(3 of 4)
Keating's pretensions had a pious side too: a devout Roman Catholic, he gave millions in personal and corporate funds to charities, including Mother Teresa. Former Senator Dennis DeConcini, whose political career was wrecked by his association with Keating, remembers meeting Mother Teresa in Washington: "I introduced myself as coming from Arizona, and she asked, 'How is my friend Charlie?'"
Although many of Keating's junk-bond customers consider him "the Hannibal Lecter of finance," as one put it, he clings to his claim of innocence, blaming regulators and Congress for his troubles. Indeed, some of his fellow inmates told TIME that he never admitted guilt or regret for his actions. Kevin McKinley, a convicted Irish Republican Army weapons dealer, grew close to Keating as the two walked the prison yard. As he put it, "Charlie was never a rat. He refused to sell out his associates and wouldn't compromise with the government just to get a better deal. Charlie believes he is right."
Don't tell that to the thousands of losers in Keating's junk-bond schemes. Ramona Jacobs of Burbank, California, a telephone-company assistant manager who testified in one of the civil-fraud cases, says she lost $11,000 when the junk bonds she was talked into buying at Lincoln Savings turned out to be worthless. (Most of the purchasers have since recovered about 70 cents on the dollar.) The loss, she says, delayed desperately needed medical treatment for her daughter Michelle. "The people at his bank told me it was safe; they said there was nothing to worry about."
Larry Flynt, publisher of Hustler magazine, certainly has not forgotten Keating either. In the 1970s and early '80s, Keating became an antismut crusader, attacking Flynt and winning an appointment from Richard Nixon to an antipornography commission. Flynt told TIME, "The Keatings of this world are the real perverts. You can't dismiss him as someone who just wanted to take people's money; he's one of the most dangerous men in America because he is completely intolerant of others and believes he is always right."
Oddly, in one sense he was. Many of his real estate deals--confiscated and resold by the feds at fire-sale prices--are today worth a fortune. If Keating had been able to ride out the real estate crash that bankrupted operators just as smart as he was, bondholders might have got their money back. But that's a junk-bond if. The Phoenician, derided as a symbol of Keating's wretched excess, is a crown jewel for its new owner, ITT-Sheraton, and worth at least twice what Keating spent to build it.
Prosecutors trying to reopen his case will have a tough time. Many of the witnesses, including key subordinates from Lincoln and its parent, American Continental Corp., are far from eager to repeat their performance now that their own cases have been settled. So it seems that Keating may have beaten the rap. True, he has served more time than nearly all the major white-collar criminals of the '80s, including notorious junk-bond king Michael Milken, with whom he did hundreds of millions of dollars in deals.