Senators friendly with Charles H. Keating Jr. offered "defense after defense after defense" of his troubled savings and loan even after being given stark warning of its unsound practices, a federal regulator says.
William K. Black ended two days on the witness stand before the Senate Ethics Committee on Thursday, standing firmly by his allegations of political pressure by the so-called Keating Five senators in the face of skeptical questioning from members of the panel.Black said he and three other regulators, in a meeting with the senators, used definitive statements to describe practices at Keating's Lincoln Savings and Loan. He said the lawmakers were told the Irvine, Calif., thrift had made massive loans without credit checks, was "flying blind," had "incompetent" management and was courting failure.
But, he said, the senators would not accept their warning that Lincoln was an institution they should avoid.
"They were listening and were coming back with defense after defense after defense of Lincoln, despite us laying out in starkest terms . . . exactly what was wrong," Black said in response to questions by Sen. Jesse Helms, R-N.C.
"It didn't impress them," Black said.
The hearings were resuming today, their 14th day, with Arizona Gov. Rose Mofford, a Democrat, appearing as a character witness on behalf of one of the five senators, Democrat Dennis DeConcini of Arizona.
The Ethics Committee is considering allegations that the five acted improperly in intervening with federal regulators on behalf of Keating, who contributed $1.3 million to their campaigns and related political causes.
After a two-hour closed session Thursday, the committee disclosed a new schedule that could prolong the hearings into January.
The panel plans to offer limited use immunity to compel the testimony of Keating's former lobbyist and top aide, James Grogan. Committee Vice Chairman Warren Rudman, R-N.H., said Grogan would produce documents in private next Wednesday and would undergo questioning in closed session on Dec. 17.