Keating Tells TV Audience to Blame Regulators, Congress for Lincoln’s Fall : Thrifts: Irvine-based S&L;’s owner says, ‘We had $700 million excess assets over liabilities in our subsidiary’ before ‘conniving’ ruined him.
WASHINGTON — Lincoln Savings & Loan Assn. owner Charles Keating said Friday that the “conniving†of federal regulators and the guilt of Congress are to blame for the multibillion-dollar failure of his Irvine-based thrift.
Keating said Lincoln showed a profit until it was taken over by federal regulators. “We had $700 million excess assets over liabilities in our subsidiary,†he said on ABC-TV’s “Good Morning America†program.
Regulators say the failed savings and loan is expected to cost taxpayers a record $2.5 billion.
“The numbers they come by are numbers that are arbitrarily written down,†Keating said of what he called the “conniving†regulators.
“It’s a ridiculous situation,†he said, “and it’s causing a loss unprecedented in the history of the United States. It’s the regulators.â€
Keating is appearing on a series of talk shows to defend his point of view, even though he took the Fifth Amendment and refused to answer the questions of a congressional committee investigating Lincoln’s failure.
Keating said Congress is part of the problem.
“The Congress tried to stop (former top thrift regulator) Ed Gray, and a lot of things happened there that make them guilty,†Keating said of Congress.
Gray testified before Congress last year that he turned down the request of five senators to ease investment rules affecting Lincoln.
Those five senators are being investigated by the Senate Ethics Committee in connection with allegations of improperly trying to interfere with federal regulation in return for $1.3 million in campaign contributions.
On Cable News Network on Thursday, Keating said he made donations to the senators--Alan Cranston, D-Calif., Donald Riegle, D-Mich., John Glenn, D-Ohio, Dennis DeConcini, D-Ariz., and John McCain R-Ariz.--because he liked their views on the thrift industry.
Lincoln, a unit of American Continental Corp., may be the most spectacular of the nation’s thrift failures, because of the expected record cost of its bailout.
Lincoln’s parent filed for bankruptcy protection April 13, 1989. Regulators seized Lincoln a day later.
American Continental’s bankruptcy left shareholders and investors with now-worthless stocks and bonds. Among the bondholders are about 22,000 small investors who bought nearly $200 million in Lincoln’s corporate bonds.
Almost two-thirds of the buyers were elderly Lincoln depositors, many of whom thought the bonds were federally insured because they were sold in Lincoln’s 29 Southern California branches.
The biggest entertainment stories
Get our big stories about Hollywood, film, television, music, arts, culture and more right in your inbox as soon as they publish.
You may occasionally receive promotional content from the Los Angeles Times.
