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But now, in a recent reversal of fortune that has outraged many of the more than 22,000 losers in Keating's junk-bond schemes, all his convictions have been thrown out. Last April, a federal court found that O.J.-judge Lance Ito, who presided at Keating's 1991 California state trial, had bungled the job by issuing faulty instructions to the jury. Then, just last December, came an even bigger shock: a federal judge ruled that Keating's 1993 federal conviction was tainted. And in a separate rebuke, a three-judge federal appeals panel declared that the evidence of his guilt is "not overwhelming." That means Keating is no longer a criminal in the eyes of the law--but he is a deadbeat. He still faces roughly $5.2 billion in civil judgments against him stemming from Lincoln's collapse. All his identifiable property, including his home, was long ago auctioned off by the government.
Keating now lives in Phoenix, Arizona, sheltered by a close-knit clan: his wife Mary Elaine, six children and 29 grandchildren. House hopping between his children's homes like a visiting relative, Keating recently left the villa belonging to one daughter and son-in-law and moved into the more modest home of another of his children in a working-class Phoenix suburb, a Gulliver at rest in a granddaughter's cramped bedroom.
At a restaurant one night, as he chats over dinner with his attorney, Stephen Neal, the legal Houdini behind his release, Keating confronts naked hostility: a complete stranger, recognizing his craggy features like a ghost from an old "wanted" poster, drops by his table to hurl an unprovoked insult. He's unperturbed. "When I was first brought into the lockup I faced a howling, screaming mob," Keating says matter-of-factly. He points out that unlike other major white-collar felons of the 1980s, who sojourned in comparatively luxurious "Club Feds," he did "hard time." On the inside, he was known as "the old guy" and initially disliked by fellow convicts. "I was locked down for nearly five years, but I survived like a man." Keating even manages some humor on his jailbird days. "I like a clean toilet," the former tycoon remarks, noting that he volunteered to clean bathrooms for a unit of 48 convicts.
Those who knew Keating during his glory days evoke a complex, highly intelligent and driven executive who often worked 18-hour days. Keating made unmerciful demands on subordinates. He leaned hard on top-flight law and accounting firms; a number, including Ernst & Young, Jones, Day and Kaye, Scholer, together paid hundreds of millions of dollars to settle claims that they helped defraud investors. The firms denied any wrongdoing.
Lincoln's boss spent the company's money as if it were his own. Jetting around in a fleet of aircraft known as "Charlie's air force," he once went on a three-week tour of Europe with more than 20 family members in tow. His lavish parties would feature the host wandering around cradling a bottle of Dom Perignon, sometimes encouraging guests to jump in the pool fully clothed. His corporate executives would often find thick, neat packets of hundred-dollar bills under their plates when they went to Keating's house for dinner. Family members got a little more: Keating put relatives--including his son, sons-in-law and daughters--on the payroll and funneled them more than $37 million in about five years. But because much of it was in stock, little remains.