Senate Panel Considers Limited Immunity for Keating : Ethics: The ex-thrift chief’s testimony on his ties to five lawmakers may be sought. But such action could harm a criminal probe of his S&L; dealings.

The Senate Ethics Committee is considering giving former thrift executive Charles H. Keating Jr. limited immunity in exchange for testimony about his ties to five senators, sources on the committee said Wednesday.

Such action could bolster the committee’s case against Sen. Alan Cranston (D-Calif.) and four others who tried to help the former owner of Lincoln Savings & Loan Assn. solve his problems with federal thrift regulators. Public congressional hearings into charges against the senators--dubbed the “Keating Five”--begin Nov. 15.

But court-approved immunity for Keating might seriously jeopardize an ongoing federal criminal investigation of him by a grand jury in Los Angeles, the sources said.

Committee members are weighing this drawback as they consider what witnesses, other than the five senators, will be summoned to the hearings.

Besides Cranston, the senators under scrutiny for their ties to Keating are Dennis DeConcini (D-Ariz.), Donald W. Riegle Jr. (D-Mich.), John Glenn (D-Ohio) and John McCain (R-Ariz.). The five received a total of $1.3 million in contributions from Keating for their campaigns and other causes.

Justice Department officials would have 30 days notice to object to any grant of immunity, which the committee could request from a federal court. But by law the department could not prevent it.

Earlier this year, Keating refused to testify voluntarily in closed committee session on grounds that he might incriminate himself.

“Would we like to have Keating testify? You bet we would,” said a source close to the committee who spoke on condition of anonymity.

He added: “I don’t think we absolutely need him, although I can’t rule it out. The committee members will have to determine that.”

Keating currently is free on $300,000 bail on California state charges that he committed fraud in the sale of bonds at branches of Irvine-based Lincoln Savings & Loan. A federal grand jury in Los Angeles reportedly is conducting a broader investigation.

Committee sources said that if Keating’s testimony is deemed important, the panel would follow procedures adopted in 1987 by special Senate and House committees investigating U.S. arms sales to Iran and diversion of profits to the Nicaraguan Contras.

Those committees obtained testimony from former presidential assistants Oliver L. North and John M. Poindexter, among others, by applying to a federal judge for limited grants of immunity so that North and Poindexter could not be prosecuted using information that they gave to Congress.

The move was deemed successful by the committees, giving them--in North’s case--an informative witness who stirred deep emotions in a nationwide television audience. But the immunity proved disastrous for federal prosecutors who sought to try North on evidence unrelated to his testimony.

The U.S. Court of Appeals threw out North’s conviction on grounds that prosecutors made unfair use of his immunized testimony before Congress.

John W. Nields Jr., a Washington lawyer who was chief counsel to the special House committee, said that under federal law a judge cannot refuse to grant immunity to a witness when requested to do so by a two-thirds majority of a congressional committee.

“It’s virtually automatic,” Nields said. “But the committee has to give the Justice Department 30 days advance notice so the department can try to persuade the committee to abandon the request.”

Nields said that he thought many ethics committee members would be reluctant to endanger the federal prosecution of a man whose thrift failure eventually may cost taxpayers $2 billion.