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ARCHIVED  July 2, 1999

Allard staff probes with 10-foot pole

Remember Charles Keating?

U.S. Sen. Wayne Allard’s highest-ranking staff members do.

The savings-and-loan tycoon convicted in the late 1980s on fraud charges had five powerful U.S. senators in his corner. The Keating Five, censured by the Senate Ethics Committee after intervening with federal banking regulators on Keating’s behalf, are examples for any member of Congress who thinks of getting involved in a government enforcement action.

When a friend of Greeley stockbroker Michael Usher arranged a meeting between Allard’s staff and Usher shortly after the Securities and Exchange Commission secured a judge’s ruling against him, Allard’s people were on guard.

“This is not a legislative matter, but an enforcement matter,´ said Mike Bennett, Allard’s chief of staff. “We have had to be very careful.”

But the sheer weight of letters from Usher’s supporters led Bennett and Allard staff attorney John Carson into conversations with regulators.

“There were no formal communications with the SEC,” Bennett said.

But Bennett acknowledged he did make phone calls to an SEC official in Washington, D.C. He declined to say whom he called, and said he kept no records of the contacts.

Allard, while removed from the contacts with the SEC and others, was kept abreast of developments in the Usher case through e-mail and verbal briefings, said Allard press secretary Sean Conway.

Steering away from the federal enforcement process, Bennett and Carson sought the counsel of Colorado Securities Commissioner Fred Joseph.

“We wanted to get his viewpoint on the enforcement action,” Bennett said. “But we won’t comment on the merits of his viewpoint.”

Carson said he relied upon Joseph’s familiarity with the securities business and the laws governing it to help gauge whether the SEC enforcement process had been conducted according to regulations.

“I’m not an expert on securities law,” Carson said. “Fred was an expert, not just on the securities law but on what role the senator’s office could play in this instance.”

Carefully choosing words during a conference call that included Carson and Conway from Allard’s Washington office, Bennett did offer a veiled hint of what he and other staff members might have been looking for in conversations with Joseph.

“Sometimes federal regulators can be overzealous,” Bennett said. “We wanted to get an opinion on that.”

Bennett said he and other staff members have tried to restrict their involvement to a review of SEC procedures in the case, rather than an examination of the decision’s merits.

“The only way we could get involved is if there were a failure in procedure,” he said. “I don’t think the procedure is finished yet. …We will be tracing it. Once the process finishes, and we get the final ruling, we can try to judge whether the procedure was conducted properly.”

Bennett said that some of the letters from Usher’s supporters were followed up with phone calls, and that he had talked personally with several of Usher’s friends and clients.

He said none were among Allard’s close associates.

“We are acquainted with several of the people,” Bennett said, “but none with more than usual access to the senator.”

Remember Charles Keating?

U.S. Sen. Wayne Allard’s highest-ranking staff members do.

The savings-and-loan tycoon convicted in the late 1980s on fraud charges had five powerful U.S. senators in his corner. The Keating Five, censured by the Senate Ethics Committee after intervening with federal banking regulators on Keating’s behalf, are examples for any member of Congress who thinks of getting involved in a government enforcement action.

When a friend of Greeley stockbroker Michael Usher arranged a meeting between Allard’s staff and Usher shortly after the Securities and Exchange Commission secured a judge’s ruling against him, Allard’s people were on guard.

“This is not a legislative…

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