Kinkaku believed that words were also ninja tools and that lies and tricks were effective battle strategies, but his fellow Cloud ninjas didn't really approve of this way of thinking. On a mission to capture the Kyuubi along with his brother, both he and Ginkaku would be swallowed whole. They'd survive, and emerge from the Kyuubi infused with a portion of it's power, it's believed they were able to do this because they may be descendants of Rikudou. When the Cloud village was going to form an alliance with the Leaf village, he and his brother wanted to take over and attacked both the Second Raikage and Second Hokage, failing and becoming reviled criminals.  
 

Powers/Abilities

 

Aside from being a Pseudo Jinchuuriki
which augments his physical abilities, he shared some of Rikudou's fabled Sacred Treasures with his brother Ginkaku. Although the two would switch items during battle, Kinkaku carried the Banana Palm Fan which is capable of generating any of the five elements with a swing, and the Seven Star Sword which is able to cut souls from someone's body and curse them.
The brothers used to possess Rikudou's fifth treasure as well, the Amber Purifying Pot, while large and hard to carry around, it was also capable of sealing someone inside of it just by getting them to respond. 
All of the items are heavily draining, and without the Kyuubi's chakra they would die from using the items for too long.