Since the McCain campaign has pulled out all the stops on the Obama campaign, it appears Obama is doing the same in bringing up the “Keating 5” scandal McCain was involved with back in the late 1980s, early 1990s. For me personally, this took some researching as I was not entirely aware of all the facts in this case.
Report on this scandal coming to light from the AP:
WASHINGTON (AP) — Nearly two decades later, John McCain is still haunted by his role in the Keating Five scandal.
His role in the 1980s banking scandal is featured in a new Barack Obama attack video. McCain’s presidential campaign quickly moved to limit any damage.
The Republican senator’s lawyer in the case, John Dowd, told reporters in a conference call Monday that McCain had been the victim of “a political smear job” by Senate Democrats.
When a reporter noted that McCain himself has spoken contritely about his role, Dowd responded, “I’m his lawyer and I have a different view of it.”
McCain said his reputation was so tarnished by the Keating case that he compared his ordeal — in some ways — to the torture he suffered as a prisoner of war.
“I faced in Vietnam, at times, very real threats to life and limb,” McCain told The Associated Press in a written statement last March. “But while my sense of honor was tested in prison, it was not questioned. During the Keating inquiry, it was, and I regretted that very much.”
The Obama video was released after Alaska Gov. Sarah Palin, McCain’s running mate, criticized Obama’s association with Bill Ayers, a founder of the Vietnam-era radical group the Weather Underground.
The Keating Five were four Democratic senators, and Republican McCain, who accepted contributions from Charles Keating Jr., a real estate speculator and savings and loan owner. His institution failed and cost many investors in uninsured financial products their life savings.
The Chicago Sun-Times breaks it down:
Here are the truths and falsehoods regarding Sen. John McCain’s role in the Keating Five savings and loan scandal:
1) John McCain was “exonerated” of any role in the scandal.
The Senate Ethics committee censured McCain, saying he “exercised poor judgment in intervening with the regulators.”
Bob Bennett, the high-powered Democratic attorney who headed the investigation, said he recommended McCain and Democratic Sen. John Glenn be dropped from the inquiry because he found them far less culpable than the other three senators. But the Senate’s Democratic majority refused his recommendation because it would have taken the only Republican out of the inquiry.
2) McCain’s actions in meeting with federal regulators cost Americans $2 billion.
After McCain and the other senators met twice with regulators, they backed off their plans to close Keating’s savings and loan. Former regulator William Black, one of the people in on that meeting, said the cost to taxpayers of that biggest-ever failure of a savings-and-loan grew from $1 billion to $3.4 billion during those two years. Bennett said the other senators were more culpable than McCain and kept up the pressure on regulators even after that second meeting, while McCain dropped the effort.
3) McCain paid back the $13,433 to Keating for nine corporate and charter jet flights McCain and his family took to Keating’s home in the Bahamas, among other places, from 1984 to 1986 but which McCain initially failed to disclose as required.
4) McCain was the only one of the five senators to “throw Keating out of his office.”
True, but that was before the two meetings.
5) Keating and friends donated $112,000 to McCain’s campaigns over the years.
6) McCain’s wife and father’s company invested $359,000 in a Keating shopping center
True. In a conference call Monday, McCain’s attorney John Dowd said McCain was not aware of his wife’s investment. But the Washington Post reported that McCain admitted knowing about the investment during Senate hearings on the issue.
6) When told federal regulators were preparing to recommend criminal charges against Lincoln Savings and Loan, McCain backed off his pressuring of regulators. McCain expressed contrition about his role and became an advocate for campaign finance reform.
McCain has since apologized for his role and recognized his failures. Still, this issue has come back to light as of recent with the Obama campaign making sure voters are informed about his role. As you can see, similar to Ayres and ACORN for Obama, both candidates to have their baggage.
Obama has launched a website called KeatingEconomics.com which states the following:
The current economic crisis demands that we understand John McCain’s attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late ’80s and early ’90s.
John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal. Today, John McCain is the only major party presidential nominee in US history to have been rebuked, censured or otherwise admonished after a Congressional ethics investigation.
The site also features a 13 minute documentary about the issue. I cannot vouch for the accuracy of the video so I didn’t post it with the story, but you can go watch it for yourself.
Whether or not this is a problem for his campaign, considering it is such old news, will be up to the voters.