Keating’s Lawyer Should Be Disqualified, U.S. Says : Court: Judge will decide whether his having represented co-defendants is enough to bar the attorney from the criminal trial.

LOS ANGELES — Federal prosecutors say Charles H. Keating Jr.’s attorney should be disqualified from defending him on bank fraud and racketeering charges because the defense lawyer has previously represented two of Keating’s co-defendants in civil matters.

U.S. District Judge Mariana R. Pfaelzer will hear arguments Monday on whether the potential conflict is serious enough to bar Stephen C. Neal from representing Keating in the criminal trial.

The Arizona developer is charged with racketeering, conspiracy and bank fraud in connection with the $2.6-billion collapse of Lincoln Savings & Loan and its parent company, American Continental Corp., three years ago.

Neal, who has been Keating’s lawyer for two years in civil and criminal matters, also has represented Keating’s son, Charles H. Keating III, and one of Keating’s sons-in-law, Robert M. Wurzelbacher Jr., in the massive civil and administrative actions that were brought in the wake of the nation’s biggest thrift failure.

Both the younger Keating and Wurzelbacher, who are two of the four co-defendants in the federal proceeding, have filed with the court their waivers of any conflicts. This means they gave up their right to object to any problems that might crop up because of a conflict. Each has a separate attorney for the federal case.

The Chicago lawyer defended the one-time owner of the Irvine thrift in the state securities fraud trial, which last month resulted in Keating’s conviction on 17 counts.

Assistant U.S. Atty. David Sklansky said prosecutors are not actually seeking to remove Neal from the case. Rather, he said, they believe that the conflict is serious enough that Pfaelzer should inquire into it and determine herself whether serious conflicts exist.

“Unless the court is satisfied that the potential conflicts do not threaten the integrity and efficiency of the court’s proceedings, the government asks that Mr. Neal and the firm of Kirkland & Ellis be disqualified from further representation of defendant Keating in this case,” the motion said.

On Monday, Wurzelbacher and the younger Keating filed waivers of their right to object to any conflict problems.

“I also believe there is a substantial advantage to me in the continued representation of my father-in-law by Mr. Neal and his firm because I believe them to be highly qualified and enormously well versed in the facts of this case,” Wurzelbacher said in his waiver.

Neal could not be reached for comment.