FRANKFORT, Ky. - The husband of former Kentucky governor Martha Layne Collins testified yesterday that he did not force officials at Donaldson, Lufkin & Jenrette Securities Corp. to make campaign contributions or to buy horse partnerships during his wife's administration.

Bill Collins' testimony came on the 32nd day of the federal conspiracy trial being held before Judge Joseph Hood in the U.S. District Court for the Eastern District of Kentucky.

The government charges that Bill Collins directed state bond business between 1983 and 1987 to Donaldson Lufkin and Cranston Securities Co. in exchange for political contributions and investments in his horse partnership business. Martha Layne Collins, his wife, served as governor for four years beginning in December 1983.

No other person has been charged in the case.

Bill Collins, who acknowledged that he was a key fundraiser in his wife's 1983 campaign, said: "We would tell people not to promise jobs for contributions."

Collins also said that he cautioned fundraisers to be careful to observe all applicable federal and state laws.

Speaking of the horse partnerships, Collins said yesterday that he "made it perfectly clear to people that they would not in any way get state business if they invested in them."

Bill Collins also denied testimony given earlier in the trial by Lester Thompson, finance secretary to Martha Layne Collins until the end of 1984. Bill Collins contradicted Thompson's claim that shortly after the inauguration, Collins put together a list of what investment bankers would be named to manage a $300 million Kentucky Turnpike Authority bond issue planned for sale in the spring of 1984.

Bill Collins acknowledged that he met with Donaldson bankers to discuss their investments in his horse partnerships.

But he said he "absolutely did not" promise to steer bond business to the firm during these visits or at any other time.

Bill Collins also said that he was unsuccessful in his efforts to convince a Wall Street-based investment bank to help him market the horse partnerships. He noted that officials at three separate firms - Donaldson, Prudential Securities, and Merrill Lynch & Co - declined to provided such assistance.

Altogether, eight Donaldson officials invested a total of $1.2 million in the Collins' partnerships.

In other courtroom action yesterday, Judge Hood refused to allow Bill Collins's attorney, Frank Haddad, to present evidence showing that Collins eventually lost $93,000 from the horse partnership venture. Hood said that the information was not relevant to the trial because the loss occurred after the alleged conspiracy took place.

On Monday, Joseph Harcum, the co-manager of public finance at Donaldson, insisted that the firm was not trying to buy its way into bond business when it paid for a $35,000 German grand piano that Bill Collins gave his wife in December 1984.

Harcum said the donation was part of an effort to create "good will" in Kentucky, and increase the firm's "presence" in the state.

Harcum said he asked senior management at Donaldson to approve funding for the piano at the request of William Johnston, then a senior vice president. Johnston, who later left the firm, coordinated Donaldson's municipal finance efforts in Kentucky.

But Harcum said he was at a loss to explain why his firm sent the check for the piano to Collins' horse partnership firm rather than to the Lexington piano dealer handling the sale.

In earlier testimony, the piano dealer, Billy Wilson, said that Bill Collins gave him the Donaldson check to pay for the piano.

Harcum also acknowledged that he and other Donaldson bankers met several times with Bill Collins in 1983 and 1984.

During Harcum's testimony, the prosecution presented as evidence several Donaldson expense account vouchers that described the purpose of the meetings with the husband of the state's governor as "Kentucky new business."

When U.S. assistant attorney John Compton asked Harcum what relationship Bill Collins had to the firm's business, Harcum replied: "Other than being the spouse of the governor, he had no position."

But Harcum vigorously defended his firm's efforts to cultivate contacts with Kentuckians close to the former governor, including her husband.

"If you want to find out what is going on, you have to get in before the [request for proposals] comes out," Harcum said. "If my team is not in before it comes out, then we are doing a lousy job."

Harcum also said that $25,000 in Donaldson donations to Martha Layne Collins' political campaign and inaugural celebration in late 1983 were appropriate.

"We regarded this as at a normal level" for a gubernatorial race, Harcum said.

Donaldson, which had not participated in state bond deals before the administration of Martha Layne Collins, was named bookrunner for three Kentucky deals sold during her administration: a $300 million Kentucky Turnpike offering issued in April 1983; a $100 million Kentucky Housing Corp. issue in November 1984; and another Housing Corp. deal in December 1985.

Harcum began his testimony as a defense witness last Friday, at which time he explicitly denied being coerced into making campaign contributions or horse partnership investments in exchange for bond business in Kentucky.

Harcum's testimony came immediately after another Donaldson banker, Benedict Marino, took the stand Friday.

Marino, co-manager along with Harcum of Donaldson's public finance department, also denied the existence of an extortion conspiracy.

Marino said the campaign contributions were made "to support our desire to generate good will and a presence where we either were doing business or hope to do business."

Marino also testified that he was in no way coerced into making investments in horse partnerships sold by Bill Collins.

Harcum had bought a $300,000 share in the partnerships, while Marino had purchased a $250,000 share.

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