PHOENIX — Charles H Keating Jr., a Phoenix banker and financier whose name became the moniker for a group of senators — including John McCain — who intervened on his behalf with regulators during the 1980s savings-and-loan scandal, died Monday night. The Phoenix resident was 90.
“It is with great sadness I learned of Charlie Keating’s death,” said Stephen C. Neal, chairman of Cooley LLP and Keating’s longtime attorney. “I had the honor to represent him over many years, and ... he faced adversity with great dignity, wit and courage.”
Keating, a Cincinnati native also known for his crusades against pornography, bought Lincoln Savings and Loan of Irvine, Calif., in 1984. It became part of a financial and real-estate empire Keating built by taking advantage of loose government restrictions on banking investments. He built the Phoenician resort and started major residential developments like Dobson Ranch in Mesa and Estrella Mountain Ranch in Goodyear.
By the end of the go-go 1980s, however, Keating’s empire was crumbling.
In 1989, federal regulators seized control of the savings-and-loan company and Keating’s other holdings, alleging that he looted the federally backed Lincoln Savings at taxpayer expense, sunk money into risky ventures and cheated the company’s investors.
Federal regulators filed a $1.1 billion civil racketeering and fraud lawsuit against Keating, accusing him of siphoning Lincoln’s deposits to his family and into political campaigns.
McCain and then-Sen. Dennis DeConcini, both of Arizona, and three other senators became known as the “Keating Five” during the S&L debacle after being accused of improperly intervening with federal regulators on behalf of Keating.
In September 1990, Keating was charged with 42 counts of fraud. His bond was set at $5 million.
Two months later, the Senate Ethics Committee convened to decide what punishment, if any, should be doled out to the Keating Five. It was determined that DeConcini’s “aggressive conduct” in helping Keating was “inappropriate” but broke no rules. The panel found that McCain had shown “poor judgment” in meeting with the regulators, but he was cleared of all charges.
In January 1993, a federal jury convicted Keating of 73 counts of wire and bankruptcy fraud in the collapse of Lincoln and its parent company, American Continental Corp.
He was sentenced to 12 years and seven months in prison, but served just 50 months — some of it in the federal prison on South Wilmot Road in Tucson — before the conviction was overturned on a technicality. In 1999, at age 75, he pleaded guilty to four counts of fraud. He was sentenced to time served.
“Charlie never wavered in his faith,” said Neal, his attorney. “It was gratifying for Charlie and all close to him that our appeals system eventually overturned past convictions and history ultimately vindicated so many of his actions. ”
Lincoln’s collapse cost taxpayers $3.4 billion, and investors lost an estimated $285 million on high-risk bonds.
While Keating was synonymous with the savings-and-loan era, he also was a military veteran and championship athlete. He served in the U.S. Navy during World War II, returning home to resume a swimming career at the University of Cincinnati in 1945.
The following year, he won the 200-yard breaststroke by a foot at the NCAA Men’s Swimming and Diving Championships, according to the University of Cincinnati.
Keating’s swimming legacy extended to his grandson, Phoenix’s Gary Hall Jr., who won 10 Olympic medals, including five golds.