No Political Influence in Lincoln Decision, Wall Says

The nation’s top savings and loan regulator said today that “no political figure influenced my decision” against seizing in 1987 an Irvine, Calif., S&L; whose later failure is destined to be the most costly in history.

M. Danny Wall told the House Banking Committee he made mistakes regarding the Lincoln case from the time he became chairman of the Federal Home Loan Bank Board in July, 1987, until the institution was taken over by regulators last April.

He also said lawmakers had spoken with him on behalf of the S&L; and its owner, Phoenix millionaire Charles H. Keating Jr. But he said his decisions “were devoid of any political influence,” and he added, “I was not under the spell of Charles Keating.”

Keating was to be the committee’s next witness.

“Clearly, had we known then what we know now, we would have acted differently,” Wall told the committee in a defense of his handling of the collapse of the S&L;, which could end up costing taxpayers as much as $2 billion.

California regulators and mid-level officials in Wall’s agency have testified in previous hearings that Keating’s political influence hampered their efforts to uncover and stop what Wall today called a “heist” of federally insured deposits in Lincoln.

The Senate ethics committee last week hired an outside counsel to investigate allegations that five senators who received $1.3 million in political contributions from Keating improperly intervened with regulators on Lincoln’s behalf.

All five--Sens. Alan Cranston (D-Calif.), Dennis DeConcini (D-Ariz), John McCain (R-Ariz.), Donald W. Riegle Jr. (D-Mich.) and John Glenn (D-Ohio)--have denied violating any laws or ethics rules of the Senate.