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Hearing to Focus On Investigation Of King, Reports - June 21, 1989 - Omaha World-Herald

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June 21, 1989 Hearing to Focus On Investigation Of King, Reports; [Sunrise Edition] James Allen Flanery. Omaha World - Herald. Omaha, Neb. pg. 13

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(Copyright 1989 Omaha World-Herald Company)


The quality of investigations into reports of child abuse allegedly associated with Omaha businessman Lawrence E. King Jr. is to be the focus of a hearing Thursday before a special committee of the Legislature.

"We're going to see if the response time was what we think was proper, and we're going to see if there is any evidence of dalliance or lack of attention given to the investigations," State Sen. Loran Schmit of Bellwood said Tuesday.

Government Agencies

Schmit is chairman of the committee, formed Jan. 10 to investigate the "responsibilities and activities" of government agencies in connection with the Nov. 4 collapse of the Franklin Community Federal Credit Union.

King, the credit union's chief executive, was indicted last month on 40 counts of conspiracy, fraud, embezzlement and federal income tax evasion.

Last July, the State Foster Care Review Board asked the Omaha Police Department and the Nebraska Attorney General's Office to investigate reports that King was allegedly involved in child abuse and child prostitution.

Omaha Police Chief Robert Wadman said the allegations were investigated and proved groundless. Nicholas O'Hara, special agent in charge of the FBI in Nebraska and Iowa, said the reports "didn't bear up under closer scrutiny." A finding of a violation of federal law "just wasn't there," O'Hara said.

The State Attorney General's Office has continued to probe the allegations, in conjunction with investigators employed by the Legislature's special committee. Attorney General Robert Spire said he expects to be asked about his agency's findings when he is called to testify before the committee Thursday.

Others subpoenaed to testify are Dennis Carlson, vice chairman of the Foster Care Review Board; Carol Stitt, the board director; Omaha Police Officer Irl R. "Chris" Carmean; Omaha Police Officer Michael Hoch; Assistant Attorney General William Howland; and Attorney General's Office investigator Thomas Vlahoulis.

The hearing is scheduled to begin at 9 a.m. in Room 1517 of the State Capitol.

More Hearings

Asked whether Wadman would testify at a later hearing, Schmit said, "I have discussed that with counsel, but I can't say."

Schmit said he expects the committee to schedule additional hearings.

But, he said, the immediate concern is meeting a July 1 deadline for an interim report to the Legislature.

In assessing the adequacy of abuse investigations, Schmit said, the committee will examine whether any possible delays in the probes were attributable to "the fact that Mr. King was somewhat influential."

Schmit said King's alleged influence was cited earlier this month at an Omaha hearing of a congressional subcommittee that also is examining Franklin.

'Atmosphere of Influence'

At the Omaha hearing, J. Leonard Skiles of Austin, Texas, regional director of the National Credit Union Administration, testified that NCUA examiners were aware that top political and business leaders supported King and Franklin.

"It was an atmosphere of influence," Skiles said. "No one ever called us up."

Schmit said the Legislature's committee may recommend changes in state law as a result of its investigation into the Franklin collapse.

Credit: World-Herald Staff Writer

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