The Real S&L Scandal

THE 101st Congress has ended for most members, but not for the Senate Ethics Committee, nor for the five senators who are under investigation by the committee for alleged influence peddling in the Charles Keating affair. The panel will reassemble after the election to conduct public hearings on actions taken by the ``Keating Five'' to shield Mr. Keating's sinking S&L from federal regulators in 1987. The eventual failure of Lincoln Savings and Loan cost taxpayers $2 billion. The senators - Democrats Alan Cranston, Dennis DeConcini, Donald Riegle, and John Glenn, and Republican John McCain - twice met jointly with regulators to deflect possible actions against Lincoln, and some had other contacts with officials in Keating's behalf. Not so coincidentally, Keating donated $1.3 million to the senators or enterprises affiliated with them.

Last week, the ethics panel voted to convene hearings on the conduct of all five lawmakers, despite a recommendation by the committee's special counsel to drop Senators Glenn and McCain from the inquiry. Without public disclosure of the counsel's report, it's hard to judge whether the committee acted fairly against Glenn and McCain. At the very least, however, the public is owed an accounting of their involvement in what was, by Senate standards, a remarkable ganging up against regulators.

It is easy to decry the actions of some or all of the Keating Five as a blatant example of providing favors for a special-interest high roller - especially as Charles Keating appears to be one of the certifiable black hats of the S&L mess. But the ethics committee is entering uncharted territory in trying to delineate rules for ``constituent services'' (somehow senators from Arizona, California, Michigan, and Ohio have all identified Keating as a constituent).

All lawmakers try to help constituents; that's part of their job. And many of those constituents have previously contributed to the lawmakers' campaign funds. The quids and quos have varying degrees of closeness, but they're often present. The ethics committee has the difficult task of going beyond the facts of the Keating caper and trying to draw lines that will help guide legislators' conduct in all such cases.

The real scandal highlighted by the Keating affair is not the actions of a few individuals, though. The real scandal is that, even with all the publicity surrounding the Keating Five and, earlier, the misdeeds of former congressional powerhouses Jim Wright and Tony Coelho, Congress still hasn't put teeth into campaign-finance reform. Bills to curb the power of PACS and close loopholes for ``soft money'' (the loopholes that Keating pushed $1.3 million through) were allowed to languish.

There were many culprits in the S&L debacle, but prominent among them was an unholy alliance between Congress and PAC-fueled lobbyists. The result was a climate that invited waste and fraud on a massive scale. Now all Americans are picking up the tab.