KEATING DEFENDS $250,000 IN GIFTS FROM TYCOON

OKLAHOMA CITY ­ Oklahoma Gov. Frank Keating said Monday that there was
nothing wrong with taking $250,000 from a mutual fund tycoon and that he is
disappointed by published reports that the money helped ruin his chance to
be U.S. attorney general.

Jack Dreyfus, who founded the Dreyfus mutual funds, gave the money in a
series of gifts to Mr. Keating's children.

"Jack Dreyfus is like a godfather to me and a godfather to my children,"
Mr. Keating said at a news conference in his office.

President-elect George W. Bush selected former Missouri senator John
Ashcroft as his choice for attorney general.

Mr. Keating said he doesn't know why Mr. Bush didn't pick him.

Mr. Keating said the gifts had been cleared by ethics panels in Washington
and were not a factor in Senate confirmation hearings on his nomination to
a federal judgeship. Democrats stalled Mr. Keating's nomination so incoming
President Bill Clinton could make the appointment.

Mr. Keating said he remains a strong supporter of President-elect Bush but
is disappointed and puzzled why "information submitted in a confidential
environment" became fodder for an article in the current edition of
Newsweek, which hit stands on Monday.

The article said the money was a factor in Mr. Bush's decision not to
select Mr. Keating for the attorney general post.

The money, which was given to the Keating children in $10,000 increments,
has been used for educational purposes, including college and summer
activities, Mr. Keating said.

In Austin, Scott McClellan, spokesman for the Bush-Cheney transition team,
called Mr. Keating "an exemplary public servant and a close friend of the
president-elect. As to the story, we're not discussing any of the
speculation about the transition process."

Mr. Keating said that he had expressed interest in the attorney general
post to Vice President-elect Dick Cheney, who inquired informally about the
Dreyfus loan but did not seem concerned about it.

Mr. Keating ran for governor after several years as a top official in
Washington at the Justice Department and the Department of Housing and
Urban Development. He said Mr. Dreyfus raised $50,000 for him over several
weeks and "that was really the beginning of my campaign in 1993 to be
governor." Mr. Keating was elected in 1994 and re-elected four years later.

The Newsweek article also said a comment Mr. Keating made on Mr. Bush's
possible past use of cocaine may have been a factor in the Oklahoma
governor missing out on the nomination.

Mr. Keating had suggested that Mr. Bush disclose anything "arguably criminal."

Keating spokesman Dan Mahoney on Monday confirmed reports that Bush
officials did not like Mr. Keating's reply when asked during the campaign
about how Mr. Bush should deal with questions about possible cocaine use.

"The Bush campaign's top staffers, we know, did not like it," Mr. Mahoney
said. "The word got back pretty quickly from Austin that they did not
appreciate the governor's advice."

Gordon Melson, executive director of the state Democratic Party, said Mr.
Keating's acceptance of the money "is another example of his ethical
envelope-pushing and follows a pattern we've been trying to point out for
over a year."

The Newsweek story said Mr. Keating received the money from Mr. Dreyfus
beginning in 1990.

The gifts were legal, but Mr. Keating never disclosed them to state
officials because state law does not require it, the article said.

"It was allowable ­ that's the bottom line," said Steve Edwards, chairman
of the Oklahoma Republican Party. "I know that Governor Keating has been
reviewed and investigated by the FBI seven times and has come up with a
clean bill of health every time."

In contending the gifts were appropriate, Mr. Mahoney said Mr. Dreyfus was
"like a second grandfather to the Keating children."

He said that Mr. Keating ran the gifts past the Government Ethics Office in
Washington and had always felt comfortable about accepting them for his
children. He said he informed the Bush campaign of the gifts when he was
under consideration as Mr. Bush's running mate.

Oklahoma Democrats and others have suggested that Mr. Keating's penchant
for making outlandish statements may have hurt his chances for the job.

"Nobody knows what all the dynamics were going into the choice for attorney
general," said Mr. Edwards, who worked on presidential appointments when
Mr. Bush's father was in office. "Rumors are the currency of trade in
Washington."

Mr. Melson said the gifts from Mr. Dreyfus are an example of the gratuitous
ties Mr. Keating has had with some in the corporate world.

Democrats had criticized Mr. Keating for allowing Conoco Corp. to pay for
an Alaskan fishing trip last year valued at between $6,000 and $7,000.
State law forbids public officials to accept gratuities that exceed $300 in
a year from companies that have a lobbyist at the Capitol.

Mr. Keating has defended the trip, saying it was tied to his efforts to
bring jobs to the state. A complaint related to the trip is pending before
the Oklahoma Ethics Commission.