Charles Keating, Jr. Dies At Age 90By: Emily Greene - April 2, 2014
A key figure in the savings and loans scandal of the 1980s has died.
In 1984 Keating’s American Continental Corp., a Phoenix-based home construction company, bought Lincoln Savings & Loan. Within four years Lincoln Savings & Loan went from being worth $1.1 billion to $5.5 billion, but it turns out Keating’s company’s worth rose because investors had been defrauded.
Customers of Lincoln Savings & Loan had been duped into buying $200 million of unsecured “junk” bonds, which were worthless once the company went bankrupt.
In 1989 Lincoln Savings & Loan was seized and soon after Keating was convicted by the state and the federal government for defrauding investors. Keating spent only five years in prison after he agreed to a federal plea deal and his convictions were thrown out.
At the time the debacle was the costliest savings and loan failure, costing taxpayers $2.6 billion.
The reputations of five senators, dubbed the “Keating Five,” were also sullied by the collapse, including Republican U.S. Senator John McCain. The “Keating Five” were accused of negotiating for Keating to halt the investigation because Keating made large political donations to the senators. At the time Keating explained his donations, “One question, among many raised in recent weeks, had to do with whether my financial support in any way influenced several political figures to take up my cause. I want to say in the most forceful way I can: I certainly hope so.”
Keating quickly became the face of corporate greed.
Many on Twitter are making jokes about the financier’s death, while others aren’t exactly saying the nicest things about the late Mr. Keating.
Image via YouTube.