Per your request, attached is a short summary of Ed Gray's troubles. I wasn't sure what you wanted in terms of format but this is a first shot. If you want changes I can come back in the office and rework this. I should be reachable this afternoon until about 6 pm D.C. time. We will be at the Kennedy Center Saturday night after seven, but don't expect to be home too late. Til be home most of Sunday other than running errands, we have an answering machine_if you want to get a hold of me. Laurie 202/364-8118 (h) 202/224-4014 (o-direct) CC: Bob Magnes SPECIAL COUNSEL THE HISTORY OF ED GRAY THE $26,000 REIMBURSEMENT In response to an investigation by the Office of Government Ethics, Ed Gray repaid nearly $26,000 to a fund maintained by the 12 regional Federal Home Loan Banks. --$13,868 was for a private plane that was chartered from Indianapolis to Monterey, California for Mr. Gray to visit his ill father in 1984. --311,899 reimbursement was made to cover Mr. Gray's wife's travel expense while accompanying him on business trips, including trips to Hawaii, Puerto Rico and Palm Beach. (New York Times, December 6, 1986) THE $50,000 REDECORATION In his first year as Chairman of the Federal Home Loan Bank Board, Mr. Gray spent nearly $80,000 to redecorate his office--way over budget. (Los Angeles Times. December 12, 1986) LIVING HIGH ON THE HOG OFF THE SAVINGS & LOAN INDUSTRY Following a four month investigation in late 1986, the Office of Government Ethics ordered the Federal Home Loan Bank Board and its Chairman Ed Gray to stop taking travel payments from the Savings and loan industry it regulates. Additionally, the Office of Government Ethics asked the Justice Department to investigate whether the bank board's past practices in this area were illegal. (Washington Post, December 5, 1986) Gray sent letters to the House and Senate Banking Committees formally apologizing for his "flawed judgments" in allowing himself and his staff to accept million of dollars in travel and other operating expenses from the savings & loan industry which his agency regulated. (Washington Post, December 9, 1986) MORE QUESTIONABLE EXPENSES The Justice Department investigation (see above) also focused on inappropriate expenditures by Gray and other bank board officials. These expenses exceed and are outside of normal Congressionally mandated spending ceilings. Examples: --In 1984 Gray's wallet was stolen in Paris when he left it in a phone booth. The $744 worth of cash and airfare discounts in the wallet were fully reimbursed by the Federal Home Loan banks. --Exploding golf balls and books for outgoing board member Hovde ($83.20) Rooms for Gray, other Bank Board members and staffs as well as reception/dinner for 50 people August 25-27, 1986 (812,324.87 including 391.48 for cigars and $40 for hair salon.) --Flowers sent by Gray (859) (Washington Post, December 3, 1986) the Por Congresmeni sounting Office (GAO) determined that Gray and other FHLBS at the request of the Rep. Ed Boland (D-Mass). Page Two THE MAN WHO LOVED TO TRAVEL During the first two months of 1986. Mr. Gray spent a total of six days in his Washington office. (Los Angeles Times, December 12, 1986) In the two month period of August and September 1986 Mr. Gray took thirteen business trips including trips to Dublin, Ireland, Hawaii and resorts in Florida and California. His estimated mileage for those trips 45,130 miles. (Washington Post, December 8, 1986) SOMETIMES ITS HARD TO SAY GOODBYE Ed Gray's term as Chairman of the Federal Home Loan Bank Board expired July 1, 1987, but six weeks later in August of 1987 he was continuing to use a government office, telephone, computer and secretary service to hunt for a job. Gray was using the facilities of a FHLBB subsidiary--ORPOS. The Director of ORPOS who Gray had hired at a six-figure salary (legally avoiding the top federal pay of $75,000) said it was his decision to allow Gray to use the space and secretarial services even though he knew Gray was doing no governmental work. (Washington Post, August 13, 1987) Please see attached article from a San Diego newspaper. Is there anything we can do to bring heat or make a statement regarding this matter? Attachment SPECIAL COUNSEL Your letter to Senator McCain dated May 30, 1989, allegedly describes a April 2, 1987 meeting between you Senators McCain, Glenn, Cranston and myself. There is little relationship between the meeting you describe and the one we held. Your recollection of the meeting is so distorted as to bear no resemblance to fact. I do not plan to get into an item by item refutation of the charges in your letter. However, I clearly recall that our meeting focused primarily on your insistence that you knew • nothing of Charlie Keating or Lincoln Savings and that you recommended we meet with your regulators from San Francisco. specifically urged us to meet with the San Francisco regulators and would not discuss any specifics of the case, pleading ignorance. Your new allegations of "a deal" are simply false. I am surprised and disappointed that a former high Administration official would stoop to this kind of duplicity. Sincerely, You Dennis De Concini DENNIS DeCONCINI United States Senator DDC/1 SPECIAL COUNSEL D000703 |