EDWIN J. GRAY

P.O. Box 16000 W

Miami, Florida 33186

June 5, 1989

Senator Dennis DeConcini

Member, United States Senate
Washington D. C. 20510

Dear Senator DeConcini:

I am in receipt of your letter of June 2, 1989.

Senator, you have understandably chosen to use selective recall
of the meeting in your office. My letter to Senator McCain avoids
the selective memory you have chosen.

The fact that I have publicly disclosed that there was a meeting
at all is embarrassing enough, given that it was held in the privacy
of your office. I can understand why you so vehemently deny today
what actually did occur in the meeting, Senator.

I reported to my staff exactly what occurred in that meeting within
a half hour of its conclusion. I had nothing to gain then from
reporting what was said in the meeting. Nor do I have anything to
gain today, certainly not accusations of stooping to...duplicity"
by you sir. Nor do they have anything to gain.

The truth is, Senator DeConcini, the meeting lasted an hour. We
did not talk for an hour about what I didn't know about Lincoln
Savings (I suggested that you therefore talk with the regulators
from San Francisco). y. description of the meeting in your office
as recounted in my letter to Senator McCain is fully accurate and
fully truthful. The fact that what was said in that meeting is
now emanantly embarrassing to you Senator does not mean that it did
not occur. You cannot simply shred it because you are a United
States Senator and are somehow above criticism by an ordinary
citizen who was there, and reported to his staff while a government
employee, what occurred in the meeting. Senatorial status does not
immunise you from truthful disclosure.

Not only do I stand by my recounting of the meeting to Senator McCai:
but I also want to state, Senator DeConcini, that telling the truth,
ugly as it may be, is not duplicity. I invite you, Senator DeConcin:
to call the members of my staff, to whom I reported the details of
the meeting in question, to verify my report to them -- only a half
hour after the meeting in your office concluded.

aan honorable man, Senator DeConcini. I am an honest man. I
indeed sorry that you have chosen to react as you have. Your
ce and name-calling are an interesting commentary in themselv

ALAN CRANSTON

United States Senate

THE DEMOCRATIC WHIP
WARKIMISTEL 8.2. 2001

June 7, 1989

Nr. Edwin Gray

Chase Federal Savings Bank

7300 North Kendall Drive
Niami, FL 33156

Dear Mr. Gray,

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 FHLBS 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 Keating 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,

Alan Cranston

6Y 00114

SPECIAL COUNSEL

ayers and pachag
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priority.

SPECIAL COUNSEL

STATEMENT OF CHAIRMAN HDWIN 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 FinanciaÏ·
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 major Southern California savinga institution wanted to hire mo 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 ! wasn't looking for a job and that she ought to call (my chief of staff) Mrs. Shannon Fairbanks 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 whe, I understood,
was in some manner representing Lincoln Savings and Lean
Association in California, the institution in question.

Subsequently discussed the matter further with my General
Counsel, Hr. Hermen Raiden. We both agreed in our conversation
that it appeared to us that Lincoln Savings was expressing
interest in employing me because the management of the
institution wanted to buy me out of, that is to say hire se
away from, my job as the chief regulator of this and other
FSLIC-insured 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 me out of my job as a Member and Chairman of the Federal Home Loan Bank Board. While it may set 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, no management or agent of any FELIC-insured institution had ever, to my knowledge, nade such a contact er approach with anyone at the Bank Board to hire no.

September 19, 1986
Page 2

Jensune of my concern, and my understandable curiousity, as to
why
agents, I asked Mzs. Paizbanks to meet with Mr. Charles Keating,
Caiet Executive Officer of Lincoln personally, in order to
determine whether it was true that Lincoln wanted to hire me,
why. Mrs. Faizbanka did have a meeting with Mr. Koating.
Then she returned from that meeting, & remember her confirming
so that, yes, Mr. Resting did want to hire so for some sort
of public relations job at Lincoln. Mrs. Fairbanks, I recall,
iso told so that she informed Mr. Kosting I would have no
interent at all in working for Lincoln because, mong other
things, my philosophy and that of Mr. Reating couldn't be more
different. Further, I recall her telling so she told Mr.
loating that I was not available for employment, in any event,
I already had a job.