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from his interest in my anti-pornography legislation, and my interest in protecting jobs for Arizona citizens. There was no connection between funds raised and my actions.
A lawsuit filed by the Federal Government in September of 1989 Indicated that funds raised for political campaigns by Charles Reating may have been illegal. I Immediately returned these contributions from my personal funds. While a flnal determination of their legality had not, and still has not been made, I felt that the serious questions raised demanded that I return these contzibutions. This followed my past policy and practice.
Many people have asked me why I Interceded with the regulators on behalf of Lincoln Savings in 1987. Let me tell you what I have told them. One of my responsibilities as a U.S. Senator 18 to look out for my constituents and to see that the Federal bureaucracy is responsive and responsible to their needs. I go to bat for Lodividuals and I go to bat for Arizona employers. In fact, during my 13 years in the Senate, my staff and i have responded to over 75,000 individual cases.
Two of my former key campaign advisers, Ron Obor and Earl Katz, had significant loans with Lincola Savings. I had no knowledge of their lavolvement with Llocoln until December of 1988, and I was never informed of the size of the loans until I was asked my a news reporter. As volunteers in my campaign, they had no obligation to tell me anything related to their personal or business financial affairs. Both men are long time friends. I
recognize, however, the appearance of the situation and I take full responsibility for it.
In the case of Lincoln Savings, their parent corporation American Continental had 2,000 Arizona exployees and was important to Arizona's economic hoalth. American Continental had approached me and other 0.s. Senators with their concerns about unfair treatment by federal regulators in San Francisco. But it was not Just American Continental's representations that I relled on. I had Information from Alan Greenspan, now the chairman of the Federal Reserve Board, vouching for the soundness of Lincoln. I had a letter from the Big Eight accounting firm of Arthur Young charging unfair treatment by the regulators. I have copies of both of these letters avallable for members of the press. Let me read to you from Mr. Greenspan's letter, in which he states that Wacola Savings bas "transformed itself into a financially strong institution that presents no foreseeable risk to the Federal Savings and Loan Insurance Corporation.'
Just recently, William Seidman, current Chairman of the Federal Deposit Insurance Corporation (and universally recognized as a very tough regulator), stated that those two documents I think were pretty extraordinary for smators to receive La terms of convincing them of the possibility that the bureaucracy was out of control." This story appeared in the Arizona press early last
My actions were motivated by these letters and my longstanding commitment to help preserve Arizona jobs. I take
full responsibility for those actions. Frankly, they do not duile substantially Iron actions I have taken on behalf of other Arizonans and Arizona employers.
There is a serious mia-impression that greatly disturbs ma. Reports have left the false perception that somehow I and the other Senators were responsible for the delay in closing Lacolo and, therefore, were responsible for the huge cost of Llacoln to the Treasury. Nothing could be further from the truth. I was seeking to expedite the audit, and at no time did I seek a delay. the delays must be laid at the feet of the Federal Home Loan Bank
During the hearings before the House Banking Committee in November, Edwin Gray, former chairman of the Federal Home Loan Bank Board, was asked whether the Senators had any offect on the Lavestigation of Lilacoln. Hore is what was said in sworn testimony:
REP. NEAL: I'm just curious. Did the Federal Home Loan Bank Board ever take any action based on the comments of this Latarvention on the part of the senators?
MR. GRAS: No.
REP. NEAL: Woll, that's what I'm having trouble moderstanding here. If the bank board never took any action, what's the signilicance of all this? I mean, how can you blama these senators for $2.5 billlon worth of damage if the Pederal Home Loan Bank Board never took any action based on anything they
Mr. Gray had no real response to this second question. My stati has copies of this available li you would like it.
Likewise, when I called government officials early in 1989 I was not seeking a delay. I called to see if the sale of Lincoln could be accomplished. I was acting to prevent a costly government takeover of Lincoln and to preserve Arizona jobs. As I feared, American Continental's bankruptcy has had a highly negative effect on Arizona's economy.
The cost of the Savings & Loan crisis is outrageous and the American people have a right to be outraged. But in looking for
an easy scapegoat, same have tarred me and the other Senators with
that responsibility, at least in the case of Lincoln. That just isn't accurate. That just isn't fair.
Let me reiterate that had I known in 1987 what I know now about Charles Keating and Lincoln Savings I would never have met with the regulators. I of course take full responsibility for my actions. But when all is said and done the people of Arizona will see that nothing I did was illegal or unethical. But I cannot wait for that eventuallty and that is why I have chosen to aggressively address these maay false perceptions.
I will be happy to answer any and all of your questions.
Baolosed plous. fiad a copy of sy roosat letter to the
This lotter expr.1000 once again ay Qoariotioa that the
If you have any coments or questions on this attor, pions do not hesitate to coatuot so.