Key Cranston Aide Lobbied Regulators on Behalf of Lincoln S&L; Chief : Thrifts: Carolyn Jordan wields power as a member of the Senate’s banking panel staff. Her role in the Lincoln affair has received little attention.

If there is one key supporting player to Sen. Alan Cranston’s role in the Lincoln Savings & Loan scandal, by all accounts it is Carolyn D. Jordan, an influential aide who serves as his alter ego on banking issues.

Jordan, who has worked for Cranston for 19 years, contacted state and federal regulators last year on behalf of Lincoln owner Charles H. Keating Jr. at a time when Keating was making a last-ditch effort to stave off the $2-billion collapse of his Irvine thrift. She also enjoyed Keating’s hospitality during an all-expenses-paid trip to Lincoln headquarters in Phoenix in 1987, financial disclosure records show.

Moreover, Jordan clearly concurred in Cranston’s decision to assist the owner of the Irving thrift in his battle against federal regulators--a decision he has since come to regret as “a pretty stupid thing, politically.”

The 46-year old Jordan, a former Los Angeles attorney whose appointment to the Senate Banking Committee staff in 1974 was considered a breakthrough for blacks and women, is an example of the little-understood but important role played in Senate offices by an inner corps of senior aides. Working outside the glare of the public spotlight and largely unknown beyond the halls of Congress, these aides wield power and influence over the shaping of policy and the actions of the senators they work for.

These aides exist primarily because senators, each representing an entire state, must deal with a range of issues and constituencies so broad that no individual can master the details of all of them. The staffers called on to help meet this challenge then develop expertise and networks of operating relationships that make them formidable figures in their own right.

Banking Expertise

In the Senate, where Jordan ranks among the most powerful female staffers, she is admired for her extraordinary grasp of issues involving financial institutions. Cranston apparently values her banking expertise so much that he allows Jordan to speak for him without consulting him first.

But Jordan is also widely regarded as a hard-ball operative with a jaundiced view of the political process--”the most cynical person I’ve ever met,” in the words of one acquaintance.

And outside the Senate, Jordan is known to dabble in local politics.

A longtime supporter of District of Columbia Mayor Marion Barry, she has been chosen as a minority partner--along with some of Barry’s closest associates--in two major redevelopment projects in Washington. For an initial investment of only $11 of her own money and $250,000 in borrowed funds, according to city records, she was given a potentially profitable share in a multimillion-dollar deal.

Jordan’s role in the Lincoln affair has received little attention so far.

Unlike Cranston, who frequently defends his involvement with Lincoln, Jordan does not discuss her actions on behalf of the Irvine thrift and insists that she has no obligation to answer reporters’ questions because she is not an elected official.

Rejecting a Times request for an interview, she declared: “You can print anything you want.”

Against Regulation

Over the past few years, Jordan made no secret of her disdain for government regulators who were trying to crack down on thrifts they thought were risking depositor funds in dangerously speculative investments.

Like Cranston, she was particularly critical of Edwin J. Gray, the former chairman of the Federal Home Loan Bank Board who sought to rein in the most aggressive thrifts and has since become Cranston’s chief accuser in the Lincoln affair.

One former bank board employee during Gray’s tenure recalls that Jordan, who had herself apparently been considered for a position on the bank board during the Jimmy Carter Administration, never missed an opportunity to ridicule Gray. “She thought he was a real dodo, a dumb jerk,” the former employee recalled.

Jordan’s views on federal regulation of the industry, according to acquaintances, were strongly influenced by executives of high-flying thrifts in California, such as Lincoln and Columbia Savings & Loan in Beverly Hills. As a result, her opinions sometimes diverged from those of the California League of Savings & Loans, which supported Gray.

Wields Influence

Clearly, Jordan has enjoyed Cranston’s full confidence for many years. And like many Senate staffers who have been given wide latitude by powerful bosses, she has never shown any reluctance to wield her considerable influence.

Indeed, Jordan’s manner bears no resemblance to her nickname: Mousy.

“I felt like she maybe orchestrated a lot on her own hook,” said a former federal regulator who recalled being “thrown out” of Cranston’s office by Jordan. “Cranston gave her a long leash and she used it. . . . She wields authority and has a presence.”

Gray recalled that whenever he testified before the Senate Banking Committee, Jordan was the aide who sat beside Cranston and consulted with him between virtually every question.

“She fed him all the questions,” said Gray. “She’s the current prince of the Senate. It’s true.”

Common Views

Cranston’s involvement with Keating began in 1985, when the owner of the Irvine thrift held the first of two fund-raising events that raised a total of $39,000 for the senator’s 1986 reelection campaign. Their meeting occurred at a time when Lincoln was under investigation by the bank board and Keating was battling efforts by Gray to crack down on aggressive thrifts.

Although Keating is a Republican, an aide to the Arizona businessman said, conversations between Keating and Cranston usually centered on their mutual support for deregulation and their low regard for Gray.

Jordan’s free trip to Phoenix occurred in April, 1987, within a week after Cranston and four other senators summoned Gray to Capitol Hill to discuss the bank board’s proceedings against Lincoln. Gray contends the senators sought to persuade him to withdraw a regulation opposed by Keating.

According to her annual financial disclosure report for that year, Jordan received free lodging in Phoenix from American Continental Corp., Lincoln’s parent company, during the week of April 13. She reported that her round-trip air fare, which included a stop in California, was paid for by a California thrift industry association.

When asked about the trip by a reporter for the San Jose (Calif.) Mercury News last November, she was quoted as replying: “You think we paid ourselves--be serious. We do these things all the time. There’s nothing unusual about it.”

Indeed, Jordan’s annual financial disclosure reports show that she took 10 trips in 1987 and 1988 that were paid for by banks, thrifts or financial groups, some of them to resorts such as Palm Springs, Calif., and Key Largo, Fla. Among the thrifts that paid for her travel was Columbia Savings & Loan, which shared her goal of deregulating the S&L; industry.

Calls to Regulators

But it was not until early 1989, when Keating was seeking permission from state and federal regulators to sell his failing savings and loan, that Jordan became actively involved in lobbying on his behalf, according to the officials involved. Keating ultimately failed to win approval of the sale of Lincoln, which was seized by the government last April 14.

Darrell W. Dochow, executive director of the bank board’s office of regulatory affairs, has said that he received a telephone call last Feb. 8 from Jordan, who demanded to know why the bank board had not approved the Lincoln sale.

“I informed Ms. Jordan that we did not have a complete application from the investor group and that from what we had seen, numerous questions remained to be answered,” Dochow later wrote in a memo to his files about Jordan’s inquiry, a copy of which was obtained by the Times.

“She inquired as to why we were so concerned with Lincoln, who had net worth of over 4% (a basic measure of financial soundness), and I responded that its reported net worth is significantly overstated . . . and that I had serious concerns over its operations.”

The telephone call was one of two inquiries that Jordan made with Dochow about the proposed sale, according to the bank board official. He said she also approached him briefly to discuss the proposed Lincoln sale during a trip he made to Capitol Hill during that period to testify before the Senate Banking Committee.

Likewise, William Davis, deputy to California Savings and Loan Commissioner William Crawford, said he received a similar call from Jordan in March, 1989.

“She called and just informed me that Sen. Cranston’s office thought a sale was a good idea,” Davis recalled. “It certainly didn’t mean much to us at the time.”

Jordan previously has said that she does not remember telephoning Davis.

Highly Irregular

Although it is not unusual for congressional staffers to contact regulatory agencies on behalf of constituents, regulators said it is highly irregular for them to advocate a particular result. Normally, congressional aides only request information about regulatory matters.

Like Jordan, however, many members of the Senate Banking Committee staff are known to be close to the financial industry they oversee. Several of Jordan’s partners in the real estate developments in which she has invested also have close ties to the banking industry. Others are government contractors or lobbyists.

Washington real estate industry officials said developers have routinely selected close friends and supporters of Mayor Barry to serve as limited partners in building projects that require city approval. These appointments satisfy a law requiring minority participation in all District of Columbia development projects.

City records show that Jordan became a limited partner in an office and shopping complex at the main downtown subway hub known as Metro Center in September, 1986, for an initial investment of $11. Her financial disclosure records show that she recently made an additional investment of at least $250,000, all of which she borrowed from one of her partners in the project with a promise to pay it back when the development is completed and begins to generate income for her.