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Then Mr. Henkel raised eyebrows by tailing tari?: executives that the industry he was then regulating had been real good to me in helping me make money ....
DM your cheerleader, I'm your spokesman."
During his first Bank Board meeting in December, Mr. Henkel proposed a rule that agency officials said could have effectively immunized only two thrifts -- one of them Lincoln -- from any enforcement actions in a dispute with the agency. The proposal died for lack of a second.
Mr. Henkel's nomination was pushed by former Sen. Mack Mattingly, a Georgia Republican who served on the Senate Banking Committee. Mr, Mattingly was defeated for reelection last year.
Messrs. Henkel and white are known to favor closer examination for ailing thrifts rather than stricter regulations for all institutions. Their stance is more acceptable to the Reagan administration than that of Bank Board Chairman Edwin Gray, also a Reagan appointee, who takes a strong regulatory approach to the troubled industry.
The shift in the balance of power was evident in December at the first Bank Board meeting for Messrs. Henkel and white. Mr. Gray backed down from a proposal to extend for two years a strict rule limiting the investments thrifts may make; he conceded that neither of his new colleagues would support him. Mr. Gray's term expires in June.
The Bank Board eventually agreed to extend the rule only through March 15 and to hold hear ings on the issue. The Bank Board is to consider the regulation again Feb. 27.
Mr. Henkel was nominated Friday to fill a vacancy for a term expiring June 30, 1989. Mr. White's nano was sent to the Senate to fill a vacancy for a term expiring June 30, 1990. Confirmation hearings for the two men haven't been scheduled yet.
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4OTH STORY of Level 1 printed in FULL fornat.
Copyright (c) 1987 The New York Times Company;
The New York Times
February 17, 1987, Tuesday, Late City Final Edition
President Reagan has renoninated Lawrence white and Lee Henkel for positions on the Federal Home Loan Bank Board, which regulates Federally insured savings and loan associations. The nominations were announced Friday.
Both Mr. White and Mr. Henkel were appointed Nov. 7 to f1l1 unexpired teras on the three-renber board. Because Congress was not in session then, they have served without confirmation. Mr. Reagan had originally sent both nominations to the Senate in October.
While Mr. Reagan had been expected to renoninate Mr. White, there was some speculation that he would offer another name in place of Mr. Henkel, who faces opposition from Senator willian Proxatre, the wisconsin Democrat'who is chairman of the Senate Banking Committee.
Mr. White, 43 years old, is an economics professor on leave from New York
Mr. Henkel, 56, is a tax lawyer and real estate developer from Atlanta, Mr.
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THE ARIZONA REPUBLIC
DATE: FRIDAY April 3, 1987
LENGTH: Medium SOURCE: By FRANCIE NOYES The Arizona Republic
DEVELOPER QUITS POST UNDER FIRE
BANK-PANEL MEMBER IS FACING NEW PROBE Lee H. Henkel jr, has resigned from the Federal Home Loan Bank Board after the Justice Department was asked to investigate possible criminal violations on his part, it was learned Thursday.
The Office of Government Ethics last Friday asked the Justice Department to investigate Henkel's proposal that might have helped Lincoln.Savings, a California thrift owned by Phoenix-based American Continental Corp.
Henkel resigned Tuesday, blaming unfounded charges and the resulting investigations for his decision to quit.
Henkel earlier had been cleared of conflict-of-interest charges on the
RANK 13 OF 14, PAGE 2 OF 3. OB AZZ, DOCUMENT 29024 same matter by the bank board's chief lawyer and the Justice Department. The now investigation would have looked into possible criminal violations.
In his statement, Henkel said, 'While I am confident that I will be exonerated yet a third time, I quite frankly am fod up with the whole process and am unwilling to put my family and myself through any more of this.
Henkel, a tax attorney and real-estate developer from Atlanta, has been serving as a temporary member of the Federal Home Loan Bank Board since November. Confirmation hearings on his permanent appointment have been scheduled by the Senate Banking Committee, headed by Sen. William Proxmire, Dwis.
Before his appointment to the three-mombor bank board, Henkel had received a series of business loans PromoLincoln.Savings.
Lincoln Savings has been the conter of a debate between bank-board Chairman Edwin Gray and American Continental Corp. Chairman Charles•Keating. Jr. Gray favors limiting thrilts to more-traditional home-mortgage loans , while Lincoln Savings has diversified into land development, commercial projects and hotel construction.
At his first board meeting in December, Henkel proposed a change in the direct-investment regulation, which critics say would have lavored Lincolno Savings. The proposal failed for lack of a second.
urricians at nmerican continenial in rnoenix could not be reached for comment on the resignation.
Last Friday, Donald E. Campbell, deputy director of the Orpice of Government Ethics, wrote a letter to Proxmire saying Campbell had asked for the investigation. The letter cited the statute that makes it a crime for a government official to participate in a matter in which he has a financial interest.
Honkol said he will return to his family and business in Atlanta.
''I would take the heat if it served a purpose," he said. "'The bottom Tine, however, is that it simply serves no useful purpose for me to serve on the board when the constant personal attacks distract me and make me unable to accomplish what I came here to do. ENO OF DOCUMENT.
american Continental's Lincoln Thrift
By David J. jeiferson
Staff Reporter on the waii Street Journal
TENDER OFFERS, MERGERS, ACQUISITIONS (TNM )
LOS ANGELES -- Federal prosecutors disclosed that a fraud
Assistant u.s. Attorney Terree Bowers wouldn't say if Anerican Continental executives are targets of the investigation, and declined to comment. A spokeswoman por Amer ican Continental of Phoenix, Ariz., said she didn't have any knowledge of a criminal investigation involving the Irvine, Calif., thrift subsidiary. *This is the first we've heard about it," she said..
News of the investigation came as American Continental, in & sudden turnabout, announced Tuesday night that it wouldn't proceed with the sale of Lincoln to an investor group headed by veteran thrift executive Spencer Scott. American Continental said the group's offer had expired in accordance with its terms' and that the company "declined to grant an extension,' American Continental wouldn't elaborate.
However, Charles H. Keating Jr., chairman of American
Mr. Keating added that Mr. Scott's group will continue to
Individuals close to the transaction said that Mr. Scott
Another official familiar with the transaction said:
SPECIAL COUNSEL Mr. Scott acknowleged yesterday that it's difficult to arrange financing for an acquisition of any savings and loan now," with so much attention focused on the federal government s plans to bail out ailing thrift's. But he said his group had commitments for 75% to 80% of the $55 million it needed to raise, and that within another week we should have it all." He declined to identify the sources of the funding or say exactly how much money had been committed.
Mr. Scott said he's not unhappy" that the offer expired, "because we want to renegotiate some of the terms of the transaction." He wouldn't be more specific.
Mr. Scott, a former chairman of Fidelity Federal Savings & Loan Association and its parent, Citadel Holding Corp., blondale, Calil., had offered to acquire the common stock of Lincoln in exchange for $288.8 million of new preferred stock that would be non-voting and non-convertible and would pay American Continental a 9% dividend. American Continental also was to have bought back certain roal-estate and securities investments from Lincoln for $388 million in 10-year notes , paying 10% interest.
A few weeks ago, American Continental tried to dispel rumors that the deal had fallen through by announcing that the closing of the acquisition was imminent. • That announcement' riiea'ena caricornia vepartment or savings & Loan. The state agency quickly fired off an announcement saying that "there is no way that the sale can be imminent" because the application for approval submitted to the department by Mr. Scott had 'significant , material omissions' and was incomplete.
The department gave Mr. Scott 30 days to provide the required information. William Davis, chief deputy Commissioner for the department, said yesterday that Mr. Scott's group hasn't yet provided the information, but that Mr. Scott has said he doesn't plan to withdraw his group's application.
Mr. Davis declined to comment on the fraud investigation involving Lincoln, Mr. Scott said he was surprised by news of the investigation. There's nothing in the due diligence reviow that even suggests there's anything like this going on," he said.
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