I have read your curious response of May 30 to Senator McCain
about the substance of a discussion involving Lincoln Savings
you allege took place with a group of Senators including
myself. Frankly, I'm astonished. I did not participate in
any discussion with you which even remotely resembles what you
describe.

If

What I said to you about Lincoln Savings when you were
chairman of the FHLBB was clear and simple: Do something to
end the inordinate delay in the examination of Lincoln.
Lincoln was violating regulations, take appropriate action
against it. If Charles Leating had broken any laws, bring
charges. But if a case could not be made against Lincoln,
then bring a halt to what appeared to be the harassment to
which Lincoln was being subjected by your regulators. Don't
keep Keating twisting in the limbo of your bureaucrats'
malicious indecision.

In any conversations I had with you about Lincoln, that was my
sole message.

Sincerely,

Mounta

Alan Cranston

GY 00114

SPECIAL COUNSEL

EDWIN J. GRAY

Miami, Florida 33184

Senator Alan Cranston

Dear Senator Cranstons

-1989.

Senator Cranston, you may be astonished. I am not.
senatorial colleagues in Senator DeConcini's office

You, Senator Cranston, may not remember what Senator
DeConcini proposed to me in that meeting. I don't know
However, whether you remember or not, what I described
did, in fact, cccur.

the taxpayers and perhaps even at the expanse of thousa

38-020-91 - 5

SPECIAL COUNSEL

STATEMENT OF CHAIRMAN KODWIN J. GRAY

September 19, 1986
Page 1

Several weeks before I testified, on October 17, 1985 before the
Financial Institutions Subcommittee of the House Banking
Committee, I received a telephone call from Board Member Mary
Grigsby in my car, which was across the street from the Cannon
House. Office Building.

I had been meeting with various members of the Financial-
Institutions Subcommittee on the Hill. Mrs. Grigsby said: she
wanted to talk with me but not on the car phone.

I got out of the car and went inside the Cannon office building and called her from a coin telephone there.

What I remember her telling me on that call was that she had received a phone call from a lawyer in Washington who told her a Bajor Southern California savings institution wanted to hizo ne to head the association and the institution was prepared to pay me a lot of money. She said she wanted me to know. I said to Mrs. Grigsby I wasn't looking for a job and that she ought to call (my chief of staff) Mrs. Shannon Pairbanks and relay whatever this was all about to her.

...

I later learned from Mrs. Fairbanks that the attorney to whom
Mrs. Grigsby had spoken was Raymond Gustini who, I understood,
was in some manner representing Lincoln Savings and Loan
Association in California, the institution in question.

Subsequently I discussed the matter further with my General
Counsel, Hz. Herman Zaiden. We both agreed in our conversation
that it appeared to us that Lincola Savings was expressing
interest in employing me because the management of the
institution vented to buy me out of, that is to say hire ne
away from,

FELIC-lassen? Job as the chief regulator of this and other

savings institutions.

I was frankly very surprised that an institution, which had vigorously and continuously opposed key regulatory actions the Board had both proposed and adopted, would apparently be seeking to get no out of my job as a Member and Chairman of the Federal Home Loan Bank Board. While it may not have been illegal for Lincoln to make such efforts, as I perceived them, I believed at the time it was inappropriate to do so, under the circumstances. Further, he management or agent of any FELIC-insured institution had ever, to my knowledge, made such a contact or approach with anyone at the Bank Beard to hire mo.

September 19, 1986
Page 2

Benause of my concern, and my understandable curiousity, as to why these approaches to hire se had been made by Lincoln or its agents, I asked Mrs. Paizbanks to meet with Mr. Charles Keating, Calef Executive officer of Liacola personally, in order to determine whether it was true that Lincoln wanted to hire me,

why. Mrs. Faizbanka did have a meeting with Mr. Keating. When she returned from that meeting, & remember her confirming ho that, yes, H. Keating did want to hire no for some sort of public relations job at Lincoln. Mrs. Fairbanks, I recall, also told so that she informed Mr. Keating I would have so interent at all in working for Lincoln because, among other thinge, my philosophy and that of Mr. Reating couldn't be more Further, I recall her telling me she told E. Beating that I was not available for employment, in any event, I already had a job.

different.

86

DECLARATION OF MARILYN J. FRIED

1. I am an attorney, licensed to practice law in the state of California and I am a partner in the law firm of Wyman Bautzer Kuchel & Silbert. I have personal knowledge of the facts set forth herein and could competently testify thereto.

2. During the course of the representation of American Continental Corporation, as debtor-in-possession in this Chapter 11 case, I was involved in the preparation of the document entitled Report by American Continental Corporation, Debtor-inPossession, in Aid of Examination and Reorganization.

3. Attached hereto are relevant pages of several drafts of the report dated October 28, 1989; November 15, 1989; November 20, 1989; and November 29, 1989. These excerpts are from drafts of the report which were circulated to members of ACC management during the course of its preparation.

4. I have reviewed the attached documents and recognize the handwritten notes thereon as having been made by me during the time the report was prepared.

I declare under penalty of perjury that the foregoing is true and correct.