
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, April 27, 1990                   TAG: 9004270005
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A6   EDITION: METRO 
SOURCE: San Francisco Chronicle
DATELINE:                                 LENGTH: Medium

CRANSTON CAMPAIGN HAD S&L CREDIT LINE

Sen. Alan Cranston, D-Calif., arranged a standby $300,000 line of credit with Charles Keating's scandal-plagued Lincoln Savings during the crucial home stretch of the senator's 1986 re-election campaign.

No funds were drawn on the credit line, but it served as insurance for a campaign that he ended up winning by a single percentage point while going $375,000 into debt from other sources.

The Lincoln credit line shows a deeper connection between Keating and Cranston than previously known - Cranston and his aides have insisted that the senator's political connections to Keating were minimal during his 1986 campaign.

It is also the first evidence that Lincoln Savings, whose bailout is expected to cost taxpayers up to $2.5 billion, had direct dealings in Cranston's political affairs. Lincoln's parent company, American Continental Corp., was the source of previously disclosed financial backing.

Arrangements for the credit line, which did not violate any law, were made late in the campaign when polls indicated that Cranston was slightly behind Republican Ed Zschau. Five months after his narrow victory, Cranston joined four other senators in intervening with regulators who were trying to close Lincoln. The Senate ethics committee is investigating what role Keating's large contributions to all five senators played in their actions.

The Chronicle disclosed last summer that Keating contributed $85,000 to an 11th-hour state Democratic Party get-out-the-vote drive that Cranston has credited with rescuing his campaign. That contribution was made near the time that the Lincoln credit line was set up. Cranston told The Chronicle two months ago that, "I presume" he or his campaign fund-raiser solicited that contribution.

Keating and his associates also gave $39,000 directly to the Cranston campaign, and Keating's American Continental Corp. later contributed $850,000 to voter registration groups affiliated with Cranston.

Darry Sragow, Cranston's 1986 campaign manager, said that although he did not remember which thrift issued the credit line, he does recall "a sense" that arrangements had been made for last-minute borrowed funds to be available "if we absolutely needed them."

by CNB