Friday, September 11, 2009

Alan Cranston: a beating from Keating

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The lifelong mission of Alan MacGregor Cranston was putting an end to the arms race. These efforts may have been the legacy of the Democratic Senator from California, and to some extent they are. Unfortunately for Cranston, his involvement in a scandal in the waning days of his government days would forever associate his name with a savings and loan scandal.

Cranston was born in Palo Alto, California, in 1914. After attending Pomona College and the University of New Mexico, he graduated from Stanford University in 1936. While at the university, Cranston became a noted track athlete and would keep up with the sport throughout his life. In 1969, the same year he began serving in the United States Senate, he set a world record in the 100-yard dash for 55-year-olds with a time of 12.6 seconds.

Following his graduation, Cranston joined the International News Service, the precursor to United Press International. In a later interview, Cranston claimed to be the first non-fascist journalist allowed into Germany under the Nazi regime. He only worked with the news service from 1937 to 1938, but it was a busy period in which he covered prewar occurrences in England, Germany, Italy, and Ethiopia. He later said that he left journalism because, "I didn't want to spend my life writing about such evil people and their terrible deeds; I'd rather be involved in the action."

Cranston got his chance in 1939, a matter of months before Germany invaded Poland. Having returned to the United States, Cranston spotted a copy of Adolf Hitler's Mein Kampf in a Macy's bookstore in New York City. Noticing that it was slimmer than the copies he had seen in Austria, Cranston was shocked to find that the English language version of the German dictator's memoir had been whitewashed to eradicate any mention of anti-Semitism or militarism. Moreover, every sale of the three-dollar book sent about 40 cents in royalties to Hitler.

Cranston responded by producing his own, unexpurgated take on Mein Kampf. Working from the original German version and two translations, Cranston produced a 32-page pamphlet in eight days. Released through a William Randolph Hearst publisher, the pamphlet made no secret of its intentions. The sections that had been cut out of the English translation were highlighted, and it included editorial commentary exposing Hitler's lies and deceptions. The cover showed Hitler carving up the planet against a red background, and boasted, "Not 1 cent of royalty to Hitler." Instead, the proceeds would go toward helping refugees from Europe.

The publication didn't last long. Houghton-Mifflin, the U.S. publisher for Mein Kampf, sued for copyright infringement. In a Connecticut court, Cranston's lawyer argued that the book's copyright had been secured in Austria, and had ceased to be valid once Germany annexed the country. The judge didn't go for it, and ordered a halt to production of the pamphlet. In the 10 days the pamphlet had been out, it had sold about 500,000 copies for a dime a piece.

Prior to the U.S. entry into World War II, Cranston worked for the Common Council for American Unity, an organization that helped European immigrants adjust to American life. From 1940 to 1944, he became chief of the foreign language division of the Office of War Information. The duties included explaining the rationale behind the war to German, Italian, and Japanese immigrants, as well as how price controls worked. In 1944, he declined a deferment and enlisted in the U.S. Army. Though he served until the end of the war, Cranston was soon taken out of the infantry to return to journalism in the field, which included writing up the war aims for soldiers. He was discharged as a sergeant.

In 1946, Cranston published The Killing of Peace, a book he had been working on during his service in the war. It focused on the failure of the United States to join the League of Nations after World War I, and encouraged the country to join the United Nations, the other world organization then coming into being. The New York Times named the work one of the top 10 books of the year.

Cranston's first noted work with demilitarization came when he became the national president of the United World Federalists in 1949. The organization called for strengthening the UN, including giving it "the power of law to control all weapons and prevent aggression," to make a more effective world federation. The first step would be the hardest, however. While speaking in support of a congressional disarmament proposal in 1950, Cranston said that the U.S. should not disarm "until all countries disarm under an effective control system." Meanwhile, the idea of creating a world federation was radical enough that Cranston had to fend off charges that the organization was linked to Communism, and it was revealed in 2003 that the Federal Bureau of Investigation began monitoring Cranston after World War II and continued doing so during his political career. Cranston remained president of the United World Federalists until 1952.

Cranston moved on to found the California Democratic Council and serve as its president from 1953 to 1958. He won his first political victory in 1958, when he was elected comptroller of the state. He served until 1967, leaving office after losing a re-election attempt, and spent the next few years in land investment and home construction, serving as president of Homes for a Better America and vice-president of Carlsberg Financial Corporation.

In the midst of these activities, Cranston launched another campaign: a bid for the Democratic nomination for U.S. Senator in the race to replace ailing incumbent Claire Engle. Though Cranston enjoyed the support of Governor Edmund "Jerry" Brown, the race became contentious when former JFK speechwriter Pierre Salinger entered the race as another popular candidate. Salinger was backed by Jesse Unruh, the speaker of the state assembly, who knew that his perception as something of a political boss would hurt Salinger if he ever publicly declared support. Cranston declared that Unruh would "take violent sides in a Little League game if he thought he could own the winner."

In the first attack on his fundraising methods, a former state inheritance tax appraiser accused Cranston of selling lucrative posts in exchange for campaign contributions as comptroller. When the Salinger campaign took up the charges, Cranston responded by filing a $2 million libel suit against them. Salinger maintained the accusations, saying the people appointed by Cranston only kept their jobs due to contributions. The ugly race finally ended with Salinger winning the nomination, though losing the general election.

Cranston met with more success in the 1968 Senate race. He was matched up against Max Rafferty, the Republican state superintendent of public instruction. Though Crafferty blasted Cranston for his support of halting bombing in Vietnam and association with left-wing groups such as the California Democratic Council, Rafferty's own image was tarnished after news reports implicated him as a draft-dodger. Cranston won the election with 52 percent of the vote.

Cranston would go on to win another three terms, and served as the Democratic whip from 1977 to 1991. He chaired the Committee on Veterans' Affairs from 1977 to 1981, and again from 1987 to 1993, and ultimately held positions on the Foreign Relations, Intelligence, Banking, Housing, and Urban Affairs committees. He supported the Strategic Arms Limitation Talks and Anti-Ballistic Missile Treaty, threw his weight behind bills on environmental protection and civil rights, and was a strong supporter of Israel. Cranston introduced the California Desert Protection Act and a bill to allow journalists to keep their sources confidential. He also co-sponsored a bill in 1977 seeking to decriminalize the possession and non-profit sale of small amounts of marijuana and the Cranston-Gonzales National Affordable Housing Act.

For the early part of his career, Cranston's potential for embarassment came not from his actions, but from his family. His son, Robin, was accused of drugging his girlfriend, who was also a former Playboy Bunny. Robin was cleared of the charges in February of 1973 due to lack of evidence. However, he was arrested again six years later, this time on suspicion of trying to murder a different ex-girlfriend by strangulation and setting fire to her house. Robin's attempted murder and arson charges did not stay in the headlines for long, so it is unclear what happened with the case. In May of 1980, he died after he was struck by a van.

Cranston was also humbled some years later, when he sought the Democratic nomination for President. He became the first Democrat to announce his candidacy, in February of 1983, and based his platform entirely around nuclear disarmament. "There can be no cure for growing unemployment, decreasing productivity, the diminishing opportunity for individual Americans to enhance their well-being, if we continue to pour a mounting portion of our national resources - our money, our technological skills, the energies of our people and our government - into an arms race," he declared. His plan was to gain a foothold in the campaign through solidarity with voters who felt strongly on the nuclear issue, then begin building on the other issues.

In June of 1983, the New Republic reported that Cranston had spent $4,000 of surplus campaign funds from his 1980 re-election on voice lessons, speechwriting services, and travel and lodging expenses for his wife. He denied any wrongdoing, saying he had consulted with the Internal Revenue Service and Senate Ethics Committee on the matter. His senior assistant, Roy Greenaway, admitted that the funds were used for Cranston's wife for events "in which there was a role for her," while the other expenses aimed at making Cranston a better public speaker. It apparently wasn't enough. Though Cranston performed well in some non-binding votes, including a straw poll in Wisconsin, he dropped out of the race in February of 1984 after finishing seventh with only three percent of the vote in the New Hampshire primary. A Cranston campaign worker named Bernard Rapoport later attributed the failure to Cranston's lack of charisma, dry manner of speech, and poor appearance on television. "He was one of the most intelligent senators I have ever known," said Rapoport, "but he did not generate any excitement on the campaign trail."

Campaign violations continued to pile up on and around Cranston, although most were minor. The marketing director for a failed bank pleaded guilty in 1986 to having the bank make and hide an illegal contribution to Cranston's presidential campaign, although Cranston was found to be unaware of the impropriety. In 1988, Cranston was fined $1,500 for violations of the campaign laws in his 1986 re-election. There, it was found that his re-election committee did not report approximately $225,000 borrowed from 13 lenders within 60 days, and also that it accepted about $7,000 from contributors who exceeded the $1,000-per-individual limit. Four men were charged with illegally channeling funds exceeding the limit to a third-party candidate in an attempt to split the Republican vote. Finally, in June of 1989, Cranston was fined $50,000 by the Federal Election Commission for violations in his presidential campaign, including that he accepted too much money from his sister and several businessmen.

So while Cranston was well-known for his ability to raise funds for his campaigns, it often came at a price. The scandal that would most affect Cranston first appeared in a small story in the Los Angeles Times in June of 1988. According to the newspaper, public records showed that Republican businessman Charles H. Keating, Jr. of Arizona contributed $85,000 to the California Democratic Party and raised $40,000 for Cranston's 1986 re-election campaign. It was also noted that Cranston, a member of the Senate Banking Committee, and four other Senators met with federal regulators in April of 1987 to ask that they ease up on their investigation into the Keating-owned Lincoln Federal Savings and Loan Association in Irvine, California. Greenaway, again speaking on behalf of Cranston, said that the Senators were seeking to put a halt to over-regulation on the government's part. It would be another 10 months before the incident blossomed into the scandal involving the "Keating Five."

Keating, a businessman with interests in several states, acquired Lincoln in 1984. He proceeded to shift most of the institution's assets into riskier real estate investments, foreign transactions, and other speculative ventures. Lincoln's practices also involved the sale of "junk bonds" and deceptive accounting that recorded the trading of empty lots as a profitable undertaking. Keating found himself under fire from state and federal regulators, who suspected him of failing to abide by federal disclosure and government accountability rules.

Lincoln collapsed in April of 1989, leaving 23,000 mostly elderly depositors devoid of their savings. The federal government took over the institution at a cost of about $2.6 billion to taxpayers. It was one of the larger blows of a growing savings and loan meltdown that cost the government hundreds of billions of dollars to bail out. With the fall of the institution, the meeting involving Cranston and the other Senators came under more scrutiny.

Aside from Cranston, the Keating Five included Democrats James DeConcini of Arizona, John Glenn of Ohio, and Donald Riegle of Michigan, as well as Republican John McCain of Arizona. All of the Senators except Riegle, who helped arrange the meeting, came together in DeConcini's office in April of 1987 to meet with Keating. Edwin Gray, a member of the Federal Home Loan Bank Board and President Ronald Reagan's chief regulator of savings and loan institutions, said Keating offered to return Lincoln to more traditional home loans if the Senators pushed to get rid of the direct investment rule. The promise would have rung rather hollow, considering the rule limited the amount of money that could be invested in high-risk ventures. The Senators all denied that the offer even took place.

In another meeting a week later with regulators in San Francisco, all of the Senators pressed for more deregulation against Lincoln. While the Senators said they were concerned that too much pressure was being placed on Lincoln, most backed off once it was revealed that the regulators were looking into possible criminal action against Keating. Cranston and DeConcini, however, continued to meet with regulators to advocate on behalf of Keating. Cranston met with regulators six times in a two-month period to keep abreast of the possible sale of the institution.

The Senate Ethics Committee received a request to investigate Glenn in September of 1989, and then another one seeking an inquiry into the entire group in October of 1989. Cranston intially kept quiet about the scandal, postponing his marriage to his third wife so the ceremony would not be waylaid by reporters. Then in January of 1990, he came out swinging against Gray, calling him a "political hack" and accusing him of seeking scapegoats because the savings and loan crisis happened on his watch. He also said Gray treated the federal bank board to extended lines of credit and lavish junkets. Cranston also showed no signs of being significantly rattled in a May 1990 interview. "It's a big nuisance," he said. "I think you're fair game when you're in public life for whoever wants to take you on." He also lamented that he would have to raise money for both a legal defense fund and re-election campaign for the 1992 contest, and that some would see his image as a reformer compromised by his acceptance of campaign funds from a conservative Republican. "My words and deeds show that I am a reformer on many fronts," he said. "Then this thing blows up and it doesn't matter what I did."

The Ethics Committee began its hearings in November of 1990 and continued them until January of 1991. Shortly before they began, Cranston announced that he would not seek re-election in 1992. He had recently been diagnosed with prostate cancer.

During the hearings, it was found that Keating had donated $1.3 million to the five senators. Cranston, whose constituencies included Lincoln, received a disproportionately large share: close to a million dollars. Some of the funds went toward his campaigns, but the majority of that money went toward voter registration groups supported by Cranston, though there was some question of whether the groups (one of which was headed by another son) were actively seeking to recruit more Democrats than Republicans. In November of 1990, Cranston testified that it was "politically unwise and stupid" to meet with Keating in the way he and the other senators did, but insisted that he had done nothing wrong. The unfortunate truth of politics, he said, was that those who contributed money had easier access to politicians, and it was only natural that they would seek some return on their investment.

In February of 1991, the committee released its initial findings. The chief counsel, Robert S. Bennett, charged Cranston with soliciting or taking donations from Keating on four occasions that correlated with political actions that favored Keating. Among the findings were a hint from Cranston's chief fundraiser in January of 1987 that contributors, including Keating, would "rightfully expect some kind of resolution" on Lincoln's problems; a call to the regulatory board of the savings and loan institutions shortly after Keating's aides delivered $250,000 to his campaign in November of 1987; and, in an incident Cranston denied, a dinner in Los Angeles in January in 1988 in which Cranston came up to Keating, patted him on the back, and said, "Ah, the mutual aid society."

The committee declared that Cranston acted improperly, and that there was "substantial credible evidence" of his official activity being influenced by Keating campaign funds. The other four Senators got off with written rebukes, while Cranston's case entered a long period of bipartisan stalemate over how to proceed on the matter. In August of 1991, Republican Senator Jesse Helms of North Carolina, a member of the committee, leaked Bennett's recommendation: censure for Cranston.

The case was finally resolved in November of 1991, when Cranston accepted a reprimand from the committee for "improper and repugnant conduct." The action avoided a formal floor vote, and was motivated at least in part by Cranston's illness and decision not to run again. Although his punishment was not much more severe than the other four senators in the Keating Five, Cranston was incensed and let the Senate know. He said the rest of the chamber would be unable to look clean after the scrutiny he had gone through, and that his actions were normal for the Senate. "You are in jeopardy if you ever do anything at any time to help a contributor -- no matter how worthy the cause, no matter how proper the need for help and no matter how proper the help you render," he said. "I stand before you as an illustration of that jeopardy." At the same time, Cranston urged that money be removed as a factor from campaigns. He said he had narrowly won his last election after spending $11 million, and that such contests made politicians more concerned with getting money than with serving the people. "There is only one way to get out: get money out of politics," he said. "Enact public financing and enact it now."

The speech drew some angry outcry from other Senators. Republican Warren Rudman of New Hampshire called it a smear on the Senate, and said testily, "Everybody does not do it." Republican Trent Lott of Mississippi also criticized Cranston. "The accused, who frankly was getting off quite lightly, in effect became the accuser," he said. Keating would go to prison after being convicted of racketeering and fraud charges, but his 12-year sentence was overturned in 1996 after it was determined that the jury was biased by the savings and loan crisis and did not have enough evidence to convict him. In the 1992 election, Democrat Barbara Boxer was elected to Cranston's seat.

After returning to Palo Alto, Cranston joined the U.S.-Kyrgyz Business Council and also served as senior international adviser to the Schooner Capital Corporation. In 1996, he partnered with former Soviet President Mikhail Gorbachev to chair the Gorbachev Foundation/USA, an organization advocating nuclear disarmament. In 1999, he founded his own organization with the same goal in mind, the Global Security Institute. The next year, he co-founded the Nuclear Threat Reduction Campaign. While the Keating scandal never came up in the 2000 interview, which took place at UC Berkeley, he again called for the removal of money as a factor in campaigns, echoing his argument from nine years before: "[U]ntil we get money out of politics, money is going to affect every issue that comes along, often adversely to the interests of the public." On New Year's Eve of that year, Cranston died of natural causes unrelated to his cancer diagnosis.

Sources: The Biographical Directory of the United States Congress, "Justice Douglas A Vice President Of Federalists" in the Evening Independent on Feb. 18 1950, "World Federalists Deny Communist Tie" in the New York Times on Feb. 25 1950, "Group Supports Call To Disarm" in the Toledo Blade on Jun. 22 1950, "Salinger-Cranston Senate Race Absorbs California" in the Toledo Blade on May 4 1964, "Cranston Sold Jobs, Ex-Appraiser Claims" in the Los Angeles Times on May 21 1964, "The Difficulty of Selling Soap" in Time on May 29 1964, "Salinger Issues Reply To Cranston Libel Suit" in the Los Angeles Times on May 30 1964, "Salinger Defeats Cranston" in the Eugene Register-Guard on Jun. 3 1964, "Who's New In The Senate" in Time on Nov. 15 1968, Copyright's Paradox by Neil Netanel, "Jury Clears Senator's Son" in the Eugene Register-Guard on Feb. 10 1973, "Cranston Backs 'Pot' Decriminalization" in the Los Angeles Times on Feb. 4 1977, "Senator's Son A Suspect" in the Spokesman-Review on Feb. 19 1979, "Didn't Leave Will" in The Bulletin on May 21 1980, "Cranston Starts Longshot Run For Presidency" in The Ledger on Feb. 3 1983, "Cranston Used Funds For Voice Lessons" in the Gainesville Sun on Jun. 5 1983, "First To Enter, Cranston Becomes First To Exit" in The Ledger on Mar. 1 1984, "Ex-Bank Aide In Guilty Plea" in the New York Times on Jun. 7 1986, "Sen. Cranston Went To Bat For Big Contributor" in the St. Petersburg Times on Jun. 14 1987, "Cranston Fined For 1986 Campaign Law Violations" in the Los Angeles Times on Jun. 7 1988, "Cranston To Pay Penalty For Campaign Violations" in the Los Angeles Times on Jun. 30 1989, "4 Men Are Accused of Election Fraud" in the New York Times on Dec. 15 1988, "Cranston Inquiry Widens To Include Signups of Voters" in the New York Times on Dec. 6 1989, "Cranston Decides To Fight In Effort To Overcome Image In Savings And Loan Failure" in the New York Times on Jan. 21 1990, "Washington At Work; Cranston, A Picture Of Calm In The Eye Of A Political Storm" in the New York Times on May 18 1990, "Citing Cancer Of Prostate, Cranston Rules Out '92 Bid" in the New York Times on Nov. 9 1990, "Cranston Accused Of Helping Keating For Contributions" in the Deseret News on Nov. 16 1990, "You Sold Your Office" in Time on Nov. 26 1990, "Cranston Says He Was 'Unwise' In Dealings With S&L" in the New York Times on Nov. 30 1990, "Ethics Committee Singles Out Cranston" in the New York Times on Feb. 28 1991, "Cranston Censure Urged By Counsel" in the New York Times on Aug. 5 1991, "Cranston Rebuked By Ethics Panel" in the New York Times on Nov. 21 1991, "Senate Panel Reprimands Cranston" in the St. Petersburg Times on Nov. 21 1991, "Reprimanded Cranston Rails At Fellow Senators" in the Pittsburgh Post-Gazette on Nov. 21 1991, "FBI Watched Cranston For Years, Paper Says" in the Los Angeles Times on Aug. 27 2003, The Sovereignty Revolution by Alan MacGregor Cranston et al., Being Rapoport: Capitalist with a Conscience by Bernard Rapoport, Senate Elections by Alan I. Abramowitz and Jeffrey Allan Segal, Ethics In Congress: From Individual to Institutional Corruption by Dennis Frank Thompson, Encyclopedia of White-Collar and Corporate Crime, Vol. 2 by Lawrence M. Salinger, In the Ring: Trials of a Washington Lawyer by Robert S. Bennett, "Conversation with Alan Cranston" in UC Berkeley's Conversations with History series (available at, "In Memoriam: Alan MacGregor Cranston" at

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