Probe Sought of Senators’ Actions for S & L in Irvine

Common Cause today asked the Senate Ethics Committee to investigate five senators who intervened on behalf of a California savings institution after receiving large campaign contributions from its owner.

At the same time, the group called on the Justice Department to determine whether Charles H. Keating Jr. and the savings and loan association he heads violated federal election laws.

Lincoln Savings & Loan Assn. of Irvine eventually collapsed and was seized by the government in April. Analysts estimate that it could cost taxpayers $2 billion to protect the institution’s depositors.

Fred Wertheimer, president of Common Cause, a citizens lobby, called for an investigation of five senators who met with regulators in April, 1987, at the request of Keating Jr., chairman of American Continental Corp., Lincoln’s parent.

The five are Sens. Alan Cranston (D-Calif.), Dennis DeConcini (D-Ariz.), John Glenn (D-Ohio), John McCain (R-Ariz.) and Donald W. Riegle Jr. (D-Mich.).

Cranston’s spokesman, Murray Flander, said the senator met with regulators only to urge them to bring their lengthy examination of Lincoln to a conclusion, not to influence its outcome.

McCain today pledged his full cooperation with any inquiry, adding in letters to the ethics panel and Justice Department, “I am fully confident that I engaged in no unethical conduct.”

After three years of examinations and audits, regulators seized Lincoln on April 14. Last month, they filed a $1.1-billion civil lawsuit charging Keating, his family and associates with fraud and racketeering. Among the allegations are that Keating diverted funds from Lincoln to fund his personal, political and charitable convictions.

All five senators received campaign contributions from Keating. Riegle, chairman of the Senate Banking Committee, returned his a year later and DeConcini last month.

Wertheimer said the Senate Ethics Committee should appoint a special counsel to determine whether the intervention violated the code of ethics for government service that prohibits members of Congress from accepting “favors or benefits under circumstances which might be construed by reasonable persons as influencing the performance of governmental duties.”

In a letter today, he asked Gerald E. McDowell, chief of the Justice Department’s public integrity section to determine whether Keating’s contributions to the senators violated federal election laws or other statutes.