Former Keating aide contradicts Riegle's testimony

December 15, 1990

WASHINGTON (AP) -- Sen. Donald W. Riegle Jr. initiated a meeting between senators and thrift regulators on behalf of Charles H. Keating Jr., a former Keating aide testified yesterday in contradiction of the Michigan Democrat's sworn statement.

James Grogan was the first Keating insider to testify in the Senate Ethics Committee hearings, and he did so only under a grant of limited immunity that prevents his statements from being used against him in court.

Mr. Riegle, chairman of the Senate Banking Committee, has told the panel that "I did not arrange the meeting April 2," 1987, between the top thrift regulator and four Senate colleagues -- who were intervening for Mr. Keating's failing Lincoln Savings and Loan. Mr. Riegle did not attend the session.

The four were: Sens. John McCain, R-Ariz., Dennis DeConcini, D-Ariz., Alan Cranston, D-Calif., and John Glenn, D-Ohio, who, with Mr. Riegle, make up the so-called "Keating Five," the targets of the hearings.

"Is there any doubt in your mind that Senator Riegle arranged the meeting with the senators?" Robert S. Bennett, committee special counsel, asked Mr. Grogan, who was Lincoln's corporate counsel.

"No, sir," Mr. Grogan answered.

Mr. Grogan said he later "got feedback the [four] senators were miffed" at Mr. Riegle's absence from the meeting with regulators, since negative news stories about Lincoln's condition made the session "politically explosive."

Mr. Grogan also told the committee that Mr. Riegle tried to hide his role in initiating the meeting.

The Keating executive said Mr. Riegle asked him to invite the other senators and to ask Mr. McCain and Mr. DeConcini, in turn, to invite Mr. Riegle to attend.

"Senator McCain reacted very negatively," Mr. Grogan said. "He said he would not invite Senator Riegle to the meeting. He was very unhappy with that concept."

Mr. Riegle's office issued a statement yesterday saying that Mr. Grogan's testimony "shows no improper activity or ethical violation by Senator Riegle in the Lincoln matter."

After Mr. Grogan testified all day yesterday, the Ethics Committee scheduled a session today to question him further.

The committee is investigating whether the five senators' intervention for Mr. Keating was related to the $1.3 million he and associates donated to the senators' campaigns and favorite causes.

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