Keating’s Lawyers Ask Federal Court to Reduce Bail : Courts: Attorneys for the former head of Lincoln S&L;’s parent firm say the $5-million bail is unconstitutional.

Former thrift owner Charles H. Keating Jr., after exhausting appeals in the state courts, sought a court order Thursday in federal court here to reduce or lift the $5-million bail that is keeping him in jail.

Lawyers for Keating, who was indicted on 42 counts of state securities fraud, said in the petition that the high bail set at a Sept. 18 hearing violates the U.S. Constitution’s ban on excessive bail.

They also argue that the Los Angeles Superior Court’s decision to keep Keating’s bail at $5 million was not supported by any evidence and that two of three co-defendants “charged with identical crimes received bail 50 times lower than Keating’s.”

They contend that Keating is not a flight risk, poses no danger to public safety, cannot meet the bail and cannot exercise his constitutional rights to due process and right to counsel while in jail.

The case was assigned to U.S. District Court Judge John G. Davies, who had not set a hearing or made any decision by 5 p.m.

Keating, 66, is the former chairman of American Continental Corp. in Phoenix, which owned Lincoln Savings & Loan in Irvine. The company filed for bankruptcy protection in April, 1989, and regulators seized Lincoln the next day. Regulators estimate that Lincoln’s failure will cost U.S. taxpayers more than $2 billion.

Keating and the others are accused of defrauding more than 17,000 people out of nearly $200 million through the sale of American Continental debt securities at Lincoln’s 29 Southern California branches during a two-year period ending in early 1989.

Many of the small investors were Lincoln depositors who claim they bought the bonds because of representations that the securities were safe and insured by the federal government. Those bonds are now worthless. Both the company and the S&L; are in the process of being liquidated.

Keating and the co-defendants--Judy J. Wischer, former American Continental president, and Robin S. Symes and Ray C. Fidel, both former Lincoln presidents--have pleaded not guilty to the charges.

The indictment against Keating and his co-defendants is the first criminal action to be filed in the wake of the collapse of Keating’s financial empire.

When the charges were unsealed last month, Superior Court Judge Gary Klausner set the high bail on Keating and $1-million bail each on the co-defendants. Klausner later reduced Wischer’s bail to $200,000 and Symes and Fidel’s bail to $100,000 each, and they posted bonds and were released.

But Klausner said the seriousness of the charges--the defendants face a maximum of 10 years in jail--and the fear that Keating might flee warranted the continued high bail on Keating. Both the state Court of Appeal and the state Supreme Court refused to review the ruling.