Though the spotlight of controversy will continue to shine on Eugene A. Ludwig, the comptroller of the currency is expected to press forward with new powers for banks. "I do not see any fallout," said H. Rodgin Cohen, a partner with Sullivan & Cromwell law firm in New York. "No one believes he acted improperly.""It won't have any effect whatsoever," added Gilbert T. Schwartz, a partner at Schwartz & Ballen law firm here. "Any indication that the comptroller would change his views because of what is an attempt to embarrass him would be an admission that there was something wrong." The vast majority of banking experts agree that the ruckus over Mr. Ludwig's presence at a May 13 coffee with President Clinton, 17 bankers, and top officials of the Democratic National Committee will blow over and that the agency will move forward on bank applications for new powers such as securities and insurance underwriting. While Mr. Ludwig is refusing interviews, his chief counsel insisted that national bank applications will be processed as usual. "Nothing has changed," Julie L. Williams said. Most people who follow banking closely say the issue is being blown out of proportion, but those same sources wonder privately whether the scandal will force Mr. Ludwig from office. Agency spokeswoman Lee Cross said Mr. Ludwig plans to finish his five-year term, which ends April 4, 1998. "He is not quitting," she said Monday. On Friday, House Government Reform and Oversight Committee Chairman Dan Burton, R-Ind., asked Mr. Ludwig to provide copies of everything he submits to Rep. Spencer T. Bachus, House Banking's general oversight subcommittee chairman. The Alabama Republican asked Mr. Ludwig on Jan. 27 to turn over all documents relating to the May 13 meeting as well as list of topics discussed. Among other things, the lawmaker wants to know the date and substance of any subsequent conversations Mr. Ludwig had with any of the 17 bankers in attendance. The Comptroller's Office is expected to deliver the documents by week's end. It's too early to tell whether Reps. Bachus or Burton will hold hearings. Staffers say it depends on how credible Mr. Ludwig's answers are and whether any new problems are uncovered. OCC officials contend the story will end after the documents are sent to the Hill. "We have nothing to hide," said one senior staffer. When the White House released lists Jan. 24 of people who attended 103 coffees organized by the DNC, Mr. Ludwig said he did not know DNC chairman Donald L. Fowler or finance chairman Marvin S. Rosen were at the meeting. If he had known they were going to be there, Mr. Ludwig said he would not have attended. Initially, White House spokesmen said there was nothing wrong with the comptroller attending an event organized by party fund-raisers. But then President Clinton said Mr. Ludwig should have been told DNC leaders would be at the meeting and agreed the comptroller should not have attended. The bankers involved have said the discussion with the President focused on the savings and loan rescue and Rep. Leach's attempts to curb bank insurance powers - not fund-raising. Before and after the meeting, the administration pushed legislation requiring banks to pay the bulk of the bailout's costs and opposed Rep. Leach's bill. Banks did end up paying less of the rescue's tab than the administration originally proposed, but the compromise was worked out with Republican lawmakers, noted Karen Shaw Petrou, president of industry consulting firm ISD/Shaw Inc. here. Of the brouhaha, Ms. Shaw said that people "are connecting dots . . . in ways that don't make any sense at all." Jaret Seiberg contributed to this story.
