Keating 5 case's tangles are under sleazy surface


Washington For the cynical and jaded among us, the ethics verdict on the Keating Five senators has been in the books for several months now: Guilty. Get rid of the bums.

That's because, viewed in its worst light, the matter seems a simple and damning case of senators who took gobs of money from a political chum in exchange for de-clawing stubborn federal regulators.

The chum was Charles H. Keating Jr., chief of the late, un-great Lincoln Savings and Loan, whose institutional death will cost taxpayers $2.3 billion; and the senators sometimes seem to have carried out their favors with the energetic eagerness of tip-cadging errand boys.

Not a pretty picture, especially for Sens. Alan Cranston, D-Calif., and Dennis DeConcini, D-Ariz., who seem to have been busiest on Mr. Keating's behalf.

Only problem is, the evidence in the case -- box after box of it -- fuzzes that picture a great deal, especially when viewed as part of the unsavory but lawful system of fund raising that dominates life on Capitol Hill.

In other words, the verdict won't be as easy to reach as one might expect, even though the first four days of public hearings on the case have often made the cynical viewpoint even more alluring.

How else to react when Senator DeConcini begins his defense by shouting, waving his arms and spending more than two hours saying that it is his accusers, not the five senators, who have sinned?

He placed himself and Mr. Keating in league with Nobel laureate Mother Teresa, while depicting the reform-minded Common Cause organization, which filed the ethics complaint that brought on the case, as a greedy lobby in search of a fund-raising gimmick. His other villain was Robert Bennett, the special counsel investigating the case. Mr. DeConcini called Mr. Bennett a glory-hogging scalp hunter.

Such histrionics only obscure the strengths of the case for him and the other four senators, and it was left to Mr. Cranston's attorney, William W. Taylor III, to present a defense in calm, measured tones. Instead of speaking vaguely of a corrupt and broken system, he cited case law and Supreme Court opinions. As he proceeded, the six members of the Senate Select Committee on Ethics nodded knowingly at times.

Mr. Taylor's remarks, when pitted against the evidence and arguments laid out a few days earlier by Mr. Bennett, provide an apt outline of the points on which the case will turn for Senators Cranston, DeConcini and Donald W. Riegle Jr., D-Mich. (The evidence against Sens. John McCain, R-Ariz.,and John Glenn, D-Ohio, is so weak that Mr. Bennett has already indicated he sees no grounds for punishment.)

For starters, Mr. Taylor said, this case might not even have attracted public attention if the savings and loan crisis not occurred, with Lincoln's failure becoming a symbolic epicenter. "It's human nature to look for someone or something to blame, even for natural disasters," he said. "$2.3 billion is a lot of money. Somebody's at fault. It can't be the poor, underpaid regulators. It must be the senators."

Also, contrary to the perception among many, no one is accusing any of the senators of gaining personally from Mr. Keating's largess. "This case is not about funny book contracts or condominiums rented to the government or cash in a shoe box," Mr. Taylor said. "It is about whether the committee should recommend discipline because someone thinks my client drew the line of constituent service and agency oversight of a contributor at a different place than where they would draw the line."

But didn't the senators, as reported so often, receive about $1.35 million from Mr. Keating and his family and associates for their political committees? Yes. But that description, necessitated by the brevity of news columns, can be misleading.

Most of the amount, $850,000, went to voter registration efforts controlled by Mr. Cranston. Though it is naive to suggest that such committees don't benefit him in any way (voter registration efforts generally favor Democrats), they are also not nearly the same as a Cranston re-election fund.

An additional $346,000 of the amount went to campaign funds and political committees for Senators McCain and Glenn, who Mr. Bennett says shouldn't be investigated further. That leaves about $159,100 in Keating-related direct campaign contributions received by Senators Cranston, Riegle and DeConcini during the mid- and late-1980s. That's nothing to sneeze at, but hardly in the league with $1.3 million, and hardly much more than they got from other interest groups during the same period.

In addition, no one is suggesting that seeking to intervene with federal regulators is wrong or unethical. Mr. Bennett acknowledged the role as an important part of a congressman's work.

The issue here is how far a senator can go, and how strenuously he may intervene before his actions cross the line to impropriety.

The intervention in question mostly involves two meetings the senators held on Mr. Keating's behalf in April 1987, the first with Edwin J. Gray, then chairman of the Federal Home Loan Bank Board, and the second with five regulators from the bank board's San Francisco office. In both meetings, the senators discussed a possible loosening of restrictions to allow Mr. Keating's thrift to make more risky investments.

The meetings, the evidence shows, did nothing to persuade the regulators to back off in their enforcement of the law. So much for the argument that the Keating Five helped bring on Lincoln's failure by prolonging its shaky practices.

But Mr. Cranston and Mr. DeConcini continued to seek help for Lincoln of different sorts after the meetings, even though the regulators told the senators that they were forwarding to the Justice Department evidence of criminal activity by the thrift. Mr. Bennett's best evidence that the continued help was improper may have come from Mr. McCain and Mr. Glenn, who said they stopped helping Mr. Keating because they felt further action would have been improper.

Mr. DeConcini's reaction to the revelation of possible criminal activity probably won't help him. Notes from the second meeting with regulators show that he said only, "The criminality surprises me. We're not interested in discussing those issues."

But it is the link between the intervention and the political contributions that is most in question. How much did the senators' help depend on the money they received?

Here, Mr. Cranston emphatically suggests that the system is to blame, forcing lawmakers to seek money from the people who come to them for help.

Mr. Bennett says that even within such a system, there are limits to coziness, and he cites four cases in which Keating contributions were "connected in time and circumstance" to Mr. Cranston's actions on Mr. Keating's behalf. He also chided Mr. Cranston for dealing with Mr. Keating through his chief fund-raiser, Joy Jacobson, on several occasions, instead of through his aide for banking issues.

So what? Mr. Cranston responded on both counts. "How can you rationally refuse to give legal and proper help at any time to someone who seems to have a reasonable grievance because he has contributed to your campaign?" Mr. Cranston asked. "Can you only help people who haven't contributed? Or can you only help people who haven't contributed lately? How lately? And what about people who might contribute in the future?"

As for dealing with Mr. Keating through a fund-raiser, Mr. Cranston pointed out with a large chart that most senators use some of their top staff members to raise political contributions.

But, as Mr. Bennett, pointed out, those staff people are at least employees of the U.S. Congress. Ms. Jacobson is not. She is a fund-raiser only, and Mr. Bennett found many of her memos to Mr. Cranston troubling in the way they seemed to link contributions to acts of help.

In one of Ms. Jacobson's memos, for example, she noted to the senator that he should mention to Mr. Keating in a coming meeting some favorable views expressed by the new bank board commissioner, and she also suggested, "You should ask Keating for $250,000."

One might also ask -- as Mr. Bennett did the other day before the committee -- why, if all these contributions were proper and aboveboard, did Senators DeConcini and Riegle return theirs ($48,000 by the former, $76,100 by the latter) during the past year?

The most difficult job for Mr. Bennett, though, may be in proving that such actions can be considered improper under existing written standards. Mr. Taylor suggested last week that no current standard applies.

He cited the vast courtroom experience of the lawyers in the committee chamber and said, "I'll bet none of us has ever been in a proceeding in which the court was trying to decide what the law was at the same time it's trying to decide whether the accused violated it."

Mr. Bennett vehemently disagreed, but, as Mr. Taylor noted, "he spent an hour talking about what the standard is" during the opening presentation of evidence.

And during that hourlong speech, Mr. Bennett drew heavily from a 1952 book by Sen. Paul Douglas, "Ethics in Government." As Mr. Taylor pointed out later, "Mr. Bennett has not cited a single precedent which controls or remotely bears upon the facts of this case."

Mr. Taylor then quoted U.S. Supreme Court Justice Byron R. White, who wrote in U.S. vs. Brewster that "it has never been thought unethical" for a member of Congress to "listen to the petitions of interest groups in his state or district," nor to also "support or oppose legislation serving or threatening those interests. He must also keep in mind the potential effect of his conduct upon those from whom he has received financial support in the past, and those whose help he expects or hopes to have in the next campaign. . . . This mutuality of support between legislator and constituent is inevitable."

The standards issue seems to trouble members of the ethics committee as much as any other, and all members expressed worry about it in their opening remarks.

Perhaps an even more uncertain variable in the case, however, is the ethics committee itself. The cynic in us suggests that this "jury of peers" will be fearful of becoming entangled in whatever web of judgment it weaves, and therefore will go easy on the senators.

But the committee members also bring to their decision the ingredient of political expedience. The public is is not happy with Congress these days, and the Keating Five case offers committee members a tidy, publicized opportunity to show that lawmakers are willing to clean up their own mess without having voters do it for them. Such reasoning would also allow them to bypass the onerous chore of changing the present fund-raising system that, while sloppy and dangerous, serves incumbents so well.


Dan Fesperman is a Washington correspondent for The Sun.

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