BANKING : Keating Assails Thrift Office for Allegations Involving Lincoln S

Former Lincoln Savings & Loan operator Charles H. Keating Jr. told thrift regulators recently that he has unpaid legal expenses totaling more than $5 million and that he now must represent himself in all civil lawsuits.

His notice came in one of a series of angry letters he wrote from prison to the Office of Thrift Supervision in an attempt to dismiss the agency’s enforcement proceedings against him.

Keating is serving a 10-year term for his 1991 conviction on state securities fraud charges. He will be sentenced June 7 for his January conviction on federal racketeering, conspiracy and fraud charges.

In one letter to the OTS, he calls the agency’s creation unconstitutional and asserts that its allegations that he looted the Irvine thrift “did not constitute valid claims.” He also berated the all-out effort by two dozen federal and state agencies to “drown” him in a flood of “investigations, litigation and unprecedented propaganda.”

“My accusers . . . put me on trial in the world media” through House and Senate hearings that were “rigged, conspiratorial, farcical extravaganzas with massive media hype,” all of which led to unfair treatment of him, he said.

The OTS said it is not withdrawing its accusations.

Keating was chairman of Lincoln’s parent company, American Continental Corp. in Phoenix, before his empire collapsed four years ago. Lincoln is the nation’s costliest thrift failure, leaving taxpayers with a $2.6-billion cleanup bill.