Wednesday, April 2, 2014

Charles Keating, who was convicted...

...of fraud in connection with Lincoln Savings & Loan, died at age 90. From his obit in the Times (my emphasis):

By 1987, its investigators found that Lincoln had $135 million in unreported losses and was more than $600 million over the risky-investment ceiling. Soon, the F.B.I., the Securities and Exchange Commission and other agencies were homing in.

Mr. Keating hired Alan Greenspan, soon to be chairman of the Federal Reserve, who compiled a report saying Lincoln’s depositors faced “no foreseeable risk” and praising a “seasoned and expert” management. And Mr. Keating called on Senators Alan Cranston of California, Donald W. Riegle Jr. of Michigan, John Glenn of Ohio and Dennis DeConcini and John McCain of Arizona, all recipients of his campaign largess, to pressure the bank board to relax its rules and kill its investigation.

All five met with regulators, and Edwin J. Gray, then the board chairman, said four senators — all but Mr. Riegle — “came to me like lawyers arguing for a client.” He resisted, but was replaced by a chairman more sympathetic to Mr. Keating, and the board backed off, with disastrous results for depositors and investors.

Mr. Keating, a 6-foot-5-inch beanpole who walked with a swagger, never minced words about buying political influence. Asked once whether his payments to politicians had worked, he told reporters, “I want to say in the most forceful way I can: I certainly hope so.”

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