Lobbyist's memo wasn't revealed at S&L hearings

April 12, 1991|By San Francisco Chronicle

WASHINGTON -- A memo written by a lobbyist for Lincoln Federal Savings and Loan, suggesting that four senators may have wanted to avoid congressional hearings, was not used as evidence in the recent Senate hearings on the S&L scandal.

The June 28, 1988, memo reported that Sen. Alan Cranston, D-Calif., was "anxious" to contact Representative Charles E. Schumer, D-N.Y., an influential member of the House Banking Committee, at a time when that committee's staff was pressing to put a public spotlight on Lincoln.

"I wanted to let you know that Senator Cranston was anxious to call Schumer and tell him that the four Democratic senators involved would greatly appreciate letting this dog die!" Lincoln lawyer and lobbyist Jim Grogan wrote Dave Evans, a key Capitol Hill lobbyist for Mr. Keating, under a Lincoln letterhead.

Congressional hearings, like recommendations by federal regulators 13 months earlier for a government takeover of Lincoln, were delayed until 1989 despite urgings from the House Banking Committee staff that had peaked when the memo about Mr. Cranston was written.

The memo, which has long been in the files of several federal agencies and offices, did not identify the three other senators or specify what the metaphorical "dog" was. But in light of what was known to be happening within the Banking Committee at the time the memo was written, the fact that it was not explored under oath during the Keating Five hearings could raise new questions about the Senate Select Committee on Ethics' investigation.

Four of the five senators investigated by the committee were Democrats. The hearings focused on whether large campaign contributions from Lincoln's Charles H. Keating Jr. prompted them to intervene with regulators on Mr. Keating's behalf in April 1987. Of the five, only Mr. Cranston was singled out by the committee for possible censure by the full Senate.

Mr. Grogan's memo is the latest discovery by the San Francisco Chronicle of information that could have challenged defenses in the ethics hearings but was either not found or went unused.

The previous findings about omitted matters centered primarily on Senate Banking Committee Chairman Donald W. Riegle Jr., D-Mich., whose 10 years of missing correspondence with regulators included a letter he and Mr. Cranston wrote in 1983 on behalf of an insolvent Florida thrift.

A Schumer spokesman said the congressman did not remember any telephone call from Mr. Cranston about Lincoln. Cranston spokesman Murray Flander said the Schumer recollection "shows Alan Cranston wasn't very anxious about it if he didn't make the call."

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