They Shoot Horses, Don't They?
Here are thirty reasons Charles Keating deserves to be drawn and quartered at a public ceremony in Patriots Square.
1) Keating's Lincoln Savings and Loan failure will be the largest bailout in history.
2) In order to clear up the mess Keating's greed caused at Lincoln, taxpayers will ultimately pay $2.5 billion.
3) Keating cynically used politicians like Arizona Senators Dennis DeConcini and John McCain.
4) By their slavish devotion to Keating's demands, DeConcini and McCain totally disgraced themselves. They should be publicly flogged on the same day.
5) A chilling example of buying a second-rate politician is Keating's treatment of Attorney General Bob Corbin. Although Corbin ran unopposed, Keating and his people dumped $55,000 into a Corbin campaign that raised a total of only $58,825.
Is it any wonder Corbin has closed his eyes while Keating raped the taxpayers of this state? Corbin also deserves a flogging.
6) Keating cowed the Arizona media for years with his constant threat of lawsuits. This kept TV totally at bay while Keating's looting went on without interruption.
7) Keating's claims that federal regulators are biased against him are without a single scintilla of merit.
8) There are now, according to the New York Times, six alleged instances of lending violations that could be the basis for criminal action against Keating.
9) Keating has built an overpriced mausoleum called the Phoenician. It will serve as a monument to his excesses long after he's gone. The problem is that there will also be massive debts left behind to contractors who remain unpaid for their work.
10) The Estrella housing project on the west side is another disaster that will hurt, even wipe out, many small investors.
11) Following Keating's purchase of Lincoln in 1984, he began directing Lincoln money directly into high-risk areas. He took a savings and loan that specialized in personal home loans into big-time speculation.
12) When Edwin Gray, then chairman of the bank board, objected, Keating tried to hire him. When that didn't work, he began to use political muscle against him.
13) Keating hired Alan Greenspan, now chairman of the Federal Reserve Board, at a huge sum, to do a study that would back Keating's position.
14) Keating urged a friend, Lee Henkel of Atlanta, to run for the three-man bank board in an attempt to blunt Gray's influence.
15) Ronald Reagan nominated Henkel, and Henkel promptly proposed a regulation that would have saved Keating. However, it was revealed that Henkel had large outstanding loans from Keating. He was forced to resign, abruptly.
16) Keating never backed off from making the brash and bullying play.
17) In 1986, the San Francisco Federal Home Loan Bank Board discovered that Keating had $135 million in unreported losses at Lincoln. They also charged him with exceeding his direct investment limit by $600 million.
18) This crisis set up a series of remarkable meetings designed to save Keating. In April 1987, DeConcini invited top bank board officials to meet with him in his Washington office. Also present for Keating were McCain, a holder of $112,000 in Keating donations; Senators Alan Cranston of California, John Glenn of Ohio, and Donald Riegle of Michigan. They had all been bought by Keating.
19) At Keating's behest, the senators tried to get officials to call off the examiners in San Francisco and avoid disciplinary action against Keating. This is clear obstruction of justice.
20) After a Michigan newspaper broke the story on the high-level meeting, Riegle, who was facing re-election, gave back his campaign donation to Keating.
21) DeConcini never gives anything back. McCain says to give back the $112,000 Keating gave him would make it look like he'd done something improper. It was not only improper. It was positively venal.
22) Not long afterward--four days to be exact--the same senators met with examiners from the San Francisco board trying to make the same deal for Keating.
23) Gray left office and when he was replaced by M. Danny Wall, Keating managed to get a new examination for Lincoln Savings. This came despite the fact that everyone agreed nothing had changed.
24) With the delay, Lincoln continued on its merry way. From 1987 to 1989 Lincoln's assets grew to $5.46 billion from $3.9 billion.
25) The investments were of the riskiest kind--raw land, construction loans, nonresidential real estate loans and junk-bond holdings.
26) The money continued flowing into the Phoenician, which is now spurting red ink.
27) When Lincoln fell and Keating's American Continental filed for bankruptcy, the entire Phoenix market sagged.
28) During the two-year delay, Lincoln managed to sell $220 million in uninsured American Continental debentures. They were marketed through Lincoln offices in $1,000 denominations. Is it any wonder customers were confused, thinking their investments were federally insured?
29) About 23,000 little people bought these worthless pieces of paper on Charlie Keating's word that they were protected.
30) None stands a chance of ever getting a penny back.
Perhaps DeConcini and McCain will call a meeting to smooth things out for them--just like they did for Keating.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss Phoenix New Times' biggest stories.
- The Time Jared from Subway Hit On Me
Sat., Sep. 12, 6:00pm
Sat., Sep. 12, 8:00pm
Sun., Sep. 13, 1:05pm
Mon., Sep. 14, 6:40pm
- Ecologist Dies on Rugged Grand Canyon Trail After Falling in Gully
- Arizona's Measles Vaccination Rate Worst in Nation, CDC Says