Sen. Dixon Reportedly Is Cleared in Ethics Inquiry

The Senate Ethics Committee recently reopened the “Keating Five” investigation after receiving information that a sixth senator, Alan J. Dixon (D-Ill.) may have intervened with federal regulators in 1989 on behalf of Lincoln Savings & Loan.

Sources said that the panel found no evidence to support the allegation against Dixon.

The inquiry was reopened after the panel received a copy of a memo written on Feb. 16, 1989, to Lincoln owner Charles H. Keating Jr. by his personal secretary, Carol Kassick. The memo was not available to the panel during its earlier two-year investigation.

“This is completely off the wall, an absurdity, a 1,000% fabrication,” Dixon said Tuesday. “I don’t even know Keating. On my oath, this is completely bonkersville.”

In her memo, a copy of which was obtained by The Times, the Keating secretary reported that a member of the Senate Banking, Housing and Urban Affairs Committee named “Dickson” had approached M. Danny Wall, then chairman of the Federal Home Loan Bank Board, to persuade him to allow Keating to sell the scandal-plagued thrift to a group of investors in 1989.

According to sources, the committee staff conducted a one-month investigation. The staff is said to be preparing a 30-page report that will say it found no evidence that the Illinois senator took any action on behalf of Keating.

Among those interviewed about the memo was Wall, who said that he had no recollection of being contacted by Dixon. The panel also asked Keating to testify but he refused in a letter dated Feb. 24, citing the Fifth Amendment right against self-incrimination.

The committee did not interview Kassick, who told The Times that she had been contacted several times about the memo, which she did not recall.

In her memo, Kassick said that Dixon--or “Dickson”--had been asked to intervene with the bank board by Sens. Donald W. Riegle Jr. (D-Mich.), Alan Cranston (D-Calif.), and Dennis DeConcini (D-Ariz.), three of the so-called Keating Five. She added: “Dickson went to Wall to get it done.”

Fritz reported from Washington and Granelli from Orange County.