MAYOR ASKS BANK TO CLARIFY HIS ROLE IN LOAN

GALVESTON - Mayor Roger "Bo" Quiroga on Wednesday publicly asked Frost Bank
officials to set the record straight on what he said was his lack of
involvement in a large bank loan to a man facing federal drug charges.

That man, Timothy Terrell Day, after receiving the loan, pleaded guilty to
trying to possess with the intent to distribute more than a pound of
cocaine. He was sentenced this month to 21/2 years in a federal
penitentiary.

After his 1998 arrest, Day, 24, was able to get a $60,000 unsecured loan
from the bank despite having reported only $805.94 in income over the
previous 51/2 years, according to a news release issued last week by the
U.S. attorney's office in Houston.

The release said Quiroga, who until last month was the bank's vice
president for business development, testified that Day and community
activists had convinced him that Day was an acceptable loan risk.

Quiroga denies playing any part in the loan and says he learned of it only
after it had been issued.

In a letter to The Daily News, he said he had called on the bank to clear
the air about his role.

Bank President F.A. "Andy" Odom said bank officials would not disclose the
details surrounding Day's loan.

"We respect the privacy of our customers and our employees," he said.

Quiroga, who has claimed his August firing from the bank was politically
motivated, said the bank could clear him without breaching Day's privacy.

"They don't have to discuss the terms of the loan if they don't want to,
but at least they ought to be able to say the mayor didn't have anything to
do with the loan," he said.

The Daily News has asked the U.S. district clerk for a recording of
Quiroga's testimony at a March detention hearing.

Kenneth Dies, the assistant U.S. attorney who prosecuted the case, said he
wrote the press release in cooperation with an agent from the U.S. Drug
Enforcement Agency.

"At this point in time, all I can say is that to confirm the validity of
the press release we have ordered the transcript," said Dies.

He added that his office was not motivated by politics in including Quiroga
in the release.

Quiroga testified on Day's behalf at a hearing to determine whether Day
would be released on bond while awaiting sentencing.

The mayor said he knew Day from meetings on revitalizing the economically
depressed neighborhoods north of Broadway.

Day also had asked the mayor to intercede on his behalf to get the police
department to return $9,000 it confiscated during the September 1998 arrest
that led to his conviction.

Quiroga said he was impressed, among other things, by Day's skill in
researching both neighborhood revitalization and the confiscation of his
money. Day later gave up his claim on the money as part of a plea agreement
in the drug case.

"He was just knowledgeable, young, but he really had a bright head on his
shoulders," Quiroga said.

In his letter, Quiroga said neither he nor the bank knew of Day's drug
background.

In an interview, he clarified that Day had not been convicted at the time
of the loan. He said he had asked Police Chief Kim O. Schoolcraft about the
money confiscated from Day and later testified on his behalf.

Schoolcraft said that Quiroga did not pressure her to return Day's money.
She said she believed the mayor and Day's other supporters had been conned
by Day.

LETTER FROM ROGER QUIROGA TO THE DAILY NEWS:

I would like to take this opportunity to clarify some of the content of the
recent non-front-page, front-page article written by Carter Thompson, Sept.
16.

First, let me assure you that I did not have any knowledge why a $60,000
unsecured business loan was made to Mr. Day by officials of then-United
States National Bank, now Frost Bank. I can't even tell you whether the
loan was an unsecured loan or not. If I had to guess, the bank probably
solicited this loan as an outreach effort to make loans to minorities.
Again, I was not privy to this loan request nor did I have any input as to
whether the bank should or should not make this loan. In order to set the
record straight, I encouraged Frost Bank officials to let the public know
that I did not participate in the approval process of Mr. Day's loan
request.

Like the bank, I did not know of Mr. Day's drug background and was trying
to only help a young man who I thought wanted to get away from gang
activity to change the direction of his life.

It is very unfortunate, but Mr. Day now has to face up to the charges that
have been brought up against him, and he will rightfully serve time for his
actions. The dealing of drugs, in my opinion, has heavily contributed to
the decline of our society. Illegal drug activities should have no place in
Galveston or any other city in our country.

Let me reiterate that my firing from Frost Bank did not have anything to do
with this situation whatsoever. As I stated on earlier occasions, I
personally feel my firing was politically motivated and again, I encourage
Frost Bank officials to set the record straight as to my non-involvement
with Mr. Day's business transactions.

Roger Quiroga, mayor of Galveston