FHLBB Chairman Returns $11,000, His Lawyer Says

Federal Home Loan Bank Board Chairman Edwin J. Gray on Monday returned more than $11,000 in expense money he had received as reimbursement for trips taken by his wife, according to Gray’s attorney.

Peter Morgan, Gray’s personal lawyer in Washington, also disclosed in a telephone interview Monday night that the controversial official paid back more than $13,000 last summer for a private jet he chartered in July, 1983.

The disclosures were made in anticipation of the release today of hundreds of pages of documents detailing the travel and personal expense records of Gray and several of his staff members. The documents will be released in response to Freedom of Information Act requests by The Times and other newspapers.

New Loans Required

Gray repaid the expenses by borrowing from his mother and by taking out a loan with a commercial bank, according to a bank board staff member.

The expenses were initially paid at least partly by the Federal Home Loan Banks in the districts in which they were incurred.

Gray, a former senior vice president of Great American First Savings Bank and a former aide to President Reagan, has been under fire for months from several savings-and-loan industry executives who object to his strict-regulation philosophy.

Gray, whose four-year term expires in June, has previously asserted that his critics are “disgruntled” savings and loan industry executives who “don’t like a tough regulator.”

Gray chartered the private jet during a meeting of the 12 bank board presidents in Indianapolis because he was unable to book a commercial flight to Monterey, Calif., to see his dying father, Morgan said.

“The doctor said that if he didn’t get there by morning, he wouldn’t see his father alive again,” Morgan added. Gray’s father died about four months later.

Morgan also said that Gray paid the bank board $11,000 on Monday for more than three years of travel expenses relating to his wife, Monique.

Gray, who is also under investigation by the Office of Government Ethics for his travel and entertainment expenses, intended to reimburse the bank board for the airplane charter, but “in the press of business and after the event was over, it slipped his mind,” according to Shannon Fairbanks, bank board chief of staff.

Monique Gray’s expenses were paid back so that Gray could “avoid any possible appearance of conflict,” Fairbanks said.

Attorney Morgan said it has been a “historical practice” for the 12 regional Federal Home Loan banks to “cover travel expenses of spouses.” Although Gray followed that practice, Morgan said that the bank board chairman “thinks it’s a legitimate area for re-examination.”

In October, Gray reimbursed the Federal Home Loan Mortgage Corp. (Freddie Mac) $1,425 for expenses he incurred during a 1985 trip to Europe. Gray repaid the agency for tickets to tennis matches at Wimbledon and for two nights’ lodging for his wife and children in Switzerland.

Freddie Mac documents released earlier show that the government-chartered agency also paid bank board staff and members’ expenses for green fees at Pebble Beach and chauffeured sightseeing limousines in London. Some of those expenses were later paid back to the agency.