Banner Graphic, Volume 21, Number 39, Greencastle, Putnam County, 18 October 1990 — Page 2

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THE BAMNERGRAPHte October It, 19M

Documents show three senators had closer ties to Keating than thought

WASHINGTON (AP) Senale documents show Sens. Alan Cranston, Donald W. Riegle Jr. and Dennis DeConcini had more extensive dealings with the owner of the failed Lincoln Savings and Loan than previously acknowledged. In one of the documents, Cranston thanks cx-Lincoln head Charles H. Keating Jr. for a $250,000 contribution to a pet political cause. In the same memo, the senator expresses pleasure that Keating’s meeting with the chief thrift regulator “had gone so well.” THE SENATE ETHICS Committee documents, obtained by The Associated Press, are expected to play a major role in the panel’s deliberations, beginning today, on whether to intensify the investigation of the three senators part of the so-called “Keating five.” Committee Counsel Robert S. Bennett has recommended advancing the investigation against Cranston, D-Calif., Riegle, DMich., and DeConcini, D-Aiiz., while dropping the investigation of Sens. John McCain, R-Ariz. and John Glenn, D-Ohio. A committee decision was not expected today. Some of the documents show: • RIEGLE’S MARCH 1987 visit to Keating’s major company, a month before he met with banking regulators on Lincoln’s behalf, had a fundraising purpose. The senator previously contended the visit was just a “brief stop” to meet the employees. • Keating’s fundraising efforts for Riegle, in the two months before all five senators met with

CIA chief says East German files are yielding a lot of good information

WASHINGTON (AP) U.S. offices are gaining important espionage information from newly available files of the disbanded East German secret police, CIA Director William Webster says. West German officials have shared with the United States information from voluminous files seized when the communist government of East Germany was tippled by popular discontent last

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regulators, were far more extensive than previously known. • A former top U.S. banking regulator, Roger E Martin, said that just weeks before the government seized Irvine, Calif.-based Lincoln in April 1989, he received “highly unusual** calls from Cranston and DeConcini at his unlisted home number urging the sale of Lincoln rather than a takeover. Cranston’s call came after 10 p.m. and DeConcini’s at 5:30 the next morning. “IT SOUNDED TO ME as if they were reading from the same script or memo,” Martin told the committee • DeConcini assisted Keating in his crusade to have former top thrift regulator Edwin J. Gray removed from the examination of Lincoln. After Gray left office, the senator wrote Keating, “Maybe things will change now that he is gone. I sure hope so.” Another document shows an application to Lincoln that identifies Cranston as a prospective “borrower” in September 1986. Cranston spokesman Murray Hander said the application was for a line of credit in case Cranston needed more money in the dosing days of his 1986 re-election campaign. Hander said the credit line was never used. IT WAS KNOWN previously that Keating and associates gave sl3 million to the campaigns and favored causes of the five senators. The Ethics Committee is trying to determine whether there was a connection between Keating’s contributions to the senators and the

fail, he said. “WE HAVE PURSUED a number of important leads,” the CIA director said in an interview with The Associated Press on Wednesday. “That’s not to say we’ve identified spies, but we’ve learned more about some notorious cases,” he said, declining to elaborate. East Germany’s notorious Stasi secret police had about 80,000 agents keeping tabs on its 11 million citizens, Webster said. The files have yielded a bonanza of secrets and identified some highly

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help he received from them as Lmcofo headed toward collapse. The takeover of Lincoln could cost taxpayers more than $2 billion, but Keating insisted he was treated unfairly by U.S. regulators. Hander said Cranston’s latenight call on the sale of Lincoln was an attempt io save jobs and taxpayer bailout expense. He said Cranston “never said they should make the sale regardless of wlcher it met the criteria.” THE SPOKESMAN ADDED there was no connection between any money raised by Cranston and contacts with regulators by Keating or the senator. DeConcini spokesman Robert Maynes said the Arizona Democrat is following his lawyer’s advice not to comment and “unfortunately is not in a position to defend himself.” Maynes deplored “leaks” of documents, which he said could be taken out of context

Riegle aide David Krawitz said the senator was bound by the committee’s request for confidentiality but “is confident that his conduct was proper at allthical times.” RIEGLE’S TRIP TO Keating’s major company, American Continental Corp, of Phoenix, came a month before Riegle and his four Senate colleagues met on April 9, 1987, with the federal regulators who were examining Lincoln. The senator’s public statement issued last November did not mention that DeConcini’s main Arizona fundraiser, Earl Katz, went along. The senator’s personal itinerary said, “No discussion of money.

placed West German officials as East German spies, he said. Webster said his counterpart in Moscow "must be wondering” how many Soviet spies have been compromised by the seizure. THE CIA DIRECTOR also said the United States and Soviet Union have been sharing information about terrorist threats, and the Persian Gulf crisis may open the way for more intelligence cooperation. But the Kremlin must be careful about sharing intelligence on Iraq with the United States because it is trying to negotiate the departure of about 5,000 Soviet citizens trapped there, Webster said. “Anything they say that suggests they provide intelligence to us may diminish their chances” of getting the Soviets out, he said. Many of the Soviets serve as military advisers, and the Iraqi arsenal is largely Soviet-made. KGB CHAIRMAN Vladimir Kryuchkov said in a recent interview with the AP that his organization is willing to share intelligence about Iraq but hasn’t offered because the CIA has rebuffed its past efforts to cooperate. “Our common interests in the gulf open up an opportunity to deal more frankly on terrorism,” Webster said. Soviet support for states like Iraq and Libya, which sponsor ter-

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Earl will collect what needs to be collected later.” The documents show that in the month before Riegle and the other senators met with regulators, there was an extensive fundraising operation for Riegle. It was led by Keating, DeConcini and Katz. AN OCT. 6, 1987, memo from Cranston to Keating coupled the subjects of Keating’s donations and a Cranston-assisted effort to ensure better treatment for Lincoln Savings from federal regulators. Cranston wrote that he was pleased “to hear that your meeting with Danny Wall (then the top thrift regulator) had gone so well.” In the same memo, Cranston said he was “very grateful for your willingness to contribute $250,000 this year” to voter registration projects for which the senator solicited money. DeConcini’s help for Keating over a five-year period was detailed in memos from his staff. ONE MEMO DATED March 10, 1988, said Keating first contacted DeConcini about his problems with Gray in June 1984. A “confidential” internal memo from a DeConcini staffer to the senator on Dec. 20, 1988, mentioned that in July 1985, the senator had “phone conversations with both Doo Regan (then White House chief of staff) and Secretary (James) Baker (then secretary of the Treasury) re: Gray. “They share DDC’s (DeConcini’s) assessment that Gray is a problem,” although no action was promised, the memo said.

rorism, appears io have declined, making some cooperation with the United States possible, he said. THE UNITED STATES cannot expose its intelligence sources in such cooperation, but it has passed along warnings to the Soviet Union about threats to its officials or diplomatic facilities abroad, Webster said. In several cases, “it was pivotal to their preventive actions,” he said. The Soviets, too, have relayed information to the United States about threats to this country’s people, Webster said. He declined to elaborate. Iraq’s President Saddam Hussein has isolated himself from his top advisers and is forming many of his impressions based on news accounts, Webster said. HE SAID SADDAM enjoys broad support among poorer Iraqis and among the military ranks, and any move to unseat him would have to come from the top echelons of his military. Saddam believes “a sit-tight mode is his best posture,” but if he thinks the United States is planning to attack, Iraq likely would take pre-emptive action, Webster said. Iraq has dug in substantial ground forces in Kuwait and “it looks like he intends to make it costly” for U.S. troops to launch a land-based offensive.

Reading the wooly worm’s fur: brace for cold winter

PIKEVILLE, Ky. (AP) Start rummaging for your long underwear, flannel sheets and electric socks. The ninth annual Lee County Woolly Worm Survey, issued today, says there’s a cold winter ahead. The folksy forecast of Kentucky’s winter weather is based on the coloring of caterpillars, known locally as woolly worms. The number of foggy mornings in August, inner designs of persimmon seeds and the height of hornet’s nests also are factored into the forecast "THE LEE COUNTY woolly worms are never in error,” said Rosemary Porter Kilduff of Beattyville in rural eastern Kentucky. Mrs. Kilduff compiles woolly worm sightings in and about Lee County and releases the winter forecast in time for Lee County’s annual Woolly Worm Festival, which begins Friday. Organizers expect Lee County’s population of 7,000 will double with visitors for the woolly wonn races, crafts show and a ’sos street dance. A parade will feature Tasha Harris of Beattyville, Miss Woolly Worm Festival Queen for 1990. LEE COUNTY residents hope the caterpillar’s predictions someday will gain the same status in forecasting as Punxsutawney Phil. Movements of the Pennsylvania groundhog foretell the coming of spring on Groundhog Day. This fall, 88 of the 188 woolly worms sighted were black.

nation

Bush’s commandments: Thou shalt not violate government ethics rules

WASHINGTON (AP) exactly Moses coming down from the mount with a set of tablets, but President Bush has an updated set of “standards of ethical conduct” for government officers ar.d employees. For instance: THOUS SHALT NOT “hold financial interests that conflict with the conscientious performance of duty.” Thou shalt not “solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee’s agency.” Thou shalt not “use public office for private gain.” These rules are contained in an order Bush signed Wednesday “to establish fair and exacting standards of ethical conduct for all executive branch employees.” THE ORDER DOES not merely forbid. It seeks what every right-thinking citizen wishes for his country. Such as: • “Employees shall put forth honest effort in the performance of their duties.” • “Employees shall disclose waste, fraud, abuse and corruption to appropriate authorities.” The White House assures that these principles are not new for the Bush administration; that the president’s executive order is “minor fine-tuning” of ethical standards put in place on April 12, 1989. ON THAT DAY, Bush unveiled a fat package of proposals covering activities by executive branch employees as well as judges and Congress. It touched on campaign finance laws and acceptance of speech fees by congressmen. The new order covers executive

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“With black in the lead, it pains me to say that we can predict a very, very cold winter from beginning to quit,” Mrs. Kilduff said. The 25 foggy mornings in August mean there will be 25 days of snow. A sighting of a hornet’s nest low to the ground means the snow won’t stay around long, she added. THE COMMUNITIES of Vermilion, Ohio, and Banner Elk, N.C., also forecast winter’s severity with the caterpillars. Venn i lion forecaster Willis “Goodnews” Gebheart predicted chilly weather for Ohio after examining the bugs, called woollybears up North. “The thick overcoats on the Ohio woollybears are as dark as a tax collector’s heart the sign of an unusual snowy and cold winter,” he wrote in a Beattyville weekly paper. Mrs. Kilduff turns the Woolly Worm survey over to the National Weather Service station in nearby Jackson. GIL RUSSELL, official in charge of the station, promised to take Mrs. Kilduff’s forecast into consideration. Last year, the woolly wonn forecast accurately predicted an early cold winter in Kentucky, followed by a warming trend. But the worms’ prediction of a harsh ending to winter didn’t occur. “There are some things I hear in folklore that I can make some kind of scientific reason for, but woolly worms is not one of them,” Russell said.

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PRESIDENT BUSH Not quite Moses

branch employees and officers whose boss is George Bush. These are the same employees who stand to be furloughed in wholesale numbers if there is no budget agreement by Friday midnight. The order said some fundamental principles of ethical service are in place “to ensure that every citizen can have complete confidence in the integrity of the federal government” IT FROWNS ON employees using federal property “for other than authorized activities” and forbids moonlighting jobs outside of government for most employees, “including seeking or negotiating for employment.” It says employees should obey the laws bearing on equal opportunity regardless of race, color, religion, sex, national origin, age or handicap. And it thinks employees, like Caesar’s wife, must be above suspicion: “Employees shall endeavor to avoid any actions creating the appearance that they are violating the law ....”