Sen. Daniel K. Inouye (D-Hawaii) told the Senate ethics committee that Congress itself is "on trial" in the investigation of five senators' ties to savings and loan executive Charles H. Keating Jr. because in their service to a constituent the senators did nothing out of the ordinary.

Inouye, the first senator to come before the panel in defense of his colleagues, said they broke no Senate rules or standards of conduct by intervening on Keating's behalf at a time when they were receiving more than $1.3 million for their political campaigns and causes.

"I believe what is on trial here is not the five colleagues of mine but the U.S. Senate," he said, "and for that matter, the Congress of the United States."

Describing Sens. Alan Cranston (D-Calif.), Dennis DeConcini (D-Ariz.), John Glenn (D-Ohio), John McCain (R-Ariz.) and Donald W. Riegle Jr. (D-Mich.) as "men of unimpeachable character," he said they were in trouble only because of the savings and loan debacle and the failure of Keating's Lincoln Savings and Loan.

"If everything turned out well, if we did not have this S and L crisis, if Mr. Keating was once against able to revive {Lincoln}, these men would be heroes to their constituents, they were able to save jobs," he said. "Today they are damned because the endeavor failed, so I think we are on trial here, the U.S. Senate."

Inouye served on the Watergate and Iran-contra investigative committees and acted as defense counsel to former Sen. Harrison A. Williams (D-N.J.) before Williams resigned from the Senate in 1982 after conviction in the Abscam bribery case. In 1988 he came under criticism for including funds in an appropriation bill for building schools in France for North African Jews after receiving a $1,000 campaign contribution from a board member of the organization sponsoring the schools. He later moved to rescind the appropriation, acknowledging that he had made "an error in judgment."

Inouye appeared on behalf of DeConcini, the only senator on hand during his appearance. The Arizona senator reacted emotionally during a break when asked about the testimony. "Sen. Inouye puts a lump in my throat. He is . . . , " DeConcini said, his voice breaking as he paused to gain composure. "He is the kind of guy who calls it as he sees it . . . even though the atmosphere is so polluted with charges of impropriety," he added.

In a related development, spokesmen for the FBI and the Justice Department declined to comment on a report in yesterday's Washington Times that said a federal grand jury in Los Angeles is reviewing evidence involving alleged bribery and vote trading by Cranston and DeConcini.

The grand jury has been investigating possible bank fraud by Keating and a Lincoln loan recipient who recently pleaded guilty to bank fraud and agreed to cooperate with prosecutors investigating the collapse of Lincoln. It has been reported before that FBI agents have questioned many individuals familiar with Keating's relationship with the five senators, but there has been no sign the grand jury had shifted the focus of the investigation to the senators.

The committee also heard testimony yesterday from Cranston fund-raiser Joy Jacobson, who said in a deposition released yesterday that she would have had "greater hesitation about how much contact we had with Mr. Keating" if she had known "how much else was going on."

Asked if Cranston knew, she said, "Well, I would assume that he did."

But she emphasized that if Keating or his representatives had ever drawn a connection between their contributions and intervention on Lincoln's behalf, she would have "passed along to the senator that this is somebody we've got to get away from." She never did so, she indicated.

Jacobson was questioned at length by committee counsel Robert S. Bennett about her attendance at meetings in which Keating and associates discussed complaints about federal regulators' treatment of Lincoln. Keating is now facing trial on fraud charges in California.

A fulltime fund-raiser who was not on Cranston's official Senate staff, she said she was at the meetings only to make the contributors "feel comfortable" while they waited for Cranston. She said she did not bring up fund-raising, saying it would have been "tacky" to do so.

Jacobson said she conducted all of her fund-raising efforts on Capitol Hill in meetings that did not involve legislative business. Asked by committee member Trent Lott (R-Miss.) if she knew it was against Senate rules to raise money in the Capitol, she said she did not.

Jacobson confirmed earlier reports that she wrote a memorandum to Cranston on Jan. 2, 1987, saying there were "a number of individuals who have been very helpful to you who have cases or legislative matters pending with our office who will rightfully expect some kind of resolution." She listed Keating among them.

But, in her deposition, she said she meant only that they deserved an answer one way or the other, not necessarily exactly what they wanted.

In a testy exchange with Bennett, she accused him of misrepresenting her response in the deposition when she was asked if Keating was "making these kinds of contributions because he was getting help from Sen. Cranston" with the bank regulators. "In retrospect, I think that there was a link there," she responded during her closed-door July 19 appearance before the committee.

Jacobson said she meant only to say that Keating may have linked the money and favors he wanted; she was not saying there was a link as far as Cranston was concerned, she said.

Under questioning from DeConcini's lawyer, James Hamilton, Inouye said he did not believe that DeConcini attempted to negotiate a deal for Lincoln in the senators' meeting with federal regulators, as Bennett and the regulators have charged. Even if he did, Inouye said, it would not have been wrong.

Nor, he added, is there anything wrong with a senator or group of senators attempting to pressure regulators in a specific case or a senator or group of senators trying to help a constituent who has contributed to them so long as it is not a favor in return for money.

"I see nothing improper, possibly vigorous, but not improper," he said.

Inouye noted that in 1961, when he was a House member, he and other lawmakers intervened with the secretary of agriculture while a sugar regulation was pending, although he conceded there were some differences in the two cases.

Under cross-examination from Bennett, Inouye acknowledged there were limits to permissible intervention, including a ban on action in return for contributions, which he said he believed had not occurred in the "Keating Five" case. He also conceded that he had read few of the thousands of documents in the case.

Inouye was asked by Bennett if he agreed with the inscription to former Sen. Philip A. Hart (D-Mich.) on the Hart Senate Office Building that recalls Hart's "incorruptible integrity." Inouye said he did but added that "there was only one" Philip Hart.

"All the rest of us strive to be another Philip Hart, but like intent and action, they often times don't coincide. We try our best, but we do fail ever so often," he said.