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Counsel Recommends Sens. Glenn, McCain Be Cleared, Sources Say

September 29, 1990

WASHINGTON (AP) _ A special Senate counsel recommended more than two weeks ago that the Ethics Committee clear two of the five senators under investigation for their ties to savings and loan operator Charles H. Keating Jr., sources confirmed Saturday.

The confidential Sept. 10 report of Robert S. Bennett said there was inadequate evidence to pursue the case against Sens. John Glenn, D-Ohio, and John McCain, R-Ariz., but advised the panel to look further in the case of the three others - Democratic Sens. Donald W. Riegle Jr. of Michigan, Dennis DeConcini of Arizona and Alan Cranston of California, the sources said.

Neither Bennett nor any of the six members of the ethics panel, led by Chairman Howell Heflin, D-Ala., would comment on the disclosure, originally made late Friday, about the special counsel’s recommendations or why the committee has yet to act upon them despite three interim meetings.

And none of the senators targeted by the probe said he had any formal word about Bennett’s findings, though McCain’s spokesman, Scott Celley, said: ″We presume it’s true, since there’s been no denial. The senator is pleased to hear this ... and hopes the Ethics Committee will vote these recommendations soon. Certainly he hopes it will have acted before the election. There is an old saying, ’Justice delayed is justice denied.‴

None of the five is up for re-election this year, but some sources, talking on condition of anonymity, said they believed Heflin and other members of the ethics panel are reluctant to take any definitive action in the heated political atmosphere, particularly at a time when the Senate is burdened with crucial floor business over the budget and other issues.

″I wouldn’t look for a thing until after election day,″ said one aide close to the case. ″Believe me a lot of senators on both sides of the aisle feel that way. I can’t count the number of them who have told me, ‘There, but for the grace of God, go I,’ and want to move the issue off center stage.″

If Glenn and McCain were cleared, Republicans could point to the fact that those remaining under scrutiny in Congress are all Democrats, and some GOP aides suggested that may have something to do with the delay. But Republicans still would have no monopoly on finger-pointing in the S & L debacle, with President Bush’s son, Neil, facing serious allegations over his dealings in a Colorado case.

And conservative Republican Sen. Jesse Helms, R-N.C., an Ethic Committee member and close political ally of McCain, said earlier in the week the committee is moving as fast as it can. ″Do you suggest we don’t work every angle?″ he asked. ″We just have a heavy load.″

All five senators subject to the investigation have acknowledged intervening with banking regulators on behalf of Keating, but say they did so in a proper manner consistent with their duties toward any constituent seeking help. Collectively, they received $1.3 million in campaign contributions from Keating and his associates.

The three senators who, under Bennett’s recommendation, would remain under investigation declined direct comment on that prospect. Riegle’s spokeswoman, Karolyn Wallace, said ″The committee is in stage one of a possible three- stage process. Senator Riegle is confident its review will find his conduct to have been proper.″

Keating controlled Lincoln Savings and Loan of Irvine, Calif., whose failure has been estimated to cost the taxpayers $2 billion. His family is from Ohio; he had a hotel project in Michigan and his principal corporation operated in Arizona, where his enterprises once pumped an estimated $100 million annually into the economy and had a payroll of 50,000.

Keating, charged with fraud in the sale of more than $200 million in risky junk bonds, is in jail in Los Angeles, unable to make $5 million bail.

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