Yet more trouble for Arizona Gov. Evan Mecham (R), who is the target of a recall campaign. The state attorney general is investigating Mecham's failure to disclose a $350,000 campaign loan in apparent violation of state law. And there is more.

A real estate agent and a lawyer named by Mecham to a state housing-bonds board were recommended for the posts by the attorney who loaned $350,000 to the Mecham campaign, The Arizona Republic reported. Attorney Barry Wolfson, according to the Phoenix newspaper, acknowledged that he suggested that Mecham consider giving the posts to the two.

Records show that shortly after he took office the governor appointed both men to the state Housing Finance Review Board, which reviews industrial-development bond awards to developers who propose to build low-income housing.

Mecham and his chief advisers were subpoenaed Thursday by Attorney General Bob Corbin to appear before the grand jury Nov. 3 to discuss whether the loan from Wolfson was granted in exchange for political favors.

Corbin is also investigating why the loan, made shortly before last year's general election, was not disclosed in the governor's campaign statements or on personal financial-disclosure forms, which must be filed with the state.

Mecham said yesterday on his regular radio talk show, "I have never knowingly broken the law," and added, "Nobody was ever selected to any office because of any contribution." Wolfson also has denied that any kind of deal was made in exchange for the loan.

Wolfson extended a $600,000 line of credit to Mecham, on which Mecham borrowed $350,000. Some $250,500 of the loan remains outstanding and is due to be paid off by Nov. 1, the newspaper said.