Lincoln S&L; Gave Cranston $300,000 Credit Line in ‘86, Newspaper Reports

A $300,000 line of credit was arranged for Sen. Alan Cranston by Lincoln Savings & Loan during the late stages of his tight 1986 election campaign, it was reported Thursday.

The San Francisco Chronicle said the funds were never drawn and no laws were violated.

The California Democrat and four other senators are under investigation by the Senate Ethics Committee in connection with the collapse of the Irvine-based thrift, which is expected to cost taxpayers $2.5 billion.

The five have been accused of intervening with regulators who were planning to close the company.

The Chronicle reported that Darry Sragow, Cranston’s 1986 campaign manager, said he had no recollection of what specific thrift issued the credit line but did recall “a sense” that arrangements had been made for last-minute borrowed funds to be available “if we absolutely needed them.”

The Chronicle quoted Cranston spokesman Murray Flanders as saying it was his understanding the credit line “was there if we needed it. But we didn’t, and we let it drop.”

The newspaper said it was told by Brad Boland, a spokesman for Charles Keating, chairman of the failed thrift, that the credit line was “agreed on in principle” and could have been executed within a day if the Cranston campaign had made final application.

The Chronicle said the line was established in October, 1986, the same month the Cranston campaign received a $348,250 loan from Deauville S&L;, which was placed in conservatorship by the government last January.

Cranston defeated Republican Ed Zschau by one percentage point in the campaign.