ABA’s new chief has heartland roots, a gold-plated resume, and likes to communicate directly with members. Meet Gov. Frank Keating

 

By Bill Streeter, editor-in-chief

Banking isn’t the only financial services industry to face negative publicity about an industry practice. When Frank Keating was head of the American Council of Life Insurers, corporate-owned life insurance (COLI) became a scandal and the subject of hearings on Capitol Hill. At the time, companies were buying life insurance policies on employees without their knowledge and using the proceeds for general corporate purposes. Aside from the appearance of being sneaky, the practice also limited an employee’s capacity to buy insurance. When Keating found out about COLI, it had become a political hot potato. Before going up on the Hill to face the music, Keating met with the ACLI board and discussed what they needed to do.

“I had a practice at ACLI,” says Keating. “When I go up to Capitol Hill to testify, I never look at my feet. I want to be able to say, ‘Congressman, Senator, we heard about this and we fixed it’.”

In this instance, the ACLI board agreed to recommend three changes. It said corporate-owned life insurance is acceptable as long as 1. the insured gives his or her consent; 2. the proceeds of the policy don’t go to general corporate use, but are lock-boxed and used to help defer the costs of the company’s health care and pension plans; and 3. it only applies to senior-level employees.

Armed with that consensus, Keating was able to say, “problem fixed,” when he went up to testify. The recommendations were passed by Congress in a bill that was signed by President Bush.

“When you’re dealing with issues of potential embarrassment,” he adds, “fix them in advance and then tell the chairman of the [relevant congressional] committee, ‘You don’t need to have a hearing, we fixed it.’ You always want to be on the moral high ground.” 

Keating plans to operate the same way at ABA, where he took over as president and CEO on Jan. 3, succeeding Edward Yingling, who retired at year-end.

“Frank is an outstanding communicator and problem solver,” says ABA Chairman-elect Albert “Kell” Kelly, CEO of SpiritBank, Bristow, Okla., who has known Keating for 25 years. “He doesn’t believe you should go into a situation without a solution that works.”

Keating, who served two terms as Governor of Oklahoma, sees trade associations as the face of an industry, not only on Capitol Hill and in state capitals, but also to everyday people. In the case of banking, Keating believes that while every industry has issues that need to be addressed, no one should be embarrassed to be a banker. “We are a white-hat industry,” he says. “We represent the dreams and aspirations of ordinary Americans.”

Challenged at The Yard
Though most of his career has been spent in public service, Frank Keating has a strong personal connection to the banking industry. He served on the board of a savings bank, his father was a bank director, and his twin brother, Dan, was president and CEO of a community bank in Tulsa for more than 20 years. Further, Keating’s grandfather owned Salem National Bank in southern Illinois and served as Illinois State Treasurer. Keating recounts that in the 1930s, his grandfather was concerned that the House Banking Committee didn’t have a banker on it, so he ran for Congress as an at-large member and was elected. After serving one term, he felt he had done his duty and returned to banking.

Frank Keating has a similar streak of citizenship in him, except that in his case his public service lasted a bit longer. As noted in the article in last month’s “Bank Notes,” Keating has served variously as an FBI agent; an assistant district attorney in Tulsa; a representative and senator in the Oklahoma legislature; a U.S. attorney for northern Oklahoma; assistant secretary of the Treasury and associate attorney general in the Reagan Administration (where he supervised most of the federal law enforcement establishment); general counsel and acting deputy secretary of the Department of Housing and Urban Development in the first Bush Administration; and governor of Oklahoma from 1995 to 2002.

As governor, Keating helped direct the response to and recovery from the Oklahoma City bombing of April 19, 1995.

“He was very much the father figure, and always on the scene,” Kell Kelly says about Keating during that difficult time. The governor was instrumental, adds Kelly, not only in responding to the tragedy, but in helping to create an amazing memorial that is a source of state pride.

Not mentioned in the earlier article is that Keating also was on the short list to be George W. Bush’s running mate in 2000, losing out to Dick Cheney, who headed the search committee.

Not much of an athlete, Keating was active in student government in high school. But at Georgetown University, where he went for his undergraduate degree, he initially gravitated toward journalism. He was the student government editor of The Hoya, the Georgetown newspaper. 

While on the paper, Keating would write, as he says, “editorials masquerading as news articles.” This didn’t endear him to the incumbent president of The Yard, as the student government was known at the time.

“One day,” he recounts, “I was in a meeting of The Yard taking notes about what was going on, and the president spotted me and said, ‘If Frank Keating were worth a damn or had any courage or any future, he’d run for this job instead of writing about it’.” His dander up, Keating thought, “Okay, I will.” In the next election he ran for president and won, and never went back to journalism.

Keating was also president of the student bar association at the University of Oklahoma, where he earned his law degree. One of the things he particularly enjoyed in these jobs was organizing big events—a fund-raising concert by the Beach Boys, for example.

Years later, as governor, he orchestrated raising $20 million in private funds to help pay for the completion of the dome on the state capitol building in Oklahoma City, which had never been finished.

At ACLI, a somewhat different financial issue faced Keating when he joined the association as president following his second term as governor. Membership was down, and the association was in serious financial trouble. “We had to borrow money to make the payroll the month I came in,” Keating recalls. With the help of Michael Hunter, his former secretary of state in Oklahoma, Keating got things back in the black, and membership back up. Hunter has joined Keating at the ABA as chief operating officer. Hunter and ABA Chief of Staff Jeff Owen will be responsible for the day-to-day operations of the ABA.

Aside from putting the ACLI financials back in order, Keating, a conservative Republican, also remade the insurance association’s government relations office into a truly bipartisan operation. Keating is “not an ideologue,” says Roger Beverage, president of the Oklahoma Bankers Association. “He’s very accomplished at working across party lines.”

“Living here, but from there”
As Keating immersed himself in meetings with ABA employees and others prior to the holidays, a couple of things jumped out at him. One was that no one can say that ABA does not represent community banks. He asked Executive Vice-President of Membership Bob Schmermund what percentage of ABA member banks had total assets of $1 billion or less. The figure is 89%. That compares with the 98% figure for the Independent Community Bankers of America—“Not a big difference,” observes Keating.

ABA’s strength, however, is that it represents all banks, which gives it great clout in Washington. The association’s board has for many years been made up of equal parts small, mid-sized, and large institutions, each with an equal voice. It’s a good arrangement, but Keating observed that there are no CEOs from a top 20 bank—and there hasn’t been one since Richard Davis, CEO of U.S. Bancorp, finished his term in 2008.

“It’s puzzling to me that we have the top 20 banks as members, but that none of [their CEOs] is on the board,” says Keating. “As an organization we have to entice the major players to participate more actively. By the same token, we want to continue to emphasize our deep representation of community banks because that’s what’s most persuasive to the public at large and to Congress.”

Keating operates easily in both worlds. His credentials and resume give him entrée to the executive suites of the largest corporations and to the offices of Washington’s power players. Keating’s roots, though, are local, despite having lived in D.C. four different times. From the age of six months, he grew up in Tulsa.

“I’m a Main Street person,” he says. “I may be living here, but I’m from there.”

Finding “a find”
Keating, 66, was at a crossroads this fall, mulling over several options for what to do next. He had already decided after eight years leading ACLI that it was time to move on. One option was to return to Oklahoma—where he and his wife, Catherine, have a farm—to work for a law firm. Another was to stay in Washington to help a retiring senator set up a law practice. Then Keating got a call from Korn Ferry, the search firm that had found him for the ACLI job, and which ABA had hired to help with its search. A whirlwind of interviews ensued and Keating got the job. He was the unanimous choice of the ABA Search Committee, despite several other well-qualified candidates.

As Roger Beverage summed up in two words, Keating is “a find.”       

The ABA job appealed to Keating for two reasons. First because he and his family have been deeply involved in banking. Second, because the industry has a very solid public-policy agenda. “Banking is hugely important for the country,” he says. “It is the centerpiece of prosperity and [financial] security for families.”

When not working, Keating loves to be outdoors. Hunting and fishing are two particular joys. In fact, both Keatings hunt. The couple takes a yearly trip to New Mexico to go elk hunting.

The Keatings have three grown children—two daughters and a son—and seven grandchildren. The latter should enjoy reading (or perhaps already have) the three books their grandfather wrote: Will Rogers, An American Legend; Theodore, a book about Teddy Roosevelt; and The Trial of Standing Bear, about the Ponca Indian Chief whose case established that Indians are people.

A fourth book, George, about George Washington, will be published this year. All of the books are targeted towards 6-9 year-olds and are illustrated by Oklahoma artist Mike Wimmer.

What can bankers expect?
If his time at ACLI is any indication, bankers should see a fair amount of Frank Keating. Jack Dolan, who was Keating’s communications director at the life insurance group, says his former boss was often on the road visiting members. “He likes to communicate directly with people and meet them on their turf.”

Keating will attend ABA’s National Conference for Community Bankers in San Diego next month, but bankers may see him on television before that. The governor enjoys dealing with the media and is comfortable in front of a camera. He is a frequent guest on political talk shows.

Asked if Keating could be described as more of a hands-on manager or a delegator, Dolan replied, “A little bit of both.” He has knowledge of a wide range of topics and will “get in the weeds when necessary,” says Dolan, “but he is a leader.”

“He believes strongly in the governor model,” says Kell Kelly, “relying on capable staff members to run day-to-day affairs. He climbs the tree to see how to get out of the jungle.”

Keating describes his management style as inclusionary. “All of us do best when we are unafraid of giving our opinions and our suggestions,” he says. “Those opinions and suggestions are best arrived at when you’ve heard from people subordinate to you and superior to you, who perhaps have different viewpoints and ideas. I never have had a hard time making decisions.”

Oklahoma banker Ken Fergeson notes that ABA members will benefit, too, from the interest and presence of Cathy Keating, who was a very popular first lady. “She will be right there with him,” says Fergeson, who is chairman of Nbanc, Altus, Okla. “They’ve always been a team.”

Both Keatings are good sports, says Fergeson. When the banker flew to China with the Oklahoma Chamber of Commerce a few years ago, the governor and first lady came along. Meals in China can be challenging. At one event, says Fergeson, Cathy Keating gamely picked out the live snake that would be cooked for their meal. At a different function, the chef prepared a special dish of pigeon, cut it up, then reassembled it so that it looked like the bird once again. As the guest of honor, Gov. Keating was told he would get to eat the head.

“Frank picked it up and crunched right down on it,” says Fergeson. “He participates!” •

The electronic version of this article available at: http://www.nxtbook.com/nxtbooks/sb/ababj0111/index.php?startid=22
 

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