Alan Cranston

Sen. Alan Cranston

Senator Alan Cranston was born and raised in Northern California. After serving in the Army and writing two failed novels, Cranston co-founded the California Democratic Council1 (CDC) in 1952 and served as its chairman until 1957. The Council was an unofficial assembling of local Democratic outfits that coordinated electoral activities and activism in California. It provided substantial support to Cranston throughout his electoral career. It began in 1958, when he was elected California State Controller. In 1968, he became a U.S. Senator. He served four six-year terms in that position, and was the Democratic Whip from 1977 to 1991. He also rose to become the second-ranking member on the Senate Banking Committee. In 1984, he ran an unsuccessful campaign for the Democratic presidential nomination, which left him with a $2 million debt.

Cranston’s involvement with Keating is complicated. Lincoln S&L was headquartered in California, and Cranston was, in his own words, a “longtime friend” of California’s financial institutions. He says that even before meeting Keating, he was a staunch supporter of “direct investment.” Cranston and Keating disregarded their political differences and developed a mutually beneficial relationship. “Ah, the mutual aid society,” Cranston affectionately greeted Keating on a tarmac in Los Angeles; Keating jetted in days before the 1986 election to provide papers for a last-minute $300,000 line of credit for Cranston’s campaign (Cranston never tapped the line of credit). Keating and associates gave $39,000 to Cranston’s 1986 re-election campaign and arranged $85,000 in corporate contributions to the California Democratic Party for a get-out-the-vote drive. Keating's contributions to Cranston totaled almost $1 million; but they were mostly directed to voter registration groups, a kind of loophole for Cranston and Keating (for whom it was a tax deduction). Cranston started and/or controlled a number of voter engagement and liberal groups, building off his success with the CDC.

Due to his battle with prostate cancer, Cranston did not testify at the 1990 Senate Ethics Committee hearings. His chief fundraiser, Joy Jacobson, and his banking aide, Carolyn Jordan, were questioned during the hearings. After working in Congress for six years, Jacobson left Cranston’s senate staff in April of 1985 to become his chief fundraiser. From the beginning of Cranston’s relationship with Keating until mid-1987, his chief legal aide, Jim Grogan, set up substantive meetings with Keating through Jacobson. When asked why she would attend meetings that did not concern fundraising, Jacobson answered, “My constituency is contributors, and my responsibility is to see that those contributors feel as though somebody cares about their existence.” Documents show that she accompanied Cranston to numerous meetings of substantive nature. Grogan even sent her a letter (the same one he sent to DeConcini and Riegle’s office), which solicited advice regarding Ed Gray’s recusal (she says she never received it). In January 1987, she sent a memo to Senator Cranston that listed the names of contributors and the legislative matters with which they were concerned. In her words, “Individuals who have been helpful rightfully expected some kind of response from our office” …Jacobson claims that she had no knowledge of the April meetings until she read about them in the press.

His banking aide, Carolyn Jordan, also claims that she had no knowledge of the April meetings until a year later when she read about them in the press (during this period in April, she was in Arizona and California visiting Lincoln and other thrifts). After the April meetings, she had much less direct contact with Lincoln than Jacobson did. She says that she did not think it was unusual for Cranston to meet with the head of an agency, even without telling her. She recalls telling Cranston after the April meetings that criminal referrals were mechanisms, commonly used by the Bank Board, to scare off members of Congress and attorneys and that a criminal referral did not mean the investigative process had stopped.

Per Cranston’s request, Jordan started investigating the sale of Lincoln in May 1988. In a phone call made that month, Grogan told her that the Board decided to take enforcement action against Lincoln despite their admission that their examiners had committed fraud against ACC. She then called a friend at the Board, who confirmed this information. Throughout this time, papers frequently reported Lincoln’s monetary gains: As late as February 1988, Thrift News ranked Lincoln 39 out of the 100 largest S&Ls in terms of net worth. Still, Jordan admits that she never made any attempts to substantiate Keating’s claims; in her words, “We tended not to try to say who is right and wrong. What we try to do is massage the process so these people could work out these difficulties.”

Soon after the April 1987 meetings, Keating contributed $125,000 to USA Votes, one of the groups the Cranston directed.2 This was followed a few months later by $325,000 to the Forum Institute, another of Cranston’s organizations. In February 1988, while Cranston was visiting the Phoenician with his son, Kim, Keating gave $400,000 to the Center for Participation in Democracy. Kim was the Center’s president at the time. (Cranston chided Jacobson for advising him to ask Keating for “only” $250,000).


1 A coalition of Democratic clubs that was designed to enable Democrats to become the majority party.

2 His aide, Carolyn Jordan, also took various trips to Arizona, including one in April 1987, with all expenses paid by ACC. These payments would have been illegal for Executive branch employees.