Keating Back in Jail After Filing Passport Application

Former savings and loan figure Charles H. Keating Jr. was back in jail Friday after a U.S. district judge in Los Angeles ordered his arrest for allegedly violating his bail by applying for a passport to leave the country.

The former Lincoln Savings & Loan operator was being held without bail in a federal jail in Phoenix, where he lives, after surrendering Friday afternoon, a U.S. attorney’s office spokesman said. Keating will be transferred to Los Angeles for a hearing on the matter.

Stephen Neal, Keating’s Palo Alto attorney, said the arrest over the passport application had been expected and that he will file “emergency papers” before U.S. District Judge Mariana Pfaelzer on Monday to free his client.

“He has been flawless over an extended period of time in meeting any condition imposed on him on bail,” Neal said.

Neal said Keating, the most notorious symbol of 1980s savings and loan failures, wanted the passport because he had been asked to serve as a consultant on a hotel project in Belize.

It was the first business offer Keating has received since his release from jail in October 1996 after a federal judge threw out his conviction on racketeering, conspiracy and fraud charges stemming from the Lincoln failure. “He has been trying to find ways to get back on his feet in the world,” Neal said.

Neal said Keating’s attorney contacted prosecutors in Los Angeles before the financier submitted his application. When government lawyers didn’t object, Keating’s lawyers told him to go ahead, Neal said.

But when prosecutors finally raised an objection, Neal said, Keating withdrew his application.

“They called us and said that the mere application for the passport would violate his bail,” he said. “The application was delivered to some office in Phoenix but he was able to retrieve it.”

Yet in Los Angeles, Pfaelzer issued a no-bail bench warrant after “allegations of a violation of his release on various bond conditions were raised to the court,” said U.S. attorney’s spokesman Thom Mrozek. He declined to specify the allegations, except to say they were not raised by prosecutors.

Friday’s jailing is the latest twist in Keating’s legal worries since the failure of his S&L; in 1989, when it was seized by regulators. The second-largest failure of a thrift, its collapse cost taxpayers about $3.4 billion and wiped out savings for hundreds of retirees.