WASHINGTON -- A former top federal banking regulator said yesterday that Sen. Alan Cranston and Sen. Dennis DeConcini contacted him to push campaign contributor Charles H. Keating Jr.'s effort to sell his faltering savings and loan rather than see it liquidated.
But M. Danny Wall, former head of the Federal Home Loan Bank Board, told the Senate Ethics Committee that his agency rejected three proposed sales of Lincoln Savings and Loan on the grounds that the potential buyers had ties to Mr. Keating and would be unable to run a viable savings institution.
California-based Lincoln collapsed April 14, 1989, after the bank board rejected the potential buyers. The S&L's demise will cost taxpayers an estimated $2 billion to pay off its insured depositors.
Mr. Wall said Senator Cranston, D-Calif., and Senator DeConcini, D-Ariz., called him last year.
"Senator Cranston urged that the board give prompt consideration to the applications and that it approve any legitimate proposal," Mr. Wall said.
"Senator DeConcini urged that the board give prompt consideration to the proposals to sell Lincoln but did not state that he wanted a particular proposal to be accepted," Mr. Wall said. "I recall thinking at the time there was nothing improper."
The Ethics Committee is looking into allegations that Senator Cranston, Senator DeConcini and Sen. John McCain, R-Ariz., Sen. John Glenn, D-Ohio, and Sen. Donald W. Riegle Jr., D-Mich., improperly intervened with federal regulators on behalf of Mr. Keating, who had spearheaded $1.3 million in contributions to the senators.