McCain and Keating Economics
Find a Conversation
| Mon, 10-06-2008 - 1:56pm |
It would do well for everyone to remember that this scandal did not happen too long ago. Watch and learn.
http://www.keatingeconomics.com/?source=sem-pm-google&gclid=CKTO8reVk5YCFQRfagodgWLRFA
The current economic crisis demands that we understand John McCain's attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late '80s and early '90s.
John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal -- the first such Senator to receive a major party nomination for president.
At the heart of the scandal was Keating's Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors' money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry -- actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.
When the savings and loan industry collapsed, Keating's failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.
The Keating scandal is eerily similar to today's credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain's judgment and values have placed him on the wrong side of history.
Edited 10/6/2008 1:57 pm ET by sistah_w

Pages
Here are the truths and falsehoods regarding Sen. John McCain's role in the Keating Five savings and loan scandal:
1) John McCain was "exonerated" of any role in the scandal.
The Senate Ethics committee censured McCain, saying he "exercised poor judgment in intervening with the regulators."
Bob Bennett, the high-powered Democratic attorney who headed the investigation, said he recommended McCain and Democratic Sen. John Glenn be dropped from the inquiry because he found them far less culpable than the other three senators. But the Senate's Democratic majority refused his recommendation because it would have taken the only Republican out of the inquiry.
2) McCain's actions in meeting with federal regulators cost Americans $2 billion.
Partially True
After McCain and the other senators met twice with regulators, they backed off their plans to close Keating's savings and loan. Former regulator William Black, one of the people in on that meeting, said the cost to taxpayers of that biggest-ever failure of a savings-and-loan grew from $1 billion to $3.4 billion during those two years. Bennett said the other senators were more culpable than McCain and kept up the pressure on regulators even after that second meeting, while McCain dropped the effort.
3) McCain paid back the $13,433 to Keating for nine corporate and charter jet flights McCain and his family took to Keating's home in the Bahamas, among other places, from 1984 to 1986 but which McCain initially failed to disclose as required.
True.
4) McCain was the only one of the five senators to "throw Keating out of his office."
True, but that was before the two meetings.
5) Keating and friends donated $112,000 to McCain's campaigns over the years.
True.
6) McCain's wife and father's company invested $359,000 in a Keating shopping center
True. In a conference call Monday, McCain's attorney John Dowd said McCain was not aware of his wife's investment. But the Washington Post reported that McCain admitted knowing about the investment during Senate hearings on the issue.
6) When told federal regulators were preparing to recommend criminal charges against Lincoln Savings and Loan, McCain backed off his pressuring of regulators. McCain expressed contrition about his role and became an advocate for campaign finance reform.
True.
And...talk about guilt by association!
I was thinking the same thing! Ayers alleged indiscretions
Rose
After a
Too bad, because they all should have been punished.
Sopal
<?xml:namespace prefix = v ns = "urn:schemas-microsoft-com:vml" />
Absolutely.
Pages