December 4, 1923

Swindler

In the 1980s the U.S. government was deregulating the savings and loan industry, making it comply with fewer federal requirements. At this time Charles Keating purchased Lincoln Savings and Loan (S&L) in Arizona for $51 million. By 1990 he was charged with securities fraud. Instead of carefully guarding depositors’ money, he had made high-risk investments that lost millions and caused the failure of the Lincoln S&L. The government stepped in to bail out Lincoln, at an estimated cost of somewhere between $2.5 million and $2.5 billion to U.S. taxpayers. Keating and his family benefited from his Lincoln transactions, as did five U.S. senators (the so-called Keating Five), who received campaign contributions from him. With the help of these high-ranking officials, Keating pressured the Federal Home Loan Bank Board, the regulatory board charged with investigating bank fraud, to ignore his mismanagement...