Ethics Action Set After Election in ‘Keating 5’ Case

The Senate Ethics Committee on Tuesday set public hearings Nov. 15 on ties between savings and loan magnate Charles H. Keating Jr. and five senators.

In deciding on the hearings, the panel reportedly rejected a recommendation by special counsel Robert S. Bennett to launch a full-scale inquiry into the actions of Sen. Alan Cranston (D-Calif.) and two of his Democratic colleagues and to drop charges against two others, one a Democrat and the other a Republican.

The action was viewed by some Republicans as an effort to ensure that their party--not just the Democrats--is left on the hook through the Nov. 6 congressional elections.

Emerging from closed-door deliberations, Ethics Committee Chairman Howell Heflin (D-Ala.) and Vice Chairman Warren B. Rudman (R-N.H.) released a panel resolution stating that next month’s hearings will provide “a full exposition of the facts, so that each of the five members can respond to the allegations made against him.”

The resolution said that in the open hearings the panel will be able to “judge credibility and determine whether there is reason to believe any improper conduct may have occurred, and the American people can hear all the evidence.”

The committee said that “except in extraordinary circumstances” it would conclude its proceedings before the end of the year.

In a report to the committee Sept. 10, Bennett reportedly had recommended that the panel drop cases against Sen. John McCain (R-Ariz.) and Sen. John Glenn (D-Ohio).

Bennett had recommended an intensified investigation of Cranston and Sens. Dennis DeConcini (D-Ariz.) and Donald W. Riegle Jr. (D-Mich.) on grounds that they had much more extensive dealings with Keating in trying to help him resolve his problems with federal thrift regulators.

All five senators intervened with regulators on behalf of Keating and his ailing Lincoln Savings & Loan Assn. In addition, they received a total of $1.3 million in contributions from Keating for their campaigns and other causes. All have denied any wrongdoing.

Cranston hailed the committee’s action Tuesday, saying that “the public is entitled to get beyond the malicious rumors and selective leaks and to know all the facts. I see this as an opportunity to achieve the public vindication I know I deserve.”

Cranston’s reference to leaks involved confidential committee documents that surfaced last week showing extensive actions that he, DeConcini and Riegle had taken to help Keating.

Among the information in the documents were references to late-night and early-morning telephone calls placed by Cranston and DeConcini to the unlisted home number of a federal regulator, Roger F. Martin.

In an affidavit, Martin said the senators used “almost exactly the same words,” urging him and his colleagues on the Federal Home Loan Bank Board to meet with an investor group that could have taken Lincoln off Keating’s hands at a time when it was on the verge of collapse.

The Irvine-based thrift ultimately was seized by the government in April, 1989, at a potential cost to taxpayers of more than $2 billion.

Although the committee did not disclose its votes, sources said Bennett’s proposal to dismiss McCain and Glenn from further investigation failed to win approval on a tie vote, with the panel’s three Republicans voting in favor and Heflin and two other Democrats voting against.

Such action would have left only Cranston, DeConcini and Riegle--all Democrats--under a cloud, giving Republicans a potential campaign issue, even though none of the three is up for reelection this year. In addition, some Democrats suspect McCain’s office of having instigated the leaks of committee documents.

The resolution calling for hearings next month into the actions of all five senators was approved unanimously, the sources said.

Glenn and McCain bitterly criticized the committee’s refusal to drop them from the investigation.

McCain said the committee’s failure to act was “an outrage” and called its refusal to make the special counsel’s report public “an act of political cowardice.”

“I am incredibly puzzled by this bizarre and clearly unprecedented decision by the Ethics Committee,” he said.

Senate Minority Leader Bob Dole (R-Kan.) and other Republicans had demanded earlier that the committee act on the recommendations before Congress adjourns, accusing the panel of inexcusable delays.

Glenn declined to attack the committee’s motives but said the panel was going back on a guarantee it made to handle the charges against him and the other senators on an individual basis.

Instead, he said angrily, “all five of us will be lined up at the same table” at the Nov. 15 hearing, and “all of you (the media) will have a field day.”

“I wanted to be treated as an individual, not as part of a group,” Glenn said, suggesting that he does not want to be tarred with the same brush as senators who may be faced with more damaging evidence. “I know what John Glenn did. I have no idea what others did.”

Heflin said the unusual decision to depart from the customary secrecy that surrounds the committee’s deliberations was motivated by a need to “promote public confidence in the integrity of the Senate.”