Tue., 10:50 pm: Savings and loan figure Charles Keating dies
PHOENIX (AP) – Charles H. Keating Jr., the notorious financier who served prison time and was disgraced for his role in the costliest savings and loan failure of the 1980s, has died. He was 90.
A person with direct knowledge of the death confirmed on Tuesday that Keating had died but didn’t provide further details. The person wasn’t authorized to release the information and spoke on condition of anonymity.
When Keating’s Phoenix-based home construction company, American Continental Corp., bought Lincoln Savings & Loan in 1984, the multimillionaire elevated its worth from $1.1 billion to $5.5 billion in a four-year period.
But his financial empire crumbled with state and federal convictions for defrauding investors. Keating allegedly bilked Lincoln customers by selling them $200 million of unsecured “junk” bonds. They became worthless when Keating’s company became bankrupt.
The thrift’s collapse cost taxpayers $2.6 billion and tarnished the reputations of five senators who became known as the “Keating Five.” One of them was Republican U.S Sen. John McCain of Arizona, and the scandal re-entered the spotlight during the 2008 presidential campaign.
As the public heard testimony of elderly bondholders who had lost their life savings, Keating became a national poster boy for corporate greed. Keating was convicted in both state and federal court, but the convictions were thrown out and he agreed to a federal plea deal that freed him after nearly five years in prison.
Post-prison, Keating moved into his daughters home in the wealthy Phoenix enclave of Paradise Valley. In 2006, he quietly began work as a business consultant in Phoenix.
Born in 1923, in Cincinnati, Keating had a middle class upbringing as the son of Charles Sr., a dairy company worker, and Adele, a homemaker. His family had financial difficulties when the senior Keating was diagnosed with Parkinson’s disease.
Educated in Roman Catholic schools, Keating studied business at the University of Cincinnati. After the first quarter, he enlisted in the Naval Air Corps and trained to fly in combat. Keating was honorably discharged in 1945.
He later returned to the university, where he achieved an NCAA gold medal in swimming. Keating then attended law school and joined a law firm in 1947.
He is survived by wife Mary Elaine, daughter Mary, son Charles and grandson Gary Hall Jr., who was an Olympic swimming champion.