Charles Keating Jr., a onetime lawyer and moral crusader who went to prison for fraud as the most prominent figure in the multibillion-dollar savings-and-loan scandal of the 1980s and 1990s, died March 31 in Phoenix. He was 90.

His longtime lawyer, Stephen Neal, confirmed the death to The Arizona Republic newspaper.

Keating was a national swimming champion who led anti-pornography crusades since the 1950s. He later became a well-connected businessman.

Keating was also a flimflam artist who reportedly was under federal investigation for financial malfeasance in the 1950s and again in the 1970s. In the 1990s, he was convicted of defrauding his company’s customers of millions of dollars in order to lead a life of baronial splendor.

In 1984, as deregulation swept through the banking industry, Keating borrowed $51 million to buy Lincoln Savings & Loan, a California-based thrift with 26 branches. It became a subsidiary of American Continental, a Phoenix real estate development company controlled by Keating.

Lincoln Savings & Loan had about $1 billion in deposits when Keating took over the business. He pushed out the old executives and brought in friends and family in their places, paying his 28-year-old son a salary of $800,000.


Before his paper empire came tumbling down, costing taxpayers more than $3 billion, Keating was described in the Los Angeles Times in 1988 as “a businessman without apparent peer in Arizona in terms of riches, clout and color.”

He unabashedly used his political connections to keep federal regulators from looking too closely at his financial transactions. In 1985, Keating asked Alan Greenspan — later chairman of the Federal Reserve Board — to write a brief attesting to Keating’s conscientious stewardship of Lincoln.

He contributed heavily to congressional campaigns, including more than $1.3 million to five U.S. senators at the time: Alan Cranston, D-Calif., Donald Riegle Jr., D-Mich., Dennis DeConcini, D-Ariz., John Glenn, D-Ohio, and John McCain, R-Ariz.

In 1987, the senators had a meeting with Edwin Gray, the head of the Federal Home Loan Bank Board, the agency that regulated savings and loans, asking him to go easy on Keating. Gray called the intervention by the so-called Keating Five “tantamount to an attempt to subvert the regulatory process.”

Later, when Keating was asked whether he expected favors from the public officials he supported, he replied, “I want to say in the most forceful way I can: I certainly hope so.”

Cranston was formally reprimanded by the Senate Ethics Committee, and Riegle and DeConcini were admonished for interfering with the Federal Home Loan Bank Board’s investigation. Glenn and McCain were absolved of any wrongdoing but were cited for “poor judgment.”


By law, no more than 10 percent of the money deposited in a savings and loan could be invested in outside ventures. In 1986, a federal audit found that, under Keating’s control, Lincoln had greatly exceeded the federal limit on outside investment by some $600 million. His S&L customers were steered toward investing their money in uninsured securities, or junk bonds.

Federal investigators accused Keating of running his businesses as a personal piggy bank, ransacking them for a series of risky investments. In three years — 1986 through 1988 — Keating paid himself and members of his family $34 million in salary, bonuses and stock. He had a helicopter and three corporate jets, including one with gold-plated bathroom fixtures.

He bought 20,000 acres in Arizona to build a city that was never completed. He used taxpayer money to build a lavish resort called the Phoenician.

“It was a grotesque and audacious looting of Lincoln Savings & Loan,” said Michael Manning, a Phoenix-based lawyer who handled many of the civil lawsuits against Keating. “He made extraordinarily risky investments with taxpayer dollars.”

In a report to the Federal Home Loan Bank Board, the accounting firm investigation of Keating noted, “Seldom in our experience as accountants have we experienced a more egregious example of the misapplication of generally accepted accounting principles.”

In April 1989, regulators from the Federal Deposit Insurance Corp. raided Lincoln Savings & Loan, which went into bankruptcy, along with its parent company.


During a four-month trial in a California state court in 1991, Keating maintained that he was an innocent victim of vengeful government prosecutors.

The prosecution brought 53 witnesses to testify against Keating. The defense rested without calling a single witness. He was convicted on 17 of 18 counts of fraud and sentenced to 10 years in prison.

Two years later, Keating and his son, Charles Keating III, were convicted on federal charges of racketeering, fraud, conspiracy and transporting stolen property. He was sentenced to 12 years, to run concurrently with his other prison term.

He had served less than five years when both convictions were overturned on technicalities. In 1999, the 75-year-old Keating pleaded guilty to bankruptcy fraud but was spared from returning to prison. Charges against his son were dropped.

Keating was a national champion swimmer at the University of Cincinnati, from which he received a law degree in 1948. His son and a son-in-law, Gary Hall Sr., were Olympic swimmers. A grandson, Gary Hall Jr., won 10 medals, including five gold medals, in Olympic swimming events.

Keating practiced law in Cincinnati with his brother, William Keating. One of their clients was Carl Lindner Jr., a tycoon who hired Keating as an executive of one of his companies, American Financial, in 1972. Keating settled in Arizona in 1976.

In the late 1980s, Keating took family members on a three-week tour of the finest hotels in Europe, which he wrote off as a business expense. After federal authorities seized his companies, Keating told Time magazine in 1990: “My family and I probably have no net worth. Period. We’re broke.”

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