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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