For Hotels, Scandals Add to Lodging's Allure

In 1989, his Lincoln Savings & Loan bank collapsed in a heap of worthless junk bonds, wiping out the life savings of 23,000 California seniors and costing taxpayers $3.4 billion. The feds seized his $300 million Phoenician hotel, built to honor his wife, Mary Elaine. Keating, who was fined $125 million, had served nearly five years in prison on 73 counts of fraud and racketeering when his convictions were reversed and he was released in 1996. Later, he pleaded guilty to four counts of fraud, but he did not serve more time. The Phoenician lives on and is considered one of the best resort hotels in the U.S.

Sheraton Palace Hotel, San Francisco: President Warren G. Harding picked an eerily fitting place to die: the Presidential Suite of the Palace Hotel in San Francisco, now the Sheraton Palace. In June of 1923, Harding set out on a cross-country trip to meet the American people and drum up support for his struggling re-election campaign in 1924. When the president and his wife got to San Francisco, they stayed at the Palace Hotel where Harding fell ill. He died suddenly on Aug. 2, 1923, and rumors still abound over the circumstances of his death. The official cause is listed as a "stroke of apoplexy," but legend also blames food poisoning.

One rumor is that his wife killed him because of his numerous affairs and illegitimate children. Harding was well-known for his carnal appetite and once told reporters, "It's a good thing I'm not a woman. I would always be pregnant. I can't say no." (Theodore Roosevelt's famously caustic daughter, Alice Roosevelt Longworth, once said of him: "Harding was not a bad man. He was just a slob.")

The hotel is also known for a certain towel episode. In 1906, the Italian tenor Enrico Caruso was staying at the hotel when the great earthquake struck. He ran out of the hotel wearing only a towel and vowed never to return to San Francisco. He kept his word and never did. The Palace's sales coordinator, Liz Pasha, says that guests rarely inquire about Harding. "I don't think people know about it because it happened such a long time ago," she says.

TriBeCa Grand Hotel, New York City: The TriBeCa Grand Hotel would rather be known as the hip downtown hotel that just hosted a fabulous Oscar party, but it is also the place where pop singer Mariah Carey had her breakdown last July.

While specific details of what happened are murky (and the hotel is staying mum), Carey was staying in the hotel's penthouse suite, which includes a bedroom, kitchenette, guestroom and roof deck. The official version is that Carey became extremely agitated and started throwing plates and dishes around. She stepped on some shards and cut her foot, and then asked to be taken to the suburban home of her mother, Patricia. Later Carey checked into a Connecticut psychiatric facility. We bet the room service wasn't nearly as nice as the TriBeCa's.

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