Charles Keating

Charles Keating Jr.
Born	(1923-12-04) 4 December 1923 Cincinnati, Ohio, U.S.
Died	31 March 2014(2014-03-31) (aged 90)
Occupation(s)	Attorney, real estate entrepreneur, financier, banking executive, conservative political advocate
Known for	1980s savings and loan scandal; anti-pornography activism; leadership of American Continental Corporation and Lincoln Savings and Loan Association; founder of Citizens for Decent Literature

Charles Humphrey Keating Jr. (December 4, 1923 – March 31, 2014) was an American attorney, real estate entrepreneur, financier, banking executive, and conservative political advocate, most notably recognized for his pivotal involvement in the 1980s savings and loan scandal.

During the 1940s, Keating distinguished himself as a competitive swimmer at the University of Cincinnati. Subsequently, he became a leading figure in the anti-pornography movement by founding Citizens for Decent Literature and participating on the 1969 President's Commission on Obscenity and Pornography.

In the 1980s, Keating assumed leadership of American Continental Corporation and the Lincoln Savings and Loan Association, taking advantage of deregulated banking investment opportunities. His business ventures encountered financial distress and were subject to federal scrutiny. His political donations to five U.S. senators sparked the well-known "Keating Five" scandal.

The collapse of Lincoln Savings in 1989 resulted in a federal government loss exceeding $3 billion and left around 23,000 investors holding worthless bonds. In the early 1990s, Keating was convicted on numerous federal and state charges including fraud and racketeering; he served four and a half years before his convictions were overturned in 1996. He later entered a guilty plea to lesser offenses in 1999, receiving a sentence equivalent to time already served. In his later years, he engaged in modest real estate activities until his passing.

Early life and military service

Born on December 4, 1923, in Cincinnati, Ohio, Keating was raised within a devout Roman Catholic family environment. His father operated a dairy business but battled Parkinson’s disease until his death in 1964.

Keating’s enthusiasm for swimming began at a Catholic summer camp and flourished at St. Xavier High School, where he captained the swim team to three championship titles while earning all-state recognition. He completed his high school education in 1941.

After one semester at the University of Cincinnati, during which he qualified for the NCAA championships in 1942, Keating enlisted in the United States Navy. He trained as a carrier-based pilot flying Grumman F6F Hellcat aircraft during World War II; however, due to training schedules and unit transfers, he did not participate in combat missions.

Education and swimming

Following his discharge from the Navy in 1945, Keating resumed his studies at the University of Cincinnati, utilizing his swimming abilities to facilitate re-admission. The university granted him academic credit for much of his military service, enabling him to complete six months of liberal arts coursework prior to commencing law school.

In 1945, Keating secured victory in the 200-yard breaststroke event at the Ohio Intercollegiate Conference championships. On March 30, 1946, he earned the NCAA national title in the same event at Yale University, outperforming notable swimmers such as Paul Murray and future coach James Counsilman with a time of 2:26.2. This achievement represented the first national championship ever won by an athlete from the University of Cincinnati. Alongside teammate Roy Lagaly, Keating became among the inaugural Bearcats to receive All-America honors. Standing at 6 feet 5 inches tall, he served as co-captain of the team and was acknowledged for his leadership qualities and determination.

Keating continued competing beyond college; notably, he placed second behind future Olympic gold medalist Joseph Verdeur in the 220-yard breaststroke at the April 1946 national AAU championships. He earned his law degree from the University of Cincinnati College of Law in 1948 and was subsequently inducted into its Athletic Hall of Fame.

Together with his brother William, Keating was an influential supporter of American swimming programs. In 1969 they donated $600,000 to construct a competitive swimming pool at St. Xavier High School (Cincinnati), which produced numerous state champions. This facility was named the Keating Natatorium in honor of their father, while Charles himself was inducted into St. Xavier’s Athletic Hall of Fame in 1985. The University of Cincinnati’s Keating Aquatic Center, inaugurated in 2006 with funding from their family, commemorates William Keating. Charles also contributed to elite swim clubs by founding Cincinnati’s Marlins—home to six Olympians who competed in 1980—and later establishing the Phoenix Swim Club dedicated to Olympic-level training.

Marriage and family

In 1949, Keating wed Mary Elaine Fette. Together, they had six children: five daughters—Kathleen, Mary, Maureen, Elaine, Elizabeth—and one son, Charles Keating III.

Their daughter Mary married Gary Hall, an Olympic swimmer who participated in the 1968, 1972, and 1976 Olympic Games, earning medals each time. Charles Keating III also competed as a swimmer in the 1976 Olympics, finishing fifth in the 200-meter breaststroke. Keating’s grandson Gary Hall Jr. took part in the 1996, 2000, and 2004 Olympics, securing a total of ten medals.

Another grandson, Chief Petty Officer Charles Keating IV, a Navy SEAL, lost his life in combat against ISIS in Iraq in 2016 and was posthumously honored with the Navy Cross for his bravery.

Early legal and business career

Following his graduation from law school, Keating performed legal duties for the FBI before entering private practice at a corporate law firm. Simultaneously, he engaged in various entrepreneurial activities such as selling life insurance, managing a fruit stand, and working with Roto-Rooter.

In 1952, he co-established the Cincinnati-based law firm Keating, Muething & Klekamp alongside his brother William and a fellow law graduate. By the late 1950s, their primary client was Carl Lindner Jr., who was expanding his enterprises across ice cream shops, supermarkets, real estate holdings, and savings and loan institutions.

In 1956, Keating applied for Q clearances on behalf of a company comprised of former Los Alamos Scientific Laboratory scientists; although investigated by the FBI over suspected fraud allegations, no formal charges ensued. He gained admission to the U.S. Supreme Court bar in 1958.

Lindner and Keating jointly founded American Financial Corporation in 1960—a holding company designed to consolidate Lindner’s varied business interests into subsidiaries and financial entities that engaged in interconnected transactions. Keating joined its board of directors three years later.

Anti-pornography activism

Keating became involved with a Cincinnati Catholic organization concerned about the impact of pornography in 1956 and began addressing parents and community groups on the issue. In 1958, he testified before the House Judiciary Committee regarding mail-order pornography, associating it with juvenile delinquency and citing reports suggesting Communist involvement. However, he later acknowledged that approximately ninety percent of obscene materials were produced primarily for profit rather than ideological motives.

That same year, he founded Citizens for Decent Literature (CDL), which expanded to encompass 300 chapters and approximately 100,000 members nationwide—emerging as the largest anti-pornography group in America. CDL absorbed other organizations over time and transitioned from a loosely organized network to a more centralized national entity featuring a magazine, film production efforts, and legal initiatives.

During two decades of activity, CDL distributed around 40 million letters promoting its cause and submitted multiple amicus curiae briefs to the U.S. Supreme Court. Keating became known colloquially as "Mr. Clean." Between 1964 and 1965, he produced Perversion for Profit, a film highlighting pornography’s moral hazards; it was widely screened and remained available for many years.

In 1969, President Richard Nixon appointed Keating to serve on the President's Commission on Obscenity and Pornography. While the commission’s majority recommended repealing restrictions on adult access to pornography, Keating stood as the principal dissenter. He secured a court injunction delaying publication of the report to prepare his opposing statement, which contended that pornography endangered the nation’s moral foundation. The Nixon administration backed his position with assistance from speechwriter Pat Buchanan in drafting the dissent.

Leveraging his national prominence, Keating advocated for strict local regulations in Cincinnati. In 1969, he obtained an injunction preventing the screening of Russ Meyer’s Vixen!, resulting in its confiscation and costly legal disputes that amounted to $250,000 for Meyer. The Ohio Supreme Court upheld this ban in 1971. Additionally, Keating attempted to block a closed-circuit presentation of Oh! Calcutta! in 1970 and successfully shut down a sex film theater by declaring it a "public nuisance" in 1972. He opposed sales of Playboy and Oui near his office location and criticized Ramada Inn’s adult cable programming. His influence contributed significantly to numerous closures of adult bookstores and theaters throughout Cincinnati following the 1973 Miller v. California ruling.

CDL and Keating frequently cited homosexuality as an example of moral corruption; Perversion for Profit asserted that homosexuals sought to seduce unsuspecting individuals—a theme Keating reiterated during public addresses.

In 1975, Oui designated Keating as its foremost "Enemy of pornography." The following year, Hamilton County prosecutor Simon L. Leis Jr. prosecuted pornographer Larry Flynt on obscenity and racketeering charges; although Flynt was initially convicted, the verdict was overturned on appeal. This case underscored Cincinnati’s stringent community standards shaped by Keating’s activism.

Keating’s role was portrayed—though somewhat exaggerated—in the 1996 biographical film The People vs. Larry Flynt. Efforts to screen Vixen! persisted but remained unlawful into the late 1990s. Conversely, a 1990 obscenity trial against Cincinnati’s Contemporary Arts Center for displaying Robert Mapplethorpe’s The Perfect Moment concluded with an acquittal by jury verdict.

American Financial Corporation

Although officially serving as an external attorney, Keating functioned as the public representative for Carl Lindner and American Financial Corporation, with whom he maintained close business and legal ties; Lindner occasionally referred to Keating as a "founder" of American Financial. The corporation enjoyed robust access to credit facilities, facilitating steady expansion. A 1977 stock analyst highlighted the company’s intricate web of transactions and subsidiaries, remarking on its notably complex financial structure.

In 1972, Keating departed from his law practice to formally join American Financial—then valued at $1 billion—as executive vice president. He became Lindner’s chief agent for workforce reductions in acquired firms, earning a reputation for assertiveness. Keating assumed operational control of The Cincinnati Enquirer, steering editorial policies, including broadening coverage of high school sports linked to Lindner’s family. Subsequently, the newspaper was sold to a consortium that included Keating’s brother William, a former Ohio Republican congressman. In 1974, Keating played a role in American Financial’s divestiture of Bantam Books and the strategic choice to forgo entry into investment banking.

During 1975 and 1976, American Financial faced several shareholder lawsuits concerning unsecured loans, stock warrants, and the sale of the Enquirer. The Securities and Exchange Commission (SEC) initiated a significant investigation, accusing Lindner, Keating, and others of investor fraud and filing misleading reports. Central to the allegations was a $14 million loan purportedly granted under preferential conditions. Amid conflicting accounts regarding his ties to Lindner following these events, Keating resigned in August 1976.

American Continental Corporation

In 1976, Keating moved to Phoenix, Arizona to take charge of American Continental Homes, a faltering homebuilding division spun off from American Financial and acquired for $300,000 as part of his exit arrangement. His family joined him two years later in 1978. The SEC case involving American Financial was resolved in 1979 with Keating signing a consent decree; he neither admitted wrongdoing nor denied it but agreed to comply with federal fraud and securities regulations. Despite this resolution, he bore much of the blame for earlier financial irregularities, which tarnished his public image.

Relocating to Arizona provided Keating with an opportunity for renewal within a business-friendly climate. He rebranded the company as American Continental Corporation and expanded its operations and divisions following a model similar to that of American Financial. As chairman and majority shareholder, he appointed family members to prominent positions, including his son Charles Keating III, who advanced rapidly within the organization.

In 1979, Keating spearheaded fundraising efforts in the Southwest for John Connally’s 1980 Republican presidential bid and briefly held the position of campaign manager, where he implemented significant staff reductions. However, the campaign faltered soon after his departure from management, having expended $11 million while securing only minimal delegate support.

Following Ronald Reagan’s 1980 election win, Keating was considered for the role of U.S. Ambassador to the Bahamas—a location where he had spent considerable time—but renewed examination of his SEC history led to his removal from consideration.

By the early 1980s, American Continental had become profitable with multimillion-dollar earnings and emerged as the leading single-family homebuilder in Phoenix and Denver, Colorado. At its zenith, it controlled $6 billion in assets across numerous subsidiaries, employed 2,500 staff members, and maintained headquarters on Phoenix’s Camelback Road. The firm operated three corporate jets plus a helicopter. Known for an intense work ethic and commanding leadership style that fostered employee loyalty, Keating demanded long hours but compensated his workforce generously. Outside business circles, he was often viewed as arrogant and difficult. His brother William described him as impatient and forceful with clear objectives but unconcerned about being well-liked. A 1977 Fortune profile observed that few favored him—a portrayal Keating countered by distributing thousands of "I Like Charlie Keating" buttons among employees and visitors.

A devout Catholic, Keating became a prominent philanthropist in Phoenix, contributing over $100,000 to the Society of Saint Vincent de Paul, exceeding $1 million to Covenant House, and providing substantial support to Mother Teresa’s missions—including lending her his helicopter for visits to remote reservations. Father Bruce Ritter of Covenant House commended him for inspiring trust in Providence. In 1983, Keating’s enterprises made unusually large yet lawful political donations to Phoenix City Council campaigns responsible for approving his construction projects and water permits related to developments around man-made ponds. This represented a shift in local political funding practices—some council members opposed these contributions while others embraced them.

Lincoln Savings and the Keating Five

In 1984, American Continental Corporation purchased Lincoln Savings and Loan Association for slightly over $50 million. Prior to the early 1980s, Lincoln maintained a conservative approach, allocating nearly half its portfolio to home mortgages and limiting risky exposure to about a quarter of its assets. After enduring several years of financial losses, the institution recorded a modest profit in 1983. Following the acquisition, Charles Keating took control of management and leveraged deregulation measures that permitted savings and loans to pursue higher-risk investments.

From 1984 through 1988, Lincoln's asset base expanded dramatically from $1.1 billion to $5.5 billion, fueled by investments in land, equity interests in real estate projects, and high-yield junk bonds. The company employed aggressive marketing strategies aimed at vulnerable clientele. By 1985, the Federal Home Loan Bank Board (FHLBB) grew alarmed by these risky activities threatening federally insured funds and imposed restrictions on direct investments—limits that Lincoln exceeded by hundreds of millions.

Audits conducted in 1986 uncovered $135 million in unreported losses alongside regulatory breaches. Keating resisted the FHLBB's constraints and sought to influence regulators through political contributions and appointments, including securing a recess appointment for an ally to the FHLBB who later resigned amid conflict-of-interest allegations. Confronted with potential insolvency, Keating turned to five U.S. senators—later labeled the "Keating Five": Democrats Alan Cranston, Dennis DeConcini, John Glenn, Donald W. Riegle Jr., and Republican John McCain.

Keating donated roughly $1.3 million in lawful political contributions to these senators, encouraging them to intervene on his behalf with regulators. McCain had a personal connection with Keating, accepting trips funded by American Continental Corporation to Keating’s estate in the Bahamas. In 1987, the senators met with FHLBB officials to advocate for more lenient treatment of Lincoln while Keating initiated legal action against the FHLBB over alleged information leaks.

By May 1988, the FHLBB consented to a memorandum of understanding that cleared Lincoln of prior violations and allowed it to concentrate on traditional home mortgage lending. A Senate Ethics Committee inquiry subsequently censured all five senators to varying extents; Cranston received the most severe reprimand while Glenn and McCain faced milder criticism. McCain later testified against Keating during civil litigation filed by Lincoln bondholders; the other senators declined to testify.

Collapse of Lincoln and American Continental

Lincoln continued operations; between mid-1987 and April 1989, its assets increased from $3.91 billion to $5.46 billion. Mirroring earlier tactics used with Lindner, American Continental built an intricate web of at least 54 subsidiaries spanning real estate, banking, and insurance sectors—including some offshore entities unknown to auditors. Keating disregarded regulatory concerns while defending his substantial salary and business practices, investing approximately $500,000 in Phoenix-area radio advertisements promoting his real estate ventures and family values. A 1988 profile in the Los Angeles Times depicted him as "a businessman without apparent peer in Arizona in terms of riches, clout and color." Although he minimized his anti-pornography activism after relocating to Arizona, his hotels prohibited X-rated films and Playboy magazines.

In October 1988, Keating unveiled his most extravagant project: the , a 600-room Phoenician Resort situated near Camelback Mountain. Valued at $300 million, this resort incorporated imported luxury materials along with costly late-stage design revisions driven by Keating and his wife. Another significant development was Estrella, a mixed-use community near Phoenix planned for 200,000 residents featuring residences, offices, schools, retail centers, a resort, and hospital facilities. Estrella initially included restrictive covenants concerning abortion and adult content but these were removed after being ruled unconstitutional. A late-1980s real estate downturn in the Sun Belt region threatened Estrella before substantial construction began.

When questioned about financial risks involved, Keating acknowledged daily concerns about bankruptcy but embraced these challenges as motivating factors tied closely to his personal pride.

As Lincoln grew, funds were siphoned off to American Continental via various schemes; American Continental then expended lavishly on speculative investments and personal costs. Regulatory scrutiny intensified starting July 1988. After Arthur Young & Co raised accounting issues, Keating replaced them with Touche Ross. American Continental urgently sought liquidity to offset real estate losses. Branch managers at Lincoln encouraged customers to exchange federally insured certificates of deposit for higher-yield but uninsured American Continental bonds—customers later claimed they were misled regarding associated risks. Regulators had already declared these bonds insolvent; FDIC Chairman L. William Seidman described this as "one of the most heartless and cruel frauds in modern memory." In late 1988, Keating attempted to sell Lincoln; however, a $50 million bid was rejected for not meeting federal standards.

A December 1988 FHLBB audit identified numerous regulatory violations at Lincoln along with default risk concerns. In January 1989, regulators ordered Keating to cease cash transfers from Lincoln to American Continental—undermining American Continental’s survival strategy and triggering its stock price collapse. Keating pursued junk bond transactions with Michael Milken and currency market speculations but suffered an $11 million loss within one month. Despite efforts by Senators DeConcini and Cranston to sway regulators toward approving a sale, their appeals were disregarded.

American Continental filed for bankruptcy in April 1989; shortly thereafter Lincoln was seized by the FHLBB. Approximately 23,000 investors held worthless bonds; many retirees lost their life savings and reported emotional distress following what they described as fraudulent conduct. Total losses incurred by bondholders ranged between $250 million and $288 million.

Ultimately, the federal government absorbed $3.4 billion covering Lincoln’s losses upon seizure. In interviews conducted in April 1989, Keating portrayed himself as a victim of government persecution yet expressed hope that his political donations had secured supportive lawmakers.

In September 1989, regulators initiated a $1.1 billion fraud and racketeering lawsuit against Keating. He claimed that he and his wife had "lost everything." In November 1989 he invoked the Fifth Amendment to decline testimony before the House Banking Committee. That same month FBI agents seized control of the Phoenician Resort—nicknamed "Club Fed" during their operation—before selling it to a Kuwaiti investment group. The Estrella project remained undeveloped until its sale in 1993 to an investment firm.

By November 1989 estimates placed the savings and loan crisis costs at $500 billion; media coverage highlighted Keating’s involvement amid widespread criticism of financial sector excesses throughout the 1980s. Both Keating and Lincoln Savings became emblematic of systemic failures and greed within the industry—referenced even in popular culture such as a deck of playing cards titled "The Savings and Loan Scandal," depicting Keating manipulating senators like puppets on his fingers.

Legal consequences

Keating attributed the downfall of Lincoln Savings to government regulators and initiated legal action to regain control; however, the case was dismissed in August 1990, with the judge ruling the seizure warranted. His monthly legal expenses escalated to $1 million.

In September 1990, California authorities charged Keating and his associates with 42 counts involving the deception of customers into purchasing worthless junk bonds issued by American Continental Corporation. Keating was unable to post a $5 million bail and was consequently incarcerated. By December 1991, he was found guilty on 17 counts including fraud, racketeering, and conspiracy. Despite appeals for mercy from Mother Teresa, citing his philanthropic contributions, he was sentenced in April 1992 to the maximum penalty of 10 years and incarcerated in a medium-security federal facility.

In May 1992, Robert M. Wurzelbacher Jr., Keating’s son-in-law and senior vice president at American Continental as well as CEO of Lincoln's investment firm, pled guilty to three federal fraud charges and agreed to testify against Keating; he received a 40-month sentence in December 1993.

A federal conviction followed in January 1993 on 73 counts encompassing fraud, racketeering, and conspiracy. In July that year, Keating was sentenced to twelve and a half years and ordered to pay $122 million in restitution, although he asserted having no assets and debts totaling $10 million.

In 1994, Keating reached a settlement with the SEC agreeing to repay millions if concealed assets were discovered. The Resolution Trust Corporation secured a $4.3 billion judgment against Keating and his wife—the largest ever awarded against an individual—but this was overturned on appeal in 1999 due to absence of a specific criminal conviction or trial verdict. Throughout his imprisonment, Keating maintained his innocence, portraying himself as a political prisoner and scapegoat linked to the biggest banking scandal in U.S. history.

The Ninth Circuit Court of Appeals overturned Keating’s state conviction in April 1996 due to improper jury instructions concerning fraud statutes. Later that year, in December, the same court vacated his federal conviction over concerns regarding juror bias. After serving four and a half years, Keating was released; he later identified enduring incarceration as his most significant personal accomplishment.

Facing retrial in April 1999, Keating entered a plea deal admitting guilt on four counts of wire and bankruptcy fraud related to extracting nearly $1 million from American Continental prior to its collapse. Remaining charges against him and his son were dismissed; he received credit for time served.

In October 2000, the U.S. Supreme Court declined to review the government’s appeal of the overturned state conviction, leaving only the plea agreement conviction standing. Due to limited sentencing prospects and witness complications, state prosecutors chose not to pursue further trials. Keating remarked that if left unmolested by authorities, investors “would all be rich.”

Final years and death

Following his release from prison, Keating parted ways with his wife Mary and relocated to Paradise Valley, Arizona, where he lived with his daughter Mary and son-in-law Gary Hall Sr.

During the 2000s, Keating engaged in business consulting and participated in prosperous real estate ventures within the Phoenix area. He kept a low profile regarding his commercial endeavors and refrained from commenting when the Keating Five controversy resurfaced during John McCain’s 2008 presidential bid. In later life, he remained physically active through swimming and walking, often able to appear publicly without recognition.

Charles Keating passed away at age 90 on March 31, 2014, at a hospital in Phoenix after an illness lasting several weeks that was not publicly disclosed.

Legacy

A 1990 profile by the Chicago Tribune depicted Charles Keating as a multifaceted individual: while some regarded him as an assertive entrepreneur who engaged in fraudulent activities amid a real estate slump, others considered him a swindler cloaking avarice with feigned sanctity.

The 1993 work Trust Me: Charles Keating and the Missing Billions by Michael Binstein and Charles Bowden presents Keating as a figure of contradictions. It acknowledges that although his speculative ventures led to the collapse of a bank, he directed funds into development projects rather than outright theft. The authors scrutinize his intentions, highlighting the disparity between his extravagant personal lifestyle and his practice of marketing junk bonds to susceptible investors despite awareness of his unstable financial empire.

Throughout, Keating attributed the substantial financial downturn not to his own conduct but to regulatory authorities.

Some of Keating’s 1980s real estate initiatives eventually found success: The Phoenician evolved into a high-end hotel, and the Estrella development partially realized his original ambitions before changing ownership again in 2005.

In popular culture

In Gore Vidal’s novel Myron, the term "keating" is employed as a substitute for profanity.

Keating was portrayed by James Cromwell in Miloš Forman’s 1996 movie The People vs. Larry Flynt, where he appears as a prominent figure in the Citizens for Decent Literature, opposing Flynt’s publication, Hustler Magazine.

External links

• Federal campaign donations by Charles Keating from 1979 to 1990
• FDIC bibliography detailing Keating’s involvement in the Savings and Loan crisis from 1989 to 1993