Keating Vows to Keep Fighting to Regain S&L; : Thrifts: The former head of Lincoln Savings & Loan says he’s broke. He insists that regulators were wrong to seize his institution.

A combative Charles H. Keating Jr., symbol of the savings and loan debacle to many, said Wednesday that he is broke and may lose his house. But he vowed to keep fighting the government’s charges of fraud and racketeering in the collapse of Lincoln Savings & Loan.

“Whether you like what I’m telling you or not, I’m telling the truth,” Keating lectured a packed house at the National Press Club.

Keating attacked federal regulators for last year’s seizure of Lincoln, which could cost taxpayers as much as $2.5 billion to clean up and is likely to become the biggest single failure among hundreds of S&L; casualties.

The government contends that Lincoln was insolvent, a collapsed structure consisting of bad investments and phony bookkeeping, and has sued Keating and other executives for $2.4 billion.

But Keating said that things were fine until the regulators stepped inside the doors of the Irvine-based institution.

“Nothing’s been lost at Lincoln; the assets haven’t been sold,” Keating said, arguing that the government should never have intervened.

“We are broke,” he said. “They took everything away from me when they took the Lincoln.”

The financier said his only regret about the “Keating Five”--the U.S. senators who intervened on his behalf with federal regulators--is that they were ineffective.

If federal officials had paid attention to the five senators’ inquiries about allegedly overzealous regulation, “the federal taxpayer would be $500 billion better off,” Keating said, referring to some estimates of the eventual cost of the entire S&L; bailout.

The five senators “did darn well and should be congratulated, but no one listened to them,” Keating said.

The legislators who have faced considerable criticism for their relationships with Keating, a big campaign donor, are Sens. Alan Cranston (D-Calif.), John Glenn (D-Ohio), Donald Riegle (D-Mich.), John McCain (R-Ariz.) and Dennis DeConcini (D-Ariz.).

Keating strongly denied assertions that he is a rich man, with millions of dollars hidden in foreign bank accounts or buried in his back yard.

“If I had $200 million, I must be the stupidest man in the world (because) none of it stuck to me or my kids,” he said. “I don’t have $200 million, I don’t have $100,000, or $20,000.”

Keating launched into a litany of denials about a number of rumors that he said have circulated about him:

- Involvement in the sale of arms to Iran. “I’ve never been to Iran,” he said. “I don’t know anybody from Iran.”

- Connections with deposed Panamanian dictator Manuel A. Noriega. “I never put a nickel in Panama. I never ran drugs. I never took drugs.”

- Building a lavish resort, the Phoenician, in Arizona solely to satisfy his vanity. “The hotel is enormously successful,” he said, with gross income of $45 million to $48 million in its first year of operations.

- Creation of secret foreign bank accounts. “I never had a nickel overseas.”

Keating, the former chairman of American Continental Corp., Lincoln’s parent firm, said he could lose his Phoenix-area house as a result of Lincoln’s failure. The company holding the mortgage has filed for foreclosure “because I haven’t paid my mortgage in four or five months,” he said.

Keating said his legal bills and expenses are being paid with proceeds from liability insurance policies for officers and executives of American Continental.

Declaring himself defiant and unbowed despite a wave of government legal attacks, Congressional criticism and negative media exposure, Keating offered one note of apology.

“I’m dreadfully sorry,” he said, for the 22,000 investors who bought $200 million worth of bonds in American Continental.

The bonds were sold at Lincoln branches, and many investors believed that they were buying certificates of deposits, insured by the federal government up to $100,000. The bonds became virtually worthless after American Continental filed for bankruptcy a day before federal regulators seized Lincoln.

“I really am sorry,” Keating repeated. “It’s the biggest pain in my life . . . I’m sorry they had problems. I’m dreadfully sorry and everybody in my family is.”

But the bondholders “have an excellent chance to recover,” Keating said, if he succeeds in legal efforts to overturn the government’s seizure of Lincoln.

Keating spoke for 40 minutes and answered questions for 20 more, insisting again and again that the S&L; crisis was a creation of the government, which seized S&Ls; that he said should have been left alone to work out their problems.

“By what right does the government come in and take these institutions?” he asked, predicting that the cost to taxpayers will climb as more S&Ls; are seized. “You’re geometrically multiplying billions, and the bill will get worse.”

Federal regulators have said their responsibility is to protect individual account holders, whose deposits are guaranteed up to $100,000. A combination of falling real estate prices, bad investments and inept or crooked management have crippled S&Ls;, making government takeovers inevitable, according to the regulators.

Keating said he will keep battling the government to achieve ultimate vindication. “I’m not afraid of the future, and my family isn’t,” he said.