ABSTRACT
Between 1982 and 1989, a small group of savings and loan operators stole more money through insider loans and extravagant pay packages than gunman Willie Sutton ever dreamed of getting through holdups. Twentyfour-year-old college dropout Charles Keating III withdrew $1 million per year in salary and benefits from his father’s Lincoln Savings & Loan. Other Keating family members collected similarly generous salaries, traveled extensively at company expense, and received unsecured loans at below-market interest rates. And the Keatings were not unique. Executives of Columbia Savings &
Loan Association spent $100,000 of depositors’ money on guns, luxury hotel rooms, and Michael Jackson tickets. Centennial Savings in Santa Rosa, California squandered more than $1 million on luxuries such as floral arrangements and pony-skin-covered stools in the thrift’s private bar. The CEO’s office at CenTrust Savings Bank in Miami was adorned with a goldinlay ceiling and a $12 million original Rubens oil painting. Congressman Jim Leach (R, Iowa) complained that too many savings and loan operators acted as if their federally insured institutions were “private piggybanks.”1
