FBI Probing Link of Arson to S&L; Scandal


State officials disclosed Monday that the FBI has joined their investigation of arson at a state-leased office building in Los Angeles that housed regulatory files relating to the troubled Lincoln Savings & Loan Assn.

Assemblywoman Delaine Eastin (D-Fremont), chairwoman of the Assembly Committee on Government Efficiency and Consumer Protection, said federal agents are apparently interested in determining if the fire was in any way connected to the "savings and loan scandal in California."

A spokesman for the Federal Bureau of Investigation said the agency could neither confirm nor deny its involvement in any investigation of Lincoln. The thrift's failure, which could cost taxpayers $2 billion, currently is the subject of a House committee hearing in Washington and has prompted several civil lawsuits against its former operators.

The March 2 blaze, which began on the 15th floor of the CNA building at 600 S. Commonwealth Ave., loosened asbestos throughout several upper floors in the structure, forcing state employees to evacuate their offices. At the time, the Savings and Loan Department, the Corporations Department, the Banking Department and the governor were leasing space in the building.

Contaminated as a result of the fire were boxes of files relating to Irvine-based Lincoln, the financially distressed thrift that was taken over by federal regulators April 14. The seizure came one day after its parent company, American Continental Corp., filed for bankruptcy.

In an Oct. 30 letter to Eastin, Chief Deputy State Fire Marshal David Walizer said investigators have determined arson to be the cause of the fire and they expect to present evidence about their prime suspect to the Los Angeles County district attorney's office in the next few days. He also noted that the FBI is involved in the investigation.

"It is unknown if the suspect was acting alone or in concert with other persons," Walizer said in a letter to Eastin.

Eastin has been conducting hearings on the fire to find out why it took the state Department of General Services nearly eight months to retrieve some of the Lincoln files from the building.

Paul Savona, the department's chief of real estate and design services, blamed the delay Monday on officials' inability to gain access to the upper floors of the building because of a lease dispute.

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