-Caveat Lector-
" At the height of a rancorous party, Keating ripped off
his shirt to reveal a T shirt with a skull and crossbones
superimposed over the letters FHLBB [Federal Home Loan
Bank Board, which was "investigating" his S&L rip-offs]."
CHARLES KEATING AND THE S&L CRISIS
<cont'd>
All this was well known by lower level federal regulators who
could not get an appropriate response from higher ups. In
testimony before the HOUSE BANKING COMMITTEE a federal regulator,
John J. Meek, testified that "AMERICAN CONTINENTAL had no records
of Keating's secret role in TRENDINVEST. Regulators learned of
the partnership only from an offhand remark by an AMERICAN
CONTINENTAL executive." Keating invested $17.5 million into this
company without even informing the board of directors of AMERICAN
CONTINENTAL.
Meeks went on to detail an unending train of baffling
Keating transactions which included $25.5 million to DIA
HOLDINGS, a Netherlands company, $10 million to SOUTHBROOK
HOLDINGS, a Panamanian company, $25 million to GFTA, a West
German company -- all deals that regulators never figured out.
In summary, did Keating have both the motive and the
opportunity to launder illegal funds for CIA operations in Latin
America and elsewhere? Yes. Yes.
It is worth mentioning that when Keating moved out of suite
150, POST/NEWSWEEK moved in. Remember, this was just across the
hall from where General John Singlaub ran the Nicaraguan Contra
campaign. This was the operation that led Ollie North and
General Secord into so much temptation. Despite the parade of
mercenaries that marched through Singlaub's office, POST\NEWSWEEK
was one among many news organizations that never had the
slightest inclination to cover any of these stories.
Inasmuch as an animal cannot be defined apart from its
environment, it is worth analyzing the political setting of
Charles Keating. During the high points of Keating's reign the
big man in Arizona was Kemper Marley. Marley was the first and
only billionaire in Arizona. His wealth was based originally on
a liquor monopoly conferred upon him by Sam Bronfman of the
SEAGRAMS family. In Arizona Marley was all powerful.
In 1948, fifty two employees of Kemper Marley's wholely
owned company, UNITED LIQUOR, went to prison on federal liquor
violations -- including Gene Hensley, the father-in-law of
Arizona Senator John McCain. Gene Hensley was Kemper Marley's
UNITED LIQUOR general manager. On the basis of so many
prosecutions some people might feel UNITED LIQUOR could qualify
as organized crime. The slick attorney who kept Marley out of
this trial and sent McCain's father-in-law to prison in his place
was William Rehndquist -- currently the Chief Justice of the U.S.
Supreme Court.
It was the judgement of the court that Gene Hensley would
be prohibited from ever working in the liquor industry. Of
course such judgments meant nothing to Marley. When Gene Hensley
got out of prison Marley arranged a BUDWIESER distributorship for
Hensley which is now in the hands of Senator John McCain and
reported to be worth $50 million!
The best source for an introduction to the environment of
total political corruption in Arizona is the book, THE ARIZONA
PROJECT: HOW A TEAM OF INVESTIGATIVE REPORTERS GOT REVENGE ON
DEADLINE. In graphic detail journalist Michael Wendland links the
most prominent people in Arizona with various organized crime
king pins. Wendland was part of the group called INVESTIGATIVE
REPORTERS AND EDITORS who came to Phoenix in the wake of the
fatal car bombing of the ARIZONA REPUBLIC's investigative
reporter, Don Bolles. It was the conclusion of this group that
Marley, by far the wealthiest man in Arizona, was behind this
murder.
According to intelligence sources of the Phoenix police, who
prepared a background profile of Kemper Marley the week following
the Bolles murder, Marley was at one time directly connected to
the remnants of the old Al Capone mob.
When Marley died July 1990 he owned 5 square miles of
Carefree )*) the highest priced real estate in Arizona. The
smallest lot in this most exclusive township is zoned for one
acre. By some coincidence the Tax Accessor made the same mistake
evaluating Marley's properties as he did on Charlie Keating's
properties. This oversight was saving Marley a million dollars a
year. Of course the official investigation showed no wrongdoing
in either case.
For the last 45 years Marley bankrolled the Republican Party
which doled out Marley's great wealth to a slate of Republican
candidates who were almost universally successful in obtaining
high political office. Marley was able to control the Democratic
party as well. Every current congressman and every senator in
Arizona owes his position to the Marley machine. These office
holders include "Keating Five" Senators John McCain and Dennis
DeConcini as well as former State Attorney General, Bob Corbin.
At one point Marley served as Chairman of the Board of the
VALLEY NATIONAL BANK. When Bugsy Siegel, on instructions from
Meyer Lansky, built the FLAMINGO CLUB, Las Vegas's first casino,
the money was borrowed from the VALLEY NATIONAL BANK.
Al Lizanetz, who served as Kemper Marley's public relations
man for 20 years, is one of the richest sources for background on
the liquor magnate. The Bolles murder was part of a package deal
that was to include a hit on Lizanetz. According to Lizanetz,
the Marley machine placed the highest priority on placing lawyers
in all the key state and municipal positions. The Arizona State
Attorney General during the Keating era, Bob Corbin, worked
formerly for Marley in the insurance industry in the 1950s.
Corbin accepted a $55,000 campaign contribution from Charles
Keating in a race where he was unopposed. Since Corbin did not
have to spend the money in the campaign he got to keep the
$50,000 when he retired. This is significant since S&Ls are
state chartered institutions and it was therefore the
responsibility of State Attorney General Corbin to oversee
Keating's operations.
Marley placed his people in the top positions of the
Department of Public Safety. The county prosecutor was also key
to him. Lizanetz claims that Marley recruited Eugene Pullium to
come to Phoenix to start the ARIZONA REPUBLIC/PHOENIX GAZZETT,
the monopoly newspaper which has succeeded in covering up these
matters. Eugene Pullium is the grandfather of Dan Quayle. Dan
Quayle grew up in the Phoenix suburb of Paradise Valley living
just next door to the founder of the JOHN BIRCH SOCIETY, Robert
Welsh. Quayle's parents were the local JOHN BIRCH coordinators.
Marley's mentor was Sam Bronfman, the progenitor of the
SEAGRAMS empire. When Sam Bronfman visited Marley in Arizona he
came in the company of Al Capone. Lizanetz claims that Jack
Ruby, assassin of Lee Harvey Oswald, was also on the Bronfman
payroll. There may be something to this since Louis Bloomfield,
the family attorney for the Bronfmans, was the chairman of the
board of PERMENDEX, the Italian company whose board also included
Clay Shaw, the man prosecuted by District Attorney James Garrison
for the murder of President Kennedy.
Many have suggested that Charles Keating fell out of favor
with the powers that be and was set up. This is clearly not so.
Ironically, after issuing millions in bribes, the downfall of
Keating's empire began and ended with one minor public official
who was not for sale. Charlie was playing fast and loose with
the rules but he did have his end game well planned.
In order to buy time for his failing company, Keating
resorted to selling AMERICAN CONTINENTAL bonds through the
affiliates of his S&L, LINCOLN SAVINGS. Telephone solicitors
were paid to call LINCOLN CD holders just prior to expiration
dates and advise them to roll over their investments into ACC
bonds. This was good for $230 million of keep alive money.
While the higher rate of interest was mentioned, the fact that
these bonds were not federally insured was not. But these minor
infractions would all be covered by Keating's most grandiose of
all grandiose schemes.
The most precious resource in Arizona is water. Keating was
going to pay off his bondholders with the profits he was going to
make through his near successful attempt to monopolize the water
supply for the city of Phoenix!
In Arizona there are five water tables from which water can
be pumped -- an enterprise known as water farming. Keating
arranged a $200 million dollar loan through LINCOLN SAVINGS for
Ron Ober, Senator Dennis DeConcini's campaign manager. The grand
plan was for Ober to purchase all the land suitable for water
farming in La Paz county just south of Phoenix that Keating did
not already own. Then Keating engineered a bill for the Arizona
legislature that stipulated that the city of Phoenix would be
legally obligated to purchase 100% of Keating's and Ober's water
before they could purchase a drop from anyone else!
Since Keating and Ober were planning to pump a million acre
feet of water a year at a thousand dollars an acre foot that
meant profits in the hundreds of millions -- far more than was
necessary to pay off the bondholders. In fact Keating and Ober
would have been well on their way to Rockefeller status wealth.
Since Senator DeConcini had purchased land in the other five
suitable water tables he would have made out ever better. This
plan was probably conceived by the more cautious DeConcini who
intended to use Keating and Ober for stalking horses for his own
business interests. Such grandiose scams can only be attempted
when one can count on the local media to keep secrets and law
enforcement to look the other way.
Despite some obstreperous lower level officials at the
Federal Home Loan Bank Board everything was going like clockwork
for Keating. While everyone slept and no one even heard of this
water legislation, Keating's bill sailed through the Arizona
House of Representatives in a record 2 days. It would have done
the same in the state senate except for one man -- State Senator
Jerry Gilespie. Another man in Jerry's position could have
parlayed for a suit case full of hundred dollar bills. But Jerry
killed the bill without wasting a heart beat. In the next senate
election a massive amount of funding showed up for Jerry's
opponent. Today Jerry heads up the BO GRITZ FOR PRESIDENT
CAMPAIGN in Arizona.
This fascinating water story made it onto the cover of the
November 1989 issue of PHOENIX MAGAZINE under the very
appropriate title PARASITES IN OUR WATER. This unbelievable
account of greed and corruption was believable only because
it was written by 5 term congressman Sam Steiger. Even so, no
wire services picked it up. This article is the first national
coverage of Keating's failed end game.
Things still looked rosy on May 20, 1988 when Keating threw
a lavish champagne party at his Headquarters celebrating what
Keating imagined to be his final victory over the Federal Home
Loan Bank Board. Keating always kept magnums of Dom Perignon
chilled for special occasions. FHLBB examiners in San Francisco
had been motioning to close down LINCOLN SAVINGS. Thanks to
backing from John McCain and Dennis DeConcini and the other
"Keating Five" senators LINCOLN SAVING's FHLBB files had that day
been moved to Washington D.C. where they were guaranteed to
receive much more favorable treatment.
At the height of this rancorous party, Keating ripped off
his shirt to reveal a tee shirt with a skull and crossbones
superimposed over the letters FHLBB. As one top exec poured cold
champagne down the front of one secretary's brassiere, Keating
threw a computer and a typewriter out through the glass of second
story windows. Everyone there roared with approval. The $1
million in bribes to senators seemed well spent. But there was
something Keating had not considered -- one $15,000 per year
state senator who did not have a price.
__________________________
** Walter J. Bush, nephew to the president, is involved in
business with Keating, flying the banner AMERICAN CONTINENTAL
LAND INVESTMENT CORPORATION at 2777 East Camelback. Walter
closed down and moved out of this location the week Keating filed
Chapter 11. Walter Bush owns this property which adjoins LINCOLN
SAVINGS 2747 East Camelback, which is owned by Keating and
adjoins Keating's HQ property 2735 East Camelback.
Walter Bush was using the name AMERICAN CONTINENTAL LIFE
INSURANCE COMPANY in 1967, long before Charles Keating came to
Phoenix. All of Carl Lindner's companies begin with AMERICAN.
Does this imply a Carl Lindner/Walter Bush connection long before
Keating came to Phoenix? It sure looks that way.
When Keating and Singlaub arrived in Phoenix at the same
time and set up offices across the hall from each other, were
they met by Walter Bush?
Copyright (c) 1998 TOTSE
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