Panel Finds 'Credible Evidence' Cranston Violated Ethics Rules

Last July the Senate voted unanimously to denounce Sen. Dave Durenberger (R-Minn.) for financial misconduct stemming from book promotion and condominium rental deals. Still pending are charges that D'Amato improperly presssured federal agencies on behalf of relatives, friends and contributors.

Only 10 senators, including Durenberger, have received some form of censure from the Senate in its 200-year history; 15 have been expelled.

Public hearings in the Keating case began in November and lasted until Jan. 15. Committee members then closeted themselves in the Hart Building for a total of 11 days in an attempt to resolve what reportedly started as a largely partisan split over whether to reprimand McCain and Glenn as well as DeConcini and Riegle.

At one point, Democrats were pressing for more or less equal treatment for McCain and DeConcini, while Republicans wanted to come down more heavily on DeConcini and Riegle than McCain and Glenn, according to sources close to the deliberations.

Even before the deliberations began, there were strong indications that Cranston would receive the harshest treatment. Cranston reacted angrily to the reports, suggesting he was being made a "scapegoat" and contending he had done nothing more culpable than the others.

Cranston, a senior member of the Senate Banking Committee, was by far the largest beneficiary of Keating's largess among the five, receiving nearly $1 million from Keating and his corporation, most of it for voter registration groups that he sponsored.

Actual campaign contributions from Keating totaled $49,000 for Cranston, $80,100 for DeConcini, $34,000 for Glenn, $78,250 for Riegle and $112,000 for McCain, although Riegle and DeConcini returned some or all of Keating's contributions to them.

American Continental, Lincoln's parent company, went bankrupt in April 1989, and the Federal Home Loan Bank Board seized control of Lincoln at an estimated cost of $2 billion to taxpayers, making it a centerpiece of the savings and loan disaster that was then beginning to sweep the country.

Staff writer Tom Kenworthy contributed to this report.

1978: Charles H. Keating Jr.'s American Continental Corp. is organized in Phoenix.

1984: American Continental buys Lincoln Savings and Loan, a thrift in Irvine, Calif.

1985: The Federal Home Loan Bank Board imposes new regulations curtailing the direct investments in real estate and other risky enterprises a thrift institution can make.

1986: San Francisco-based regulators begin an examination of Lincoln because of risky investments and Keating accuses Edwin J. Gray, then bank board chairman, of a vendetta against Lincoln.

1987: Sens. Alan Cranston (D-Calif.), Dennis DeConcini (D-Ariz.), John Glenn (D-Ohio) and John McCain (R-Ariz.) meet on April 2 with Gray to discuss Lincoln's problems and are joined by Sen. Donald W. Riegle Jr. in a meeting April 9 with San Francisco regulators.

The April 9 meeting ends with a warning from regulators that they are referring the Lincoln case to the Justice Department for a criminal investigation; Glenn, McCain and Riegle take no further action on Lincoln's behalf. M. Danny Wall succeeds Gray as bank board chairman; San Francisco regulators recommend government seizure of Lincoln.

1988: Bank board accepts resolution of the case, supported by Lincoln, that includes transfer of supervision out of San Francisco office. New examination of Lincoln is begun. American Continental begins efforts to sell Lincoln.

1989: American Continental files for reorganization under the bankruptcy code on April 13; the bank board seizes control of Lincoln April 14 and puts it into receivership in August. On Oct. 13, Common Cause asks the Senate ethics committee and the Justice Department to investigate the five senators' intervention on behalf of Lincoln in light of $1.3 million in contributions they or their causes received from Keating. The ethics panel launches a preliminary inquiry into the case on Dec. 22.

1990: Keating is indicted on state fraud charges in California in connection with junk bond sales. On Sept. 10, Robert S. Bennett, special counsel to the ethics committee, submits his report, including a recommendation that the panel continue its probe of Cranston, DeConcini and Riegle but take no action against Glenn and McCain. Unable to agree, the committee schedules public hearings, which begin Nov. 15 and continue through Jan. 16, 1991.