FINANCIAL CRISIS: Keating 5 History
Analysis: McCain’s contrition ends over Keating
Associated Press, October 7, 2008
According to John Dowd, John McCain’s lawyer in the Keating Five investigation during the 1980s banking scandal, said Monday [that McCain had been] the victim of “a classic political smear job” and a “cheap shot” by Democrats who investigated him [during the Keating Five investigation].
Dowd said the Democratic chairman of the Senate ethics committee during the investigation was a “stooge” of his leadership.
When a reporter pointed out that Dowd’s comments seemed at odds with McCain’s history of contriteness, Dowd said:
“I’m his lawyer and I have a different view of it.
“I understand why John feels the way he does. He feels this was an embarrassing and humiliating matter.”
The “matter” was the committee’s investigation of four Democratic senators and Republican McCain, which ended in 1991.
All had accepted contributions from Charles Keating Jr., a real estate speculator and savings and loan owner who became the national symbol of greedy thrift owners.
Keating’s Lincoln Savings and Loan was among many institutions that failed [during the savings and loan crisis], and the uninsured financial products he’d sold cost many investors their life savings.
McCain and Keating were friends and political allies.
[Keating contributed] $112,000 to McCain’s campaign.
The senator and his family flew in Keating’s company plane to the Bahamas and elsewhere.
In the events that triggered the Senate investigation, McCain and four other senators took up Keating’s cause with financial regulators in 1987 as they were investigating the businessman and referring possible criminal charges to the Justice Department.
Keating eventually went to prison for financial wrongdoing.
An embarrassed McCain repaid $112,000 to the U.S. Treasury and reimbursed Keating for all the trips.
The senator said he believed Keating had previously been reimbursed for the trips, but he had not been.
McCain clearly was shaken by the experience.
[On Monday,] Dowd’s news conference was part of a nasty exchange with Democratic rival Barack Obama’s campaign over the character of the two candidates.
[Dowd’s] tone was nothing like McCain’s writings in his 2002 book, Worth The Fighting For.
McCain wrote that he learned many lessons from the Keating case, “And I’ve never forgotten a single one of them.”
“I refrained from ever intervening in the regulatory decisions of the federal government if such intervention could be construed, rightly or wrongly, as done solely or primarily for the benefit of a major financial supporter of my campaigns.”
He vowed to always be “an honest servant of the public interest.”
His attendance at two meetings with banking regulators was “the worst mistake of my life,” McCain wrote.
He became the Senate’s leader in reforming the way campaigns are financed.
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