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Some Want Priority on Abuse Allegations Franklin Probe Splits Senators - July 12, 1989 - Omaha World-Herald

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July 12, 1989 Some Want Priority on Abuse Allegations Franklin Probe Splits Senators; [Metro Edition] James Allen Flanery. Omaha World - Herald. Omaha, Neb. pg. 21

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(Copyright 1989 Omaha World-Herald Company)

Some state senators say they are split over what should be the top priority of a legislative committee probing the failure of the Franklin Community Federal Credit Union.

Several committee members - including the chairman, State Sen. Loran Schmit of Bellwood and State Sen. Bernice Labedz of Omaha - want to make "the money trail" the panel's chief focus.

About $38 million is said to be missing from the credit union.

Other committee members - including State Sens. Dan Lynch of Omaha and Jim McFarland of Lincoln - want the priority to remain child abuse and its alleged connection with Franklin's former manager, Lawrence E. King Jr.

It was unclear Wednesday where State Sen. Ernie Chambers of Omaha, the committee's vice chairman, stood.

Chambers, the panel's most demanding questioner at a hearing last month focusing on the adequacy of various Franklin-related, child-abuse investigations, said it was inappropriate for him to comment.

"I won't make an ad-hoc statement," Chambers said. "A committee decision will have to be made."

'Insensitive, Ongoing'

An apparent split was indicated Tuesday when Schmit attached three pages of comment to a progress report summarizing the committee's activities. The report was written by committee attorney Kirk E. Naylor Jr. of Lincoln.

Naylor wrote that the committee probe of the abuse allegations was "intensive and ongoing." He said he expected a conclusion in late August.

Schmit wrote that although the probe was continuing, "I believe it is important that I state at this time that none of these allegations or rumors have been verified."

He said considerable time and effort had been spent investigating an "overabundance of rumors."

Now, Schmit wrote, "I suggest the most important trail to follow is the trail of the money. Find where the money went, and you will find hanging on the limbs of those expenditures the individuals involved and the improprieties involved, if any."

Schmit said the abuse allegations had "tend(ed) to distract from the original intention" of the Legislature in creating the committee Jan. 10. He said that was to explain why Franklin failed and to determine whether the failure called for any changes in state laws or regulations.

'Legitimate Disagreement'

Sen. Labedz said, "I think Sen. Schmit is right that if you follow the money trail, you'll probably come up with something."

She also said, "If there was abuse, perhaps you can find it by tracking the money."

Lynch said tracing the money was important.

"But my priorities are first of all with the alleged abuse and the state system as it may or may not have been involved or local county systems as they may or may not have been involved. There is a legitimate disagreement here."

McFarland said, "I would agree with Dan (Lynch) that the first priority would be that (the alleged abuse). That is what brought this to the Legislature's attention. Let's do look at the money trail, but there definitely were some things (concerning alleged abuse) that were not investigated as they should have been.

"Surely, there was a lack of communication between the Omaha Police Department and the Attorney General's Office about who was going to investigate those allegations. Somebody dropped the ball on that. In a way, both dropped the ball."

Issue in Court

McFarland said a judgment cannot be made about the allegations until the legislative committee obtains investigative reports from the State Attorney General's Office pertaining to the alleged abuse.

Attorney General Robert Spire has refused to release the reports to the committee. The committee has gone to Lancaster County District Court to compel release of the documents.

Omaha police, the FBI, the State Attorney General's Office and the Nebraska State Patrol have investigated the alleged abuse and have said they could not find enough evidence to warrant criminal charges.

Schmit and Naylor, in their comments and report, also took different positions on another matter - the role of the Attorney General's Office in overseeing the Omaha police investigation of the alleged abuse.

Naylor tentatively concluded that the Attorney General's Office did virtually nothing between July and November 1988 to investigate reports of child abuse allegedly associated with King.

"Based upon the evidence available to this point, it would not appear that any meaningful steps were taken by the Office of the Attorney General to investigate the allegations of child sexual abuse until late November 1988," Naylor wrote.

July 1 Deadline

Schmit wrote that it was too soon to reach conclusions about the quality of the attorney general's probe or related probes of alleged abuse.

"It is . . . important that we know the full extent of all investigations carried on by all agencies before we reach a conclusion as to the adequacy of any of those investigations," Schmit wrote.

Schmit's comments and Naylor's report were filed Tuesday with the clerk of the Legislature. When the Legislature formed the Franklin committee Jan. 10, it ordered the panel to produce an interim report July 1.

July 1 fell on a Saturday, so Naylor submitted the report to the panel Monday, July 3. Chambers signed it, but Schmit declined to until he had had an opportunity to review it further.

Naylor said Tuesday that the differences between the report and Schmit's comments were insignificant and did not reflect committee disagreement.

Schmit told a reporter he was not interested in "bashing" the Attorney General's Office until the Franklin committee questioned more Omaha police officers and representatives of the Douglas County Attorney's Office.

Additional Omaha policemen are to testify at the committee's July 27 public hearing at the State Capitol.

Schmit told a reporter that four or five years have elapsed since the abuse allegedly occurred. Also, he said, a number of the alleged victims are now adults "and don't want to talk" about what may have happened to them.

Spending Report

He said committee investigators interviewed several alleged victims, as well as a person who spoke of witnessing cult acts that included homicide.

He said these allegations still are being pursued.

The committee has spent $45,293 on the investigation, Schmit said. It has generated more than 96 interviews and more than 125 investigative reports.

Naylor's report says the committee investigation thus far "raises a serious question whether allegations of child abuse, particularly in circumstances where local law enforcement may not be in a position to respond appropriately, are being dealt with promptly and effectively by the criminal justice system."

The report says: "The committee intends to determine, in the near future, whether legislative action may be necessary to remedy this problem."

Credit: World-Herald Staff Writer

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