Character Analysis
To paraphrase a quote from The Godfather, Part III: just when he thought he was out, they pulled him back in.
According to Verbal Kint, Dean Keaton's a basically decent guy who wants to go legit and put his criminal past behind him. The first time we see Dean, it seems to confirm Verbal's opinion—he and his lawyer girlfriend, Edie Finneran, are meeting with a group of businessmen to discuss a proposition for starting a new restaurant.
Aww. How upstanding.
But Keaton's restaurateur dreams are shattered when cops suddenly roust Dean from this dinner meeting and drag him into a police lineup with Verbal and the others—humiliating him in front of his would-be business partners.
Keaton's so angry afterwards, that, after a little prompting for Verbal, he decides to re-embrace a life of crime. The other criminals all look up to him, and they're glad to have him in on their heist—he's apparently a pretty experienced and savvy criminal. He's also a gentleman through and through…sort of like Danny Ocean, if Danny Ocean had had a dubious Irish accent.
But again, this is all Dean Keaton according to Verbal Kint.
And Kujan isn't buying it. The way Kujan describes Keaton, he's a vicious and unrepentant murderer:
"I've been investigating him for three years. The guy I know is a cold-blooded bastard. N.Y.P.D. indicted him on three counts of murder before he was kicked off the force, so don't sell me the hooker with the heart of gold... Keaton was under indictment a total of seven times when he was on the force. In every case, witnesses either reversed their testimony to the grand jury or died before they could testify. When they finally did nail him for fraud, he spent five years in Sing Sing. He killed three prisoners inside - one with a knife in the tailbone while he strangled him death."
Yeesh.
When we learn at the end of the movie that Verbal made up much of his story, we realize that Kujan's depiction of Keaton might be the correct one—in fact, it probably is, given that anyone who murders witnesses has got to be a bad dude.
After Kujan tells Verbal that he knows about Keaton's badness, we see Verbal adjust his story a little. On the surface, it seems like he's trying to make Keaton look better—but of course what he actually wants to do is obliquely cast more suspicion on Keaton.
He does, however, Keaton's violence seem a bit less than psychopathic. For example, he tells Kujan that Keaton and Redfoot exchanged the following dialogue:
REDFOOT: The way I hear it, you did time with ol' Spook. Good man, wasn't he? I used to run dope for him. Too bad he got shivved.
KEATON: Yeah. (Pause). I shivved him. Better you hear it from me now than from somebody else later.
REDFOOT: Yeah, well, I appreciate that. Just out of curiosity, was it business or personal?
KEATON: A bit of both.
This makes it sound like Keaton might've had his reasons for stabbing this guy—and maybe they weren't so bad. But since we learn at the end that Redfoot isn't real, we recognize that Verbal was just messing with Kujan—we don't know what Keaton was like, in a first-hand way.
We just get Verbal's distorted version.
Keaton remains a closed book to us at the end, when we see Verbal/Söze kill him in a flashback to the boat massacre. Was he a bad guy? Yeah, probably.
But we only ever encounter him as a character in Verbal's story—the Keaton we know is a fictional representation, though one possibly based on fact.
Dean Keaton's Timeline