Keating Jury Impaneled; Trial Opens Today : Courts: Defense gives up an attempt to keep from the jury inflammatory statements made by the former S&L; chairman.
A jury was impaneled Tuesday to hear evidence against Charles H. Keating Jr., the first person to go to trial on criminal charges stemming from the collapse of Lincoln Savings & Loan and its parent company.
Opening statements in the state securities fraud case will begin this afternoon before a panel of 12 jurors and eight alternates in Los Angeles County Superior Court. Judge Lance A. Ito is expected to rule this morning on motions to exclude certain evidence.
The 67-year-old Keating, former chairman of American Continental Corp., is charged with defrauding 22 small investors of a total of $1.8 million. He faces a maximum of 10 years in prison if convicted on at least six of 20 counts.
The narrowly focused case deals with only a small portion of the fallout from the nation’s biggest thrift failure to date, which is expected to cost taxpayers $2.6 billion.
But evidence that prosecutors hope to introduce will cover a broad area that includes the financial condition of American Continental and Lincoln, and Keating’s running battle with federal thrift regulators during the five years his company owned Lincoln.
The 22 bondholders are among thousands of investors--mainly Lincoln depositors--who lost more than $250 million in American Continental bonds after the company filed for bankruptcy and regulators seized Lincoln in April, 1989.
In a surprise to prosecutors, defense attorney Stephen C. Neal withdrew his effort to keep from the jury several inflammatory statements made by Keating and related by witnesses to the state grand jury that indicted Keating.
Among the Keating quotes that prosecutors plan to use in opening remarks is one in which Keating told regulators in February, 1988, that he wasn’t a Lincoln director because he didn’t want to go to jail. Keating also asked a former Lincoln president in December, 1988, “why they couldn’t cheat” on a bond sale technique, and told a regulator in October, 1988, that seizing Lincoln would cost the government $2 billion.
