The Keating Five hearings are a hot ticket on cable TV this month, but the atmosphere is even hotter out of range of the cameras.
During one break in the hearings, witness William Black found out just how hot. Black was a regulator for the Federal Home Loan Bank Board when it was trying to rein in Charles Keating's Lincoln Savings and Loan in 1987. The future of five U.S. senators is riding in part on what Black remembers about the way they may have tried to intervene for Keating. The bearded Black has been a cool and smiling witness, refusing to be bullied by the attorneys for the Keating Five. During a lunch break, sources tell us that Black passed the lawyer for one of the five, Sen. Don Riegle, D-Mich., and attempted a pleasantry."Hello. How are you?" Black said to Riegle's attorney, Tom Green. "Don't you worry about how I am, ever!" snarled Green. "You just worry about how you are going to be!" Black might have steered clear of Green had he known that his own lawyer, not one minute earlier, had received a dressing down from Green because Black, in his testimony, had said aloud the name of the law firm that Green works for. "If Black mentions my firm one more time I am going to (expletive) knock his head off," Green said. Then he said it two more times just to make sure he wasn't misunderstood.
Why was Riegle's lawyer so touchy about hearing the name of his law firm from the lips of a witness? Because Green's firm is a big Chicago outfit, Sidley and Austin, that once lobbied for Charles Keating. The law firm that helped Keating pitch his cause to the bank board in the 1980s is now representing one of the senators accused of pressuring the bank board to go easy on Keating when his thrift was being driven into the ground.
Apparently Green is sensitive about the connection. After chewing out Black for saying, "Hello," Green registered a complaint with the Ethics Committee concerning Black's repeated references to the law firm.
Sources told our associates Michael Binstein and Tim Warner that the heated exchange continued. Later that day, the dauntless Black passed Green again, tapped him on the shoulder and said, "Hello." "If you ever touch me again, I'm going to take you outside," Green said. "Don't you ever talk to me again."
We asked Green about the exchanges, and he refused to comment. Green is no babe in the woods on Capitol Hill. He represented Richard Secord during the Iran-Contra hearings. But that and other experiences apparently have not thickened his skin. In 1988, Green did not work for Sidley and Austin, but Marjorie Waxman did. One of her assignments was to lobby the bank board on behalf of Keating. In May 1988, Keating won several concessions from regulators, among them reassigning his case to a different regulatory office and out of Black's hands.
Just before the bank board voted on that issue, Waxman wrote a memo to Keating: "You have the board right where you want them. I have put the pressure on (bank board Chairman Danny) Wall to work toward meeting your demands and he has instructed his staff: If they mess up this time . . . it's all over."
Sidley and Austin is also a defendant in a lawsuit filed by 20,000 investors who bought now-worthless junk bonds from Keating's American Continental Corp.