Officials from Fleet Securities met with New York City Comptroller Elizabeth Holtzman in June 1992 to lobby for a higher status in the city's bond syndicate, a source close to the bank said.

The source also said Fleet officials promised her a $3,000 campaign contribution.

Holtzman has previously said she was unaware Fleet was vying for a co-manager slot on the city syndicate until after the city named the firm to the position in March 1993. Two months after the June meeting, her Senate campaign negotiated a low-interest loan from Fleet that is now the subject of a city conflict of interest investigation.

Press officials representing Holtzman did not return telephone calls yesterday.

The source said the $3.000 contribution was made during the meeting, which he also described as a "mini fund-raiser." He said the contribution came from four executives at the securities firm: John J. Flynn, Robert Speer, Brigget Jandreau-Smith, and William Homann. He said only Smith was at the meeting with John O'Brien, president of Fleet Securities.

Federal election records show the four came through with their promise of $3,000 four days later. on June 15, although the source said the contributions were made during the meeting or immediately after.

Details of the meeting, which occurred between Holtzman, O'Brien, and bank executives emerged as the city's Department of Investigation on Friday concluded a four-month inquiry into conflict of interest charges. The charge surrounded the recommendation by Holtzman's office of Fleet as a co-manager of city bonds.

The city appointed Fleet in March 1993 after Holtzman's failed U.S. Senate campaign received a $450,000 loan in August 1992 from Fleet's banking affiliate.

At the moment, the city's Conflicts of Interest Board is reviewing the DOI's findings, and based on its review, the board can hold private hearings on the matter, said board spokeswoman Laura Denman.

The five-member board can impose fines or refer the case to federal or state prosecutors after it completes its review. The board's review is done in private, although the final outcome of the hearing would be made public, Denman said.

So far, Holtzman has blocked publication of the DOI's report, as is her right under city charter rules.

According to published reports, the DOI has recommended that federal prosecutors investigate if Holtzman campaign officials including finance director Sheila Levin gave false information to Fleet Bank to obtain the loan made at an interest rate of 7%, just 1% above prime.

Levin in a statement released Saturday said, "I have done nothing wrong and I will establish that. "

Holtzman today will face two challengers in the Democratic primary for city comptroller, state Assemblyman Alan G. Hevesi and former deputy mayor and U.S. Rep. Herman Badillo. Both Hevesi and Badillo have called on Holtzman to release the report. Holtzman has said to do so before the conflicts board rules would be unfair to herself and others in her campaign because the report may be incomplete.

Fleet officials acknowledged yesterday that securities executives there had met with Holtzman on June 11, 1992, to demonstrate the firm's expertise as a city bond underwriter and to be promoted within the city's bond underwriting syndicate.

Such meetings, known as "courtesy calls," are common within the Holtzman administration, city officials say. Holtzman, who was elected comptroller in 1989, often holds private meetings with investment banking executives who are vying for city bond business.

The meetings usually last for about 10 minutes, city sources say, with investment bankers explaining their expertise to Holtzman and her finance staff.

For Fleet, the June 1992 meeting was an attempt to prove that the firm had much more to offer the city than a proven ability to distribute bonds, said a source with knowledge of the meeting. The source said "it's safe to say" that Fleet wanted to play a larger role in New York City finances.

At the time, Fleet was a selling group member in the city syndicate, the lowest underwriting bracket in the underwriting group.

The source, who asked to remain anonymous, said Fleet requested the meeting with an eye toward impressing upon Holtzman that it should be promoted from the selling to the co-manager ranks.

Thomas L. Lavelle, a spokesman for Fleet Financial Group, confirmed that firm officials had met with Holtzman. "We met with her to point out our strengths and our interests in expanding business," Lavelle said.

For municipal bond underwriters, the co-manager group is a more lucrative underwriting class than the selling group, which is usually reserved for firms that have good distribution of bonds but have little to offer the city in terms of investment banking expertise.

City officials typically designate more bonds to co-managers than selling group members. Selling group members often obtain bonds during times of market distress. As a result, co-managers usually earn more money on city bond deals than selling-group members.

Fleet's inclusion as a co-manager in the syndicate came despite preferences by finance officials representing Mayor David N. Dinkins that the firm remain in the selling group. A city source said that finance officials representing the mayor had not included Fleet in their co-manager picks because Fleet had not "demonstrated the required level level of banking capabilities" such as informing city officials about better ways to sell the city's debt.

In addition, Fleet in January 1993 lost a key member of its investment banker team, a city finance source said. Investment banker Joseph C. Bosch had left the firm to join the public finance department at George K. Baum & Co.

Bosch, the city source said, had been the only Fleet public finance executive to have approached finance officials representing the mayor with financing ideas. When Bosch left the firm. finance officials representing the mayor had little contact with Fleet, the source said.

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