AND COST TAXPAYERS 2 BILLION DOLLARS. McCAIN PLEADED IGNORANCE OF BANKING REGULATION AND NOTHING HAS CHANGED SINCE THEN.
McCain’s ties to Keating mirrors current financial crisis
This isn’t the first financial crisis that John McCain has been at the center of.
To finance his campaign, McCain dipped into the Hensley family fortune. He secured an endorsement from his mentor, Sen. Tower, who tapped his vast donor network in Texas to give McCain a much-needed boost. And he began an unethical relationship with a high-flying and corrupt financier that would come to characterize his cozy dealings with major donors and lobbyists over the years.
Charlie Keating, the banker and anti-pornography crusader, would ultimately be convicted on 73 counts of fraud and racketeering for his role in the savings-and-loan scandal of the 1980s. That crisis, much like today’s subprime-mortgage meltdown, resulted from misbegotten banking deregulation, and ultimately left taxpayers to pick up a tab of more than $124 billion. Keating, who raised more than $100,000 for McCain’s race, lavished the first-term congressman with the kind of political favors that would make Jack Abramoff blush. McCain and his family took at least nine free trips at Keating’s expense, and vacationed nearly every year at the mogul’s estate in the Bahamas. There they would spend the days yachting and snorkeling and attending extravagant parties in a world McCain referred to as “Charlie Keating’s Shangri-La.” Keating also invited Cindy McCain and her father to invest in a real estate venture for which he promised a 26 percent return on investment. They plunked down more than $350,000.
McCain still attributes the attention to nothing more than Keating’s “great respect for military people” and the duo’s “political and personal affinity.” But Keating, for his part, made no bones about the purpose of his giving. When asked by reporters if the investments he made in politicians bought their loyalty and influence on his behalf, Keating replied, “I want to say in the most forceful way I can, I certainly hope so.”
The story continues . . .
When McCain became a senator in 1986, filling the seat of retiring Republican icon Barry Goldwater, he was finally in a position that a true maverick could use to battle the entrenched interests in Washington. Instead, McCain did the bidding of his major donor, Charlie Keating, whose financial empire was on the brink of collapse. Federal regulators were closing in on Keating, who had taken federally insured deposits from his Lincoln Savings and Loan and leveraged them to make wildly risky real estate ventures. If regulators restricted his investments, Keating knew, it would all be over.
In the year before his Senate run, McCain had championed legislation that would have delayed new regulations of savings and loans. Grateful, Keating contributed $54,000 to McCain’s Senate campaign. Now, when Keating tried to stack the federal regulatory bank board with cronies, McCain made a phone call seeking to push them through. In 1987, in an unprecedented display of political intimidation, McCain also attended two meetings convened by Keating to pressure federal regulators to back off. The senators who participated in the effort would come to be known as the Keating Five.
“Senate historians were unable to find any instance in U.S. history that was comparable, in terms of five U.S. senators meeting with a regulator on behalf of one institution,” says Bill Black, then deputy director of the Federal Savings and Loan Insurance Corporation, who attended the second meeting. “And it hasn’t happened since.”
Following the meetings with McCain and the other senators, the regulators backed off, stalling their investigation of Lincoln. By the time the S&L collapsed two years later, taxpayers were on the hook for $3.4 billion, which stood as a record for the most expensive bank failure — until the current mortgage crisis.
Think McCain’s involvement in the S&L crisis and the Mortgage Meltdown are just a coincidence? Consider McCain’s connections:
One of the giant mortgage companies at the heart of the credit crisis paid $15,000 a month from the end of 2005 through last month to a firm owned by Senator John McCain’s campaign manager, according to two people with direct knowledge of the arrangement.
For the second time, when Americans needed someone to pay attention to regulation, John McCain allowed himself to be bought off.
John McCain cannot be trusted.
Monday, October 06, 2008 The Richmond Democrat