One more about Keating Five

The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s.

McCain, Cranston, DeConcini, Glenn, and Riegle became known as the Keating Five.

McCain was one of the so-called “Keating Five” senators.

Politico is reporting that on Monday afternoon the Obama campaign will launch a “multimedia attack” on John McCain’s ties to the Keating Five Scandal!

McCain was one of the “Keating Five,” congressmen investigated on ethics charges for strenuously helping convicted racketeer Charles Keating after he gave them large campaign contributions and vacation trips.

He was counsel to the Federal Home Loan Bank Board during the savings and loan crisis of the 1980s and was a whistleblower in the Keating Five scandal.

For too long, McCain has been given a free pass by the media, which promotes campaign-finance reform to silence other voices, and by his Republican colleagues, who are concerned about alienating McCain given the GOP’s tenuous majority in the Senate.

McCain went from Republican front runner to 3rd or 4th in various polls, spent all of his huge pile of cash and lost most of his staff, and worked his way back to win the nomination and lead for president at the beginning of September.

Federal auditors were investigating Keating’s banking practices, and Keating, fearful that the government would seize his S&L, sought intervention from a number of U.S. senators.

John McCain is a maverick senator, Vietnam veteran and former prisoner of war for 5 years in North Vietnam.

Lincoln Savings and Loan collapsed in 1989, at a cost of $2 billion to the federal government.

“Obama-Biden communications director Dan Pfeiffer said: “While John McCain may want to turn the page on his erratic response to the current economic crisis, we think voters will find his involvement in a similar crisis to be particularly interesting.

He also is known for crafting bipartisan approaches to issues such as smoking and campaign reform.

Those four senators and Sen. Don Riegle, D-Mich., attended a second meeting at Keating’s behest on April 9 with bank regulators in San Francisco.

At Keating’s behest, four senators-McCain and Democrats Dennis DeConcini of Arizona, Alan Cranston of California, and John Glenn of Ohio-met with Ed Gray, chairman of the Federal Home Loan Bank Board, on April 2.

McCain has said if he is elected president that he will appoint Gramm to a cabinet position, likely as Secretary of the Treasury.

Twenty-one years ago today five U.S. senators met with federal savings and loan regulators at the request of Charles Keating, who controlled Lincoln Savings and Loan.

The Committee concludes that, given the personal benefits and campaign contributions he had received from Mr. Keating, Senator McCain exercised poor judgment in intervening with the regulators without first inquiring as to the Bank Board’s position in the case in a more routine manner.

Phil Gramm, a more senior Republican senator on the banking committee, pushed the nomination of Durward Curlee, a Texas lobbyist representing the most notorious S&L frauds in Texas and, after Keating, the strongest opponent of S&L regulation.

Regulators did not seize Lincoln Savings and Loan until two years later.

The Senate Ethics Committee probe of the Keating Five began in November 1990, and committee Special Counsel Robert Bennett recommended that McCain and Glenn be dropped from the investigation.

Keating and DeConcini were asking McCain to travel to San Francisco to meet with regulators regarding Lincoln Savings; McCain refused.

In this connection one must always remember Keating’s reply to the question of whether he thought his campaign contributions influenced the recipients.

“Mr. Keating, his associates, and his friends contributed $56,000 for Senator McCain’s two House races in 1982 and 1984, and $54,000 for his 1986 Senate race.

In 2000, he nearly beat George W. Bush by being an outspoken, even honest politician, which stunned everybody.

Mr. Keating also provided his corporate plane and/or arranged for payment for the use of commercial or private aircraft on several occasions for travel by Senator McCain and his family, for which Senator McCain ultimately provided reimbursement when called upon to do so.

Federal investigators had gotten tipped off that Keating was running the Lincoln Savings and Loan as his personal piggy bank giving himself and friends multi-million dollar loans and not repaying them.

His convictions were overturned on technicalities; for example, the federal conviction was overturned because jurors had heard about his state conviction, and his state charges because Judge Lance Ito screwed up jury instructions.

After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings, with Cranston receiving a formal reprimand.

Beginning in 1985, Edwin J. Gray, chair of the Federal Home Loan Bank Board , feared that the savings industry’s risky investment practices were exposing the government’s insurance funds to huge losses.