Charging It to Uncle Sam : TRUST ME: Charles Keating and the Missing Billions, <i> By Michael Binstein and Charles Bowden (Random House: $25; 417 pp.)</i>

There are now so many books about the savings and loans crunch that when another one stumbles out onto the stage you can almost hear the sounds of seats flipping up as the audience sprints for the exits. But Charles Keating retains some of his old crowd appeal (trust me!) mainly because he was such a gross caricature of the event. Better than anyone, he exploited the special enthusiasm during the Reagan years for the hypocritical entrepreneur who celebrated his success at Le Cirque and left his failures for the government to clean up.

When Congress liberated thrifts from the old investment rules in 1984, Keating ponied up $51 million dollars from God knows where for a sleepy California savings and loan called Lincoln. Once in control he was able to lay hands on as much money as he wanted, not because he was an investment genius--this is important to remember--but because investors knew that if he lost it they would be reimbursed by the government. Never was he subjected to the discipline of the market.

By 1989, when federal regulators shut him down, he had sunk $300 million into a luxury hotel in the desert; $150 million into his private, pornography-free city called Estrella; $36 million into corporate jets and helicopters; and millions more into magnanimous gestures, such as flying an entire village in Ireland to Phoenix for a vacation. (They’d been nice to him.)

He had lent fantastic sums on a whim and a prayer. On the strength of a 20-minute conversation, for example, he handed a man without much talent for business $70 million. While his company squandered about $3 billion, he paid 17 of its employees $250,000 a year, five more than $1 million a year, and himself and his family an average of about $7 million a year. This last figure is usually trotted out to capture Keating’s character. Greed! But in the context of his profligacy, and when compared to the paychecks of similarly spirited saving and loan operators, the number is low (Thomas Spiegel, who ran Columbia Savings & Loan on Wilshire Boulevard, paid himself $10 million in a year). Keating was less interested in hording huge sums of money for himself than in using his thrift to buy control of things and of people.

So say Michael Binstein and Charles Bowden in their very entertaining account of Keating’s life. The authors struggle mightily and sincerely--albeit for dramatic purposes--to portray Keating as a “complex, enigmatic human being.” That they fail is an indication less of their substantial talents than of his. One doubts not only the authors’ choice of adjectives ( arbitrary and self-deluded sound more accurate) but also their noun. This reader would not have been surprised had Keating wheeled around and peeled off his human face to reveal a giant green lizard with the long red tongue. The evidence in “Trust Me” of Keating’s shallow monstrosity is so abundant that one is reluctant to spoil the larger case by relating just a piece or two of it. But if you insist. . . .

In his spare time Keating picked fights with pornographers--he sat on Nixon’s Pornography Commission--yet he seems to have insisted that his female employees turn up for work in high heels and silicone. “If you’re the only flat chested girl in the whole legal department,” one of them told the authors, “it is kind of obvious you had better get some tits.” One of the boss’s favorite activities was to remove his secretaries to a shopping mall, tell them they had 30 minutes to buy whatever they wanted, and then sit back and watch their breasts jiggle as they raced around spending his money.

Although Keating was insistent that his employees share his family values he went ballistic when one of his executives took a few hours off to be with his wife in the delivery room. “Hey,” he said, “kids are born every day, some of them live and some of them die. . . . Wurz should know where his priorities are.”

Just as dogs often come to resemble their masters, and husbands their wives, books have a strange way of taking after their subjects. This one suffers from a lack of self-restraint and a debilitating ambition to be more than it was meant to be. The novelistic technique--the story is told through the eyes of people swirling, however remotely, around Keating--is used with perhaps more literary gain than loss. But there is a cringe-making attempt to set up Larry Flynt, the proprietor of Hustler magazine, with whom Keating warred briefly in the early 1970s, as Keating’s doppleganger. And subplots come and go without about as much logic as Keating’s investments.

All of this is more than made up for by the authors’ use of Edwin Gray, the chief savings and loan regulator who attempted early on to restrain Keating and whose life Keating set out to destroy. For this purpose, he employed five U.S. Senators (Alan Cranston, John McCain, John Glenn, Donald Riegle, Dennis DeConcini). Through Gray’s eyes Binstein and Bowden write the best descriptions I’ve read of the struggle between savings and loan operators and savings and loan regulators. Of course, we know how it ends. Keating’s influence led to Gray’s replacement in 1987 by Danny Wall, who held the view that Charles Keating was a brilliant entrepreneur better left to his own devices. “These guys are so well connected they can get you in ways where you will never know you’ve been gotten,” explained Wall’s chief of staff to fellow Bank Board employees. For his troubles Edwin Gray found himself very nearly unemployable.

Two years and a couple of billion dollars later, Lincoln Savings & Loan was finally closed. (One of the first things the investigators found was that the room in which the bank examiners had worked was bugged.) And though he was tried and convicted of criminal fraud, Keating argued to the bitter end that he hadn’t failed. He was right, in a sense. There was money on tap to pay for his losses for as long as people would lend to the U.S. government. He was a creature of government interference who wanted to believe that government interference was the source of all his problems.