Monday, September 15, 2008

McCain, Worst of the Keating Five

Well. I really hadn't paid attention to the Keating Five scandal when it happened at the time. I was young and I only came away with the understanding that banks had failed and Senators were implicated somehow. It was a huge amount of money that the FDIC had to pay out, which means me, you, and everyone else too had to pay through our taxes.

I have recently found out more about the Keating Five and how McCain was involved. It's not pretty.

The way the bank, Lincoln Savings and Loan and by the way also 20% of other banks at the time, failed was by the insiders giving themselves loans that they didn't have to repay...um, I'm just going to call that stealing... Charles Keating did this to the outrageously, heinous, unbelievable amount of $3.4 BILLION dollars. Meanwhile, he was a friend to some senators, had given thousands in contributions, and turned to them for support to get the federal investigators off of his back as the crime was beginning to be found out.

McCain was a congressman at the time of his friendship with Keating, and then became a senator as censures were handed out for wrongdoing to the senators. The Senate felt that it could not censure McCain as he had been a Representative when the unethical actions on behalf of Keating took place. The other Senators either left in disgrace immediately or within one term. McCain was able to stay.

McCain tried to stop an investigation of a criminal friend who had ripped off the American people $3.4 billion dollars?! What the hell! How is he even still in office?

With friends who rip off the American people $3.4 billion dollars and with not knowing how many houses he actually owns, I can see why McCain thinks under $5 MILLION dollars is middle class.

This is from a blog that has all sorts of information about the Keating Five scandal and McCain's involvement:

What is the Keating Five?

For anyone not aware of the Keating Five, here’s a very simple summary:

Charles Keating owned a savings and loan in California. He was illegally using the money of his bank’s customers to give loans to himself and friends that they didn’t have to repay, and to speculate on risky real estate investments, which was strictly forbidden by U.S. law (the latter was one cause of the Great Depression).

When the feds found out what was going on and launched an investigation into Keating and his company, Keating called five U.S. Senators whom he had wined, dined, and lavished with hundreds of thousands of dollars in campaign donations and personal gifts for years.

Keating asked the five Senators to tell the feds to bug off, and the five Senators, later known as the Keating Five, obliged, meeting with federal investigators twice and pressuring them to stop investigating Keating’s crimes. They bought Keating some time, but the feds didn’t give up and eventually Keating was nailed. The reason the feds were so persistent was because Keating wasn’t playing with mere chump change. Keating blew $3.4 billion through illegal personal loans and bad investments, and the FDIC eventually had to reimburse Keating’s customers who had been ripped off. (The FDIC is a part of the federal government funded by taxpayers dollars, so when Keating stole from his customers you and I were the ones who paid for it.)

(Background Info - Keating wasn’t the only Savings and Loan owner who was committing fraud, 20% of the S&L’s that failed during that three year period were found to have been caused by fraud and/or insider trading. The failure of the Lincoln Savings and Loan and other S&L’s pushed the country into a recession, costing the U.S. government $126 billion dollars in FDIC insurance payouts to investors. All of this came to a crescendo during the first year of the presidency of George H.W. Bush, who pushed through the S&L bailout plan to keep the economy afloat.)

When the involvement of the Keating Five was made public, a scandal erupted and the Senate Ethics Committee launched their own four month long hearing into whether the Keating Five senators had violated Senate ethics rules. It was a giant mess (see the Keating Five Videos section). The other four Senators left office either immediately or within one term. John McCain was formally rebuked by the Senate Ethics Committee for exercising “poor judgment” for intervening with the federal regulators on behalf of Keating, but because McCain accepted Keating’s gifts of travel and vacations to Bahama while McCain was a member of the House of Representatives (he served one term there before moving to the Senate), the Senate claimed they had no jurisdiction to censure McCain. (However the meetings to pressure federal regulators occurred during the first few months of McCain serving in the Senate in 1987, so that excuse doesn’t hold up)

John McCain then went back to the drawing board and re-invented himself as “the Straight-Talk Express” and the media gobbled it up. “Tax-Evading-Criminal” doesn’t sound as catchy as “Straight-Shooting-War-Hero”.

Ever since the scandal, when McCain lies today, it’s never questioned, because he’s a “straight talker”. The man has more skeletons in his closet than any politician in history. The Keating Five is just one bone.

There are two fantastic articles about the Keating Five we highly recommend reading.

One is from 1989, written by the Phoenix New Times, called McCain: The Most Reprehensible of the Keating Five. That article does a good job of capturing the anger at the time at John McCain and the other corrupt Senators. It took an incredible spin job for McCain to have survived the scandal.

The other article is from Slate.com, written in 2000 and titled, Is John McCain A Crook?

2 comments:

LittleStar said...

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Laura said...

OK littlestar--nice spam.

An ad for a loan on a post about corruption in banking and politics on a blog about trying to do without and trying to not consume so much...nice placement.

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