Charles Bowsher, tax watchdog during the S&L crisis of the 1980s, dies at 91
Mr Bowsher’s death was confirmed by his son, Stephen. No cause was given.
For more than five decades, Mr. Bowsher has built a reputation as a crisis accountant, joining teams that guided New York City after its bankruptcy in 1975 and probing financial irregularities at the Smithsonian Institution in 2007. .
In Washington, as comptroller general of the General Accounting Office, the chief auditors’ office under congressional scrutiny, Mr. Bowsher was thrust into the center of one of the most sweeping upheavals in American banking since the Great Depression. . The collapse of America’s savings and loan system – caused by a combination of rising interest rates, deregulation and fraud – has left thousands of local institutions insolvent while a special federal insurance fund – deposits ran out.
The debacle was a political minefield for the Reagan administration, which then turned it over to George H.W. Bush after his election victory in 1988. Both tried to hide the full cost of impending federal bailouts to go to depositors and settle the steps.
Mr. Bowsher emerged as a reality check, putting the GAO in the unfamiliar gaze of high-stakes politics. In reports and testimony on Capitol Hill, Mr. Bowsher repeatedly described the massive scale of America’s thrift store crisis (think construction and lending in “It’s a Wonderful Life”) and how much it would ultimately cost the audience.
Mr. Bowsher particularly took aim at congressional moves to weaken oversight of savings and loans, which at the time represented a powerful lobbying bloc.
“It’s a huge outrage,” Mr. Bowsher said in 1990, “and to a large extent it’s been allowed to grow because of the way this town does business.”
Ultimately, an agency set up to sort out the mess closed more than 745 S&Ls, with assets exceeding $400 billion, according to government data. Some distressed properties that landed in government hands, such as unfinished condominiums, were burned down rather than put on the market for possible sale. The ultimate cost to taxpayers was $124 billion, with some estimates even higher.
From 1991: A guard dog with a bite
Mr. Bowsher was seen by many as a welcome direct shooter in Washington, even at the risk of angering President Ronald Reagan, who appointed Mr. Bowsher to the 15-year post of comptroller general in 1981.
“He was someone who insisted on telling the truth and resisted pressure from those who wanted to help the White House,” said Kathleen Day, a lecturer at Johns Hopkins Carey Business School and a former Washington Post reporter whose the 1993 book, “S&L Hell,” detailed the savings and credit crisis and its aftermath.
During his tenure at the GAO (now known as the General Accountability Office), Mr. Bowsher’s views on government spending and priorities often took a finicky turn. He told the Senate Committee on Government Affairs in 1993 that waste and fraud were so rampant that “there are hardly any well-run government agencies”.
“It’s a shock to hear that,” replied Sen. William V. Roth (R-Del.).
Mr. Bowsher could at times appear in tune with the liberals, sounding warnings about a US health care system that leaves millions uninsured. “Universal access to health care is achievable, but the costs are considerable,” he wrote. He also sided strongly with deficit hawks, describing fiscal imbalances as one of the most serious long-term threats to the country.
Mr. Bowsher’s appeals helped pass landmark legislation, the Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985, designed to eliminate the federal budget deficit by limiting spending for five fiscal years. If the deficit targets were exceeded, automatic cuts would take place, requested by the Comptroller General.
A trial, Bowsher vs. Synar, brought by Rep. Mike Synar (D-Okla.) and the National Union of Treasury Employees, went to the Supreme Court. In a 7-2 vote in 1986, the court struck down the law, ruling that it gave the Comptroller General powers not granted by the Constitution.
“You’re talking to an unconstitutional Comptroller General,” Mr. Bowsher told the Boston Globe after the ruling.
A Wall Street Journal editorial called him “President Bowsher” for his apparent political influence. “Who elected him? It said.
Charles Arthur Bowsher was born on May 30, 1931, in Elkhart, Ind., a base for his father, a New York Central Railroad engineer who operated trains between Elkhart and Chicago.
Mr. Bowsher graduated from the University of Illinois at Urbana-Champaign in 1953 with a degree in accounting. After two years in the army, he received his master’s degree in commerce from the University of Chicago in 1956, then joined the Chicago office of the accounting firm Arthur Andersen & Co..
He served from 1967 to 1971 as Assistant Secretary of the Navy for Financial Management, then returned to a senior position with Arthur Andersen. Among his projects, he helped create accounting systems for the 1976 presidential campaigns for both parties. He joined other top accountants in New York to put the city on the path to economic recovery after it nearly declared bankruptcy.
Besides his son, he is survived by his wife of 59 years, Mary Mahoney; one daughter, Kathryn Bowsher; and three grandchildren.
Announcing Mr Bowsher’s appointment as Comptroller General in 1981, Reagan said he had “an insider’s expertise with an outsider’s perspective”.
After stepping down as Comptroller in 1996, Mr. Bowsher served on the boards of various corporate and philanthropic entities, including the Nuclear Threat Initiative and the Washington National Cathedral Foundation, where he served as Treasurer and Trustee from 1999 to 2003. .
In 2007, he was part of a panel that released a scathing report on financial mismanagement in the Smithsonian system, which includes museums, galleries and the National Zoo. He blasted an ‘imperialist and insular’ culture established by former Smithsonian top official Lawrence Small, who resigned amid allegations of billing more than $1.1 million in fraudulent housing charges and use of funds for lavish personal travel.
Mr. Bowsher also played a behind-the-scenes role advising Natwar Gandhi, the district’s chief financial officer from 2000 to 2013 and a former GAO colleague.
“Whenever a problem arose, [Mr. Bowsher] would be there to help talk about it,” Gandhi said. “He had a great sense of history and a strong sense of public service.”
It was a style Mr. Bowsher encouraged during his years at the GAO.
“He pushed us to be more than bean counters,” Gandhi said, “and to become political advisors.”