Gonzalez Hits Wall’s Role in Lincoln S&L; Probe

A House committee chairman Tuesday accused M. Danny Wall, the nation’s chief thrift regulator, of trying to improperly influence congressional testimony by two federal regulators who were involved in an investigation of troubled Lincoln Savings & Loan of Irvine.

Rep. Henry B. Gonzalez (D-Tex.), who heads the Banking, Finance and Urban Affairs Committee, said in an interview that he will question the two regulators, William Black and Mike Patriarca of San Francisco, about these allegations when they appear before the panel Thursday.

If their testimony provides sufficient evidence to support his accusation, Gonzalez said, he will charge Wall with violating a law against trying to influence the testimony of congressional witnesses.

“If I find in interrogating the witnesses that any attempt was made to influence their testimony,” Gonzalez said, “I will invoke the statute.”

The hearings, which are expected to culminate Nov. 7 with the testimony of Wall and Lincoln owner Charles H. Keating Jr., will explore allegations that Wall’s failure to take control of the S&L; in 1987 ultimately will cost the government’s thrift insurance fund $2 billion.

The collapse of Lincoln, which finally was seized by the government in April, is expected to be the largest savings and loan failure in the nation’s history.

Wall, who took over as chairman of the Federal Home Loan Bank Board in July, 1987, and now heads the Office of Thrift Supervision, or OTS, the bank board’s successor agency, has denied any wrongdoing in the way he supervised the agency’s investigation.

In 1987, Wall rejected a recommendation by regulators in California to seize Lincoln. Instead, he transferred supervision of the thrift to Washington. Black and Patriarca have been called by the committee to testify about those events.

In response to the charges leveled by Gonzalez, Carl Hoyle, Wall’s spokesman, acknowledged that Black and Patriarca met recently with OTS officials at the invitation of Wall to discuss their upcoming testimony. But he said that neither man was required to attend the meeting.

Hoyle said that the two Californians were asked to meet with OTS officials to review the history of the case and “make sure they get the right information.” He said no effort was made to influence opinions they will express in their testimony.

The meeting with Black and Patriarca included the attorney who is handling a civil suit filed recently against Lincoln by Wall. Hoyle said the two men were advised about how to avoid saying anything before the committee that would jeopardize that suit.

In accordance with agency policy, Black and Patriarca, who are OTS employees, also have been asked to submit their testimony to Wall’s office in advance of their appearance on Capitol Hill, Hoyle said.

Also on Tuesday, former Common Cause President Archibald Cox wrote a letter urging the Senate Ethics Committee to retain outside counsel to investigate charges that Sen. Alan Cranston (D-Calif.) and four other senators violated Senate rules by intervening in the Lincoln case on behalf of Keating, who made large contributions to their campaigns.

The Ethics Committee, responding to a complaint filed two weeks ago against the five senators by Common Cause, has requested that each of the senators submit a written response explaining his role in the matter. Cranston has not yet submitted his.