Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, August 27, 1993 TAG: 9308270278
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: DAVID M. POOLE STAFF WRITER
DATELINE: LENGTH: Medium
Cranwell said he resigned Wednesday from the board of International Guaranty Insurance Co., which was set up this year with five senior Democratic legislators on its board of directors.
He said he would put his interest in the company in a blind trust, and tell whoever manages the trust to sell it as soon as possible.
Cranwell, who faces re-election this fall, acknowledged that his decision was based in part on pressure from his constituents.
"I found in discussions with people that a lot [of them] understand that a citizen legislator has got to earn a living," the Roanoke County Democrat said.
"But many said, `When so many of you are serving [on the company's board], that makes us a little uncomfortable.' "
His opponent in the Nov. 2 election said it should not have taken Cranwell so long to figure out what the public thought about his involvement with International Guaranty.
"It's not so much that he saw the light than felt the heat," said Bud Brumitt, a Botetourt County Republican.
"I think everybody in the valley should applaud the fact that he understands - finally - that the public expects high ideals of ethics beyond what is written in the law."
Cranwell and four other senior legislators violated no law when they invested $25,000 each in International Guaranty and joined the board of directors.
The arrangement, however, drew criticism from consumer groups, editorial writers and leading Democrats, including Gov. Douglas Wilder and former Attorney General Mary Sue Terry.
International Guaranty is seeking to join a small number of firms that sell private mortgage insurance, which protects banks when lending to homebuyers who cannot afford down payments of at least 20 percent.
Critics noted that the involvement of five powerful legislators may prompt banks - which seek favors from the General Assembly each year - to steer their business toward International Guaranty. Others said that the General Assembly may be less willing to regulate private mortgage insurance rates if senior legislators are involved in the business.
Senate Finance Chairman Hunter Andrews, D-Hampton, and Del. Alan Diamonstein, D-Newport News, resigned from the company board earlier this month.
Cranwell held his ground, insisting that he had not violated the state's conflict-of-interest law.
"People say it's an appearance of impropriety," he told The Washington Post on Aug. 9. "Well, I don't know who is in charge of making that determination."
Thursday, Cranwell said fallout from the International Guaranty deal created a "whirlwind" the likes of which he has never experienced in his 20 years in the House of Delegates.
"I have taken these steps because . . . I have listened and responded to the people I represent," he said.
To ensure that part-time legislators can avoid similar controversies in the future, Cranwell said he would introduce a bill in the upcoming General Assembly session that would prohibit more than one state legislator from serving on the board of any state-regulated company.
If approved, the bill could force legislators to resign from the boards of banks, mortgage companies, utilities or insurance companies.
"If there's more than one of them, someone's going to have to get off," he said.
Cranwell said he never imagined his involvement in International Guaranty would cause a stir. He said he invested in the company and joined the board without knowing that four other legislators would be extended the same offer.
"It never dawned on me that anyone would say, `These guys are going to go down there and twist everyone's arm in the legislature to make this business work,' " he said.
The other two legislators - Del. Lewis Parker, D-South Hill, and Del. Alson Smith, D-Winchester - have said they are not contemplating resigning as directors.
Keywords:
POLITICS
by CNB