Ethics Panel Hears Cranston in S&L; Case : Thrifts: The senator is summoned to a closed session to discuss his ties with Charles Keating Jr. Charges against two others may be dropped.

Sen. Alan Cranston (D-Calif.), one of five senators accused of improperly intervening with regulators on behalf of Lincoln Savings & Loan owner Charles H. Keating Jr., was summoned before the Senate Ethics Committee on Tuesday to review the case against him amid indications that the panel is on the verge of dropping charges against two of his colleagues.

The investigation of Cranston will continue, sources said, even if the panel soon votes--as expected--to clear Sens. John McCain (R-Ariz.) and John Glenn (D-Ohio) for lack of evidence.

Neither Cranston nor the committee members would disclose what was discussed in their private meeting, but sources said that the session was designed to review the evidence the committee has gathered on the California senator.

Clearing McCain and Glenn would follow the recommendation of special counsel Robert S. Bennett, who told the Ethics Committee in a 350-page report last month that the evidence he had found would justify continuing the investigation only against Cranston and Sens. Donald W. Riegle Jr. (D-Mich.) and Dennis DeConcini (D-Ariz.).

According to these sources, Bennett’s investigation found reason to suspect that the actions of Cranston, Riegle and DeConcini were directly linked to the campaign contributions they had received from Keating.

The committee voted earlier this year to authorize Bennett to conduct a preliminary inquiry into the charges against the senators, who have become known as the “Keating Five.” They were accused of being influenced by Keating’s campaign contributions to intervene in 1987 with Federal Home Loan Bank Board regulators who were investigating Lincoln and its owners.

Common Cause, the citizens lobbying group, has charged that Keating’s influence delayed FHLBB action against fraud and mismanagement at Lincoln. The Irvine-based thrift eventually was seized by the government in April, 1989, and Keating since has been charged with fraud in the sale of junk bonds to Lincoln customers, most of them elderly Californians.

Like Riegle and DeConcini, Cranston solicited large contributions for his campaign and other causes from Keating while acting on behalf of the thrift owner. These contributions included $35,000 for his 1986 Senate campaign, $85,000 for the California Democratic Party and $850,000 for three voter registration groups identified with Cranston.

Committee investigators found that Cranston received a memo from his campaign aide, Joy Jacobson, in early January, 1987, telling him that Keating had contributed to his campaign and the state Democratic Party and advising him that Keating “rightfully expects some kind of resolution” to his complaints against the FHLBB.

The following April, Cranston attended two meetings in which he and the other four senators questioned bank board officials about Keating’s complaints against the agency. These meetings are at the heart of the charges against the five senators.

In his own defense, Cranston has said that he only urged the regulators to bring their investigation of Keating to a close as quickly as possible. He has insisted that he never lobbied bank board officials to drop their investigation, as Keating was seeking.

Cranston met nine times with Keating between 1984 and 1988, according to Keating’s travel logs and appointment books published this week in the National Mortgage News.

These included a trip to Keating’s headquarters in Phoenix in February, 1988. Other meetings between Cranston and Keating occurred on Dec. 17, 1984; July 16, 1986; Aug. 12, 1986; Jan. 28, 1987, March 24, 1987, shortly before the April sessions with regulators; Sept. 4, 1987; Jan. 28, 1988, and at a Dec. 14, 1988, dinner at the Bel-Air Hotel in Los Angeles.

Cranston previously has acknowledged meeting with Keating on several occasions but has refused to say when those meetings occurred or what was discussed.

Members of the Senate Ethics Committee have been deeply divided over how to proceed with the investigation since receiving Bennett’s report, according to sources. Sen. Howell Heflin (D-Ala.), who chairs the panel, has been accused by some members of delaying action on Bennett’s recommendation because some Senate Democrats do not want to drop charges against McCain, the sole Republican among the Keating Five.

Heflin, who is well-known in the Senate for his slow, deliberate manner, has indicated that the committee will vote on Bennett’s recommendation later this week after interviewing all five senators in separate closed sessions.