Northern New York Newspapers
NNY Business
NNY Living
Thu., Dec. 18
Serving the communities of Jefferson, St. Lawrence and Lewis counties, New York
In print daily. Online always.

Insufficient funds

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Charles H. Keating Jr. died Monday in Phoenix where his ignominious career peaked and then collapsed, leaving in its wake destroyed businesses, defrauded investors and a financial scandal that cost taxpayers $2.6 billion.

Mr. Keating had a vicious career of exploitation of the marketplace. He first came to Watertown’s attention when he honed his economic rapier by destroying the old and once proud Agricultural Insurance Co., whose former headquarters building remains here on Washington Street as the home of some of Watertown’s most distinguished businesses. In 1971, Mr. Keating joined Carl H. and Robert Lindner to take over what was known as the Ag.

The Ag was a north country-controlled insurance business that provided property and casualty insurance for generations. Its community roots were deep, dating to its founding in Evans Mills in 1853.

By 1971, the Ag boasted of a $50 million balance sheet with insurance policies providing $60 million of coverage, $25 million of which was in Northern New York. And it employed 160 people here, another in 104 in St. Paul, Minn., and 90 more in Los Angeles.

The Ag was controlled by many venerable Watertown families: John A. Sherman, Willard Ives, James R. Stebbins and Percy Willmott. For its last two generations, the business was led by Erwin J. Dickey and then his son, who doubled its size in just 17 years. It was publicly traded, and that is how the Keating gang struck.

They discovered the exceptional balance sheet and moved to take over the business, paying in excess of $30 million. The Cincinnati operatives elected new directors, and pillaging of the business immediately began until it was absorbed into other financial holdings of Mr. Keating’s gang.

So Northern New Yorkers were not surprised to discover that Mr. Keating was the mastermind of the 1980s savings and loan scandal, which victimized investors who trusted their retirement accounts to bonds Mr. Keating sold to finance his money grab.

While the savings and loan scandal dominated the news through the late ‘80s and into the ‘90s when Mr. Keating was tried and ultimately imprisoned, it paled in the magnitude of the Lehman Brothers collapse in 2008. This contributed to the national collapse of the real estate market and wiped out millions of investors and homeowners.

The memory of what might have been at the Agricultural Insurance Co., the anguish we all felt when the Ag no longer was a mainstay of the Watertown economy and the pain the country suffered in the repeated financial scandals all come to mind upon the death of Mr. Keating. He will not be fondly remembered.

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