Sanctions Planned for Neil Bush, Paper Says : Thrifts: President’s son could accept a similar post under certain restrictions, report says. He is accused of conflict of interest.

DENVER —  Federal regulators plan to impose sanctions against President Bush’s son Neil for conflict of interest while he directed the failed Silverado Banking, Savings & Loan Assn., according to a published report.

The report in Saturday’s editions of the Denver Post cited unidentified sources at the Office of Thrift Supervision.

The agency plans to announce sanctions against the President’s son as early as Monday, the sources told the newspaper.

Bush’s Denver attorney, James Nesland, has said in the past that Bush would appeal any sanctions levied by the thrift office.

Bush, 36, has denied any wrongdoing.

The sources were quoted as saying that the Office of Thrift Supervision was expected to accept the recommendation of a December ruling by Administrative Law Judge Daniel J. Davidson.

Davidson said that Neil Bush was guilty of conflict of interest but that he should be allowed to accept a future position with a savings institution under certain restrictions.

If Bush again becomes an S&L; or bank director, Davidson recommended, he should be required to abstain from voting on any proposals involving people or companies in which he has an interest.

Bush also should make a full disclosure at least once a year of his business relationships with customers or potential customers of the S&L; or bank, Davidson has recommended. He said that the information should be updated each time there is a relevant change in Bush’s financial situation.

Thrift office attorneys charged that Bush and his oil company, JNB Exploration, benefited from Silverado borrowers Kenneth M. Good and Bill L. Walters.

While Bush was a Silverado director from 1985 to 1988, he voted to approve $106 million in loans to Walters and tried to win a $900,000 Silverado line of credit on Good’s behalf.

Bush did not reveal to Silverado that he would have benefited from the loan. He also did not tell Silverado that Good paid his salary and funded his oil business while the real estate developer defaulted on $30 million in loans from Silverado.

Silverado’s collapse in December, 1988, is expected to cost taxpayers $1 billion.

The administrative law judge issued his recommendation to thrift office director T. Timothy Ryan Jr., saying Bush’s actions “raise the specter of special favors.”

On Monday, Bush and 12 other defendants are scheduled to appear in U.S. District Court in Denver for settlement negotiations in a $200-million lawsuit filed by the Federal Deposit Insurance Corp. for gross negligence at Silverado.

Chief U.S. Magistrate Donald Abram will hear arguments from Bush and the other defendants before arbitrating an estimated two weeks of secret settlement negotiations.