The Sorry Life of Business Executive Charles Keating

On this day, December 4 in the year 1923, the man considered as the face of the US savings and loan crisis of the 1980s was born in Ohio, USA. His name was Charles Humphrey Keating Jr., the CEO of the failed Lincoln Savings and Loan Association and American Continental Corporation.

Charles Keating Jr.
Charles Keating Jr. (Credit:

Charles Keating Jr. was the son of a dairyman. After attending a private Catholic high school, he went to college but soon dropped out due to poor grades. He joined the United States Navy during World War II as a pilot stationed in Florida. After the war, he was accepted back at the University of Cincinnati by virtue of his being a swimmer and a pilot. He went on to finish a degree in law in 1948 and later, got a job at the Federal Bureau of Investigation. In 1952, he set up his own law firm. Later, he assisted his special businessman-client, Carl Lindner to form American Financial Corporation as a holding company for several businesses. In 1972, he joined the firm as an executive in addition to his being a legal adviser.

In 1976, Charles Keating broke off from American Financial after the firm was investigated by government authorities for fraudulent transactions. He moved to Phoenix and engaged in real estate under his own firm American Continental Homes, which was a spin-off of American Financial. The company grew enormously on the back of the real estate boom in and around Phoenix, one of the fastest growing cities of the US at the time.

In 1984, American Continental bought Lincoln Savings and Loan Association, a conservatively-run company that made modest profits. When Charles Keating took over management, he invested aggressively in high-risk ventures, taking advantage of the relaxed environment brought about by financial deregulation. After four years, assets of the LSLA ballooned to over $5 billon from just $1 billion when he took over management. When government authorities investigated the company’s transactions and reports, they found out a lot of irregularities including illegal transfer of cash to parent American Continental.

In 1989, American Continental went bankrupt and Lincoln was taken over by the government for being insolvent. Although Charles spent a fortune in giving campaign contribution to many politicians, this did not help when he was sued and convicted of fraud, racketeering and conspiracy. He served four years in jail but he was released after his conviction was overturned on appeal.

Charles Keating Jr. died in 2014 at the age of 90. He had six children with his wife Mary Ellaine.


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