Ex-Regulator Is Added to Suit Over Irvine S

The former parent of Lincoln Savings & Loan on Thursday added its one-time nemesis, Edwin J. Gray, as a defendant in its pending lawsuit against current and former federal regulators over claims that they leaked confidential, inaccurate and misleading information to the public.

American Continental Corp. in Phoenix contends that its Irvine-based thrift was damaged by the leaks and seeks $200 million in compensation in U.S. District Court in Phoenix.

The company claims that Gray, former chairman of the Federal Home Loan Bank Board, leaked damaging information “in retaliation” for the company’s active objections to Gray’s alleged re-regulation of the thrift industry.

The company said in a prepared statement that its accusations against Gray are based in part on House Banking Committee testimony by Rosemary Stewart, the top federal thrift enforcement regulator.

Stewart characterized the bank board’s attitude about Lincoln as a “vendetta” and said Gray and another executive wanted to hold out Lincoln as an example of “the evil” that results from investment excesses, “even to the point of punishing Lincoln for its vocal objections” to restrictive regulations.

Gray, now president of a Miami thrift, left office at the end of June, 1987.

Regulators seized Lincoln one day after American Continental filed for bankruptcy protection. The S&L;’s collapse is expected to be the single costliest thrift failure, with taxpayers paying up to $2 billion to bail it out.

American Continental’s move Thursday came a day after Sen. Alan Cranston launched a scathing attack on Gray as a “publicity-hungry political hack” who “lies over and over in the Hitlerian technique of the Big Lie.”

Gray has blamed Cranston and four other senators of trying to pressure him in 1987 when they questioned him and, later, other regulators about a regulatory audit of Lincoln in 1987. All five had received campaign contributions from American Continental executives and their spouses and business associates.

Gray is reportedly on vacation and could not be reached for comment.