walters column sig

State, national columnists

Keating’s death recalls California’s big savings and loan debacle

By From page A9 | April 06, 2014

Charles Keating, the high-flying savings and loan tycoon at the center of a financial and political scandal in the 1980s, died Monday in Phoenix.

The scandal was rooted in California’s 1982 deregulation of state-chartered savings and loans – banks then limited to home loans – freeing them to make virtually any speculative investment.

That huge, ultimately corrosive policy change is a story unto itself, having to do, as former Assembly Speaker Willie Brown later acknowledged, with his crafty scheme to advance Republican Assemblyman Pat Nolan’s career.

Brown encouraged Nolan to carry the high-profile deregulation bill and it was approved by the Legislature and then-Gov. Jerry Brown, helping Nolan to become the Assembly Republican leader.

A few years later, Willie Brown called in the chit when his speakership was threatened by five rebel Democrats and Nolan wouldn’t help them topple the speaker. The rebellion collapsed and Nolan was later ensnared in a federal undercover investigation of Capitol corruption and packed off to prison.

In 1984, after deregulation, Keating acquired Orange County-based Lincoln Savings. He contributed lavishly to campaign treasuries of Nolan and other California politicians, including then-Gov. George Deukmejian, and hired a close Deukmejian adviser as his lobbyist as he sought state permission to use Lincoln money to support his other businesses.

In Washington, Keating battled with regulators over how Lincoln was spending its federally insured deposits and enlisted five U.S. senators, including California’s Alan Cranston, to help him.

“One question, among many raised in recent weeks, had to do with whether my financial support in any way influenced several political figures to take up my cause,” Keating said at one point. “I want to say in the most forceful way I can: I certainly hope so.”

Joining the “Keating Five” ruined Cranston’s long political career, which at one point even included presidential ambitions. He was formally reprimanded by the Senate for unethical conduct, decided not to seek re-election to a fifth Senate term in 1992 and died in 2000.

Lincoln collapsed in 1989 – the poster child for many S&L debacles. Keating’s subsequent criminal convictions were voided on appeal, although he spent 4½ years in prison and pleaded guilty to federal bankruptcy fraud. After many years in the spotlight for his high-flying finances and quixotic crusades against pornography, he retired into obscurity.

Two days after he died, the U.S. Supreme Court declared that the aggregate limit on how much money wealthy persons can give to federal campaigns is unconstitutional. The ruling drew sharp criticism from Sen. John McCain, an Arizona Republican who was one of the Keating Five, but later morphed into a campaign finance reform advocate.

Dan Walters is a columnist for the Sacramento Bee. Reach him as [email protected]

Dan Walters


Discussion | 10 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Please read our Terms of Service and Privacy Policy before commenting.

  • Judge From The Franklin Savings and Loan Pedophilia ScandalApril 06, 2014 - 8:59 am


    Reply | Report abusive comment
  • http://whatreallyhappened.com/WRHARTICLES/Franklin/FranklinCoverup/franklin.htmApril 06, 2014 - 9:13 am

    The Franklin Coverup Scandal - What Really Happened

    Reply | Report abusive comment
  • Bill Clinton Murders ( A real shooting war against women ? )April 06, 2014 - 9:40 am


    Reply | Report abusive comment
  • http://www.counterpunch.org/2004/04/03/how-neil-bush-succeeded-in-business-without-really-trying/April 06, 2014 - 9:55 am

    Google....How Neil Bush Succeeded in Business Without Really Trying counterpunch.......... Neil Bush, the fourth child of George and Barbara, was long thought to be the rising star of the family. He had the looks, the convivial demeanor, middle-of-the-road politics and, despite suffering from a severe case of dyslexia that made him the laughing stock of St. Albans, the stuffy DC prep school that groomed Al Gore, the brainpower. At least he seemed brighter than Jeb or George Jr. And, most important of all, he was the favorite son of Barbara Bush, the Agrippina of American politics................... All those lofty political aspirations came to a fatal crash in the fall of 1988, at the precise moment his father was poised to ascend to the presidency, when the Silverado Savings and Loan went belly up with Neil in the driver’s seat................. In these days of multi-billion dollar financial crimes by the likes of Enron, Tyco and WorldCom, the failure of a relatively small Colorado thrift may not seem like much. But Silverado came to symbolize the entire savings and loan debacle, which ended up costing the government more than $150 billion in bail out money. Many of these companies exploited the newly deregulated financial markets to lavish unsecured loans to company insiders or political favorites and rewarded company officers and directors with ostentatious salaries and benefits. When the thrifts collapsed, the directors and executives walked away unscathed, while small investors and account-holders were left out in the cold. Appropriately, the looting of the savings and loans hit Texas harder than most other states.

    Reply | Report abusive comment
  • Bill Clinton (Rockefeller) & The Mysterious Learjet Crash daysApril 06, 2014 - 10:02 am


    Reply | Report abusive comment
  • So.... Do we get the Government that we Deserve?April 06, 2014 - 10:53 am

    Why do we keep electing people like this? Who are the real Horrors?... You people in the "Trusted Media" all corrupt and paid for also....

    Reply | Report abusive comment
  • So I am telling you that Normal PeopleApril 06, 2014 - 2:37 pm

    Who have not been corrupted need to run for office and to get involved in the Political Parties on a County by County Basis, but we need a large enough group of Normal people that are awake and will not be duped by the State Party levels and the Federal level Democrat National Committees and the Republican National Committees. Probably too little too late...READ REVELATION IN THE BIBLE

    Reply | Report abusive comment
  • ?April 06, 2014 - 2:15 pm

    Not letting me post again? Test

    Reply | Report abusive comment
  • Check out Infowars this SundayApril 06, 2014 - 2:16 pm


    Reply | Report abusive comment
  • http://www.gnosticliberationfront.com/satanic_concubines.htmApril 06, 2014 - 4:21 pm

    Hmmmmm is the Republican party going to have the Republican convention in Las Vegas? In General Google... las vegas child slave auctions... See...Sat.Concubines - Gnostic Liberation Front ... What then must we do.... at the very minimum do not become part of the evil..... WAKE UP TO THE LIES from all the top Politicians both Republican and Democrat.

    Reply | Report abusive comment
  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • Special Publications »

    Use of this site constitutes acceptance of our Terms of Service (updated 4/30/2015) and Privacy Policy (updated 4/7/2015).
    Copyright (c) 2016 McNaughton Newspapers, Inc., a family-owned local media company that proudly publishes the Daily Republic, Mountain Democrat, Davis Enterprise, Village Life and other community-driven publications.