Memos Describe Cranston, Keating Fund-Raising Ties : Thrifts: Joy Jacobson had frequent dealings with senator’s office--often at the behest of Lincoln S&L; owner. She also set up meetings between the two.

In a January, 1987, “confidential” memorandum to Sen. Alan Cranston (D-Calif)., a Cranston fund-raiser wrote that savings and loan executive Charles H. Keating Jr. was among campaign supporters who “rightfully expect” some resolution of pending requests for help from the senator.

Over the next few months, Cranston met several times with Keating and twice with federal thrift regulators on Keating’s behalf to discuss their inquiries into Keating’s Irvine, Calif., operation, Lincoln S&L.; Then, in September of that year, the fund-raiser, Joy Jacobson, told Cranston she had set up another meeting with the thrift owner, adding: “You should ask Keating for $250,000.”

Cranston did, and collected $250,000 from a Keating aide in his office in November, part of a total of $850,000 the senator received from Keating for voter registration groups that Cranston supported.

The Senate Ethics Committee has been investigating the role of Cranston and four other senators who received financial contributions from Keating--now jailed in California on fraud charges--while they intervened for him with regulators, who eventually shut Lincoln down.

The committee is now considering a special counsel’s recommendation to continue the investigation against Cranston and Sens. Dennis DeConcini (D-Ariz.) and Donald W. Riegle Jr. (D-Mich.), while dropping the inquiries of Sens. John Glenn (D-Ohio) and John McCain (R-Ariz.).

Cranston has said publicly that his actions on Keating’s behalf were motivated by concern that a constituent be treated fairly, and later by the loss of jobs at Lincoln, not the money Keating was donating. Sources said Cranston told the committee he wished Jacobson had used different language in some of the fund-raising memos, but he acknowledged that he had never told her to stop sending them.

Asked for comment Friday, Cranston said through a spokesman: “I don’t have anything I want to say about that.” Jacobson also declined to answer questions, saying it would be “inappropriate” to do so with the matter before the committee.

The government estimates the Lincoln failure will cost taxpayers about $2 billion, and Keating has become a symbol of the savings and loan debacle.

As described in the memos she wrote, Jacobson’s role provides more detail on the close connection in Cranston’s office between fund-raising and help for donors. Although Jacobson was not on Cranston’s Senate staff at the time, Keating and his aide, James Grogan, often sent appeals to Cranston through Jacobson, and she sometimes attended meetings in the senator’s office, where the savings and loan owner complained about his treatment from federal regulators.

Her Jan. 2, 1987, “confidential” memo to Cranston covered several fund-raising topics. Under the heading, “CASES-LEGISLATION,” Jacobson wrote: “Now that we (Senate Democrats) are back in the majority, there are a number of individuals who have been very helpful to you who have cases or legislative matters pending with our office who will rightfully expect some kind of resolution.”

She listed five, including Keating, who had raised about $40,000 for Cranston’s reelection and contributed $85,000 to the California Democratic Party. Keating, she wrote, “is continuing to have problems with the Bank Board and Ed Gray,” then head of the Federal Home Loan Bank Board. Grogan and another Keating aide were coming to see the senator “to get your advice on how to handle the current problem.”

In February, Grogan mailed to Jacobson’s home a copy of a legal motion Keating was considering to try to force Gray off the Lincoln case. “Obviously, this is a very sensitive, confidential matter and one in which we would appreciate your, Carolyn’s and the senator’s review and advice,” Grogan wrote. The reference to Carolyn was apparently to Carolyn Jordan, Cranston’s banking committee aide.

In March, Keating made the first $100,000 donation to a Cranston-supported voter registration group. In April, Cranston and the other senators met with Gray and his regulators to complain about the treatment of Lincoln. It was these meetings that eventually triggered the Ethics Committee investigation.

Gray was replaced as Bank Board head that summer by M. Danny Wall. On Sept. 6, Jacobson wrote Cranston about scheduled appointments with potential sources of voter registration money, including Keating.

She attached a news story about Wall, “obviously . . . good news to Keating. You should ask Keating for $250,000.” Keating met with Cranston on Sept. 24. Keating met Wall the same day.

On Oct. 6, Cranston wrote Keating, saying it was “a pleasure to see you and your lovely bride while you were in Washington last week and to hear that your meeting with Danny Wall had gone so well.” He then noted that donations to the voter registration program were tax-deductible, unlimited in amount and not subject to federal election reporting requirements.

“I am very grateful for your willingness to contribute $250,000 this year, and have asked Joy to discuss with Jim Grogan the states in which you would most like to help.”

A month later, Grogan visited Cranston’s office and handed him checks for $250,000. Six days after that, Cranston called Wall, talked about the personality problems between San Francisco regulators and Lincoln officials, and then told Keating about the call.

In early 1988, Cranston and his son, Kim, head of one of the voter registration groups, had dinner with Keating and Grogan in Los Angeles, where Cranston has acknowledged they discussed Keating’s regulatory problems and possible donations to the registration project. Ten days later, Jacobson wrote another memo to the senator, saying she was “pleased to hear that your dinner went so well with Charlie Keating. He has asked that you call Danny Wall and request that Wall meet with him next week” about why the federal examination of Lincoln’s finances was taking so long.

On Jan. 20, Cranston called Wall, according to sources, who said he would be willing to meet with Keating again. The senator then called Keating.

On Feb. 9, Cranston and his son flew to Phoenix and stayed at Keating’s home. During the visit, Keating gave the senator two corporate checks totaling $500,000 for voter registration groups. A week later, Cranston called Wall about another matter, and may have discussed Lincoln too, sources said.

During April and May, there were more calls and meetings between Cranston and Keating and Wall.

In January, 1989, Grogan attended a fund-raiser at the Super Bowl to benefit Cranston’s political action committee. In early February, the senator met with Grogan and aides to DeConcini and Riegle and then called Wall and L. William Seidman, head of the Federal Deposit Insurance Corp., about Keating’s proposed sale of Lincoln.