SUPERVISORY GOODWILL: A NATIONAL SCANDAL

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0><tr> <td valign="top" colspan=2 height=110 BGCOLOR="#006699" TEXT="#080000"> <div> <FONT SIZE="5" COLOR="#FFFFFF" FACE="Times New Roman" ><B>MeritorPSFS Shareholders Association, Inc.</B></FONT><B>     |     </B><A HREF="index.htm" TARGET="_top" TITLE="MeritorPSFS Shareholders Association, In"><B>home</B></A></div> <div> <A HREF="id73.htm" TARGET="_top" TITLE="WELCOME!">WELCOME!</A>   |   <A HREF="id71.htm" TARGET="_top" TITLE="NEW TO THE SITE UPDATES">NEW TO THE SITE - UPDATES</A>   |   <A HREF="the_king_is_dead_long_live_t.htm" TARGET="_top" TITLE="The King is Dead Long Live the King!">The King is Dead Long Live the King!</A>   |   <A HREF="id18.htm" TARGET="_top" TITLE="FOLLOW THE MONEY: WHAT HAPPENED TO PSFS">FOLLOW THE MONEY:  WHAT HAPPENED TO PSFS AND WHY</A>   |   <A HREF="id27.htm" TARGET="_top" TITLE="SLATTERY V. THE UNITED STATES">SLATTERY V. THE UNITED STATES</A>   |   <B>SUPERVISORY GOODWILL:   A NATIONAL SCANDAL</B>   |   <A HREF="id21.htm" TARGET="_top" TITLE="JUST WHAT IS SUPERVISORY GOODWILL, ANYWA">JUST WHAT IS SUPERVISORY GOODWILL, ANYWAY?</A>   |   <A HREF="id41.htm" TARGET="_top" TITLE="THE FDIC COVERUP OR SCREWUP?">THE FDIC - COVER-UP OR SCREW-UP?</A>   |   <A HREF="the_warnings_the_fdic_ignore.htm" TARGET="_top" TITLE="THE WARNINGS THE FDIC IGNORED">THE WARNINGS THE FDIC IGNORED</A>   |   <A HREF="id49.htm" TARGET="_top" TITLE="THE U.S. COURT OF FEDERAL CLAIMS">THE U.S. COURT OF FEDERAL CLAIMS</A>   |   <A HREF="id52.htm" TARGET="_top" TITLE="THE UNITED STATES HAS NOT ACTED AS THE G">"THE UNITED STATES HAS NOT ACTED AS THE GREAT, JUST NATION THAT IT IS"</A>   |   <A HREF="id36.htm" TARGET="_top" TITLE="DEPOSITION OF WILLIAM M. ISAAC">DEPOSITION OF WILLIAM M. ISAAC</A>   |   <A HREF="id53.htm" TARGET="_top" TITLE="PRICE WATERHOUSE: MERITOR WOULD HAVE SU">PRICE WATERHOUSE:  MERITOR WOULD HAVE SURVIVED BUT FOR THE FDIC</A>   |   <A HREF="id50.htm" TARGET="_top" TITLE="FIVE REASONS WHY THE GOVERNMENT DOESNT S">FIVE REASONS WHY THE GOVERNMENT DOESN'T SETTLE THE GOODWILL LITIGATION</A>   |   <A HREF="id58.htm" TARGET="_top" TITLE="Title 58">Title 58</A>   |   <A HREF="id59.htm" TARGET="_top" TITLE="Title 59">Title 59</A>   |   <A HREF="id60.htm" TARGET="_top" TITLE="Title 60">Title 60</A>   |   <A HREF="id62.htm" TARGET="_top" TITLE="Title 62">Title 62</A>   |   <A HREF="id65.htm" TARGET="_top" TITLE="Title 65">Title 65</A>   |   <A HREF="id66.htm" TARGET="_top" TITLE="Title 66">Title 66</A>   |   <A HREF="id67.htm" TARGET="_top" TITLE="Title 67">Title 67</A>   |   <A HREF="id68.htm" TARGET="_top" TITLE="Title 68">Title 68</A>   |   <A HREF="id70.htm" TARGET="_top" TITLE="Title 70">Title 70</A></div> <div> <B> </B></div> </td> </tr><tr> <td valign="top" width=210 BGCOLOR="#00FFFF" TEXT="#080000"> <div> <IMG SRC="062b3a40.jpg" border=0 width="179" height="164" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></div> <div> <A HREF="id21.htm" TARGET="_top" TITLE="JUST WHAT IS SUPERVISORY GOODWILL, ANYWA"><IMG BORDER="0" SRC="Symb075c00b700f099330000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Just what is "Supervisory Goodwill", anyway?</A></div> <div> <A HREF="id49_free_use_of_other_people_s_money_for_20.htm" TARGET="_top" TITLE="THE U.S. COURT OF FEDERAL CLAIMS"><IMG BORDER="0" SRC="Symb075c00b700f099330000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The government gets away with an "efficient" breach -- or, how the courts have encouraged the government to use other people's money for 20 years -- without compensation.</A></div> <div> <A HREF="id52.htm" TARGET="_top" TITLE="THE UNITED STATES HAS NOT ACTED AS THE G"><IMG BORDER="0" SRC="Symb075c00b700f099330000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">The United States has not acted as the great just Nation that it is.</A></div> <div> <A HREF="id50.htm" TARGET="_top" TITLE="FIVE REASONS WHY THE GOVERNMENT DOESNT S"><IMG BORDER="0" SRC="Symb075c00b700f099330000.png" HEIGHT="16" WIDTH="24" ALIGN="bottom" HSPACE="0" VSPACE="0">Reasons why the government won't settle.</A></div> </td> <td valign="top" height=370 width="100%" BGCOLOR="#FFFFFF" TEXT="#080000"> <div> <B>SUPERVISORY GOODWILL:   A NATIONAL SCANDAL</B></div> <div>      </div> <div> <FONT SIZE="4" COLOR="#000000" FACE="Times New Roman" ><I>     </I></FONT><I>"It is the obligation of the United States to do right. Every free government can be judged by the degree to which it respects the life, liberty and property of its citizens.  The United States stands tall among the Nations because it is a </I><I><U>just</U></I><I> Nation. In the instant cases the United States has not acted in a manner worthy of the great, just, Nation it is. Because the dollars at stake appear to be so large, the government has raised legal and factual arguments that have little or no basis in law, fact or logic".</I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> --- Hon. Loren A. Smith, Chief Judge, U.S. Court of Federal Claims</div> <bR> <div> <I>     "A number of us felt strongly that the elimination of goodwill was wrong and that a deal was a deal.  Even governments should keep their word.   Now, our government lectures  the newly-democratized countries about the "rule of law" and how, in a free society, contract rights must be respected.  Our government's position on these goodwill lawsuits makes a mockery of those words.  It's an  embarrassment to our country and I'm amazed and disappointed that we're going into our third administration without anyone's having had the courage to admit the mistake and rectify a terrible wrong".</I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> --- Former U.S. Congressman Thomas B. Evans, Jr. (R-Del.)</div> <bR> <div> <I>     “I made a commitment . . . and the government breached it and I find that very offensive . . . I made a promise . . . that we would count goodwill as part of  capital for 15 years, amortized on a straight-line basis.  It was a very conscious decision on our part.  We knew what we were doing and I don't think anyone after me had the right to turn their backs on that.  If you can't count on the government to live up to its word, then the FDIC is never going to be able to do business with people in the future”.</I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> --- William M. Isaac, former chairman, Federal Deposit Insurance Corporation</div> <bR> <div> <I>     "This is a problem we should have anticipated.  I argued (in 1989) that an undue emphasis on being tough . . . in FIRREA would result in yet greater cost to the taxpayer in the long term and argued against the rapid imposition of the new standards (disallowing goodwill) --  unfortunately to no avail.  The possibility I foresaw may unfortunately now become a reality.  It is sometimes cost effective to be temperate . . . "</I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> --- U.S. Congressman John J. LaFalce (D-NY)</div> <bR> <div> <I>     "These Winstar (supervisory goodwill) lawsuits arouse my civic conscience.  The wrong that has been done is really an affront to law and order on the most basic of levels.  Parties have a right to rely on a contract.  If the government (of all parties!) is not required to honor its contracts, even though possibly in pursuit of the public interest, the most basic contamination of justice has occurred."</I></div> <DIV ALIGN="LEFT"></DIV> <div> <I>                                                  </I>--- Hubert Stiles, Baltimore, Maryland</div> <div> <I>     </I></div> <div> <I>     </I><I>"What the government did here is really no different than what they did to the Indians 150 or so years ago.  They proposed a deal to these banks and then, after they signed on the dotted line, they simply confiscated their property.  And then when they were caught, they argued for years that screwing them was justified -- because it was in the public interest."</I></div> <DIV ALIGN="LEFT"></DIV> <div> --- The Goodwill Report, July, 2000</div> <bR> <div> <I>     "In my 30 years . . . I've never seen anything like it.  If I didn't read what I read and hear what I hear, I wouldn't believe it was happening.  If the government can get away with treating rich, white Republican bankers like this, then what in heaven's name are they doing to ordinary people who can't afford to put up a fight?  It's no wonder that people (didn't) believe their version of </I><I>(what happened at)</I><I> Waco."</I></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> --- Name withheld by request</div> <bR> <div> <I>     </I></div> </td> </tr></table></body>