Fred F. Fielding, being duly sworn according to law, states as follows:

1. I served as Counsel to the President of the United States for the period January 1981 through May 1986.

2. One of the duties of that office was to review background information regarding all potential Presidential appointees, and to recommend either approval or disapproval of the candidate on the basis of his/her suitability for appointment by the President.

3. During the year 1981, Mr. Charles Keating was a potential candidate for United States Ambassador to the Bahamas. It is my recollection that sometime in the late summer or early fall I recommended disapproval of his candidacy and so advised the Presidential Personnel office and State Department. I do not at this time recall the specific problem or problems that caused me to reach that decision, or whether the problem or problems were on-going and current or an event(s) of the past. I do believe the problem was related to business activity of Mr. Keating.

4. Although particular recommendations made in the course of the clearance process were not generally to be made known to the public or the candidate, in this instance it is my recollection that at some point Mr. Keating became aware that it was my office that was blocking his appointment, and sought a personal appointment with me. Records indicate that such a meeting took place with me on November 17, 1981. I have no present recollection of the meeting or of what may have been specifically discussed at it.

5. I was aware that Senator DeConcini was supportive of Mr. Keating's nomination, and assume that knowledge came to me from Mr. Keating. Also, I am aware that after my meeting with Mr. Keating, Senator DeConcini placed several telephone calls to my office regarding Mr. Keating's proposed nomination. To the best of my recollection I never discussed this subject with the Senator. I would not have returned his phone calls at that time if I knew the subject was Mr. Keating's proposed nomination, as I would have not wanted to discuss any particulars of my reasons for recommending against Mr. Keating's appointment, out of fairness to Mr.

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EX. 504

Keating's privacy and to preserve the integrity of the clearance process.

Fred F. Fielding

District of Columbia: ss:

Sworn to and subscribed before me this 13th day of November, 1990

Roberta P. Barkee

Notary Public

My Commission Expires

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AFFIDAVIT

I, JAKE GARN, being duly sworn do depose and state as follows:

1. I am presently a member of the United States Senate from the State of Utah. I have served in the Senate for the past 16 years.

2. I first became aware of Charles H. Keating, Jr. in late 1980. My calendars reflect a meeting scheduled with Mr. Keating on December 3, 1980. This meeting was cancelled and rescheduled for December 10, 1980. (My calendars are attached hereto as Exhibit 1.) The meetings may have been scheduled at the request of Senator Dennis DeConcini. Although I have no specific recollection of this, Senator DeConcini may have attended the meeting on December 10, 1980. It is my practice not to refuse a request from a colleague to meet with a constituent. I had never met with Mr. Keating before this time, and knew only that he was from Arizona and was a constituent of Senator DeConcini's. My meeting with Mr. Keating generally focused on the issue of home-building and problems with interest rates.

3. At the December 10, 1980 meeting, Mr. Keating told me that it was his intention to build homes in Utah. I was somewhat concerned by this comment. It raised a red flag in my mind. I do not generally give appointments for people who bring up that they are campaign contributors, and Mr. Keating's statement had a similar tone.

4. I met again with Mr. Keating on May 14, 1981. (My calendar reflecting this meeting is attached hereto as Exhibit 2.) It is my recollection that Mr. Keating requested this meeting. According to my records, Danny Wall, a member of my staff at the time, may have attended the meeting. I recall Mr. Keating again discussing home-building problems and high interest rates. There was no discussion of the savings and loan ("S & L") industry. Mr. Keating was not in the S&L business at this time.

5. At the conclusion of the May 14, 1981 meeting, I instructed my secretary that Mr. Keating should never be given an appointment with me again. I gave this same instruction to Mr. Wall. Although Mr. Keating made no illegal or unethical offers or demands, and in no way threatened me, I was offended by his arrogance and "pushy attitude".

6. Although I received approximately $4000 in campaign contributions during 1980-1985 from Mr. Keating and individuals affiliated with him, I was not aware of this fact until December 1989. I learned about the contributions from Glenn Simpson, a reporter from Roll Call who had researched Federal

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Election Commission records for an article he was writing. I never discussed campaign contributions with Mr. Keating.

7. I recall receiving a telephone call from Senator DeConcini on or about January 3 or 4, 1985. Senator DeConcini said he was concerned with the consequences of the Federal Home Loan Bank Board's ("FHLBB") policies regarding state-chartered thrift institutions. I do not recall whether Senator DeConcini specifically mentioned Mr. Keating's problems with the FHLBB. Although I do not remember the specifics of this conversation, it is likely I told Senator DeConcini that it was my position that the FHLBB should be tougher on the thrift industry. At that time, I was concerned with the worsening condition of the thrift industry. Although I am not certain whether Senator DeConcini asked me to contact Ed Gray, I am certain that if he did, I would have told Senator DeConcini that I supported the Direct Investment Rule and Ed Gray's policies on that issue.

8. From 1981-1986, I served as Chairman of the Senate Banking Committee. During 1987-1988, I was the ranking Republican member of that Committee. In 1985, while I served as Chairman, Senators Cranston, DeConcini, and Glenn, wrote to request that the Committee hold an oversight hearing on the direct investment regulation. I did not schedule such a hearing, since I believed such investments could be a serious problem and therefore supported the regulation.

9. I recall that Lee Henkel received a recess appointment to the FHLBB in the fall of 1986. Although I do not recall being aware at that time of Mr. Henkel's ties to Mr. Keating, I knew that Mr. Henkel had some personal financial problems. I recall receiving a lot of negative feedback on Mr. Henkel. I determined that Mr. Henkel was someone who should not be on the Bank Board. Consequently, I opposed his nomination. Mr. Henkel was aware of my opposition and made reference to it during hearings held by the House Banking Committee on Nov. 7, 1989.

10. During my interview in the matter before the Senate Ethics Committee, I reviewed a copy of a document which apparently was sent by Mr. Keating to Senator Cranston's office regarding Mr. John Rousselot's proposal to purchase Lincoln Savings and Loan Association ("Lincoln"). The document, attached hereto as Exhibit 3, dated April 8, 1989 reads in part: "Some politically important person has got to lay it on the line to Danny Wall and Jake Garn that they inescapably and must decisively approve the deal. They must do it in such a way that forcefulness cannot be misunderstood." I recall no contact from Senator Cranston or any of the other Senators under investigation regarding any proposals to purchase Lincoln.

11. I have no personal knowledge of the facts involved in the matter now under investigation by the Senate Ethics Committee. Consequently, I am not in a position to pass judgment on the conduct of Senators Cranston, DeConcini,

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Glenn, McCain or Riegle. In my office, it has been and continues to be my practice that I will not intervene on behalf of a single constituent or institution to influence a regulatory decision. I would not consider it appropriate for me to engage in such conduct. Requests from individuals are referred to my staff who are instructed that they may make status inquiries only.

12. My view that the Bank Board should take tougher, rather than weaker actions to reign in the speculative activities of state-chartered institutions, was clearly and publicly articulated. For example, in Banking Committee hearings held on May 14, 1985, Ed Gray described the need to limit the activities of state-chartered institutions. He noted that many states authorize activities far beyond those permitted for federally-chartered institutions. However, the insurance risk was borne by the Federal Government. Even further, Mr. Gray felt that the basic policy of providing Federal Home Loan Bank credit for institutions engaging in these state authorized activities was improper. I stated in response to these comments:

Well, I don't disagree. We have a difficult problem because no one is more of a defender of States rights than I. But on the other hand, it's an area we have to pursue and I don't have the answers. If it endangers the Federal insurance fund and it is also unfair to Federalchartered institutions who are not allowed to do those sorts of things and, in my opinion, should not be allowed to do those sorts of things, you've got an unfairness issue there as well.

13. Later in this same hearing I elaborated on this point during a discussion with William Bergman, representing the National Association of State Savings and Loan Supervisors. Following Mr. Bergman's remarks in opposition to Bank Board restrictions, I stated:

But I think Mr. Gray makes a very good point as far as the insurance fund is concerned. I've got another responsibility and that is to do everything I can in this committee to provide for the safety and soundness of institutions and provide the credibility and confidence in both the FDIC and the FSLIC.

So how do we rationalize that problem? First of all, it's up to the State legislature to decide what to do, but if they are under the umbrella of the FSLIC which gives their customers a great deal more confidence and ability to work and function within their State, how do we solve that problem? Like I say, nobody is more strongly for States rights than I, but I also don't think that it's fair to allow those State-chartered institutions that may be getting into a so-called go-go category... of operations, to have the advantage of that Federal insurance, and yet,