John McCain & The Ghost of Keating Five

Back in the 1980s, when the US faced a major savings & loan crisis, John McCain intervened to protect S&L magnate Charles Keating--a major McCain donor and friend--from federal regulators. McCain was later rebuked by the Senate Ethics Committee for "poor judgement" and embarrassed by the $112,000 in campaign contributions, trips and gifts he accepted from Keating. Following the entanglement, McCain became a born-again reformer and tried to scrub the Keating episode from his resume.

But the ghost of Keating Five lives on. Sherrod Brown, one of the smartest populists in the Senate, says McCain's behavior during that period still illuminates the character of the so-called maverick today.

Here's what Brown told Sam Stein of the Huffington Post today:

"It is not so much his economic proposals but his economic record," Brown said of McCain. "His main adviser is Phil Gramm -- he was his mentor in the Senate -- and you just tie it all together. Of course John McCain supported the oil industry, he has oil lobbyists working for him. Of course John McCain supported these trade agreements, he has got Wall Street people working for him... It is all wrapped up together. John McCain is a creature of these interest groups in Washington. He is no maverick and, from the Keating Five on, his ethics have been questionable. He's not a maverick and Barack has got to just keep hammering on that."

Stein points out that Obama referenced the S&L crisis in a speech today.

"Instead of sensible reform that rewarded success and freed the creative forces of the market, too often we've excused an ethic of greed, corner-cutting and inside dealing that threatens the long-term stability of our economic system," he said. "It happened in the 1980s, when we loosened restrictions on Savings and Loans and appointed regulators who ignored even these weaker rules. Too many S&Ls took advantage of the lax rules set by Washington to gamble that they could make big money in speculative real estate."

Yet Obama missed an opportunity to remind voters of McCain's ties to Keating, and the Arizona Senator's response the last time taxpayers faced an economic crisis caused by crooked deregulation.

Back in May, Obama said the scandal was still fair game. "I was just asked previously about a whole host of issues and associations that are a lot more flimsy than John McCain's relationship to Keating Five," Obama told reporters. "What I said, I can't quarrel with the American people wanting to know more about that and me having to answer questions about it."

What better time than now?

Comments (16)

1. Too old and too weak a soup to use against McCain. I'd focus on how he's now "pro-regulation"...in the last two weeks after PROUDLY proclaiming himself "fundamentally a regulation cutter" all those years before.

   Plus (and yes, here it comes) Sherrod "Pro-Torture If It Gets Me Elected" Brown is hardly the poster boy for moral lecturers!

   Posted by Maskdelta at 09/17/2008 @ 4:02pm

2. Posted by RedRiver_. at 09/17/2008 @ 4:18pm

   See? Even the interminably lame RIO/RED can come up with SOMETHING somewhat substantial to throw back on the Keating Scandal....that "let's McCain off the hook".

   Again, want a real scandal? Go after Maverick John on his PREVIOUS statements and VOTES that helped gut regulations...and how he's now "against them before he was for them".

   Oh, and why is "the reformer" Saint Sarah trying to sue her own Republicans...to squelch an investigation of something she's supposedly "completely innocent of"???

   More of that "taking on your own Party" stuff?....heheh

   Posted by Maskdelta at 09/17/2008 @ 4:32pm

3. Hey Red, This is for you. I'm putting the whole damn article in so you don't have to go to the link.

   Mark Nickolas BIO Become a Fan Get Email Alerts Bloggers' Index Feds Finally Seize Failed Bank That McCain's Son Ran Posted September 8, 2008 | 02:47 PM (EST)

   Read More: Andrew McCain, Banking, Banking Crisis, Charles Keating, Fdic, John McCain, John McCain Keating 5 Scandal, Keating Five, Mccain, Silver State Bank, Politics News

   One item that I've discussed a great deal here has been that of the failing bank (Silver State Bank) that John McCain's son -- Andrew McCain -- ran as a member of the bank's board of directors and its audit committee. (See previous stories below)

   Well, we have an update. The bank has finally failed, and seized by federal regulators on Friday night, making it the 11th bank to fail in the U.S. this year.

   In light of the attention being paid to the takeovers of Fannie Mae and Freddie Mac, and the two political conventions, the media seems to be overlooking this very important story on how the son of the Republican presidential nominee -- and one of the campaign's biggest fundraisers -- suddenly and mysteriously resigned from Silver State Bank in July, citing only "personal reasons," refusing to discuss the issue with the media (or even return their calls). Sadly, America is in the thick of the biggest national financial crisis since the savings and loan meltdown of the 1980s and McCain was at the epicenter of the 11th bank failure

   Posted by Wolfgang1 at 09/17/2008 @ 4:33pm

4. redriver-How many of those undemocrats are running for POTUS?

   Posted by i'm nobody at 09/17/2008 @ 4:38pm

5. Posted by Wolfgang1 at 09/17/2008 @ 4:33pm

   Really kind of a waste of time to argue with RED/RIO.

   The man only has one setting..."Hate Democrats!"

   I'm guessing some "Demoncrat" run oft with Mrs. RIO a while back....heheh

   Posted by Maskdelta at 09/17/2008 @ 4:43pm

6. I'm guessing some "Demoncrat" run oft with Mrs. RIO a while back....heheh

   Posted by Maskdelta at 09/17/2008 @ 4:43pm

   To get away from Rio, she'd probably run off with a democrat, socialist, communist or the ghost of Joseph Stalin and one couldn't blame her a bit.

   Posted by Wolfgang1 at 09/17/2008 @ 4:55pm

7. Posted by RedRiver_. at 09/17/2008 @ 4:52pm

   Funny how I didn't write the article. Can't you deal with reality Rio/Red?!

   Posted by Wolfgang1 at 09/17/2008 @ 4:56pm

8. "The story of how the "Keating Five" senators allegedly pressured regulators to lay off a failing Arizona S&L became a major scandal, and marked a turning point in McCain's life - the near-death of his political career followed by his eventual rebirth as a crusader for campaign finance reform.

   The events of 1987, when McCain met with regulators, and 1991, when the Senate Ethics Committee concluded that he used "poor judgment" in the matter, are only dimly remembered by many.

   Responding to recent coverage of that case, his campaign issued a statement last week saying the Arizona senator has "never done favors for special interests."

   That declaration appeared at odds with McCain's previous acknowledgment that he made errors in the Keating Five case, which he called in his 2002 autobiography the "worst mistake of my life."

   McCain has also seemed to soften his earlier statements about being influenced by political donors and lobbyists. In 2000, McCain told the Globe: "People give money to buy access. We're all tainted by this system. . . . They have access, and therefore they have influence. It corrupts the system. And I'm a victim of it, too."

   So I guess people are starting to remember too:

   Poll___________Date_____McCain__Obama

   Gallup______09/14 - 09/16____45____47

   Rasmussen___09/14 - 09/16____48 ___ 47

   Hotline/FD___09/14 - 09/16____42___ 45

   Reuters/Zogby_09/11 - 09/13____45___ 47

   Newsweek____09/10 - 09/11____46___ 46

   Posted by hsuBfools at 09/17/2008 @ 5:06pm

9. this shit's been brewing for years now. with each reversion to laissez faire we've been getting closer and closer...

   the dystopic future is now!

   Posted by dexter666 at 09/17/2008 @ 6:01pm

10. Hey I got one, I heard McCain, in 4th grade, copied the answers to a test from the student next to him. Lets get after this!! This is clearly a charge that will finally stop him in his tracks.

    Focus on the present and what we can do to improve the lives of all Americans.

    Posted by Incoming at 09/17/2008 @ 7:47pm

11. Focus on the present and what we can do to improve the lives of all Americans-----Posted by Incoming at 09/17/2008 @ 7:47pm

    Uh....Drill, Drill, Drill???

    Posted by Maskdelta at 09/17/2008 @ 8:34pm

12. Yep, people are starting to figure it out, YOU THINK!

    Poll___________Date_____McCain__Obama

    CBS N/NY T__09/12 - 09/16 ___ 44____49

    Quinnipiac___ 09/11 - 09/16____45____49

    Gallup______09/14 - 09/16____45____47

    Rasmussen___09/14 - 09/16____48 ___ 47

    Hotline/FD___09/14 - 09/16____42___ 45

    Reuters/Zogby_09/11 - 09/13____45___ 47

    Newsweek____09/10 - 09/11____46___ 46

    Posted by hsuBfools at 09/18/2008 @ 08:30am

13. Posted by hsuBfools at 09/18/2008 @ 08:30am

    Why that's odd?!?!?!?!

    PONTI told us

    "Obama's lead is melting....melting....melting.....

    and the media can't help him. The more people learn about Obama, the more it becomes obvious that the guy is not only an empty suit, but a huge fraud. He's the latest in a long line of left-wing losers. He's going to lose in a landslide."-----Posted by pontificus at 08/18/2008 @ 10:38pm

    Posted by Maskdelta at 09/18/2008 @ 09:27am

14. Does anybody really think that any of these people can or want to change anything? Look back at the Enron collapse. The changes in regulations that were put into play in the 90's that opened the electrical energy markets to speculators instead of actual energy companies are still in effect and being shifted over to manipulate the oil market. These conditions almost bankrupted the entire west coast. It is still referred to as the Enron loophole, in fact Phil Graham and his Enron employed wife had a lot to do with it. This Enron loophole still exists! If they can't even close this obviously disastrous loophole after almost 10 years, what makes you think they will do anything else?

    Posted by aljstl at 09/18/2008 @ 2:30pm

15. "That declaration appeared at odds with McCain's previous acknowledgment that he made errors in the Keating Five case, which he called in his 2002 autobiography the 'worst mistake of my life.' "

    Funny. I'd think his biggest mistake would be flying through enemy AA fire to bomb civilians.

    Posted by HAL9000 at 09/18/2008 @ 2:39pm

16. Nevermind. That little episode gave him the judgement to be president. My bad.

    Posted by HAL9000 at 09/18/2008 @ 2:42pm