Alan Cranston, one of five U.S. senators with ties to financier Charles Keating Jr., declined an invitation to testify before a grand jury probing junk bond sales at a Keating thrift, transcripts unsealed Friday show.
Cranston is one of the "Keating Five," senators who accepted $1.3 million in political contributions from the Arizona developer.The Senate Ethics Committee is investigating whether they improperly intervened with regulators on Keating's behalf to keep open his Lincoln Savings and Loan Association long after it should have been seized.
Larry Mason, special counsel to the grand jury, said in the transcripts that an invitation to testify was sent to Cranston. The Democratic senator's attorney replied with a letter saying Cranston would be unable to testify.
Cranston said he was unaware of the severity of Lincoln's problems at the time he spoke to thrift regulators. He said he talked to the regulators merely to try to cut red tape on behalf of Keating, a substantial California employer.
The 4,600-page, 45-volume transcript unsealed at the request of media organizations in Keating's criminal fraud case was filled with other allegations.
Keating and three former top officers of his companies are charged with misleading investors about the safety of risky junk bonds sold at branches of Lincoln Savings, which later failed. The bonds were issued by the now-defunct parent of Lincoln, American Continental Corp., which Keating headed.
Keating and the others are charged with ordering employees to steer Lincoln depositors away from insured certificates of deposit and into the bonds.