RTC Proposes Banning of Two Firms : Ethics: Salomon Bros., Morgan Stanley are accused of violating S & L cleanup agency’s rules.

The Resolution Trust Corp., the thrift cleanup agency, proposed Friday to bar Salomon Bros. Inc. and Morgan Stanley & Co. from future agency contracts, citing alleged violations of agency rules prohibiting gifts to and entertainment of RTC employees, the agency said in a statement.

The proposed exclusions are the first results of a continuing investigation by the RTC of practices of firms that have provided financial advisory and underwriting services to the agency. As part of this investigation, which covers January, 1991, through June, 1993, the RTC is examining possible ethics violations of former and current employees of the RTC.

Also Friday, three former RTC employees were notified that they aren’t authorized to contract directly with the agency because of possible past ethics violations, pending a final decision on their eligibility by an RTC ethics officer.

In addition, the RTC said it has begun action against 11 current employees for violations of ethics rules prohibiting the acceptance of gifts or entertainment from RTC contractors. These actions range from a written reprimand to ethics counseling, the agency said.

The firms and people accused of ethics violations are entitled to defend themselves against the allegations before the prohibitions become final. The U.S. attorney has declined to make a criminal prosecution out of the alleged violations, the RTC said.

Salomon Bros. and Morgan Stanley are alleged to have purchased meals and provided tickets to theater and sporting events for current and former RTC employees. The entertainment values ranged from about $12 to $450, averaging about $68 per event, the RTC said.