Robert SpindlerArizona State University LibrariesApril, 2015rob.spindler@asu.edu

ACCOUNTING FOR KEATING: PRIVACY, CORRUPTION AND DISCLOSURE IN THE

AMERICAN CONTINENTAL CORPORATION RECORDS COLLECTION

THE KEATING TRIALS – THE MODERN COURT

THE KEATING TRIALS – THE MODERN COURT

THE KEATING TRIALS – THE MODERN COURT

• 3 million documents sent to Document Depository for discovery phase

• File level inventories of 6,000 boxes of records prepared

• Attorneys reviewed individual documents, had them scanned and digitally marked them with notes regarding their relevance to trial proceedings

• Digitized documents and videotaped depositions could be displayed and annotated in the court

THE BEGINNING

• March, 1993 ASU enters negotiations with Ron Clifton and Attorney William Rose re: acquisition of American Continental Corporation (ACC) Records.

• ACC is bankrupt, Clifton and Rose are representing the entities managing ACC at the end of the Keating/ACC trials.

• In July 1993 the court authorizes ACC to continue negotiations with ASU.

• Spindler is asked to review descriptions of ca. 6,000 boxes of “Relevant” and “Irrelevant” corporate records. He selects all Relevant and 300 boxes Irrelevant files.

• Pearce-Moses is asked to recover data from I-PRO 1st generation digital imaging system used in the discovery phase of the trial.

FIRST COURT ORDER – JUNE 1994

FIRST COURT ORDER – JUNE 1994

• ACC is authorized to execute agreement with ASU and transfer to ASU 1,355 boxes of Relevant, 300 boxes of Irrelevant, 1,288 boxes of Grand Jury Original Documents and 9 Boxes of hearing and trial transcripts.

• ASU is directed to “Index and process” the documents and open them for research by January 1, 1995.

• The court recognized objections by attorneys for the accounting companies regarding access to 80 boxes of trial deposition videotapes and transcripts and would rule separately on the matter.

SECOND COURT ORDER – JULY 1994

SECOND COURT ORDER – JULY 1994

• Videotaped depositions and transcripts shall be “transported” to ASU and opened for research by January 1st, 1995

• BUT, public access to the “Accounting Defendants” depositions shall be denied for one year

• Accounting firms objecting to release of a specific depositions based on “trade secrets or competitive information” shall file with the court within one year a motion for exclusion

• Use of the deposition videotapes is specifically limited to viewing, and may not be “copied or shown” outside ASU until January 1, 2004.

REACTION IN THE PRESS

REACTION IN THE PRESS

• Resolution Trust Corporation and their attorney Michael Manning want the depositions released:

• to show how Keating, attorneys and accountants created a financial catastrophe

• to defend RTC against charges by members of Congress and others of overzealous prosecution and harassment of Keating and ACC

• Keating wants the documents released to show how the RTC engaged in “lies and outrageous claims” regarding ACC and Lincoln

• Accounting firms claimed the release would embarrass their clients and that they presumed the depositions would be confidential

THIRD COURT ORDER – JULY 1995

THIRD COURT ORDER – JULY 1995

• Accounting defendants placed no objections during the year

• All deposition videotapes and transcripts opened for viewing, but copying or reuse of videotapes still closed until 2004, EXCEPT

• The video deposition of accountant Jack Atchison will be available for copying and reuse *immediately*

• Atchison was Arthur Young's partner in charge of auditing the Lincoln account and pleaded the 5th in all trials

• Published book “Legal Extortion” in 1995 complaining about FHLBB harassment of Lincoln officials

• Directly intervened with federal regulators on behalf of Lincoln

MEANWHILE BACK AT THE ARCHIVES• ACC Collection duly opened for research January 1, 1995.

• User agreement approved by Judge Bilby protects privacy of ACC/Lincoln customers

• Efforts to save the I-PROS imaging system failed, cost over $5,400.

• Novell Netware server and system was never restarted

• Files extracted from server hard drive by Ontrack Data Recovery mostly useless, “severe internal electro/mechanical problems and data structure damage” (1994)

• 103 940 MB optical discs contain document images with attorney notes re: discovery and assignment of Relevant and Irrelevant

• Consultants built new platform to run disc drives, 12 of 12 sample discs failed to read – “reformatted” (1999)

TODAY, WE STILL HAVE THIS

TODAY, WE ALSO HAVE THIS

Robert SpindlerArizona State University LibrariesApril, 2015rob.spindler@asu.edu

ACCOUNTING FOR KEATING: PRIVACY, CORRUPTION AND DISCLOSURE IN THE

AMERICAN CONTINENTAL CORPORATION RECORDS COLLECTION