Cranston Called Involved in S&L;’s Affairs : Thrifts: Former chief regulator says the senator made an ‘unusual’ number of phone calls to urge sale of Lincoln. But he insists he was not pressured.

Sen. Alan Cranston (D-Calif.) made an “unusual” number of phone calls on behalf of Lincoln Savings & Loan and was “substantially involved” in the ailing thrift’s affairs, the nation’s former top S&L; regulator told the Senate Ethics Committee Tuesday.

But M. Danny Wall, the ex-regulator, insisted that he did not feel intimidated or pressured by Cranston’s efforts to urge a speedy sale of the beleaguered Irvine-based thrift.

“I didn’t feel it was out of order,” Wall said, referring to contacts by Cranston and Sen. Dennis DeConcini (D-Ariz.), who also called him in the days before the government seized Lincoln in 1989.

Wall acknowledged, however, that he would have been much more concerned by Cranston’s intervention if he had been aware that Lincoln owner Charles H. Keating Jr. had given $850,000 to Cranston’s voter registration drives. Keating also donated $60,000 to Cranston’s campaign organization and $85,000 to the California Democratic Party at Cranston’s request.

“Had I known . . . I would have been very disturbed by Sen. Cranston’s calls regarding Lincoln,” Wall said in an affidavit given to the committee and discussed at Tuesday’s hearing. “In fairness to me, had I known then what I know now, I probably would have reacted differently to Sen. Cranston’s numerous contacts on behalf of Lincoln.”

Wall’s testimony provided new details of Cranston’s aggressive efforts on behalf of Lincoln.

The California Democrat first contacted Wall in the summer of 1987 to urge that regulators finish a financial examination of Lincoln. He renewed the request at another meeting in 1988, said Wall, who was chairman of the Federal Home Loan Bank Board.

When Lincoln’s financial problems worsened, Cranston met with Wall in 1989 and called him three more times to urge speedy bank board action on proposals by Lincoln’s owners to sell the institution. But the regulators rejected all the proposals on grounds that the buyer groups were fronts that would allow Keating to keep control of Lincoln, according to Wall.

On April 14, 1989, the day the government seized Lincoln, Wall said, Cranston told him: “I think the board has made a mistake--I hope you are right.” Lincoln’s demise will cost U.S. taxpayers an estimated $2 billion, making it the single biggest failure among hundreds of collapsed thrifts.

The Ethics Committee is investigating whether Cranston, DeConcini and three other senators acted improperly by intervening on behalf of Lincoln with federal thrift regulators. The senators collected $1.3 million in contributions from Keating, who is under indictment for fraud in California and is being sued for more than $1 billion by the federal government.

Wall testified that none of the other senators under investigation by the committee--John McCain (R-Ariz.), John Glenn (D-Ohio) and Donald W. Riegle Jr. (D-Mich.)--ever called him in connection with Lincoln’s problems.

Cranston’s devotion to Lincoln’s problems was notable, said Wall, who had been staff director of the Senate Banking, Housing and Urban Affairs Committee, which was headed by Sen. Jake Garn (R-Utah), when Republicans controlled the Senate from 1980 through 1986. He was appointed to the regulatory post by former President Ronald Reagan in 1987.

“I would say that it was unusual for a senator to place so many phone calls to me with regard to a single savings and loan institution,” Wall said in his affidavit.

“Sen. Garn wouldn’t have done it,” he said in response to questions from committee members. Citing his 13 years as a Senate staff member and then chief thrift regulator, Wall said that the “breadth and depth of Sen. Cranston’s involvement in the affairs of a single institution also was unusual.”

Wall said Cranston suggested in his April, 1989, calls that regulators “give prompt consideration and approval to any legitimate proposals” for Lincoln’s sale.

DeConcini asked for “prompt consideration but did not state that a particular proposal (should) be accepted,” Wall said.

Cranston and DeConcini have testified that they had hoped a sale could be achieved to preserve jobs at Lincoln and at the thrift’s Arizona-based parent firm, American Continental Corp.

Wall said he did not remember specific details of his conversations with Cranston and DeConcini but insisted he never felt they were trying to pressure him improperly.

Sen. Terry Sanford (D-N.C.), one of the six members of the Ethics Committee, asked Wall: “Sens. Cranston and DeConcini did not ask you to do anything in an improper way . . . and you were not influenced by them?”

“That’s correct,” Wall said.

Another Ethics Committee member, Sen. David Pryor (D-Ark.), asked a series of questions about whether any of the five senators had asked Wall to slow down enforcement efforts or to provide special help for Lincoln. To each question, Wall replied, “no.”

Wall’s testimony contrasted with the comments of his predecessor as chief thrift regulator, Edwin Gray Jr., who told the committee that he felt intimidated during an April, 1987, meeting with four of the senators.