The story behind the year’s biggest bank failure

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Fortune‘s Brian O’Keefe (the man who gave the Curious Capitalist its name) has an epic account of the rise and fall of Bobby Lowder and Colonial Bancgroup. Much Auburn University gossip is dished as well. Just one almost-randomly chosen example:

For years, Lowder’s most vocal opponent on the board of trustees was a lawyer named John Denson. Denson had a particular interest in Auburn’s Ph.D. program in economics, which had a free-market bent and attracted graduate students from around the world. When the board conducted a university-wide review of academic programs in 1999 the Ph.D. program was eliminated despite its robust health.

During the same review, the journalism department, which Lowder had publicly blamed for pushing the school newspaper to write negative stories about him, was folded into the communications school.

“I’ve never met anybody like that before,” says Denson, who is now a judge in the Auburn area. “Lowder plans long range. He plots. It’s not a flare of temper. It’s a calculated plan of control.”

Lowder’s calculated plan of control at Colonial led to this year’s biggest bank failure, costing the FDIC an estimated $2.8 billion. Anyway, I found Brian’s whole story fascinating. That could be partly because I used to live in Alabama, although the tale may actually be more shocking and amazing to those who haven’t lived there.