On Monday, DeConcini admitted he was aware as early as 1984 that his chief fund raiser, Earl Katz, was in business deals with the recently convicted financier Charles H. Keating Jr., who controlled the failed Lincoln Savings and Loan.
Until now, DeConcini has maintained that when he pressured federal regulators to go easy on Keating in the mid-1980s, he did so simply because Keating was an Arizona businessman in need of relief from overzealous bureaucrats.
DeConcini has insisted he was unaware that his two top aides, Katz and longtime campaign manager, Ron Ober, were both involved in multimillion dollar deals with Keating.
Under cross-examination on January 9, 1991, by the Senate Ethics Committee special counsel, Robert Bennett, DeConcini repeatedly denied any early knowledge of Katz's ties to the swindler.
"I first became aware of Mr. Katz having business--that I can recollect--having business connections in 1988 when I was driving around Las Vegas going to a fund raiser, and that he had some property there that Mr. Keating had financed," testified DeConcini under oath.
This week that story changed.
Responding to questions through his press secretary, Bob Maynes, DeConcini now acknowledges being aware of the Katz-Keating business connection four years earlier.
"Dennis does not know what kind of business relationship they [Katz and Keating] had," said Maynes. "He did know that they had a business relationship when that letter was written."
"That letter" refers to a controversial note from DeConcini to Keating in which the senator expresses gratitude in his own handwriting to the financier "for helping Earl Katz."
The correspondence is dated December 18, 1984.
Ober's financial relationship with Keating was much more complicated than Katz's and, in the end, proved much more damaging. It was the details behind Ober's $110 million in loans that helped convict Keating on massive fraud charges.
Hal Cole was ready to talk.
The last five years had not been easy on his homebuilding business. Once on the verge of going public and reaping millions of dollars, his company, R.A. Homes, was badly wounded.
Cole was being sued in a class-action lawsuit. He was being interviewed by FBI agents and the Arizona Attorney General's Office. Federal thrift regulators were grilling him for information about the failure of Lincoln Savings and Loan and his dealings with Keating. There was even a risk of criminal charges.
As Cole entered the majestic Arizona Biltmore hotel and headed for the Prescott Room on the morning of March 26, 1991, six high-paid lawyers were waiting for him to tell his story. He was ready to cooperate.
"There is a point and time when everybody has to give an honest statement," Cole would later tell the lawyers.
For Cole, that time had arrived.
A month before, the U.S. Senate Ethics Committee had concluded its historic, four-month hearing on the Keating Five. Senators John Glenn, Donald Riegle, Alan Cranston, John McCain and Dennis DeConcini had dodged the bullet. While they were rebuked by the committee for their dealings with Keating, they avoided the humiliation of facing a full Senate hearing on their ethical lapse.
DeConcini's defense during the hearings was bolstered by the lack of discussion about the senator's ties to R.A. Homes. Barely a word was mentioned during the proceedings about the homebuilding company. This was surprising, since one of Cole's partners, Ron Ober, was intimately linked not only to Keating but also to DeConcini.
If the Senate Ethics Committee had taken the time to fully explore the extensive financial ties between Ober and Keating, the outcome for DeConcini may have been far different. The committee merely accepted DeConcini's explanation that he didn't know that Ober, one of his closest and most respected aides, had done more than $110 million worth of business with Keating during the period DeConcini was waging war with thrift regulators on Keating's behalf.
While the details of Ober's dealings with Keating were not pursued during the public portion of the Keating Five hearings, the depth of the relationship slowly emerged from the tens of thousands of document pages entered in federal, state and civil suits that were later filed. This record, together with direct testimony and interviews, allows the first glimpse inside the DeConcini, Ober and Keating triangle.
It is an alarming picture.
Ober's deals with Keating included his participation in "sham" transactions, "land parking," and other sales concocted by Keating to hoodwink federal regulators; in other words, the sleazy practices that precisely characterized the collapse of the savings and loan industry.
When Dennis DeConcini went to bat for Charles Keating, the highflying financier was more than just a constituent who had oiled the senator's election machine with cash contributions. Because Keating's house-of-cards financial conglomerate hung in the balance, so, too, did the real estate empire of DeConcini's key aide Ron Ober.