Cranston Asked Milken for Aid, Aide Discloses

Sen. Alan Cranston’s top aide acknowledged Monday that the senator had once asked junk bond expert Michael Milken to contribute to a voter registration project set up by Cranston for the 1988 election.

But Roy Greenaway, aide to the California Democrat, said the solicitation came before Milken was indicted Sept. 7 on federal securities fraud charges. Also indicted was Milken’s employer, Drexel Burnham Lambert of Beverly Hills.

A foundation set up by Drexel contributed $10,000 to the Forum Institute, one of three voter registration projects Cranston helped establish. The institute’s records show the money was received after the indictments.

The San Jose Mercury News, which first reported the $10,000 contribution Sunday, indicated there was some confusion among Cranston’s advisers over when he solicited money from Milken and over how the Drexel contribution was sent to the voter registration group.

Greenaway said Monday in a telephone interview, “Alan did ask Milken to give to the group but it was well before (Milken’s) problems, as much as two years ago.”

As for the $10,000 given by Drexel’s foundation to Voter Forum, Greenaway said, “It did not go through us,” meaning through Cranston’s own Senate reelection apparatus.

“We didn’t know anything about it,” Greenaway said. “It must have gone directly to Voter Forum.”

Earlier this year Cranston, a member of the Senate Banking Committee, urged the Securities and Exchange Commission not to force Drexel to move its high-yield bond division from Beverly Hills to New York.

As Cranston looks to reelection in 1992, the large contribution by Drexel to the senator’s voter registration project could become controversial, since Cranston contacted the SEC to plead Drexel’s case.

Potential Controversy

Another potential controversy arose last week when Cranston acknowledged that he had asked for $850,000 in contributions to the voter registration groups from Charles H. Keating, chairman of the American Continental Corp. of Phoenix.

American Continental Corp. owns Lincoln Savings and Loan, the Irvine thrift that was taken over by regulators in April.

At Keating’s request, Cranston and other senators met with federal savings and loan regulators in April, 1987.

Last March and April, Cranston also spoke with two bank board members to ask to them to approve Keating’s effort to sell Lincoln Savings. Regulators would not approve the sale because they said the proposed buyers did not have enough cash.

A lawsuit filed by American Continental investors charges that Keating made large contributions to prominent politicians in an effort to get them to meet with regulators on his behalf. The investors contend that they were defrauded by Keating and led to believe that the bonds they bought were federally insured.