Charles Humphrey Keating Jr. (December 4, 1923 - March 31, 2014) was an American athlete, lawyer, real estate developer, banker, finance expert and activist famous for his role in savings and scandalous loans in the late 1980s.
Keating was a champion swimmer for the University of Cincinnati in the 1940s. From the late 1950s to the 1970s, he was a renowned anti-pornography activist, founded the Citizenship organization for Decent Decency and served as a member of the 1969 Presidential Commission on Obscenity and Pornography.
In the 1980s, Keating manages the American Continental Corporation and the Lincoln Savings and Loan Association, and takes advantage of loosening investment banking restrictions. His company began to suffer financial problems and was investigated by federal regulators. His financial contributions to, and requests for regulatory interventions from five seated US senators led to legislators dubbed the "Keating Five".
When Lincoln failed in 1989, the federal government cost over $ 3 billion and about 23,000 customers were left with worthless bonds. In the early 1990s, Keating was convicted in federal and state courts of numerous allegations of fraud, extortion and conspiracy. He served four and a half years in prison before his conviction was canceled in 1996. In 1999, he pleaded guilty to more limited set of wire fraud and bankruptcy fraud, and was sentenced at the time he had served. Keating spent his last years in low-profile real estate activities until his death in 2014.
Video Charles Keating
Early life and military service
Keating was born on December 4, 1923, in Cincinnati, Ohio, into a devout Roman Catholic family. He is the son of Adele (nÃÆ' Â © e Kipp) and Charles Humphrey Keating. He grew up in the neighborhood of Avondale and Clifton in the city.
His brother William was born in 1927. Their father came from Kentucky and runs a dairy company. Charles Keating Sr. lost legs in a hunting accident, and then fell into a long decline from Parkinson's disease around 1931, and was treated by his wife until his death in 1964.
Keating started swimming in a Catholic summer camp and became excited about getting involved in this sport. He attended St. Xavier High School, where he became a good student, was on the swim team for four years, and also ran track and play soccer.
In a swim he leads the team to three Catholic League championships, sets some school records, named all the countries, and becomes team captain in his senior year. Keating graduated from St. Xavier in 1941.
After a semester at the University of Cincinnati in the fall of 1941, Keating left for poor grades, though he advanced to the Men's NCAA Swimming and Diving Championships in 1942, finishing sixth in 200 yards of breaststroke. He is registered in the United States Navy, where he will spend four years. He trained at the Naval Air Corps to become a pilot of a Fighter-based fighter flying F6F Hellcats.
During World War II, Keating was stationed in the US, sometimes at Banana Creek in Florida, and flew Hellcats to armed service swim meetings. He almost escaped from a serious one night wound at Naval Air Station Vero Beach when he forgot to lower the landing gear at Hellcat and damaged the plane in an unexpected stomach landing. Due to additional training on new methods of interception and rarity of squadron transfers, the war ended before it would be deployed to any combat theater.
Maps Charles Keating
Education and swimming
Keating was ready to return to college after finishing his navy service in 1945. His swimmer ability made him an attractive recruiter, even though he had been out early. He broke a deal with the University of Cincinnati where he will receive for much academic credit from his naval services, so he will take six months of liberal arts course before entering his law school.
Keating won the 200-yard breaststroke at the Ohio Intercollegiate Conference championship in 1945. On 30 March 1946, Keating competed in a 200-yard breaststroke at the NCAA Men's Swimming and Diving Championships, before a crowded home with 2,500 spectators at Payne Yale University Whitney Gymnasium. In an exciting contest, back and forth with Paul Murray of Cornell University and future coach James Counsilman of Ohio State University, he wins on foot to win the championship with a time of 2: 26.2. (The event was later reclassified as a butterfly in the NCAA record due to a definitional evolution involving two strokes).
This is the world's first sporting championship for the University of Cincinnati. He and his teammate Roy Lagaly became the first Bearcats to be named All-American. Keating is an impressive 6 foot 5 inch, natural leader and team captain with Lagaly. On Keating, Lagaly said, "You can even say that he will be very successful, he is very ambitious, whatever he does, he does it all the way." Keating followed this with a swim for the Cincinnati Gym, finishing second to Olympic gold medalist Joseph Verdeur in a 220-yard chest at the national AAU championship in April 1946.
Keating received his law degree from the University of Cincinnati College of Law in 1948, and was later to be named a member of the University's Athletic Hall of Fame.
Charles Keating is a longtime supporter of US swim and started in 1969 he and his brother William donated $ 600,000 to St. Xavier High School in Cincinnati to build a state-of-the-art competition pool. The swimming team went on to win many state titles. St. Xavier named the Keating Natatorium after the father of the brothers, and inaugurated Charles Keating into the Hall of Fame Athletics class beginning in 1985. The 2006 Cincinnati University athletics building was named Keating Aquatic Center, in honor of William Keating, and donations from the Keating family used to build it. Charles Keating financed the Cincinnati Marlins swimming club; six swimmers in the 1980 Summer Olympics squad came from the list, including future Olympic champion Mary T. Meagher. When he later moved to Phoenix, Charles Keating built the Phoenix Swim Club, where the Olympians also practiced.
Marriage and family
Keating married Mary Elaine Fette in 1949. She is an athletic-athletic-minded Catholic from an established Cincinnati family. They have six children: Kathleen's daughter, Mary, Maureen, Elaine, and Elizabeth, and a son, Charles Keating III.
Her daughter, Mary, married to Gary Hall, who would swim at the Summer Olympics of 1968, 1972, and 1976, won medals in each. Charles Keating III swam at the 1976 Summer Olympics, finishing fifth in a 200-meter breaststroke. Granddaughter Keating Gary Hall Jr. competed in the 1996 Summer Olympics, 2000, and 2004 as swimmers and won ten medals overall.
Another Keating grandson, Petty Officer of 1st Class Charlie Keating IV, Navy SEAL, was killed at the age of 31 years while battling ISIS in Iraq in 2016.
Legal and business careers early
After graduating law school, Keating does legal work places for the FBI, then joins a law firm that does corporate law. In addition, he entered the business world where his businesses were involved in selling life insurance, running fruit kiosks, and working for Roto-Rooters.
In 1952, along with his brother, William, and a mutual friend from law school, he became a founding partner of Cincinnati Keating law firm, Muething & amp; Keating. Beginning in the late 1950s they took Carl Lindner Jr. as a client. Lindner quickly piling up ice cream stores, supermarkets, real estate, and savings and loans, and soon became Keating's sole client. In 1956, he filed a request for Q clearance on behalf of a small company former Los Alamos Scientific Scientific scientist with offices in Newtown, Ohio; Unknown Keating, the FBI suspects the app is fake and launches an investigation against it, but no allegations are made. Keating was accepted in the US Supreme Court bar in 1958.
In 1960, Lindner and Keating created the American Financial Corporation, Lindner's different business parent company that created more subsidiaries and financial instruments, all doing business with each other. Keating was named for the company's board of directors in 1963.
Anti-pornography activism
In 1956, Keating joined a priest leading a group of concerned Catholics in Cincinnati who were concerned about the dangers of pornography, and he began giving lectures on the problems of parents and other groups. In 1958, Keating testified before the House of Justice Committee on mail-order pornography, saying that it was "capable of poisoning the mind at any age and transforming our entire young generation", and that it is closely related to juvenile delinquency, while also citing Committee reports The Senate that "part of the Communist conspiracy is to print (matter indecent)". Keating mentions the relationship between pornography and Communism at other times, but distanced himself from the stronger anti-Communist groups in the early 1960s. He states that 90 percent of obscene materials are produced for profit, not ideological reasons, and told Congress in 1960, "I'd better say [...] that I do not blame America's obscenity on the Communists."
Keating founded Citizens for Decent Literature (CDL) in 1958 (later renamed several times, the most famous of which is Citizens for Decency through Law), which advocates reading classics instead of "smut." It will grow up to 300 chapters and 100,000 members nationwide and become the largest anti-pornography organization in the country. It absorbs some other groups, such as National Citizens for Proper Literature and Better National Pittsburgh Board of Magazines. The CDL structure was initially decentralized, but Keating became frustrated because several local chapters took aggressive action that was not approved by him, thus providing a more controlled focus with national magazines, film production, and a larger role in legal action.
Over the next two decades, the CDL sent around 40 million letters in the name of its position and filed a series of amicus curiae briefs before the US Supreme Court. Keating gets the nickname "Mr. Cleaner".
In 1964-1965, Keating produced Perversion for Profit , a film featuring broadcaster George Putnam. It was a survey of available and indecent materials, and confirmed that pornography caused moral damage. This, along with two lesser known films produced or distributed by CDL, is often played all over the country and remains in print for a long time.
In 1969, Keating's national reputation on this issue led to President Nixon appointing him to the President Commission on Obscenity and Pornography, which had begun under the predecessor of Nixon, Lyndon B. Johnson. The majority of the commissions issued a report concluding that pornography did not degrade adult morals or cause crime and recommended that all federal, state and local laws prohibiting adults from obtaining pornographic material were revoked. Keating, who was only appointed by Nixon on the 18-person commission, was the chief commander of the report.
In September 1970, Keating was granted a temporary restraining order from D.C. The Federal District Court to postpone the issuance of the report, stated that he needed access to all reporting support materials and time to write dissent. A few days later, Keating was given the desired material and two weeks to write his report by the committee.
Keating proposed his disagreement, saying, "At a time when the spread of pornography has reached epidemic proportions in our country and when the moral fiber of our nation seems to be rapidly unraveling, the urgent need is for enlightenment and intelligent control of the poison that threatens us - not the embedded moral bankruptcy statement on the repeal of a law that has defended the right people against pornographers for profit. "Keating writes," One can consult with all the experts he chooses, can write reports, make studies, etc., but the fact that corrupt obscenity lies within common sense, reason, and everybody's logic. "
The Nixon Administration quietly endorses Keating's legal remedies, and President Advisor John Ehrlichman assigns White House's speechwriter Pat Buchanan to help draw up a disagreeable report. The commission's majority report was condemned by congressional leaders from both parties and also by the government.
The commission's involvement earns Keating's further national concern, which he uses to encourage harsh behavior in Cincinnati. In 1969, Keating obtained an order to prevent a show in Cincinnati's softcore sexploitation film, Russ Meyer Vixen! , claiming it was indecent, and the film was confiscated by police on the first day it opened. The filming of the film was successfully stopped in another part of Ohio as well, and Meyer spent $ 250,000 in defense against Keating legal action. Keating says Meyer has done more to weaken morale in the country than anyone else; Meyer replied that "I'm happy to do it." Case of Cincinnati Vixen! was appealed and in 1971, the Ohio Supreme Court upheld the ban.
In 1970, Keating tried to block the musical closed-circuit show. Oh! Calcutta! in Cincinnati, saying that "it attracts passionate interest in sex." During 1972, Keating's legal action made movie theaters closed as "public disorder". He tried to prevent newspaper stalls near his office selling Playboy magazines and Oui . He denounced the Ramada Inn network for offering adult programs on cable television for guests. Other local actions involving closing down shops and removing books from public libraries were provided by civil liberties advocates for Keating's "oppressive" trend. Such was Keating's and the organizational effectiveness that when the US Supreme Court awarded the 1973 decision Miller v. California stipulating that the definition of obscenity is based on local community standards, every adult bookstore and adult film in Cincinnati is closed within a few hours.
Citizens for Decent Literature and Keating often warn about homosexuality as an example of what they see as deviant behavior. The Film Perversion for Profit has included claims that homosexuals have a slogan that says "today's conquest is competition tomorrow"; in a 1977 speech in Miami, Keating repeats this sentence, concluding that homosexuality represents an endless "innocent persuasion".
In 1975, Oui's magazine gave Keating the top spot on his list of "pornographic enemies". Hamilton County Attorney Simon L. Leis Jr. put Ohio pornographer Larry Flynt in court in 1976 for trafficking obscenity and engaging in organized crime. Local public opinion contradicts Flynt. Flynt was sentenced on both charges and received a maximum sentence of 7 to 25 years in prison. While the conviction was later canceled on appeal, the verdict re-established the Cincinnati community standard in this regard, and even after Keating left for Arizona, his influence remained in Cincinnati at the center of the anti-pornography spirit. In the 1996 biopic, The People vs Larry Flynt , which reportedly exaggerated Keating's role in prosecution and trial, Keating was played by actor James Cromwell. Attempts to show Vixen! in Cincinnati will continue, but in the late 1990s it is still illegal to do so.
American Financial Corporation
Although officially an outside lawyer, Keating serves as a public face for Carl Lindner and American Financial Corporation and both are close associates in business and legal matters; Lindner sometimes calls Keating a "founder" of American Financial. The company has easy access to credit lines, allowing it to continue to grow. The transaction network involving companies and subsidiaries was large and complex, and a stock analyst stated in 1977 that he "never found a company that had so much weird paper in his books."
Keating abandoned his legal practice in 1972 and formally joined American Financial Corporation, now a $ 1 billion company, as executive vice president. Keating became the Lindner man who was in charge of firing employees of the newly acquired company. In the Keating business circle gained an aggressive reputation and arrogance. He was involved in the operation at The Cincinnati Enquirer, the city's only municipal newspaper. He intervened in editorial decisions, such as adding coverage to high school sports that he or Lindner's children were involved with. The newspaper was then sold to a group including his brother, William, who had been a Republican congressman from Ohio's first congressional district in the early 1970s. Charles Keating was involved in the sale of the Bantam Book of 1974 by American Financial, and his decision of that year to exclude investment banking.
In 1975 and 1976, several shareholder litigants filed against American Financial, and Keating was burned for aspects involving unsecured loans, share warrants, and the sale of the Enquirer . The Securities and Exchange Commission (SEC) launched a major investigation into the company and accused Lindner, Keating, and others of having deceived investors and filed a fake SEC report. On a particular issue is a $ 14 million loan that the SEC says is made on special terms. Keating resigned from American Financial in August 1976, with conflicting stories about whether Keating and Lindner remained close or whether they had fallen.
American Continental Company
Keating moved to Phoenix, Arizona in 1976 to run a real estate firm, American Continental Homes, a failed reshuffle, losing millions of dollars from American Financial given to Keating for $ 300,000 as part of his departure package. This step was completed when his family followed him in 1978. In 1979 the SEC case with American Financial was settled, with Keating signing an agreement of consent in which he neither admitted nor denied the guilt but agreed not to violate federal fraud laws and securities. In practice, Keating is blamed for many irregular financial practices that have gone on and his reputation has been severely damaged.
Keating benefits from moving to Arizona, a wide open area in both physical and business terms that allows a person to start a new one. He changed the now-renamed American Continental Company, adding various operations and divisions in structures somewhat similar to American Financial. As chairman and controlling shareholder, Keating relies heavily on family members, hires his son and four of his son-in-law in prominent positions. Charles Keating III has a fast career inside the company.
In 1979, Keating served as head of fundraiser at Southwest for John Connally's campaign for 1980 Republican presidential nomination. Connally is a favorite of the business community, but his campaign is having difficulty pouring fundraising success into popular support. In early December 1979, Keating was appointed as a campaign manager, with existing managers being demoted to campaign strategists. Keating's first action was as a "gardener" who promptly dismissed twenty workers at campaign headquarters in Virginia. The campaign continued to struggle, and, in late February 1980, Keating came out as manager, with Connally taking the role. The Connally campaign ended two weeks later, famous for spending $ 11 million and getting only one delegate.
After winning the 1980 elections, President Reagan contacted Keating about becoming the US Ambassador to the Bahamas, where Keating has spent much time. When Keating's run-in with the SEC reappears in a press report, however, he is excluded. This disillusioned Keating, who then said, "To get people like me out of that position because of yellow journalism, I do not know what that is for."
In the early 1980s, America's Continental profits amounted to millions and had become the largest single-family home builder in Phoenix and Denver. At its peak will have $ 6 billion in assets, a large number of subsidiaries, 2,500 employees, and headquarters complex at Phoenix's Camelback Road. It has three corporate jets and a helicopter. He is a very hard worker and a strong presence for his employees; someone then said, "It's almost magnetic.When he moves, things happen.The office will come alive when he walks in." He inspired solidarity and strong allegiance in it. While he demands long hours, he often rewards employees with money and rewards. Businessmen outside his company often find Keating who is arrogant and difficult to deal with. Congressman William Keating, who is well-liked, said of his brother: "Charlie is impatient, aggressive, always moving, he has a clear purpose, I do not think he's worried about his position's popularity." The Fortune profile in 1977 reported, "It seems almost impossible to find anyone who really likes Charlie Keating." The story makes Keating's ranking, which then has more than five thousand big buttons "I Like Charlie Keating" which he made to be distributed to employees and visitors. Keating said, "There are many people who will say bad things, I'm sure, about me, but it's not true that no one likes Charlie Keating."
A devout Catholic, Keating became a heavy donor for charity when he moved to Phoenix, donated $ 100,000 to the Saint Vincent de Paul Society, over $ 1 million for the Covenant House, and another over $ 1 million for Mother Teresa's operations , including lending him his helicopter while he was in Arizona so he could visit a remote Indian escape in the state. Father of the House Covenant Bruce Ritter said of Keating, "He made you believe in God." In 1983, Keating and his company made a tremendous but tremendous legal campaign donation in the race for the Phoenix City Council, which was responsible for approving its building projects including the use of water for housing construction built around artificial ponds. The donation scale represents a shift from past practice in local Phoenix politics; some council figures oppose the trend, while others are ready to ask for funds.
Savings Lincoln and Keating Five
In 1984, American Continental Corporation purchased the Lincoln Savings and Loan Association for more than $ 50 million. By the early 1980s, Lincoln had been a conservatively managed company, with almost half his assets in home loans and only a quarter of his assets considered risky. It made slow growth at its best, and has shown a loss for several years to make a profit of several million dollars in 1983. Once he took over, Keating fired the existing management. Savings and Loans associations have been deregulated in the early 1980s, enabling them to make high-risk investments with their depositors' money, which changes to which Keating and other savings and loan operators take advantage. When Keating was later asked why he got into savings and loans, he said, "I know business inside, and I always feel that S & D, if they loosen the rules, is the biggest moneymaker in the world."
Over the next four years, Lincoln's assets increased from $ 1.1 billion to $ 5.5 billion. Lincoln's special investments took the form of buying land, taking up equity positions in real estate development projects, and buying high-grade junk bonds. A sales document from this period urges staff to, "always remember that weak, meek and stupid is always a good target."
Starting in 1985, the Federal Home Loan Bank Board (FHLBB) is concerned that risky investment practices from the savings industry reveal government insurance funds for huge losses. This institutionalizes the rules by which savings associations can retain no more than 10 percent of their assets in "direct investment", and are thus prohibited from taking ownership positions in certain financial entities and instruments. Lincoln had been saddled with bad debts due to his aggressiveness in the past, and in early 1986 his investment practices were being investigated and audited by the FHLBB office in San Francisco: in particular whether he had violated this rule of direct investment; Lincoln has directed the accounts insured by the Federal Deposit Insurance Corporation into commercial real estate ventures. By the end of 1986, the FHLBB office had found that Lincoln had $ 135 million in unreported losses and had exceeded the $ 600 million set-point direct investment limit.
Keating believes that the regulator is against him because he is against their rules. He also told his staff that some San Francisco regulators might be "homosexuals" who "came out to get him" for his strong moral views. Keating took steps to oppose the FHLBB, including recruiting studies from private economist Alan Greenspan who said that direct investments were harmless, tried to hire FHLBB members or their wives, and asked President Ronald Reagan to make a recess appointment from a Keating ally, a real estate developer Lee H. Henkel Jr., to FHLBB. However, in March 1987, the allies had resigned over the news that he had a large loan due to Lincoln. It seems as though the government might confiscate Lincoln for bankruptcy.
Beginning in January 1987, Keating sought help from the so-called "Keating Five": US Democratic Senator Alan Cranston of California, Dennis DeConcini of Arizona, John Glenn of Ohio, and Donald W. Riegle of Michigan, and US Republican Senator John McCain Arizona. Keating has, or will soon make, a legal political contribution of around $ 1.3 million to the senators, and he asks them to help him fight the regulator. Keating became McCain's personal friend after their initial contact in 1981, and McCain was the only one of five with social and personal relationships close to Keating. McCain and his family have made several trips at Keating cost, sometimes on an American Continental jet, to vacation in the Bahamian luxury at Keating on Cat Cay.
Keating requested that Lincoln be given a soft judgment by FHLBB, thereby limiting high-risk investments and entering a relatively secure home mortgage business, enabling businesses to survive. Letter from audit firm Arthur Young & amp; Co backed Keating's case that the government's investigation took a long time. McCain initially refused to meet Keating because of FHLBB and Keating's problems calling McCain a "coward" behind him. The two held a heated and heated encounter in which McCain said he had not spent years in the North Vietnamese war prison camps to have his courage or integrity questioned; friendship ends and they will not talk anymore. In April 1987, the senators met twice with FHLBB members investigating the American Continental Company and Lincoln, in an attempt to end the investigation. Meanwhile, Keating filed a lawsuit against FHLBB, saying it had leaked confidential information about Lincoln. The head of FHLBB who was out in Washington delayed the decision and the new chief was more sympathetic to Keating. In May 1988, the FHLBB approved an unprecedented memorandum of understanding that gave Lincoln a clean slate and forgiveness for each offense until then. (In 1991, senators would be reprimanded to various levels by the Senate Ethics Committee, with Cranston accepting the harshest and Glenn and McCain verdicts at least.Meain then testified against Keating in a civil suit brought by Lincoln holder, while four others refused to testify.)
Lincoln Failure and American Continental
Lincoln remains in business; from mid 1987 to April 1989, its assets grew from $ 3.91 billion to $ 5.46 billion. Following Keating's past practice with Lindner, American Continental collected many collections of connected subsidiaries in the real estate, banking and insurance business; this amounts to at least 54, and there are some overseas that are not realized by the auditor. Keating wins in defeating the regulator, whom he hates as a useless relic from an outdated financial past, and defends his high salary and business practices. He spent about $ 500,000 on radio advertising in the Phoenix area to improve his public image; it emphasizes its real estate projects and family values. A 1988 Los Angeles Times rated Keating as "an entrepreneur with no obvious partner in Arizona in terms of wealth, influence and color." While Keating has taken Citizens for morality through Laws with him, he generally does not emphasize anti-pornography work when he moved to Arizona. However, X-rated movies and Playboy are prohibited in their hotels.
In October 1988, Keating opened its most luxurious real estate project ever, 250-acre (1,0Ã, km 2 ), 600-room The Phoenician resort at the base of Camelback Mountain. The construction cost $ 300 million, including many luxurious features, imported, and saw a number of examples of Keating or his decorator wife making major wholesale design changes at great expense. Another major project is Estrella, a 20,000-acre mixed-use development outside Phoenix in Goodyear, Arizona, toward Sierra Estrella. Combining homes, offices, industrial buildings, schools, shopping, resorts and hospitals, it is meant to eventually house 200,000 people and become a 21st century model city. American Continental writes the rule that Estrella's homeowner can not "accidentally end [human] pregnancy" or have "adult material," but remove it once Keating is notified that the agreement is unconstitutional. The decline of the late 1980s on the Sun Belt estate market put Estrella in jeopardy before much of the building could be done.
Asked in an interview if he was worried about going bankrupt, Keating replied, "All the time, every day, I come to the office feeling empty in my stomach a lot of time.... You're stuck almost.You're too much of a responsibility, so easy to carry , risky, dangerous, there is the possibility of failing with it every day and every night, but on the one hand, it's a challenge, refreshing, it's no use not being a player - you're here.... It's not just money.It's embarrassing, myself, your masculinity.I'm not sure I will have big problems with it.On the other hand I'm not sure I will not. "
As Lincoln grew, money was siphoned from Lincoln to the Continental US parent company under various schemes, and Continental Americans spent a lot of money on speculative investments and personal expenses. New regulatory investigations began in July 1988. After Arthur Young & amp; Co. showed some doubt about some accounting practices, Keating fired them in September 1988 and switched to Touche Ross. American Continental desperately needs cash inflows to make up for losses in purchases and real estate projects. Lincoln branch managers and tellers convince customers to replace a federal government insured deposit certificate with a higher American Continental bond certificate; the customer then said that they were never properly notified that the bonds were uninsured and very risky given the American Continental financial situation. The regulator has already decided the bond to not have any support solvent. Federal Deposit Insurance Corporation chairman L. William Seidman later wrote that Lincoln's impulse to make depositors switch was "one of the most vicious and cruel scams in modern memory". At the end of 1988, Keating began trying desperately to sell Lincoln; regulators rejected a potential sale of $ 50 million because buyers did not meet federal requirements.
The audit in December 1988 by FHLBB found Lincoln breaking many rules and in danger of default. The following month they ordered Keating to stop transferring cash from Lincoln to American Continental, which jeopardized his last survival strategy and caused the stock price to dive. Keating tried to set up a rubbish bond offering with Michael Milken and placed a bet on the global currency market to make money, but the move failed and he lost $ 11 million in one month alone. Keating made Senators DeConcini and Cranston pressure regulators to let sales pass, but this time lawmakers were ignored.
Continental America went bust in April 1989, and Lincoln was arrested by FHLBB. About 23,000 customers were left with worthless bonds. Many investors, often living in California's retirement communities, lose their life savings, and then claim to have experienced emotional trauma for being cheated on their financial ruin. The total loss of bondholders reached between $ 250 million and $ 288 million.
The federal government was ultimately responsible for $ 3.4 billion to cover Lincoln's losses when he seized the agency. Speaking with reporters in April 1989, Keating declared that he was a victim of the federal government who had spent years trying to destroy him, and then said, "One question, among many who grew up in recent weeks, is whether finance I support in any way influence some political figures to take my goals I want to say in the most powerful way I can: I certainly hope so. "
In September 1989, Keating was hit with a $ 1.1 billion fraud and extortion action, filed against him by the regulator. He stated that, "We have lost everything in this case, my wife and I. It is devastating." In November 1989, Keating was summoned to testify before the House Banking Committee, but refused to answer questions, pleading for his right not to denounce himself under the Fifth Amendment. Also in November, his Phoenician Resort was confiscated by the FBI; under their operation it was known as the "Fed Club" before being sold to the Kuwaiti group. Estrella's highly ambitious project will remain empty and sold in 1993 to the investment group.
In November 1989, the estimated cost of overall savings and loan crises had reached $ 500 billion, and media coverage often highlighted Keating's role as part of what became madness. Keating and Lincoln Savings became an easy symbol to use for arguments about what went wrong in the American financial system and society, as well as for the 1980s greed in general, and featured in popular cultural references. A deck of playing cards will be marketed, called the "Rescue and Loan Scandal", featured on their faces, Charles Keating, holding his hand, with a picture of a Keating Five senator depicted as a puppet on his fingers.
Legal consequences
Keating blamed the government regulator for the failure of Lincoln Savings and sued control over the bank. The lawsuit was dismissed in August 1990, with a judge calling the seizure fully justified., Keating's legal fees run at $ 1 million per month.
In September 1990, Keating and his colleagues were charged by the State of California for 42 allegations related to the stupidity of Lincoln's customers to buy unsavory waste bonds from American Continental Corporation. Keating went to jail when he could not post $ 5 million in bonds. He was convicted in December 1991 of 17 counts of fraud, extortion, and conspiracy. Mother Teresa asks the court to show concessions to Keating, in recognition of the large amount he has donated to charity operations. In April 1992, California Superior Court Judge Lance Ito gave Keating a maximum 10-year prison term, quoting Woody Guthrie, to say "More people have suffered from pen-point than from a gun." Keating was sent to the Federal-security Medium-sized Penitentiary, Tucson to serve his time.
In May 1992, Keating's son-in-law, Robert M. Wurzelbacher Jr., senior vice president of American Continental, and chief executive of an investment firm owned by Lincoln Savings, was also involved, pleading guilty to three federal frauds in connection with the collapse of the Lincoln Savings and Loan Association and agreed to testify against Keating. (In December 1993 Wurzelbacher was sentenced to 40 months in prison.)
In January 1993, a federal conviction followed, on 73 allegations of fraud, extortion and conspiracy. In July 1993, Keating was sentenced to 12 1/2 years in prison. The judge ordered Keating to pay $ 122 million in compensation to the government, but Keating said he had $ 10 million in debt and no assets to sell.
One case filed by the US Securities and Exchange Commission was resolved in 1994: Keating said he was bankrupt but agreed to pay millions if hidden assets were found. The third case filed by the Resolution Trust Corporation resulted in a $ 4.3 billion conclusion assessment of Keating and his wife in 1994, the greatest ever assessment of an individual. The ruling was annulled at the time of appeal in 1999, arguing that Keating could not be held personally accountable to the government without certain criminal convictions or other decisions in court. Throughout his detention, Keating maintains his innocence, saying he is a "political prisoner" of the US government and the scapegoat for the biggest banking scandal in the nation's history.
In April 1996, the 9th US Circuit Court of Appeals in San Francisco ruled that the judge of the state court of Ito had given the jury a false instruction about the law of fraud. The conviction is reversed. In December 1996, the same Court of Appeals ruled that some jurors in the federal case may have been influenced by their knowledge and discussion of country case outcomes, and throwing federal convictions. Keating was released after 4 1/2 years in prison; He then said that staying tough during his detention was the thing he was most proud of. He is said to have mixed up well with other prisoners and served as the best man at the wedding for the few that he met there.
In April 1999, before a federal court trial, Keating signed a plea agreement. He claimed to have committed four counts of wire fraud and bankruptcy by withdrawing nearly $ 1 million from American Continental Corp while anticipating the collapse that took place a few weeks later. The federal prosecutor dropped all the other charges against him and his son, Charles Keating III. He was sentenced to time served.
In October 2000, the US Supreme Court refused to hear the government's call for a reversal of state confidence. This left keating was without conviction other than his plea bargain. State prosecutors refused to move for retrial, saying it would take no more than six months' imprisonment and that many witnesses had died temporarily or were in poor health. Keating replied that if the government let it alone, investors "will all be rich."
Past year and death
After being released from prison, Keating is separated from his wife, Mary. She moved with her daughter Mary and her son-in-law Gary Hall Sr in the Valley of Heaven neighborhood in Phoenix.
During the 2000s, Keating worked as a business consultant and in 2008 was involved in several successful real estate developments in the Phoenix market. He kept a low profile in his business operations, and declined to comment during John McCain's presidential campaign in 2008 when the Keating Five scandal was raised again by the press. During his final years, Keating maintains a good physical form through swimming and walking and can go out in public without being recognized.
Charles Keating died in a Phoenix hospital on March 31, 2014, at the age of 90, after an undisclosed illness for several weeks.
Legacy
The Chicago Tribune ' Keating's long profile in 1990 says in summary:
To say that Charles Keating is a complex man seems to be an understatement. Some people see him as an aggressive man who is desperate when the real estate market reaches its lowest point and crossed the line between "business as usual" and fraud. Others see it as a con artist who is finally caught, a hyprocrite that covers his greed with false piety.
Michael Binstein and Charles Bowden's 1993 book, Trust Me: Charles Keating and Missing Billions , also presents Keating as a complex individual with a contradictory tendency, and concludes:
Charlie Keating built many things, and, to some extent that haunted anyone who checked his notes, he thought his plan would work. He not only robbed the bank. He destroys the bank with his dream. If he's just a thief, why does he put money into transactions and projects rather than into his own pocket? If he's just a hard-working businessman who's just trying to make a profit and creating a job, why jet, fancy food, big salary for his family? If he is a devout religious communicator, why does he sell hundreds of millions of dollars worth of bonds to his parents when he knows that his empire is in serious danger?
Keating firmly declared that it was not his fault or criminal act, but the regulator's actions were responsible for huge losses. A 2004 Milken Institute study also made the claim that the regulator's actions were responsible for Lincoln's failure and presented Keating's actions in a favorable light.
Several assessments of Keating's 1980s as developers later proved true. The Phoenician became a successful hotel in the luxury segment, and the Estrella project reached at least some of Keating's visions and was acquired again in 2005.
References
Bibliography
- Alexander, Paul (2002). Man of the People: John McCain's Life . Hoboken, New Jersey: John Wiley & amp; Children. ISBNÃ, 0-471-22829-X.
- Binstein, Michael; Bowden, Charles (1993). Believe Me: Charles Keating and Missing Billions . New York: Random House. ISBN 0-679-41699-4.
- Day, Kathleen (1993). S & amp; L Hell: People and Politics Behind the $ 1 Trillion Savings and Borrowing Scandal . New York: W. W. Norton & amp; Company. ISBNÃ, 0-393-02982-4.
- Strub, Whitney (2010). Perversion for Profit: The Politics of Pornography and the Rise of New Rights . New York: Columbia University Press. ISBN: 0-231-14887-9. Ã,
External links
- Contribution of Charles Keating's federal campaign 1979-1990
- the FDIC bibliography of Keating's participation in the S & amp; L 1989-1993
Source of the article : Wikipedia
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