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PAGE (C) 1988 Los Angeles Times, March 13, 1988 Lincoln Savings has also loaned Covenant House more than 540 million to buy buildings in Manhattan. "He makes you believe in Providence," said a grateful father Bruce Ritter, the Franciscan priest who founded the organization and has expanded it to cities throughout the country.

When Mother Teresa came to the United States recently, it was American Continental's helicopter that transported the famous Roman Catholic nun to remote Indian reservations in the Southwest.

"He said he wanted to be daan sure he gets to heaven,' said Pat Murphy, publisher of the Arizona Republic, adding 'I's not sure he said that facetiously.'

Replied Keating: 'T'u take any way to heaven I can."
GRAPHIC: Photo, Charles Kating is a developer who fights battles on many
fronts. RANDY LEFF INGUELL / Los Angeles Times

TYPE:
Profile

SULECT:
KEATINS, CHARLES HIN, ENTREPRENEURS, BUSINESSHENG LINCOLN SAVINGS I LOAN
ASSOCIATION, CONSERVATIVES; GOVERNMENT RÉGULATION, BUSINESS ETHICS; BANKING
INDUSTRY ORANGE COUNTY; SAVINGS AND LOANS; AMERICAN CONTINENTAL CORP

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Staff Reporters of The Wall Street Journal
13/18/86
WALL STREET JOURNAL (J)

GOVMT
BANKS, THRIFT INSTITUTIONS (6NK )

Even for the industry-oriented Federal Home Loan Bank
Board, real estate developer Lee H. Henkel Jr. seems an
unusually avid booster of the thrift industry he's just been
appointed to help regulate.

"It's been real good to me in helping me make money, Mr.
Henkel said of the industry in a recent talk to thrift
executives in Los Angeles. 'I'm your cheerleader. I'm your
spokesman. I'm not going to give away your industry to the
FOIC (Federal Deposit Insurance Corp.) or the banks."

It's no secret that the former Atlanta tax lawyer favors
less regulation of the savings and loan industry unlike
embattled board chairman Edwin J. Gray and many of the
nation's larger, established thrifts. And Mr. Henkel has said
he's bothered philosophically by a soon-to-expire rule that
bars federally insured thrifts from investing more than 10%
of their assets directly in real estate or stocks.

What have been less noted as the Bank Board meets today to
consider Mr. Gray's proposed two-year extension of the
so-called direct investment rule are the scope and closeness
of Mr. Henkel's business dealings with a California thrift
controlled by one of the most outspoken critics of the
regulation, Charles H. Keating Jr. Mr. Keating controls the
parent of Irvine-based Lincoln Savings & Loan Association,
which has about 20% of its $3.87 billion in assets in direct
investments and has been rebuffed by the Bank Board in all
its efforts to make new direct investments over the past two
years.

A search of deed records in four counties in the Atlanta
area shows that Lincoln Savings has made at least $61.9
million in loans to corporations and partnerships in which
Mr. Henkel had an interest. The records indicate that Lincoln
was by far the largest single source of financing for a
closely held real estate development company of which Mr.
Henkel was chairman, a shareholder and one of three
directors.

To be sure, the 58-year-old Mr. Henkel isn't the first
Bank Board member with previous ties to the thrift industry.
Mr. Gray is a former executive of a big California thrift and
is being investigated for accepting expense reimbursements
from thrift industry organziations while chairman of the Bank
Board. Few board members, however, are known to have had
financial dealings as large as Mr. Henkel's with a thrift
that has taken such an aggressive position on a controversial
regulatory issue.

Mr. Henkel, who still faces Senate confirmation hearings
after appointment to the Bank Board during a recess, sees no
problems with his past business dealings with Mr. Keating.
Mr. Henkel declines to comment on the details of his real
estate development activities, but says that he has put all
his business interests that had dealings with thrifts
including those with loans from Lincoln -- into a blind

SPECIAL COUNSEL trust. He also intends to recuse himself from Bank Board

EX. 514 votes that specifically affect thrifts he dealt with,

But Mr. Henkel says he won't recuse himself from policy votes on issues such as the proposed extension of the direct investment rule, even if Lincoln or other thrifty he has dealt with have a significant interest in the outcome. On Asiters of policy, it is permissible for me lu yu gieou and exercise my judgment, Mr. Henkel said in an interview. "I intend to be rigidly independent," he said of his role on the three-nenber Bank Board.

Questions about Mr. Henkel's close ties to Mr. Keating are likely to be raised when he faces the Senate Banking Committee during confirmation hearings early next year. Sen. William Proxmire (0. Wis.), who will become chairman of the Senate Banking Committee, says that Mr. Henkel's 'close relationship with Mr. Keating 'would disqualify him in my mind as a board member.

Mr. Henkel has declined to say how he will vote if the direct investment rule comes to a vote today. He did tell .thrift executives in Dallas last week that he believes a vote on any long-term extension of the rule -- currently scheduled to expire Dec. 31 should be delayed until after a public near ing can be held.

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By John E. Yang and Jano Mayer

Staff Reporters of The Wall Street Journal
02/13/87
WALL STREET JOURNAL (J)

GOVMT
BANKS, THRIFT INSTITUTIONS (BNK)
CAECUTIVE EAC.
CONGRESS (CNG)

WASHINGTON -- President Reagan is expected to renominate
Lawrence White to the Federal Home Loan Bank Board, but it
was unclear whether Lee Henkel's nano also will be submitted
to the Senate, administration officials said.

Both Messrs. White and Henkel wore appointed Nov. 7 to Pill unoxpired terms on the three-momber Bank Board. Becauso Congress wasn't in session then, they havo served without confirmation. The law requires Mr. Roagan to submit nominations for their seats by tomorrow, 40 days after the 100th Congress convened.

Mr. White, a 43-year-old economics professor on leave from
New York University's business school, is expected to win
confirmation easily. A Damocrat, Mr. White previously has
served in both the Carter and Reagan administrations.

However, Senate Banking Committee Chairman Willian
Proxmiro (D., Wis. I strongly opposos Mr. Honkol, 56,
primarily because of Mr. Henkel's association with Charles
Koating, an outspokon critic of thrilt regulation. Mr.
Keating controls Lincoln Savings & Loan Association in
Irvine, Calil.

Lincoln made at least $61.9 million in loans to
corporations and partnerships in which Mr. Honkal had an
interest. Mr. Hankel has put all his business Interests that
had transactions with thrifts into a blind trust and agreed
to rocuse himself from Bank Board votos specifically
involving thrilts he has dealt with.

As previously roported, Mr. Henkel proposod a Bank Board
rule in December that could have alloctively immunized two
thrifts -- one of them Lincoln -- Prom any onforcement
actions in a dispute with the agoncy. The proposal died for
lack of a second.

If he is renominated, Mr. Henkel may have to face Mr.
Proxmire's opposition without a sponsor on the Banking
Committee. Mr. Henkel's sponsor, Georgia Republican Mack
Mattingly, was doleated for reelection last year, and no
other supporter has yet omarged on the panel.

Mr. Honkol, a Republican, was Treasury Department and
Internal Rovenue Service counsel in the Nixon administration.
Later, he was a tax attorney and real estate developer in
Atlante.

Both Messrs. Honkol and white are known to lavor closer
examination and supervision for ailing thrilts rather than
stricter regulations for all institutions. Bank Board
Chairman Edwin Gray, a Roagan appointoo who is supportod by
Sen. Proxmire, takes a strong regulatory approach to the
troubled industry. Mr. Gray's term expiros in Juno.

Mr. Honkel was originally nominated to the Bank Board Oct. 7 to fill a vacancy for a term expiring Juno 30. 1989. Mr. whito's namo was sent to the Senate Oct. 17 to fill o vacancy SPECIAL COUNSEL for a torn expiring June 30, 1990.

EX. 515 The Senate adjourned Oct. 18 without acting on aither

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By John E. Yang

Staff Reporter of The Wall Street Journal
02/17/87
WALL STREET JOURNAL (J)

GOVMT
BANKS, THRIFT INSTITUTIONS (BNK )
EXECUTIVE (EXE)
CONGRESS (CN6 )

WASHINGTON -- President Reagan appears to have picked a
tough fight with Senate Democrats by renominating Lee Henkel
to the Federal Home Loan Bank Board.

Mr. Henkel and Lawrence White, both appointed to the
three-member Bank Board Nov, 7 after Congress adjourned
without acting on their nominations, were renominated Friday.
Because the Senate wasn't in session when the two men were
appointed, they were able to serve without confirmation. But
now,

both men must go before the Senate Banking Committee for
approval.
That shouldn't be a problem for Mr. White, a 43-year-old

a
economics professor on leave from New York University's
business school. Committee Chairman William Proxmiro 10.,
Wis.) has called him obviously well-qualified.' A Democrat,
Mr. White has held positions in the Carter White House and
the Reagan Justice Department.

But Mr. Proxmire strongly opposes Mr. Henkel, 58, because
of disagreements over regulatory philosophy and because of
Mr. Henkel's ties to Charles Keating, an outspoken critic of
thrilt regulation. That relationship "would disqualify him in
my mind, Mr. Proxmire has said.

Mr. Keating controls Lincoln Savings & Loan Association in
Irvine, Calif. The thrilt made at least 561.9 million in
loans to corporations and partnerships in which Mr. Henkel
had an interest. Lincoln was by far the largest single source
of financing for Continental Southern Inc., a closely held
real estate development company of which Mr. Henkel was
chairman, a shareholder and one of three directors.

In 1985, Lincoln also made a personal loan of more than
$250,000 to Mr. Henkel at two percentage points above the
Prime rate, according to Mr. Henkel's financial disciosure
forms. The loan has been paid, according to the document.

Mr. Henkel has put all his business interests that had
transactions with thrifts into a blind trust and has agreed
to recuse himself from Bank Board votes involving thrifts he
has dealt with.

Mr. Henkel, a Republican, was Treasury Department and
Internal Revenue Service counsel in the Nixon administration.
Later, he was a tax attorney and real estate developer in
Atlanta.

Mr. Henkel's nomination wasn't certain and has been
controversial. He was appointed while Congress wasn't in
session after the Reagan administration had told Democratic
launakers that Mr. White would be the only appointment made
during that time.

SPECIAL COUNSEL

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