Step Down, Please

Edwin J. Gray used to handle press relations for President Reagan and is now in his fourth year as chairman of the Federal Home Loan Bank Board. His term will end next June, but performance makes it clear that he has already been in the job too long.

Washington knew early on that he would be different. In his first year as chairman, according to the records, he went nicely over budget to spend nearly $50,000 to redecorate his office. He seemed to travel more than was really necessary. The Wall Street Journal once noted that he was in his Washington office a total of six days in the first two months of last year. At least part of the tab for his trips often was picked up by the savings-and-loan industry, which traditionally sees to the comforts of its regulators. In that respect Gray did not break any new ground; he just dug deeper than his predecessors, including charging off expenses for some of his wife’s trips to one or another of the 12 regional offices of his agency.

Much of this came to light as a result of a grudge match. There are two philosophies in the savings business. One says that S&Ls; should stick with the job that they were created to do--write home mortgages, a policy promoted by the larger savings institutions and the U.S. League of Savings Institutions, the industry’s chief trade association. The other says that S&Ls; should be more free to branch out into other forms of banking, including equity investments. Gray chose sides, papering Congress and the rest of Washington with speeches arguing that S&Ls; were risking an even higher rate of failures by getting into investments in windmill farms and gambling casinos. The record does not bear that out. The more competitive S&Ls; went after him, and the records of his spending habits came tumbling out.

With Congress and the White House in a tug-of-war over the truth about how much of the conduct of foreign affairs has been turned over to the private sector, the Gray case might be written off as one more case of a minor official living beyond his means with the help of public money.

But it is also one more case of one more person holding down an important job for no more apparent reason than that he was sent over by the White House. His experience in banking was as a public-relations officer, not a banker. And even though the Federal Home Loan Bank Board is not the Pentagon or the State Department, it regulates institutions with nearly $1 trillion in assets, and it deserves better. Having settled up his $27,000 in challenged expenses, Gray would do the industry and the President a service by stepping down.