Sen. Donald W. Riegle Jr. (D-Mich.), in testimony marked by frequent memory lapses and contradiction of statements by other witnesses, yesterday denied arranging a critical 1987 meeting held by four other senators with federal regulators on behalf of savings and loan executive Charles H. Keating Jr.
Riegle also rejected suggestions from Robert S. Bennett, special counsel for the Senate ethics committee, that he may have engaged in fund-raising activities with Keating while Keating was lobbying senators for help in curbing a regulatory crackdown on his Lincoln Savings and Loan.
But Riegle acknowledged that he was troubled by "the possibility of an appearance of a conflict of interest" in 1988 when he returned $78,000 in contributions raised by Keating after news reports of the fund-raiser, held less than two weeks before the meeting with regulators.
Asked by Bennett if the "juxtaposition" of contributions and intervention by lawmakers on a donor's behalf gives an appearance of impropriety, Riegle said the real test should be whether the conduct itself is proper.
Riegle's role in the 1987 meeting is important because the meeting has become a pivotal event in assessing propriety of the senators' activities and because it affords a test of his credibility and that of several key witnesses in the case.
In its seventh week of public hearings on the "Keating Five" case, the ethics panel is seeking to determine whether any or all of the senators were influenced by more than $1.3 million in contributions that they received from Keating when they intervened on Lincoln's behalf.
Sens. John Glenn (D-Ohio) and John McCain (R-Ariz.) completed their testimony last week, and Sen. Dennis DeConcini (D-Ariz.) is scheduled to testify after Riegle finishes today. Sen. Alan Cranston (D-Calif.) is under treatment for prostate cancer in California and may testify by long-distance hookup.
Riegle's denial of any role in setting up a meeting on April 2, 1987, between the other four senators and Edwin J. Gray, then chairman of the Federal Home Loan Bank Board, puts Riegle at odds with other witnesses, including Gray and James J. Grogan, a Keating lobbyist.
Gray testified that the meeting was Riegle's idea, and Grogan told the committee under a grant of limited immunity, which permits prosecution for perjury, that Riegle arranged the meeting and, apparently concerned about appearances, sought a written invitation from his colleagues to attend.
Riegle did not attend the meeting but came to one a week later with San Francisco-based regulators after DeConcini invited him in writing. The regulators testified that DeConcini offered a deal on Lincoln's behalf at both meetings and implied without contradiction that he was speaking for all senators in attendance. The senators have denied that they proposed or endorsed such a deal.
Asked by his attorney, Thomas C. Green, whether he suggested or arranged the April 2 meeting, Riegle said, "No, I never felt I did." He also denied soliciting invitations to the meeting. He was asked to attend the second meeting in his capacity as a ranking member of the Senate Banking Committee, said Riegle, now chairman of the panel.
But the idea of such a meeting made sense, he said, adding, "I always felt the concept of a meeting was somewhat of a red herring."
Riegle said he could remember no details regarding many other incidents involving Keating and offered only to speculate on what might have happened. He said he attends 3,500 meetings a year and cannot be expected to remember details, especially when nothing "dramatic" happens.
Green, his attorney, has told the committee that Riegle has a "general disability" in remembering details on any subject.
Riegle also sought repeatedly to raise questions about Grogan's recollection of events.
Grogan corrected himself at several points in his testimony but was adamant that Riegle had suggested the April 2 meeting with Gray during a visit the previous month to Keating's corporate headquarters in Phoenix. In addition, Grogran said, Riegle called Keating later to say he had set up the meeting.
In his testimony last month, Grogan also said Riegle and Keating discussed the fund-raiser that Keating was planning for Riegle at the Ponchartrain Hotel, which Keating owns, in Detroit.
Pressed for details of his discussion with Keating, Riegle said, "I can't say in any specific detail. I just can't play back that conversation or any other conversation during that period." But he said he knew he did not arrange the meeting or call Keating later about contacting Gray.
If Keating had asked his help in dealing with the regulators, Riegle said, he would have suggested that Keating contact his own senators.
Asked if he had combined official business and fund-raising, Riegle said he knows that he did not because he regarded such action as improper. When someone attempted to link the two on another occasion, he said, he reported the incident to the U.S. attorney in Detroit.