INTERVIEW WITH ARTHUR M.

SIMON
An Exercise in Democracy
BY
DAVID ARTHUR WALTERS

INTRODUCTION

The Great Recession has taught us all that banking, securities,

and insurance regulation is crucial to the survival and flourishing
of the American way of life. Since that way is the way of
democracy, and since a successful democracy depends on a well
informed people, nothing can be more important to its
preservation and advance than the dissemination of knowledge
by a free press in the form of fair and accurate reporting

And now, given the near collapse of the credit system and the
banking system supporting it, nothing is more obvious to the
American people than that they were largely deceived as to the
safety of the financial system, hence the security of their
livelihoods were put in jeopardy. They depended on public and
private sector banking experts, and on the press to watch those
experts, and now they feel defrauded.

A great deal of fortune has disappeared, and the watchdogs did

not bark until people were robbed blind. The people therefore are
critical of the press and banking regulators, and they want to
know who is at fault and why, to hold someone responsible for
bringing the nation and the world to the brink of absolute ruin,
and to see what can be done in the way of effective reform so
that they and their progeny can be secure in their financial
futures. A democratic people will of course proceed by becoming
better informed of the activities of financial and media
institutions, no matter how boring the study of those functions
may seem at first, until understanding results in keener interest.

Not only do people feel cheated by the System and its elected
and unelected chiefs, they know they were deliberately defrauded
by the likes of Bernie Madoff, Scott Rothstein, and Allen Stanford.
The last fraudster named is most infamous because he used a
bank to steal the lifesavings of thousands of small investors all
over the world. A third of the money was stolen in Miami and
shipped offshore in private airplanes. The Miami Herald told the
story in an award-winning series under the rubric "MIAMI HERALD
WATCHDOG - ALLEN STANFORD CASE."

The Miami Herald reports accused the State of Florida, via its
banking regulators, of aiding Stanford with his criminal scheme. It
painted the director of bank regulation at the time, Arthur M.
Simon, a distinguished man who had devoted his life to public
service, as the villain who created the Stanford disaster, signing a
deal with the devil illegally allowing the fiend to open an office in
Miami to swindle innocent people.

Arthur M. Simon is an attorney and lecturer at the University of

Miami. He began his public service with the United States Marine
Corps, serving as an officer from 1968 to 1971. He attended the
University of Miami, where he got his law degree and a book
award for excellence in constitutional law. Subsequently, he went
to Harvard's Kennedy School of Government, where he received
his master’s degree in public administration. Years later, he
earned a Ph.D. in public administration from Florida State
University. His doctoral dissertation was entitled “Hazards in the
Dual Banking System: Survival Analysis and Population Ecology of
Florida Banks, Thrifts and Credit Unions”. He practiced law with
Miami-based law firms for about two decades. He served in the
Florida House of Representatives from 1982 to 1994, where he
participated in major financial legislation. He joined the Florida
Department of Banking and Finance in January 1995, and served
as Director of the Banking Division for five years. Then he served
as Deputy Comptroller until the end of 2002. He lobbied for
Associated Industries of Florida and then his alma mater, the
University of Miami. Later he joined the University of Miami,
Department of Political Science, as a Fulltime Lecturer. He
teaches courses on state and national government, public policy
and administration, political analysis, administrative law, and
game theory.

After reading the Miami Herald reports, I decided to file a sworn

complaint against Dr. Simon with The Florida Bar, the arm of the
Florida Supreme Court that regulates the practice of law. I
thought it would be best to retrieve whatever documents the
Miami Herald had to support its accusations before filing my
complaint. The newspaper was uncooperative, so I obtained the
documents via public information requests.

The newspaper reports were apparently false, unsubstantiated by

the documents, in several respects. I was in shock. I had, along
with hundreds of other Internet parrots, spread the defamatory
gossip around the world. To rectify my mistake, I decided to do
whatever I could to clear Dr. Simon's name, by spreading the
truth about his role as a bank regulator in Florida in 1998, when
he signed an agreement with Stanford Trust of Antigua to open an
international trust company representative office in Florida.

I was surprised when Dr. Simon granted me a personal interview

with him at the University of Miami. After all, I had been one of his
detractors, and he knew it. It was some time after the interview
that it dawned on me that he had brought me in from the cold, so
to speak. He actually welcomed my criticism. It soon became
obvious to me that he is not one of those petty officials or
politicians who complain about complainers and resent criticism.
Rather, he has the wisdom to see the profit in criticism, without
which civilization by no means would exist or advance. He knows
that people who feel wronged have some right in mind, some
ideal they believe in, and when they are not right about the
wrong, he is willing to patiently show them the wrong until they
get it right. Thus is he willing to recognize the virtue in
troublemakers and to bring them into the fold. He was unwilling to
join my little crusades against lawyers and the press because he
believes the professions of law and journalism are essential to
democracy and should be given some leeway to err.

My own early circumstances were unsettling to say the least, and

I was disposed to distrust and detest authority and to refuse to
conform to the herd when I could get away with doing so.
Otherwise, I might have been very much like Arthur M. Simon.
Although I was a liberal and sometimes wild thinker, I eventually
learned to act more or less conservatively. In any event, an
interest in the truth led me to Arthur M. Simon, and he won me
over. The interview itself, I realized, was an exercise in
democracy.
 #

WALTERS: A librarian at Richter Library gave me a pass, and I

toured two of the nine floors of stacks. I felt right at home among
the over two-million volumes - I saw familiar books when I got off
the elevator. I would love to invest a few weeks in that library.

SIMON: I love libraries. They are very important.

WALTERS: They are the arks of civilization. Many people do not

understand how I can stand being a bookworm, literally living in
libraries, but it’s a rich life as far as I am concerned, and a good
library is essential to it.

SIMON: The Library of Congress has the largest collection, and

Harvard the second largest. When I was at Harvard, I heard it said
that Harvard is the largest collection without cookbooks.

WALTERS: This is a great campus, Mr. Simon. I certainly would

like to be put out to pasture here, to do some farming.

SIMON: I feel very fortunate to be here.

WALTERS: I thank you for taking the time for this interview. My
associates are suggesting that I am wasting my time writing
about your role as bank regulator at the time Allen Stanford was
ramping up his fraud unless it is for the Wall Street Journal or the
like. No matter how much I try to simplify the subjects involved,
they say the whole affair is so complicated that few readers can
understand it, and most will not bother to try, that I am wasting
my breath, especially when I start talking about the law, because
nobody cares to actually read and understand the law except
lawyers who can turn a buck on it. And it seems that no one who
is not a Stanford victim cares very much about the victims any
more, and they could care less about whether the reporting of the
newspaper was accurate or not. The Miami Herald gave them the
impression that you forged an illegal deal with the devil that
allowed billions to be stolen from innocent investors. The bags of
money were flown out in private airplanes. Enough said, let's go
on to the next scandal - the Rothstein scandal was far more
interesting to Floridians. I don't know why, but I don't think the
subject matter is too complicated to understand, and I find it
fascinating. I want to know what was really going on. I am in it for
the truth of it.

SIMON: The more you know about the world and the people in it,
the more you understand it, the better. There are a few things
that are so complex it is indeed very difficult to understand them.
But most things can be understood if you take the time and have
the patience to get to the bottom of them. The spread of
knowledge is crucial to democracy, and that is what brings the
world together.

WALTERS: Mr. Simon, the Miami Herald stated that you, acting for
the State of Florida as its banking division director, and against
the advice of Richard T. Donelan, chief banking counsel at the
time, allowed Allen Stanford to defraud investors by permitting
Stanford to operate an office in Florida without any fraud checks
or money laundering requirements. Therefore the state violated
its own laws and created a financial disaster, said the reports.

SIMON: The reports are patently false, and the Miami Herald
should have known that.

WALTERS: But the Herald supports the accusation with testimony

of what I've called a peanut gallery of cooperative lawyers, its
band of so-called experts.

SIMON: Mr. Walters, I support a free press. Sometimes reporters

call you, and you want to be cooperative whenever you can. You
pretty much know what the reporters want you to say from their
loaded questions, and if that sounds correct, a busy lawyer might
answer accordingly instead of offering no comment, or refusing to
answer until time-consuming research is conducted. In any event,
whatever anyone says to the press, I did not allow nor permit
anyone at any time to commit crimes in this state.

WALTERS: Were the Miami Herald reporters rude? Did they ask
loaded questions?
SIMON: They were polite for the most part. One of them, Lucy,
was somewhat pushy - she was pushing the corruption angle. And
at one point, Mike wanted me to say that Governor Bush asked
me to sign the agreement, which he had not done - I had no
contact with the Governor on the matter at all.

WALTERS: Did anyone else contact you besides the Miami Herald?

SIMON: Only you. You are the only one who has contacted me
since the Herald covered the story. Most interestingly, at no time
subsequent to the disclosure of Stanford's fraud has anyone from
the State of Florida contacted me, or anyone else for that matter,
although there are ongoing investigations into the fraud.

WALTERS: That is strange. Maybe it’s because they can see that
you are obviously innocent of any wrongdoing, and don’t want
that to be known.

SIMON: I've thought about it. You have to know how these people
work. They go around and collect information for some time
before they approach you....

WALTERS: So they have all that stuff, and try to get you to say
something, to disclose something they want to know, to trip you
up or whatever?

SIMON: Correct.

WALTERS: But tell me, since I am here, did you in fact permit
Stanford to circumvent state and federal money laundering laws
when you signed the special agreement for him to operate an
international trust representative office in Florida?

SIMON: Certainly not. There was nothing illegal about that

agreement, and they might have proceeded without any
agreement. What you should know, and what every expert in the
field definitely should be aware of, is that the agreement between
Florida and Stanford did not in any way exempt Stanford Trust,
doing business as Stanford Financial Investors Services, from
money laundering laws by recognizing the entity as something
other than a "financial institution" under Florida banking law. You
see there are two money laundering statutes in Florida, one in
Chapter 655 that expressly covers “financial institutions” and
another one, in Chapter 896, that covers everything other than
“financial institutions”. Chapter 655 is administered by the Office
of Financial Regulation - the successor in interest to the former
Department of Banking and Finance. In contrast Chapter 896 is
administered by the Florida Department of Revenue. Both
statutes do essentially the same thing. Arguably, Stanford’s trust
representative office was not covered by Chapter 655, because,
as a matter of law a trust representative office was never defined
as a “financial institution” in the Florida Financial Institutions
Codes. If, however, you read the pertinent section of Chapter 655
more carefully, you will note that it covers any entity defined as a
“financial institution” under the federal money laundering act,
specifically, 31 United States Code, Section 5312. The federal
definition, adopted by reference in Chapter 655, covers the usual
array of state-licensed financial institutions, such as banks, trust
companies, insurance companies, and today also travel agencies,
automobile dealers, gambling casinos and a slew of other
businesses that might be tempted to engage in illicit money
laundering activities. But now, and pay very close attention to
this: the federal money laundering law also includes in the
definition of “financial institution” any other person who engages
in as a business in the transmission of funds, or any network of
people who engage as a business in facilitating the transfer of
money domestically or internationally outside of the conventional
financial institutions system. This statutory language places the
prohibition on the activities of any business whatsoever that
might act as substitutes for the definitely listed types of
businesses, such as banks and trust companies. Moreover, federal
law empowers the Treasury Secretary to define by rule any other
type of business that the Secretary thinks may have something or
the other to do with money laundering crimes, tax evasion, and
other regulated conduct. Therefore, in my considered opinion,
because the Florida Control of Money Laundering in Financial
Institutions Act adopts by reference the broader federal definition
of “financial institution,” the Florida act would conceivably cover
any trust representative office in Florida which regularly engages
in the transfer of currency or monetary instruments from Florida
to a foreign country – despite the fact that a trust representative
office was not “financial institution” per se (for any other purpose)
under Florida law. Moreover, even if for sake of argument, a
Stanford trust representative office was not covered by Chapter
655, it was always subject to Chapter 896, Florida's Money
Laundering Control Act. As such, Stanford would have to file
copies of currency reports with the State Department of Revenue;
and the DOR, in turn, was required to provide these reports to the
Office of Financial Regulation - much like the analogous
arrangement the Florida OFR has with the U.S. Department of
Treasury to obtain copies of currency reports filed by state-
chartered “financial institutions” with the federal government.
So, in conclusion, Florida's agreement with Stanford Trust did by
no means violate federal and state anti-laundering laws, or
exempt Stanford Trust from those laws. The claim that the
agreement circumvented anti-money laundering laws is
absolutely false. Futhermore....

WALTERS: I think you have made that perfectly clear. Mr. Simon, I
have examined the information you sent to me on your role in the
Stanford affair, and it appears to me that you could write an
enormously useful book on what happened in Florida from your
unique perspective. You were instrumental in the drafting of
banking laws for this state. You were the director of the banking
division who signed the agreement with Stanford Trust to operate
an office in Florida. You have been wrongly cast by the popular
press as a villain for signing the agreement. You are an esteemed
professor of government at the University of Miami, a highly
respected university throughout the world. You have the
credentials, the expertise, and the experience. Certainly an
academic publisher would print a few thousand copies of your
book for distribution to libraries throughout the world, so that
professors and students of banking and government could benefit
from your knowledge and first-hand experience. Professors are
supposed to write books every once in awhile. And in writing this
book you would crucify the Miami Herald for the lies it has
smeared your good name with.

SIMON: A free press is essential to democracy. The Miami Herald

did the public a service with its Stanford series.

WALTERS: But a free press must be held responsible for its free
speech - it must be regulated.
SIMON: After a certain point....

WALTERS: Falsehood?

SIMON: Yes.

WALTERS: Anyone who reads the documents the Herald must

have had, and who can think clearly, can see that the Miami
Herald maligned you. Are you considering suing the paper for
libel?

SIMON: I can say that I have consulted with a panel of outside

experts on this issue amongst others, and the consensus right
now is to stand by pending further developments. On the other
hand....

WALTERS: Why not see if you can have 1st-degree misdemeanor

charges brought under Florida's defamation statute? At least you
would get a retraction, an apology or sorts.

SIMON: The paper is not going to back down from an accusation it

has so adamantly repeated. It will stand by its accusations. In any
case, I am not about to write a self-serving J'accuse. [Professor
Simon was referring to Emile Zola's open letter published by
L'Aurore, accusing the government of anti-semiticism in the case
of Alfred Drefus, who was wrongly prosecuted for espionage].

WALTERS: Maybe it would be more appropriate for me to write an

J'accuse.

SIMON [reaching for a thick binder, of about two-hundred page]:

As a matter of fact, I have been reconstructing the relevant
events.

WALTERS: Single-spaced, I see. This is your account of the

Stanford affair?

SIMON: Yes.
WALTERS [reaching for the file]: May I see it? May I copy it?

SIMON [pulling the file away]: My primary interest here is not in

going after the paper or profiting from a book but in serving the
public.

WALTERS: Nailing the paper to the wall would serve the public
well. I believe the paper recklessly disregarded the truth in its
award-winning series, and that the actual malice standard
applies. Do you believe the reporters and editors were malicious
or just stupid?

SIMON: Stupid. Not to change the subject, but you mentioned my

part in drafting Florida's financial code. There is something I have
done that no one knows about yet.

WALTERS: Oh? What?

SIMON: I don't mean to brag here, but to bring up a point relevant

to my formal responsibility in the Stanford mess.

WALTERS: Please do.

SIMON: I am largely responsible for the scheme that placed

banking, securities, and insurance regulation under the purview of
appointed directors of two offices, the Office of Financial
Regulation and the Office of Insurance Regulation, both being
offices of the newly created Department of Financial Services.

WALTERS: You are the father of the new regulatory structure?

SIMON: I was the back-office operator who came up with the

scheme and managed to convince my superiors that it was theirs.
And they deserved the credit for its realization - the proposal was
very controversial at the time, and that got the job done. As a
Marine Corps officer I was subordinate in rank to General Milligan,
and I would by no means appear to go over his head.

WALTERS: General Milligan?

SIMON: My boss Robert Milligan, he was Florida's comptroller at
the time, and he was a Marine Corps general.

WALTERS: I see.

SIMON: Maybe you don't see the point yet, not in the context of
the accusations against me. Although I am willing to accept
responsibility for any mistakes that I might have made in regards
to the agreement with Stanford at that time, you should know
that, as the director of the banking division, I was not the ultimate
authority over banking regulation. That authority was an elected
official. The possibility for corruption is obvious when you have
elected officials regulating banks, securities and insurance
companies. But under the new regulatory scheme that I came up
with – a plan for government reorganization which was nurtured
to fruition by the Comptroller, the Treasurer, and the Governor –
which is the regulatory structure in place now, the setting of
policy is in the hands of the governor and cabinet, sitting as the
Financial Services Commission, but the actual regulation, the
implementation and enforcement of public policy, is entrusted to
appointed officials, experts in their fields. This scheme in effect
depoliticized financial regulation in Florida.

WALTERS: One wonders, then, why the Herald did not go up the
hierarchy and blame your superiors.

SIMON: I don't think anyone was to blame, however, for the

agreement was legal. Keep in mind that I signed it after the
lawyers, including Mr. Donelan, had negotiated and agreed on it.
In fact, as I remember it, the Stanford agreement was for the
most part negotiated over my head, and I attended only a couple
of meetings with the counter-party attorneys. I mentioned it in
passing to Donelan one day, asked him how the negotiations were
going, and he said well, noting a few issues that had been
resolved.

WALTERS: But the Miami Herald insists that he objected to it

several times, and you signed it anyway - apparently that is what
he told the reporters.
SIMON: Nonsense. Donelan is a fine lawyer, and I worked closely
with him on many issues. If he had had any objections to the
agreement with Stanford Trust, if he felt it was contrary to the
public interest, he would have put his objections in writing to his
superiors, not only to protect the public, but to....

WALTERS: Cover his own ass?

SIMON: Correct. That is first-year law school.

WALTERS: But why would he tell the Miami Herald that he

objected to the agreement on multiple occasions, and that you
signed it anyway?

SIMON: Believe me, if that is what he said to the reporters, I

cannot explain it. When I read the newspaper report on the
scandal, I said something is wrong here. Donelan did not object.
He's the counsel that approved it before it was sent to me. That
was almost a dozen years ago, so I wondered to myself: Was
there some email, something I have forgotten, something the
paper has that they think is their smoking gun on this?

WALTERS: The Herald's executive editor did not respond to my

request for any information that would support their claim.

SIMON: That speaks loudly. And the Office of Financial Regulation

told you just a few days ago that there is no record of any
memorandum written by attorney Donelan objecting to the
Stanford trust representative office or the Stanford Memorandum
of Agreement. Indeed, the OFR now acknowledges, after a diligent
search of Department records, that no such memo was ever
issued. Also, it is noteworthy that the respective House and
Senate bill analyses for the new law the Florida Legislature
enacted this year in response to the massive Stanford financial
fraud both indicate clearly and unequivocally that the Department
of Banking and Finance did not have any regulatory authority
over international trust company representative offices. As such,
Stanford Trust Company could lawfully open a representative
office in this state without any prior approval or regulatory
oversight from the Division of Banking and Finance. Obviously,
then, the office was not illegal; and neither was the Memorandum
of Agreement.

WALTERS: You know I asked you this before, but let me ask again
because you did not answer, weren't you indignant or angry or
even enraged by the Miami Herald reports that scapegoated you,
cast you as a villain?

SIMON: Well, when the news first broke about Allen Stanford's
fraud, I thought to myself, Gee, I signed that agreement with the
Stanford Trust. And when I heard Stanford was using CDs on an
Antigua bank to forward his Ponzi scheme, I thought, What?
Selling CDs on an Antigua bank? And then, Why in the world
would people want to buy CDs on an Antigua bank?

WALTERS: But weren't you pissed off, or hurt when the paper
implicated you personally?

SIMON [avoiding the question]: Look, I take full responsibility for

any mistakes I may have made, and having the benefit of
hindsight, I would not sign that agreement with Stanford Trust
now.

WALTERS: But without that benefit, would you sign it again?

SIMON: Yes, I think so. Stanford Trust could have proceeded

without the agreement, anyway, as the Greenberg Traurig lawyer
- I think it was Carlos Loumiet although it was unsigned - argued
in a memorandum in the first place.

WALTERS: I received a copy of that memorandum from someone

in Antigua, and when I read it, with its supporting citations of our
federal and state supreme courts, I was persuaded Stanford did
not need that state banking division's approval.

SIMON: Greenberg Traurig has expert lawyers.

WALTERS: If the State had refused to permit the trust to open an

international representative office in Florida, could it had gotten a
mandate from a court?
SIMON: Good question. Greenberg Traurig is a powerful law firm.
In one meeting a Stanford attorney was indignant that the
Department lacked statutory jurisdiction prevent the opening and
operation of a trust representative office, and said he would take
the matter higher. I wondered what he meant by higher.

WALTERS: If Stanford Trust could have done business in Florida

without getting permission from the banking division, how did it
come to the division's attention in the first place? Why did it do
the tango with banking?

SIMON: Because Stanford Trust applied to the Department of

State to register as a foreign corporation under the name of
Stanford Trust Company Limited, and the Department
automatically kicked back the application because it had the word
"trust" in it. Florida law prohibits the use of the word trust, which
would suggest to the public that the entity is a regulated trust
company. Actually, there is way that the word might be used
providing that the company using it does not engage in a certain
kind of activity.

WALTERS: So Stanford Trust could have registered a corporation

here under some name without the word trust in it, gotten under
the Secretary's radar and perpetuated whatever scheme it may
have had?

SIMON: Correct. But they wanted to use the word 'trust.'

WALTERS: Why? Marketing reasons? Because it signifies

trustworthiness?

SIMON: Yes.

WALTERS: But what about the trust functions, aspects such as

secrecy, sequestering assets, avoiding probate and other taxes?

SIMON: That too. Although there was a way they might have used
the word 'trust' in the name, apparently the functions they had in
mind moved them to suggest another name, 'Stanford Fiduciary
Investor Services.'
WALTERS: But “fiduciary” services suggest "trust services,"
although fiduciary services could mean something other than
trust services.

SIMON: When I first saw the name 'Stanford Fiduciary Investor

Services,' the word 'fiduciary' stood out, but even more so did the
word 'investor.' I had my doubts about what was meant, about
the nature of the business the words signified, but the more I
thought about it, I could see nothing wrong with the use of those
words in the context of what a international trust representative
office could do, which would be to represent a foreign trust
company by providing its customers with conveniences, but not
operate as a trust company in the state.

WALTERS: There certainly is much ado over words. Until the new
legislation was passed, there were no specific words in the law
prohibiting international trust representative offices from being
set up in Florida, so anyone could have set one up, because the
law does not prohibit what it is silent on.

SIMON: Correct.

WALTERS: I guess that answers the question: What's in a word?

Apparently everything. Professor Simon, were you hoodwinked by
Greenberg Traurig lawyers into signing an agreement with a
shifty character? If Donelan and you had reservations in the back
of your minds, why not just refuse to go along?

SIMON: I don't know if we were hoodwinked. Stanford counsel

presented strong legal grounds. You have to understand that
what we do is governed by law. Any refusal would have to be
supported by law and put in writing.

WALTERS: You mean you couldn't refuse because you didn't like
someone's looks or your intuition told you he might be a crook?

SIMON: Correct.

WALTERS: Is Greenberg Traurig a crooked law firm? Didn't its

lawyers deliberately perpetuate a fraud?
SIMON: I have seen no indication of that. Many highly regarded
people were fooled by Stanford, and even praised his activities,
including President Clinton and President Bush.

WALTERS: But they were not so close to him. I suppose the

lawyers were doing what lawyers do, playing the lawyer game,
presumably according to the rules, so I guess a prosecutor would
have to prove they actually knew their client was stealing or were
helping him break laws....

SIMON: Before I forget, I want to emphasize that the Stanford

fraud was based on his marketing of securities, his brokerage
operations, and not on his representative trust office activities in
Florida. He already had a brokerage operation in Florida, and in
any event his licensed brokers could have sold the CDs.

WALTERS: The trust was irrelevant?

SIMON: The legal action is for fraud in reference to securities.

WALTERS: But the Herald made a big deal over the trust's Miami
office, and reported that it was his inroad into the perpetuation of
his fraud throughout the United States.

SIMON: The trust per se was not the issue; the issue was
securities fraud, wherever it was committed, no matter what
office was used.

WALTERS: So it would not matter if a licensed broker sold a CD in

a trust office or a brokerage office, or if one office doubled as the
other, the employees changing hats?

SIMON: No, I don't think so.

WALTERS: So the big deal over the trust's office in Miami and the
agreement you signed is a red herring?

SIMON: As I said, the issue is securities fraud.

WALTERS: Were you in charge of securities regulation?

SIMON: No, I was the banking director. I am not an expert on

securities, but I know my banking. The director of the securities
division, since 1986, was Don Saxon, one of the most
distinguished state securities experts in the country. Incidentally,
about 25% of the nation's securities brokers and investment
advisors, I think, are registered to do securities business in
Florida. As a matter of fact, Don Saxon was appointed in 2003 to
be the first director of the newly created Office of Financial
Regulation I told you about.

WALTERS: Maybe he should have been scapegoated. But they

saw your signature on the agreement with Stanford Trust, so they
went for you, painted you as the villain if not a lax regulator.

SIMON: You go ask anyone I regulated if I was a lax regulator

during my five years as banking director. They will tell you I was a
tough regulator. As a matter of fact, I dealt with international
bank agencies and representative offices then, and even with one
foreign owned or controlled trust company, which we determined
was originally approved based on false, misleading, or incomplete
information. Also, when the banks in foreign countries were
having difficulties, no deposits in their Florida agencies were lost
on my watch, deposits which were uninsured, incidentally, and
that's because I took immediate and decisive action. Likewise, no
state-chartered commercial banks in Florida failed on my watch. I
worked very closely with the Fed, and on one occasion the Fed
called me in the middle of the night from Washington, D.C. to
take emergency action against an international agency in Miami
before it opened for business the next morning, because it had
too much red tape to deal with and I could get there first, and I
did, and I resolved the situation. I wish I could give you a few
examples, but I'm not sure whether or not I would be violating
confidentiality laws.

WALTERS: I had better end the interview here before you start
charging me for the education.

SIMON: It's not like I have nothing else to do - I'm preparing for
the next semester.
WALTERS: This is a beautiful university, and you certainly have
beautiful students here.

SIMON: That we do.

WALTERS: Thank you very much.