Panel Backs Alexander as Education Secretary : Cabinet: But four Senate Democrats say the former Tennessee governor’s business transactions trouble them.

A Senate committee Wednesday recommended that former Tennessee Gov. Lamar Alexander be confirmed as secretary of education, but only after four Democrats expressed dismay over his personal business transactions.

Sen. Claiborne Pell (D-R.I.) said Alexander had used “poor judgment and poor taste in his investments.” But, like 15 other members of the Senate Labor and Human Resources Committee, Pell cast his vote for President Bush’s nominee, saying Alexander had “the qualifications, the experience and the ability to be an excellent secretary of education.”

Only Sen. Tom Harkin (D-Iowa) failed to favor the nomination, casting his vote as “present.” Referring to Alexander’s business dealings, Harkin said: “In my mind, the jury’s still out.”

The committee spent seven weeks investigating financial records that showed that the net worth of Alexander and his wife, Leslee, increased from $151,000 in 1978--before his election as governor--to about $3 million in 1990. Alexander left the governor’s office in 1987 and then served as president of the University of Tennessee.

Harkin told his colleagues that “someone was making fast bucks out there,” and complained that it appeared that Alexander had “paid a lot of attention during his public service to making money.”

Committee Chairman Edward M. Kennedy (D-Mass.) acknowledged that “a number of questions arose with respect to the propriety of a series of complex transactions that produced substantial personal financial gains for Gov. Alexander and his family” after he won his state’s highest office.

But Kennedy stressed: “I have found no persuasive evidence of violation of law.” Kennedy praised the nominee as “a strong advocate of public education” and said Alexander had “initiated far-reaching reforms in the Tennessee public schools.”

The committee had found “no ethical violations by Gov. Alexander that we could prove,” Sen. Howard M. Metzenbaum (D-Ohio) said.

In one deal examined by the panel, Alexander belonged to a group that arranged the sale of the Knoxville Journal to Gannett Communications Inc. in return for Gannett stock. For his efforts and without making any investment of his own, he obtained a profit of $620,000 through the sale of his Gannett stock in 1984, 1986 and 1987.

Harkin pointed to information obtained by the committee that Alexander once received an unsecured bank loan of $132,000 at the prime interest rate, saying that “the appearance of it” suggested favoritism resulting from his high public office.

There were also questions about his wife’s investment of $8,900 in a private prison management company--stock that she swapped and sold for $142,000 five years later.

Responding to Republican criticism that the Democrat-controlled panel had merely sought to embarrass Alexander and to delay his confirmation, Metzenbaum insisted that the inquiries were legitimate and had no political motivation.

He said that “there has been no quarrel” about Alexander’s qualifications and policy experience.

Sen. Orrin G. Hatch (R-Utah), the panel’s ranking minority member and chief advocate of Alexander’s nomination, said it is “no crime for a public official or former official to make money, if he does it legally and ethically.”

Hatch said the nominee had “completely and forthrightly answered all the committee’s questions and opened all his financial records.”

Referring to Alexander’s business profits, Hatch said: “If he can show that kind of success at the Department of Education . . . we’ll all be better off.”

Harkin pointed to Alexander’s success at making money and said with a measure of sarcasm: “I somehow think we have the wrong nominee here. We need him as secretary of the Treasury.”