Charles Humphrey Keating Jr. (1923–2014) was an American businessman, financier, and conservative activist best known for his central role in the massive Savings and Loan (S&L) crisis of the late 1980s and early 1990s. As the head of Lincoln Savings and Loan Association, his fraudulent and high-risk business practices led to one of the largest bank failures of the time, costing American taxpayers billions of dollars.
Key Biographical Information
| Detail | Information |
| Full Name | Charles Humphrey Keating Jr. |
| Born | December 4, 1923, Cincinnati, Ohio, U.S. |
| Died | March 31, 2014 (aged 90), Phoenix, Arizona, U.S. |
| Key Occupation | Real Estate Developer, Banker, Financier |
| Key Scandal | Savings and Loan Crisis; Lincoln Savings and Loan Collapse |
| Controversy | Involvement of the “Keating Five” Senators |
| Convictions | Convicted of fraud, racketeering, and conspiracy (later overturned on technical grounds) |
Early Life, Law, and Activism
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Education and Sports: Keating was born into a devout Catholic family. He attended the University of Cincinnati, where he was a champion college swimmer in the 1940s. He later graduated from the University of Cincinnati College of Law in 1948.
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Anti-Pornography Crusader: From the late 1950s through the 1970s, Keating gained national prominence as a conservative social activist, founding the organization Citizens for Decent Literature (CDL) to campaign against what he deemed to be indecent and obscene publications. He was appointed to President Richard Nixon’s 1969 commission on pornography.
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Transition to Business: After practicing law, Keating transitioned into finance, joining the American Financial Corporation in the 1970s before relocating to Phoenix, Arizona, in 1980 to establish the real estate development firm American Continental Corporation (ACC).
Lincoln Savings and Loan and the Scandal
The core of the S&L scandal centered on Keating’s acquisition of a financial institution and his exploitation of recently deregulated banking rules.
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Acquisition of Lincoln S&L (1984): ACC acquired the Lincoln Savings and Loan Association of Irvine, California, in 1984. Taking advantage of loosened federal restrictions on S&L investments, Keating used Lincoln’s federally insured deposits to finance high-risk, speculative investments, primarily in junk bonds and real estate ventures, often through deceptive accounting practices.
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Investor Fraud: Keating pressured Lincoln’s customers, many of them elderly, to exchange their federally insured deposits for worthless, high-yield junk bonds issued by his parent company, ACC, falsely claiming they were safe and guaranteed.
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Regulatory Intervention: By the mid-1980s, the risky practices caught the unwanted attention of federal regulators. When regulators began investigating Lincoln, Keating appealed to highly placed political figures for help.
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The Keating Five: Keating had made large sums of money in campaign contributions to five sitting U.S. Senators: Alan Cranston, Dennis DeConcini, John Glenn, John McCain, and Donald Riegle. These senators were dubbed the “Keating Five” after they intervened with the federal banking regulator on Keating’s behalf. The ensuing ethics investigation harmed the political careers of several of the senators and demonstrated the corruption inherent in Keating’s operations.
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Collapse: In 1989, ACC entered bankruptcy, and federal regulators seized control of Lincoln Savings and Loan. The collapse ultimately cost American taxpayers over $\$3$ billion and left thousands of bondholders facing the loss of their life savings.
Convictions and Legal Reversal
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Conviction and Imprisonment: In the early 1990s, Keating faced multiple trials in both state and federal courts. He was convicted of numerous counts of fraud, racketeering, and conspiracy and sentenced to prison terms of 10 and 12 years.
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Overturned Convictions: After serving four and a half years in prison, his convictions were overturned on appeal in 1996 on the grounds that the state jury had been prejudiced by pretrial publicity and that the trial judge had given the jury incorrect instructions. The federal conviction was also overturned on technical grounds.
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Guilty Plea: In 1999, to avoid a costly retrial, Keating pleaded guilty to four lesser felony counts of wire and bankruptcy fraud. He was sentenced to time already served and released.
Charles Keating’s legacy is one of the most prominent examples of white-collar crime and regulatory failure in American history, representing the excesses and political corruption of the 1980s financial environment.