Wider Questions Arise from S&L Ethics Case CAPITOL HILL

Article excerpt

THERE'S far more than meets the eye to the Senate hearings that opened this week into the propriety of the activities of five senators in connection with the difficulty savings and loan owner Charles Keating had with federal regulators.

What at first glance appears to affect only five senators in fact raises questions about America's entire campaign finance system.

On the surface the issue is what the Senate Committee on Standards, commonly called the ethics committee, is narrowly probing: Did the senators act improperly in calling two meetings with federal regulators in 1987?

The five senators - Alan Cranston (D) of California, Dennis DeConcini (D) of Arizona, John Glenn (D) of Ohio, John McCain (R) of Arizona and Don Riegle (D) of Michigan - are accused of meeting with regulators to blunt a long-running investigation of Mr. Keating's Lincoln Savings and Loan, whose 1989 failure could cost taxpayers some $2 billion.

Keating donated a total of $1.3 million in perfectly legal contributions to the five senators' reelection campaigns or other favorite causes.

The senators are not accused of breaking the law, only of breaking Senate rules governing conflict of interest and contacting regulators outside regular channels. Most think the hearing will center on Senators Cranston, DeConcini, and Riegle, because leaks from Capitol Hill several weeks ago indicated that the prosecutor hired by the committee favors dropping the charges against Senators McCain and Glenn.

"The most important thing here is not so much the guilt of innocence of the individual senators," says ethics expert Bruce Jennings. "It is to understand that we are dealing with a problem that's a part of our political system.... It involves the way in which our campaign finance system gives undue influence to some citizens" - large campaign contributors - at the expense of the rest of the citizenry. Mr. Jennings is an associate for policy studies at the Hastings Center, which studies ethical issues and public policy questions.

"What's at stake is whether the office of the US Senate can be used to provide extraordinary activity on behalf of a wealthy backer," says Fred Wertheimer, president of Common Cause.

"The idea that a congressman would go to bat for one who has given him a contribution is well accepted," says ethicist Michael Josephson, president of the Josephson Institute for the Advancement of Ethics. …