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The Savings and Loan Scandal: The Untold Story


Article # : 18941

Section : CURRENT ISSUES
Issue Date : 2 / 1991 3,496 Words
Author : Glenn R. Simpson
Glenn R. Simpson covers the Keating case for the Capitol Hill newspaper Roll Call.

The National Mortgage News, the Orange County Register, the Mesa (Arizona) Tribune, Regardie's magazine: These are some of the unlikely press heroes of the Charles Keating-Lincoln Savings and Loan scandal. Along with some bigger newspapers like the Detroit News, the Los Angeles Times, the San Francisco Chronicle, the Dallas Morning News, the Arizona Republic, and the Wall Street Journal, these journalistic bush leaguers made major contributions to uncovering the financial misdeeds and vast subterranean web of political influence spun by accused racketeer Charles H. Keating, Jr.

Without them, the story of one of the most sensational American scandals of the 1980s would in all likelihood have remained untold. For the two most politically influential news organs in America, the Washington Post and the New York Times, have snoozed--albeit fitfully--through most of this complex but sensational tale of venality, greed, and political corruption.

One accomplished investigative reporter for a medium-sized West Coast paper bitterly calls the Post and the Times "the Pravdas." When it comes to the Keating scandal, that is a devastatingly accurate description; both papers virtually dictate what is news--even the television networks take their cues from the two dailies-and little, indeed, has seemed newsworthy to them about Keating.

This reporter has written several ground-breaking stories about the Keating affair, some as recently as last fall, but they have been ignored by the Pravdas and, as far as Washington is concerned, might as well never have been written. It is a familiar plaint among the small community of Keating investigators in the press.

On May 24, 1988, an ironic memorandum was written by a senior aide on the House Banking Committee. He urged his boss, then-Banking Committee Chairman Fernand St. Germain (a Rhode Island Democrat who in November of that year became one of the first electoral casualties of the S&L scandal), to investigate the long-controversial Lincoln.

The thrift, the aide wrote, "is now very much in the eyes of the various national investigative reporters--Jack Anderson, Mike Binstein, Brooks Jackson up front and others like [Kathleen] Day not far behind. My guess, based on conversations with Binstein and Jackson, in particular, is that Lincoln smells and that they will track the smell like sharks after blood."

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