Frank Keating pledged Tuesday to take a bipartisan approach as the next head of the , dismissed concerns about a past scandal from his former career as Oklahoma governor as "unfair" and touted his experience with issues relevant to mortgage securitization and the Bank Secrecy Act.
Keating, who will officially succeed the ABA's current president and chief executive Ed Yingling in January, largely avoided laying out a detailed agenda, saying his first job was to hear what members have to say and to carry out the agenda of the group's board of directors.
"My top priority is to listen to the board of directors and those who make the loans and receive the deposits — the bankers who will determine the agenda for the organization," Keating said in an interview. "But in every instance we will focus on what's best for small business and depositors across this country."
Although Keating is a well-known Republican, even working as co-chair of Sen. John McCain's presidential campaign two years ago, he said he would run the group the same way he ran the American Council of Life Insurers as its CEO from 2003 until earlier this month: with a bipartisan approach.
"As head of the ACLI we were an entity, an association in crisis … now we're very healthy financially, and from day one I've made ACLI bipartisan, which wasn't an easy thing to do," Keating said. "It was not even a rough sea when the Democrats took over the Congress in 2006."
Although at the national level, Keating has given exclusively to Republicans, and was even considered a potential running mate for George W. Bush in 2000, he said he has tried to differentiate between his personal views and the group he is representing.
"I'm neither a Republican or Democrat heading the American Bankers Association," Keating said. "I am representing the banking industry. I felt the same way in the life insurance industry. … I'm a proud conservative Republican, but I work very well with Democrats because they are the other party and I need to and will."
While some have questioned whether the ABA, which is perceived as having a rocky relationship with the Obama administration because of its strident opposition to the regulatory reform bill, was wise to choose a Republican for its CEO, Steve Wilson, the group's chairman, said it maintains a good working relationship with the administration.
"I don't know that the relationship needs to be repaired," Wilson said. "Yes, we remained opposed to the bill — but we stayed at the table right to the end."
Keating added that the group is willing to work with lawmakers from both parties if they decide to make changes to the Dodd-Frank law.
"To the extent that amendments to the statute are needed and desirable … we will be in the forefront to work with both parties," Keating said.
Keating also dismissed concerns about a political scandal while he served as governor of Oklahoma from 1995 to 2003. Keating accepted roughly $250,000 from the retired mutual fund chief Jack Dreyfus between 1990 and 1997 and had lobbied vigorously to President Clinton and every other governor in the country on Dreyfus' behalf to use an experimental drug called Dilantin to help calm violent inmates.
Keating also arranged meetings between Dreyfus and state and federal prison officials to discuss the drug but ran into controversy for accepting the financial gifts since the Oklahoma Constitution bars public officials from accepting anything of value for performance of official duties.
After the gifts from Dreyfus became an issue, he returned the money, according to a July 2001 story by the Associated Press.
During the interview, Keating said he had done nothing wrong, and had received money from Dreyfus because he was a close family friend.
"It was fully disclosed in financial filings when I was in the government and it was approved by the office of government ethics," Keating said. "It was revealed by persons who remain unknown and for reasons that remain unknown, but it was a very unfair allegation and quite truthfully if it had any substance, the American Council of Life Association would never have hired me."
Nor would the ABA have hired him, Wilson said, expressing his vote of confidence during the interview.
It was clearly not an issue for Roger Beverage, the president and CEO of the Oklahoma Bankers Association, who said he considers Keating a personal friend.
"What a terrific choice" for the ABA, Beverage said. "Frank Keating is one of the finest men I know. He's bright. He's articulate. He's one of the hardest-working guys I have ever been around. He was a great governor. He will do a fantastic job at the ABA. He's the right person at the right time."
Beverage said of Keating's past scandals: "It's irrelevant. It has nothing to do with this function. It has nothing to do with the ABA. It's ancient history and it's bullshit and you can quote me."
The ABA chairman said the board chose Keating because of his extensive management experience as a governor and head of a national trade group.
Keating touted his banking connections, noting he has served on bank boards and his twin brother is a community banker. He also cited his background a former law enforcement official working with Bank Secrecy Act issues as an assistant secretary at the Treasury Department in the Reagan administration. He also worked on lending and securitization issues while serving as general counsel at the Department of Housing and Urban Development under former Secretary Jack Kemp.
"My background is largely in law enforcement as a former FBI agent and the first Reagan U.S. attorney as a state felony trial prosecutor," Keating said. "I supervised as an assistant secretary of the Treasury all the financial crimes and the Bank Secrecy Act and others. … At HUD as Jack Kemp's general counsel we had legal oversight of [the Federal Housing Administration] and monitoring lending practices, securitization issues involving housing finance in particular."
Alfred A. DelliBovi, the president of the Home Loan Bank of New York and deputy secretary at HUD during that time, praised Keating on Tuesday, saying he brings great political skills.
"He's an excellent choice," DelliBovi said. "He comes from a banking family. … He has energy. He's smart and he's got integrity, and I think the ABA particularly at this point will be well served by him. Ed Yingling is a hard act to follow, but I think Frank has the ability to do that. He'll have, I believe, institutional credibility on the Hill."
In particular, DelliBovi said Keating is well liked on Capitol Hill and known for his credibility.
"He has instant integrity," DelliBovi said. "People know him and they believe him. … My other point is that the proof is in the pudding, and the life insurance industry did pretty well on the Hill in the last couple of years."
Indeed, while the ABA lost some crucial battles during the regulatory reform debate, the ACLI was largely untouched by the regulatory reform bill.
Keating said his law enforcement background would improve the ABA's credibility on anti-laundering issues.
"Bank Secrecy Act is a statutory fact of life and money laundering, particularly involving terrorist financial transactions, is also a political and national security fact of life, so these issues will come back," he said. "What we need to do is make sure whatever structures are applied to the system that they make sense from a national security, law enforcement perspective and are not just busy ministerial acts. So we'll look at all and every suggestion here, because I think in my background, particularly supervising most of the federal law enforcement staff during my career, I think my voice and the voice of this association will be very persuasive at the table."
Keating dodged taking a stance for now on the GSEs, but acknowledged that a deficit reduction panel he worked on led by former Federal Reserve Board Gov. Alice Rivlin identified the GSEs as a burden on the debt that must be addressed.
"The whole issue of housing finance and the GSEs, their role, their blank guarantees, are hugely significant and very sensitive to the long-term financial health of the United States and that will be something that we debate and discuss in the very near term," he said.
This story has been reprinted with permission from American Banker.
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Corrected November 24, 2010 at 9:25AM: yes