Sen. Dennis DeConcini, defending himself against ethics allegations, Wednesday denied he tried to negotiate with federal regulators on behalf of Charles H. Keating Jr.'s failing savings and loan.
DeConcini, the Arizona Democrat who is one of the so-called Keating Five senators, recalled for the Senate Ethics Committee his memory of a crucial April 2, 1987, meeting four of the senators held with the top federal thrift regulator, Edwin J. Gray, on a disputed rule that would have restricted the ability of Keating's Lincoln Savings and Loan to engage in risky speculative investments.He said the issue didn't come up because of Gray's insistence he knew nothing about Lincoln.
"Mr. Gray refused to talk to us about Lincoln," DeConcini said. "We didn't get around to anything of substance, forebearance or anything else."
Gray has testified that DeConcini led efforts to pressure regulators for easy treatment of Lincoln and tried to broker a deal on behalf of Keating's thrift. DeConcini said he also did not try to negotiate in a meeting a week later with San Francisco-based regulators, and he denied any attempt to harass or intimidate those career regulators.
"We were not in a position to offer a settlement," DeConcini said. "We were not in a position to negotiate. We didn't know what their (the regulators') position was."
DeConcini denied assertions that he instructed Gray not to bring any staff aides to their meeting. Gray testified someone in DeConcini's office issued that instruction.
The Arizona senator acknowledged that Keating himself requested he meet with Gray the month before. DeConcini said he told Keating he was interested in helping but because of past difficulties with Gray "I was not really the guy to put together a meeting."
He said he later met with Sen. Donald Riegle, D-Mich., who "said he thought it was a good idea to have a meeting with Mr. Gray." DeConcini said he called Gray himself later to ask for the meeting, and that Gray readily agreed.
DeConcini made the comments as he underwent public questioning before the committee, which is investigating allegations the senators improperly intervened with federal regulators on behalf of Keating's Lincoln Savings and Loan.
The committee chairman, Howell Heflin, said he hoped the hearings would conclude by the middle of next week. Then the panel will consider whether to take action against any of the senators or whether to recommend more serious punishment by the full Senate.
DeConcini's appearance will wrap up testimony by the senators who are under ethics scrutiny. Sens. John McCain, R-Ariz., and John Glenn, D-Ohio, testified last week. The committee voted unanimously Tuesday to excuse the fifth senator, Democrat Alan Cranston of California, from testifying in person because of the debilitating effects of his cancer treatment.