
sion, helped nudge the first family’s
income down to $452,732 in 1990
from $456,780 the year before, re
turns released by the White House
showed Monday.
As a result, their tax bill also de
clined slightly — $99,241 to the Inter
nal Revenue Service from the $101382
they paid on 1989 income.
The family’s 1040 form, which
lists President Bush’s occupation
simply as “president” and Barbara
Bush’s as “housewife,” showed they
were due a $14,129 refund.
However, the president decided to
apply $10,000 of that to his 1991
taxes.
Although well over half the first
family’s income still comes from
Bush’s blind trust, it also included the
president’s $200,000 salary and $1,000
that Barbara Bush made for an article
she sold to Reader’s Digest last fall
on the importance of reading to chil
dren^
The Bushes claimed $97,118 in
itemized deductions, including $38,667
in contributions to 50 charities and
$330 to unidentified charities by the
blind trust.
Bush also reported receiving $7,042
in royalties from his 1988 campaign
book, “Looking Forward.” Both
Bushes donated the proceeds from
their writings to charity.
The Bushes did not list any in
come on Mrs. Bush’s bestseller,
“Millie’s Book,” released last fall.
However, Mrs. Bush said sepa
rately that the volume, which pur
ports to be told through the eyes of her
pet spaniel, produced a First royalty
check of $625,000 that was paid di
rectly to charity.
Meanwhile, Vice President Dan
Quayle and his wife, Marilyn, re
ported paying federal taxes of $24,558
on an adjusted gross income of
$121,126. The Quayles’ income in
cluded $1,702 in interest income and
$ 11,742 in dividend income, all from
Quayle’s holdings in his family-run
Central Newspapers Inc.
The vice president reduced his
$123,250 vice presidential salary to
$117,307 by contributing to a so
called 401 (k) retirement plan, which
allows taxes to be deferred until the
money is drawn.
The Quayles claimed $3,624 in
charitable contributions and will re
ceive a refund for $1,438 from the
federal government. They also claimed
a $9,625 loss associated with the costs
of renting the house they own in
McLean, Va.
Congress told of tissue transplant1
WASHINGTON (AP) - A scien
tist described for Congress on Mon
day the nation’s first fetus-to-fetus
transplant, but said future operations
are jeopardized by the administra
tion’s ban against federal support of
research using electively aborted tis
sue.
Robert Slotnick, an obstetrician
and geneticist at the University of
California at Davis, said it won’t be
known for weeks whether the surgery
last May, involving the transplanta
tion of tissue from an aborted fetus,
saved a child bom in November from
a fatal disease.
“I wish I could tell you this was a
success, but we don’t know that yet,”
said Slotnick. “But I can tell you this
work can’t continue without the sup
port of the federal government,” he
testified to the House Energy and
Commerce health subcommittee.
Slotnick recounted for lawmakers
the still unpublished experiment in
which tissue from a fetus aborted in
an ectopic, or tubal, pregnancy was
transplanted into a fetus with a rare
disease called Hurler syndrome. The
parents had two other children who
died from the disease.
The hope, said Slotnick, was for
the transplanted tissue to produce blood
cells that, in turn, would manufacture
an enzyme that is missing in Hurler
syndrome victims. He said it would
be several weeks before he can deter
mine whether that was the case.
Cheney: No politics
in proposed closings
WASHINGTON (AP) - Defense
Secretary Dick Cheney rejected
congressional charges Monday that
politics played a role in his pro
posal to close 43 U.S. military bases
and scale back 28 other installa
tions.
“When I made the announce
ment ... I did not know a? that time
which bases fell in which mem
bers’ districts. I did not want to
know,” the Pentagon chief told the
Base Closure and Realignment
Commission.
Cheney said he wanted to avoid
accusations that the list is based on
political affiliation, but charges of
partisanship surfaced even before
the recommendation was officially
announced on Friday.
“I don’t know what those people
are thinking about but it almost
looks like the Democratic strong
holds have been hit the worst,” said
Rep. Joe Moakley, D-Mass., who
complained about the proposed
closure of Fort Devens.
Among the major base closings
are Fort Ord in California, located
in the district of House Budget
Chairman Leon Panetta, D Calif.,
and the Philadelphia Naval Ship
yard, in the home state of House
Assistant Democratic Leader Bill
Gray and in the district of Demo
cratic Rep. Thomas Foglieua.
Cheney responded that the Cali
fornia governor, Pete Wilson, and
one senator, John Seymour, are
Republicans while GOP Sen. Ar
len Specter represents Pennsylva
nia.
The eight-member, independ
ent panel has until July 1 to decide
whether to approve or amend
Cheney’s list before forwarding it
to President Bush and Congress,
who are required to accept or reject
the package in its entirety.
-—-1
Secret society
refuses women,
stays men-only
NEW HAVEN,Conn. (AP) - Skull
and Bones, the all-male secret society
at Yale whose members include Presi
dent Bush, was ordered closed for a
year by its alumni directors after
rebellious students invited women to
join.
The alumni directors have been
debating whether to end the private
club’s 159-year-old tradition as a
bastion of male-only bonding, but
were having difficulty reaching a
decision.
The 15 seniors in the current class
of Bonesmcn, frustrated by the lack
of action, notified the board of direc
tors at an emergency meeting Friday
night that they had invited seven
women and eight men to join.
In response, the board over the
weekend replaced the locks on the
“Tomb,” the windowless, mausoleum
like building where the society meets.
Sidney Lovett, the society’ssecre
tary and assistant treasurer, said
Monday that the alumni directors had
no choice but to suspend operations
for a year.
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