Charles Keating, financier at center of savings and loan scandal, dead at age 90: media reports

by Reuters
Wednesday, 2 April 2014 03:25 GMT

PHOENIX, April 1 (Reuters) - Charles Keating Jr, a banker who played a leading role in the savings and loan scandal of the 1980s that embroiled five U.S. senators, died on Monday at age 90 in Phoenix, local media reported.

The Arizona Republic newspaper and television station KSAZ, a Fox affiliate in Phoenix, cited multiple sources in reporting Keating had died. KSAZ said he passed away in Phoenix.

Keating, an Arizona resident, was known for his role as head of California-based Lincoln Savings and Loan, whose 1989 collapse at the time ranked as the costliest thrift crash in U.S. history. It cost U.S. taxpayers $3.4 billion, according to the New York Times.

Keating came to represent everything wrong with the once-booming savings and loan industry, as the collapse of Lincoln had a domino effect that sent thrifts into bankruptcy across the U.S.

A former attorney for Keating could not immediately be reached for comment on his reported death.

The collapse of Lincoln had links to several U.S. senators, who came to be known as "The Keating Five" after they were accused of lobbying federal banking regulators on behalf of Keating. He was a heavy contributor to their campaigns.

Senators John McCain, a Republican from Arizona; Dennis DeConcini, a Democrat from Arizona; Donald Riegle, a Democrat from Michigan; John Glenn, a Democrat from Ohio; and Alan Cranston, a Democrat from California, were investigated by the Senate ethics committee in 1990.

All but Cranston, who was censored by the committee and later chose not to run for re-election, were subsequently exonerated of any wrongdoing.

In the case of McCain, a former Republican presidential nominee and the only one of "The Keating Five" who is still in the Senate, the ethics committee found he used poor judgment.

Keating was convicted by a federal jury in 1993 of securities fraud and other charges in connection with the Lincoln Savings and Loan crash. But the judge in that case later overturned the conviction based on concerns the jury might have been tainted.

In 1999, he pleaded guilty to fraud charges and was sentenced to 50 months - the time he had already spent in federal prison.

Keating came to Arizona from his native Ohio, where he was known as a crusader against pornography. (Reporting by David Schwartz in Phoenix; Editing by Alex Dobuzinskis and Kenneth Maxwell)

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