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A headline-grabbing scandal. Congressional hearings. Criminal charges on the horizon. It's happening now with Enron, but Bill Seidman has seen this movie before. Seidman played a starring role in one of the biggest scandals to ever hit corporate America: the savings-and-loan disaster of the 1980s and early 1990s.

The dramatic collapse of the country's S&L industry was arguably the largest U.S. economic catastrophe since the Great Depression. More than 800 S&Ls were declared insolvent, at a cost to U.S. taxpayers of nearly a quarter-trillion dollars. The S&L debacle pushed several states into a near depression, including Florida, Massachusetts, and California. The hardest hit was Enron country. In Texas, 9 out of the 10 largest banks failed. Apprises Seidman, who isn't prone to hyperbole: "The savings-and-loan disaster nearly destroyed the U.S. financial system."

A burly, avuncular man who was known in Washington for his blunt talk and rare independent streak, Seidman wore the white hat in the S& L shoot-out -- he played the role of the enforcer. As chairman of the Federal Deposit Insurance Corp. (FDIC) under President Reagan and the elder President George Bush, Seidman was tapped to head up a newly created federal agency called the Resolution Trust Corp. (RTC), which landed the mammoth task of cleaning up the S&L mess.

Arrayed against Seidman and the RTC were the black hats, featuring the notorious Lincoln Savings and Loan operator Charles Keating and the junk-bond king Michael Milken. They were the star villains among a cast of thousands -- cowboy real-estate speculators, greedy bankers, inept directors, and members of organized crime -- who together ran roughshod over two-thirds of the nation's S&Ls.

These days, Seidman roams the country as a chief commentator for CNBC, an assignment that has given him a close-up view of the fallout from Enron. With its long legacy of financial shenanigans and too-cozy relations with Washington lawmakers, the Enron scandal is like a rerun of the S&L debacle, says Seidman. He calls Enron "S&L, Part II."

Except for one critical difference. The S&L scandal was essentially an old-time fraud. Enron is very much a scandal for the 21st century. "If the S&Ls were bank robbers, these Enron guys were high-tech robbers who didn't need a gun," says Seidman. "Their weapon was their deep knowledge of accounting rules, which enabled them to game the system. Enron only went astray when it hedged its trading bets with its own companies. When the hedges went wrong, Enron lacked a third party to absorb the loss. That's when it all blew up in their faces."

Routing the Regulators

At the epicenter of both the Enron and the S&L scandals was a sustained lobbying effort to deregulate the nation's energy and banking industries. "While the S&Ls fought to get free of regulations, Enron campaigned so that no regulation would ever be put in place," says Seidman. "Enron was essentially unregulated and fought very hard to keep it that way, whereas the S&Ls were in a highly regulated industry. But that industry got into trouble when its constituency gained control of the regulators. Eventually, the S&Ls had incredibly ineffectual supervision."