Keating Takes the Fifth at His Civil Trial

Invoking the Fifth Amendment privilege against self-incrimination, Charles H. Keating Jr. refused to answer questions Wednesday in federal court about charges that he swindled investors in Lincoln Savings & Loan’s parent company out of $285 million.

Keating, former owner of the failed thrift, declined to answer about 50 questions from five lawyers because his testimony could be used against him in a federal criminal case filed in Los Angeles charging him with fraud, conspiracy and racketeering.

On the witness stand, Keating started to explain how badly he wanted to testify, telling one lawyer that he wanted to respond “more than you think.” But Judge Richard M. Bilby cut him off, saying that any response could cause him to waive his Fifth Amendment privilege.

Outside the courthouse, as a lone heckler jeered, the 68-year-old former Arizona developer said, “Until I am able to testify, the truth will not be known.”

Keating, who was convicted last year on state securities fraud charges, said he will testify at the federal criminal trial in August. His lawyer, Jeffrey Powell, said outside the courthouse that the truth will come out at that time.

In the civil trial now under way, Keating and his lawyers and accountants are accused of swindling 23,000 investors, most of them elderly Southern Californians who bought risky bonds issued by Lincoln’s parent company, American Continental Corp. The bonds became worthless when Lincoln was seized by the government in 1989. The failure will cost taxpayers $2.6 billion, the most expensive thrift bailout ever.

On Wednesday outside the courthouse, Keating also expressed regrets about the small investors who lost their money in American Continental.

“I feel as bad as they do,” Keating said as he stood outside with his wife, three of his children, his secretary and Powell. “I’ve lost everything I had, too, and, of course, their loss comes first. Nothing in my life grieves me or my wife more than that.”