Charles Keating - American Continental Corporation

American Continental Corporation

Keating moved to Phoenix, Arizona, in 1976 to run the real estate firm American Continental Homes, a struggling, millions-losing homebuilding spin-off of American Financial that was given over to Keating for $300,000 as part of his departure package. The move was completed when his family followed him in 1978. In 1979 the SEC case with American Financial was settled, with Keating signing a consent agreement where he neither admitted nor denied guilt but agreed not to violate federal fraud and securities statutes. In practice, Keating was blamed for much of the irregular financial practices that had gone on and his reputation was significantly damaged.

Meanwhile, Keating benefitted from the move to Arizona, a wide-open territory in both a physical and business sense that allowed someone a fresh start. He turned the now-renamed American Continental Corporation around, adding various operations and divisions in a structure somewhat reminiscent of American Financial. As chairman and controlling stockholder, Keating relied heavily upon family members, employing his son and four of his sons-in-law in prominent positions. His son Charles Keating III had an especially fast career rise within the company.

During 1979, Keating served as head of fundraising in the Southwest for John Connally's campaign for the 1980 Republican Party presidential nomination. Connally was a favorite of the business community, but his campaign had difficulty parlaying its fundraising successes into popular support. In early December 1979, Keating was named campaign manager, with the existing manager being demoted to campaign strategist. Keating's first action was as a "pruner" who immediately fired twenty workers at the campaign's Virginia headquarters. The campaign continued to struggle, and by late February 1980, Keating was out as manager, with Connally taking over the role himself. Connally's campaign ended two weeks later, famously known for having spent $11 million and gaining only one delegate.

Having won the 1980 election, President Ronald Reagan contacted Keating about becoming U.S. Ambassador to the Bahamas, where Keating had spent considerable time. When Keating's run-in with the SEC resurfaced in press reports, however, he was dropped from consideration. This dismayed Keating, who subsequently said, "To keep people like me out of positions like that because of yellow journalism, I don't know what good it does."

By the early 1980s, American Continental's profits were in the millions and it had become the biggest single-family home builder in Phoenix and Denver. At its peak it would have $6 billion in assets, a large number of subsidiaries, 2,500 employees, and a headquarters complex on Phoenix's Camelback Road. It also had three corporate jets and a helicopter. Keating was a very hard worker and a strong presence to his employees; one later said, "It's almost magnetic. When he moves, things happen. The office would come alive when he walked in." He inspired both camaraderie and fervent loyalty in them. While he demanded long hours, he often rewarded employees monetarily and with gifts. Business people outside his company, however, often found Keating arrogant and difficult to deal with. Former Congressman William Keating, who was as well liked as his brother was not, said: "Charlie is impatient, aggressive, always on the move. He has clearly defined goals. I don't think he worries about the popularity of his positions." A 1977 Fortune magazine profile had reported that "It seems almost impossible to find anyone who actually likes Charlie Keating." The story long rankled Keating, who later had over five thousand large yellow "I Like Charlie Keating" buttons made up which he handed out to employees and visitors. Keating said, "There are a lot of people that would say nasty things, I'm sure, about me, but it ain't true that nobody ever liked Charlie Keating."

Still deeply religious, Keating became a heavy giver to charity when he moved to Phoenix, donating $100,000 to the Society of Saint Vincent de Paul, more than $1 million to Covenant House, and another more than $1 million to Mother Teresa's operations, including lending her his helicopter when she was in Arizona so that she could visit remote Indian reservations in the state. Covenant House's Father Bruce Ritter said of Keating, "He makes you believe in Providence."

In 1983, Keating and his companies made legal but unusually large campaign donations in races for the Phoenix City Council, who were responsible for approving his building projects including water usage for residential developments built around artificial ponds. The scale of donations represented a change from past practice in local Phoenix politics; some council figures opposed the trend, while others readily asked for the funds.

Read more about this topic:  Charles Keating

Famous quotes containing the words american and/or corporation:

    The American who has been confined, in his own country, to the sight of buildings designed after foreign models, is surprised on entering York Minster or St. Peter’s at Rome, by the feeling that these structures are imitations also,—faint copies of an invisible archetype.
    Ralph Waldo Emerson (1803–1882)

    It is truly enough said that a corporation has no conscience; but a corporation of conscientious men is a corporation with a conscience.
    Henry David Thoreau (1817–1862)