Countywide : Irvine Students Grill Cranston on Scandal

U.S. Sen. Alan Cranston swung through Orange County on Tuesday, talking to Irvine high school students about the Lincoln Savings & Loan Assn. scandal and discussing affordable housing with Anaheim officials.

Several Irvine High School students asked Cranston about Lincoln, an Irvine-based thrift that collapsed. Cranston, one of five senators who intervened with regulators on behalf of the thrift, is awaiting the results of an investigation by the Senate Ethics Committee into the controversy.

Cranston asked the students to put themselves in his shoes, imagining that a businessman--Charles H. Keating Jr.--who employs 1,000 Californians approached the senators to complain about harassment by federal regulators.

After talking to several sources, including the chairman of the Federal Deposit Insurance Corp. and respected accountants, Cranston told the students, they would learn that the business was regarded as “solvent and not in danger of going out of business.”

They also would find that the senators from the businessman’s home state--Sens. Dennis DeConcini, D-Ariz., and John McCain, R-Ariz.--also vouched for the business and complained that the federal auditors were behaving in a “reckless” manner.

“I went to a meeting to ask why he was being bothered by the auditors and that’s all I did,” Cranston told the students. “I submit that any senator had to do what I did, and that’s what you would have done.”

Some students weren’t satisfied with Cranston’s remarks, however.

“I wanted to know what he thinks a thrift regulator is, what he thinks their job is, and he completely went around the question,” said senior Jeff Granberry, 18.

Another student, Rick Vadas, 18, was also disappointed by Cranston’s remarks. “He’s a politician; what do you expect?” Vadas said.

Before answering questions about Lincoln, Cranston gave a short speech in which he said money saved by reducing military spending should go for education and health care programs. Cranston said he favors a reduction in military spending of $300 billion to $150 billion due to reduced threat from the Soviet Union and other Warsaw Pact countries.

He admits, however, that military contractors will be slow to retrain their employees to create educational, health or other tools instead of military equipment.

In Anaheim, Cranston told city officials that he believes his affordable-housing bill will be passed by Congress this year.

“The dream that every American can own their own home is fading, and we must reverse that,” said Cranston, who plans to seek reelection in 1992.

He said his bill, called the Affordable Housing Act, could offer Orange County $182 million in federal aid next year, an increase of $37.5 million over the current federal funding level for housing assistance.

The bill would also set up the Housing Opportunity Partnerships program, which would help coordinate nonprofit agencies, state and local governments and private businesses in providing affordable housing to suit the needs of each community.

“(When) there are many young families with very good incomes who cannot afford the down payment . . . yet they can afford the monthly payments, something has gone very wrong,” Cranston said.

Local business representatives and bankers asked Cranston to consider using the funding to increase the limit of FHA loans for first-time home buyers. They said the current level of $124,000 needs to be raised for Orange County, where the average home price exceeds $200,000.