Top Regulator Cleared of a Conflict of Interest : Banking: Comptroller of the Currency Robert L. Clarke’s investments did not violate government ethics rules, a probe concludes.

Bush Administration attorneys cleared Comptroller of the Currency Robert L. Clarke of allegations of conflict of interest Tuesday after an investigation of his extensive financial investments, which he has continued to actively manage despite his role as one of the nation’s chief banking regulators.

In a detailed report on Clarke’s complex personal holdings, the general counsel of the Treasury Department found that Clarke, a millionaire, did not violate government ethics rules.

Treasury Department counsel Jeanne Archibald found no conflict of interest, although Clark had invested in high-risk junk bonds and made investments with another employee of the Office of the Comptroller of the Currency, which regulates nationally chartered banks.

While Clarke was personally investing in junk bonds, he was appointed to the board of the Resolution Trust Corp., the agency that is selling off the assets of failed savings and loans seized by the government. Many of the S&Ls; had large holdings of junk bonds, so newspaper reports suggested that Clarke’s investments might conflict with his role at the RTC.

Archibald said she agreed with Clarke’s recent decision to put his holdings in a blind trust to avoid an appearance of conflict of interest.

When the issue of his personal investments was raised in stories published by the Washington Post this year, Clarke denied that he was guilty of a conflict of interest. A wealthy banker, he insisted that he had abided by ethics rules that allow senior government employees to actively manage their investments as long as their transactions don’t represent a direct conflict with their jobs.

But Clarke is up for reappointment to his post as Comptroller of the Currency and is facing strong opposition from Senate Banking Committee Chairman Donald Riegle (D.-Mich.), who criticized Clarke’s initial decision not to place his funds in a blind trust.

Clarke finally agreed to do so last month.

In a statement Tuesday, Clarke suggested that he hopes that the Treasury report will help clear the way for his reappointment, which Riegle has delayed for months.

“I regret that any of my financial activities or holdings have inadvertently contributed to a public perception of conflict of interest,” Clarke said. “I hope that the results of this review . . . will put to rest any questions about my financial transactions. I look forward to moving ahead with the confirmation hearings on my nomination.”

Riegle seems in no hurry to open hearings on Clarke’s renomination, which the White House sent to the Senate in January. He has refused to set a schedule for his committee’s consideration of the nomination.

Riegle is embroiled in a battle with Clarke’s staff over whether regulators must publicly reveal names of individuals who held bad loans at Bank of New England, which collapsed in January. Riegle has refused to consider Clarke’s nomination until regulators turn over the information--which the Administration considers confidential.

Riegle’s critics charge that he is holding up Clarke’s nomination at least partly out of bitterness over his own bruising ethics battle. Riegle was a member of the “Keating Five,” the group of senators investigated for helping--in return for campaign contributions--Charles H. Keating Jr. delay a government takeover of Keating’s Lincoln Savings & Loan. Lincoln eventually collapsed, precipitating the most costly thrift bailout to date.

Riegle was cleared by the Senate Ethics Committee. His critics complain that he is holding up Clarke’s nomination to embarrass the Bush Administration and force it to accept the blame for the crisis in the banking industry.