Riegle denies setting up meeting with regulators on Keating

January 08, 1991|By Dan Fesperman | Dan Fesperman,Washington Bureau of The Sun

WASHINGTON -- Though confessing to having a fuzzy memory, Sen. Donald W. Riegle Jr. said yesterday that he knows one thing for sure: He didn't set up the fateful meeting with a federal banking regulator in April 1987 that triggered an ethics investigation of himself and four other senators, a group now known as the "Keating Five."

As for his memory lapses, which were criticized by the Senate Ethics Committee's special counsel, Mr. Riegle, D-Mich., explained yesterday that it's hard to remember details when you're as busy as he is, attending about 3,500 meetings each year.

The 1987 meeting, which four other senators attended, was called on behalf of Charles H. Keating Jr., a savings and loan executive who was also a generous contributor to the senators' re-election campaigns and political causes. The senators met with Edwin Gray, then chairman of the Federal Home Loan Bank Board, to discuss the regulation of Mr. Keating's now-defunct thrift, Lincoln Savings and Loan.

A week later, Mr. Riegle joined the same four senators in a meeting with San Francisco banking regulators. Mr. Gray and two of the regulators at that meeting have since said that one of the senators, Dennis DeConcini, D-Ariz., improperly asked them to set aside a regulation Mr. Keating

opposed. Mr. DeConcini and the other senators have said they don't recall such an offer.

A former lobbyist for Mr. Keating, James Grogan, testified last month that Mr. Riegle arranged the first meeting, and the committee special counsel, Robert Bennett, said other evidence also bore out that allegation. But Mr. Riegle testified yesterday, "Something was misconstrued somewhere along the line."

Mr. Grogan said that Mr. Riegle first proposed the meeting during a March 9 meeting with Mr. Keating at the banker's Phoenix offices. The two men also discussed a fund-raising event for Mr. Riegle that was to be organized by Mr. Keating, Mr. Grogan said.

Mr. Riegle said he recalled the meeting and the discussion about his fund-raiser, but he said there was no talk of any meeting between the senators and regulators.

Though Mr. Bennett earlier criticized Mr. Riegle for not being forthcoming during the investigation of the Keating case, he otherwise found little fault with the senator's behavior in the case. He said that Mr. Riegle's interest in helping Mr. Keating seemed to cease after the second meeting with regulators, in which they told the senators of possible criminal actions by Mr. Keating's thrift. Mr. Riegle agreed yesterday, saying, "All of us were surprised by that, distressed by that and troubled by that."

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