DECEMBER 17, 1997

Sweeneys versus The Feds
may be reaching crisis stage

Mediating judge calls it an impasse

        John and Rhetta Sweeneys' respite may be coming to a close.

        The couple's decade-long dispute with the Federal Deposit Insurance Corporation (FDIC) has been in mediation for the past five months, but the federal judge acting as mediator has said talks have reached an impasse. He is expecting to make a decision Friday on the case, and the couple could once again face eviction from their Hamilton home.

        "I must have some concrete proposal to justify my continuing involvement and the stay (of eviction) I entered early on." U.S. District court Judge David Mazzone said in a letter to State Sen. Bruce Tarr.

        Mazzone's letter was in response to a letter Tarr wrote to him last week urging him to continue the process while the Sweeneys meet with the principals of the FDIC seeking an acceptable compromise.

        If the judge does not continue his stay, the U. S. Marshals could come into the Sweeneys' Meyer Lane home and seize the property on behalf of the FDIC.

        "Were not leaving. We will not relinquish our rights." declared Rhetta Sweeney. "The feds have no legal order, no grounds to come in here."

Sequence of events

        The threat of seizure has been hanging over the Sweeney family's head since last June, when the judge originally issued an eviction order.

        The sequence of events started with a commercial loan in 1987, a foreclosure, a state lawsuit, a federal takeover of the bank and another foreclosure leading to the eviction threat.

        The FDIC claims that the Sweeneys owe a large sum of repayment of a note they signed in 1987 for a $1.6 million commercial loan to finance a planned subdivision of their 14 acre property in Hamilton and to consolidate existing mortgages.

        The Sweeneys sued the lending institution, ComFed, for deceptive lending practices and contend that their mortgage commitment was satisfied by the state court, which awarded them $4 million in 1991 in that suit. Middlesex Superior court Judge Elizabeth Izzo found that the bank had used unfair and deceptive trade practices in their dealings with the Sweeneys.

        ComFed was taken over by the FDIC because of alleged unsound lending practices during the flurry of savings and loan bailouts by the FDIC.

        FDIC took control and the Resolution Trust Corporation (RTC) was formed in 1991 to regain control of the savings and loan industry. The bailout of ComFed cost the taxpayers $828 million, according to the Sweeneys' documentation.

        The passing of the bank's liabilities to FDIC made the Sweeney loan a federal issue. Sweeneys' favorable state judgment was nullified, and their original mortgage commitment was reinstated with the federal government as the new mortgagee. The conduct of this change is one of the main features of the Sweeney resistance to the current takeover of their property. They have a long list of allegations of wrongdoing by the bank, the RTC, the FDIC and particularly the attorney who acted first for the bank and then for the RTC.

        After the eviction order was issued in June, the Sweeneys barricaded themselves in the house, which has been in John Sweeneys' family for generations. The couple launched a media blitz, calling on area politicians, the townspeople and activists worldwide to come to their aid.


        Although a court order for mediation in August gave them a little respite from immediate eviction, the judge's recent letter could mean a change this week.

        The Sweeneys have met with the Judge Mazzone three times since August. As of last week, they were preparing a response to the FDIC's latest documentation and expecting a continuation of the mediation.

        "I don't believe any further exchange of positions will be fruitful," Mazzone said in his letter to Tarr last Friday.

        One of the points the Sweeneys are pressing is a meeting with FDIC leadership in Washington in an attempt to resolve the conflict face to face.

        The judge's letter to Tarr said the FDIC is willing to meet if the discussion involves payment to the FDIC by the Sweeneys.

        "We're going to have to insist on a meeting in Washington," Rhetta said. "We've been very clear about the questions that need to be answered. We're very surprised the judge is taking this position."

        The mediation has been taking place in Boston with Mazzone on one side and the Sweeneys' team on the other. The team consist of John and Rhetta Sweeney, their daughter Faith, their attorney Linda Thompson, Sen. Tarr and Episcopal Bishop Mark Dyer, formerly rector of Christ Church in Hamilton. Tarr and Dyer have offered to accompany the Sweeneys to Washington for their proposed meeting with the FDIC.

        "From all the evidence I've seen, they (the Sweeneys) certainly do have a legitimate grievance, " Dyer said. "I wish the judge gave them more time to resolve the issue, and I'm sorry he didn't let the state court judgment take its course."

        Fighting Back

        The Sweeneys are not passively standing by waiting for favorable results of the mediation. They are fighting back, alleging fraud and abuse in the banking industry and subsequent cover-up by the FDIC.

        They are pressing the U. S. Congress and the state legislature for resolution of their case and state and county law enforcement agencies for prosecution of several members of the legal and banking professions.

        The Sweeneys have fought the eviction notice from the start.

        They went public with their battle against the federal giants, getting press coverage on NBC, CBS, CNN, Reuters, the Associated Press, the Washington Post, the British press and most of the state and local newspapers.

        They have created a virtual war room in their home, communicating with the world by e-mail, fax, shortwave radio and press releases.

        "People from all over the country are watching this situation, even people from other countries," Rhetta said.

        State legislators have also been supporting the Sweeney battle. State Senator Bruce Tarr (R-Gloucester), Cheryl Jacques (D-Needham) and Robert Hedlund (R-Weymouth) and State Rep. Tim Clark (R-Hamilton) have corresponded with the FDIC on behalf of the Sweeneys.

        "We've also been blessed with a lot of community support," Rhetta said. "We're thinking about forming a community coalition."

        She cites the unwavering support of Bishop Dyer, present rector of Christ Church, Jurgen Liias, Tarr, Clark, Peter Britton of the Planning board and all the other citizens and town officials who have helped in many ways through they years of conflict.

        The Sweeneys have been less successful gaining the active support of Massachusetts congressional delegation. Senators John Kerry and Edward Kennedy and Rep. John Tierney have declined to intervene while mediation is in progress. Former Rep. Peter Torkildsen supported the Sweeneys in his House Subcommittee on Small Business while he was in office.

Fighting on four fronts

1. The Sweeneys are continuing to negotiate within the mediation process. They are still amassing documentation for a response to the FDIC's latest submission to the mediators.
    2. They are seeking a face-to-face meeting with FDIC officials in Washington with the support of Tarr and Dyer.
    3. They are offering more testimony in proposed congressional hearings where they hope to receive recognition of the fact that the federal agencies have been acting without legal jurisdiction. They hope for support by congressional over-sight committees. Rhetta has testified at House and Senate committee hearings on these issues before.
    4. They are providing documentation to the Essex County District Attorney hoping to get judicial action against some of the lawyers and bankers who are still doing business in the state. The Sweeneys claim violations of state laws, including tampering and concealment by ComFed (and later RTC) lawyers of their state court judgment. They are also hoping to get more action from the state legislative oversight committees.

        "Above all, we want our lives and our home back," John said.

        More information on the Sweeney v. FDIC case can be found on the Internet at the Sweeneys' home page at http://www.qui-tam.com