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03
Apr

Charles Keating, Face of 1980s S&L Fraud, Dies

Charles Keating, the banker who became one of the symbols of the last great mortgage crisis, has died at age 90.

Keating bought Irvine-based Lincoln Savings & Loan in 1984. It and other savings and loan institutions went bust in the late 1980s following the policies of President Reagan, who strongly advocated deregulation and letting the “free market” work. As with the banking crisis of the past eight years, the “free market” was anything but free, costing homeowners and stock investors billions in losses in the devastating savings-and-loan crisis. It also stuck taxpayers with $500 billion in bail-out costs.

Long after the damage was done, federal regulators pursued a $1.1 billion civil racketeering and fraud lawsuit against Keating. Among other things, they accused him of using the money from Lincoln’s depositors for himself and his family and to finance his failed political campaigns. Ultimately, he was sentenced to 12 years in seven months in prison but lucked out after his conviction was overturned on a technicality and served only 50 months of the sentence.

Charles Keating‘s involvement in politics exposed the relationship between bankers and politicians as Senator John McCain and former Senator Dennis DeConcini, both of Arizona, were accused along with three more senators of improperly acting on his behalf by intervening with the federal regulators. Those senators became known as the “Keating Five“.

Another famous family was caught up in the S&L scandal: Neil Bush and Jeb Bush, sons of President George H. W. Bush. Click here to read about their roles.

Read the original article in USA Today.

© Copyright 2007-2017 Monique Bryher

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