McLame was a bully in HS who only got into the Naval Academy because of his daddy and grandaddy who were admirals. He would have flunked out of the academy (he was near the bottom in grades) except for same. He was a loser in pilot training and would have been let go except for...you know, dad and gramps and all that. He managed to get shot down soon after deploying. When he got home from the Hanoi Hilton, he dumped his wife of many years who had patiently waited for his release so he could marry the rich daughter of an Arizona beer baron with shady associations. With his rich wife's new money, he managed to get elected to Congress. Then there was the Keating boys...McLame was doing the dirty business, but the good Senator and his pals managed to get that swept under the rung by their good legal counsel (I'll leave it as an exercise for the reader to figure out the name of the legal mouthpiece who swept the savings and loan scandal out of sight). Then McLame began his egotistical march to the White House. With the help of the bigot, Warren Rudman, he tried to trash GWB. Finally, the truth caught up with McLame and he was toast as a presidential candiate. His big ego has never forgiven Bush, and he continues to bully his way around the Senate...the darling of the left-wing press.
In early 1987, at the beginning of his first Senate term, McCain attended two meetings with federal banking regulators to discuss an investigation into Lincoln Savings and Loan, an Irvine, Calif., thrift owned by Arizona developer Charles Keating. Federal auditors were investigating Keating's banking practices, and Keating, fearful that the government would seize his S&L, sought intervention from a number of U.S. senators.
At Keating's behest, four senators--McCain and Democrats Dennis DeConcini of Arizona, Alan Cranston of California, and John Glenn of Ohio--met with Ed Gray, chairman of the Federal Home Loan Bank Board, on April 2. Those four senators and Sen. Don Riegle, D-Mich., attended a second meeting at Keating's behest on April 9 with bank regulators in San Francisco.
Regulators did not seize Lincoln Savings and Loan until two years later. The Lincoln bailout cost taxpayers $2.6 billion, making it the biggest of the S&L scandals. In addition, 17,000 Lincoln investors lost $190 million.
In November 1990, the Senate Ethics Committee launched an investigation into the meetings between the senators and the regulators. McCain, Cranston, DeConcini, Glenn, and Riegle became known as the Keating Five.
(Keating himself was convicted in January 1993 of 73 counts of wire and bankruptcy fraud and served more than four years in prison before his conviction was overturned. Last year, he pleaded guilty to four counts of fraud and was sentenced to time served.)
McCain defended his attendance at the meetings by saying Keating was a constituent and that Keating's development company, American Continental Corporation, was a major Arizona employer. McCain said he wanted to know only whether Keating was being treated fairly and that he had not tried to influence the regulators. At the second meeting, McCain told the regulators, "I wouldn't want any special favors for them," and "I don't want any part of our conversation to be improper."
But Keating was more than a constituent to McCain--he was a longtime friend and associate. McCain met Keating in 1981 at a Navy League dinner in Arizona where McCain was the speaker. Keating was a former naval aviator himself, and the two men became friends. Keating raised money for McCain's two congressional campaigns in 1982 and 1984, and for McCain's 1986 Senate bid. By 1987, McCain campaigns had received $112,000 from Keating, his relatives, and his employees--the most received by any of the Keating Five. (Keating raised a total of $300,000 for the five senators.)
After McCain's election to the House in 1982, he and his family made at least nine trips at Keating's expense, three of which were to Keating's Bahamas retreat. McCain did not disclose the trips (as he was required to under House rules) until the scandal broke in 1989. At that point, he paid Keating $13,433 for the flights.
And in April 1986, one year before the meeting with the regulators, McCain's wife, Cindy, and her father invested $359,100 in a Keating strip mall.
The Senate Ethics Committee probe of the Keating Five began in November 1990, and committee Special Counsel Robert Bennett recommended that McCain and Glenn be dropped from the investigation. They were not. McCain believes Democrats on the committee blocked Bennett's recommendation because he was the lone Keating Five Republican.
In February 1991, the Senate Ethics Committee found McCain and Glenn to be the least blameworthy of the five senators. (McCain and Glenn attended the meetings but did nothing else to influence the regulators.) McCain was guilty of nothing more than "poor judgment," the committee said, and declared his actions were not "improper nor attended with gross negligence." McCain considered the committee's judgment to be "full exoneration," and he contributed $112,000 (the amount raised for him by Keating) to the U.S. Treasury.
In this connection one must always remember Keating's reply to the question of whether he thought his campaign contributions influenced the recipients. He said, "I certainly hope so."
At one point, DeConcini even pushed Keating for ambassador to the Bahamas, where Keating owned a luxurious vacation home.
Charlie Keating always took care of his friends, especially those in politics. John McCain was no exception.
In 1982, during McCain's first run for the House, Keating held a fund-raiser for him, collecting more than $11,000 from 40 employees of American Continental Corp. McCain would spend more than $550,000 to win the primary and the general election.
In 1983, during McCain's second House race, Keating hosted a $1,000-a-plate dinner for McCain. When McCain pushed for the Senate in 1986, Keating was there with more than $50,000.
McCain had also carried a little water for Keating in Washington. While in the House, McCain, along with a majority of representatives, co-sponsored a resolution to delay new regulations designed to curb risky investments by thrifts like Lincoln.
On March 24 at 9:30 a.m., Keating went to DeConcini's office and asked him if the meeting with the regulators was on. DeConcini told Keating that McCain was nervous.
''McCain's a wimp,'' Keating replied, according to the book Trust Me, by Michael Binstein and Charles Bowden. ''We'll go talk to him.''
Keating had other business on the Hill and did not reach McCain's office until 1:30. A DeConcini staffer had already told McCain about the wimp comment.
When Keating questioned his courage, McCain invoked his POW experience. He told Keating that he didn't spend 5 1/2 years in the Hanoi Hilton to be called a coward.
The two argued, then Keating stormed out.
Despite the dust-up, McCain attended not one but two meetings with the regulators. McCain later explained that he thought it was the right thing to do, because Keating was a constituent.
The first meeting, on April 2 in DeConcini's office, included Ed Gray, chairman of the Federal Home Loan Bank Board, as well as four senators: DeConcini, McCain, Alan Cranston, D-Calif., and John Glenn, D-Ohio.
The meeting had a clandestine air. Gray came alone. None of the senators brought their aides.
Gray offered to set up a meeting between the senators and the San Francisco regulators.
The second meeting was on April 9. The same four senators attended, along with Sen. Don Riegle, D-Mich. Also at the meeting were William Black, then deputy director of the Federal Savings and Loan Insurance Corp., James Cirona, president of the Federal Home Loan Bank of San Francisco, and Michael Patriarca, director of agency functions at the FSLIC.
In a recent interview with The Republic, Black said the meeting was a show of force by Keating, who wanted the senators to pressure the regulators into dropping their case against Lincoln. The thrift was in trouble for violating ''direct investment'' rules, which prohibited S&Ls from taking large ownership positions in various ventures.
''The Senate is a really small club, like the cliche goes,'' Black said. ''And you really did have one-twentieth of the Senate in one room, called by one guy, who was the biggest crook in the S&L debacle.''
The five senators, including McCain, seemed like a united front to Black.
''They presented themselves as a group,'' Black said, ''and DeConcini is the dad, who's going to take the primary speaking role. Both meetings are in his office, and in both cases it's 'we' want this, with no one going, 'What do you mean we, kemo sabe?' ''
''McCain was the weirdest,'' Black said. ''They were all different in their own way. McCain was always Hamlet . . . wringing his hands about what to do.''
Glenn, a former astronaut and the first American to orbit the Earth, was not as tactful.
''To be blunt, you should charge them or get off their backs,'' he told the regulators. ''If things are bad there, get to them. Their view is that they took a failing business and put it back on its feet. It's now viable and profitable. They took it off the endangered species list. Why has the exam dragged on and on and on?''
Added DeConcini, ''What's wrong with this if they're willing to clean up their act?''
Cirona, the banking official, told the senators that it was ''very unusual'' to hold a meeting to discuss a particular company.
DeConcini shot back: ''It's very unusual for us to have a company that could be put out of business by its regulators.''
The meeting went on. McCain was quiet, while DeConcini carried the ball. The regulators told the senators that Lincoln was in trouble. The thrift, Cirona said, was a ''ticking time bomb.''
Then Patriarca made a stunning comment, according to transcripts released later.
''We're sending a criminal referral to the Department of Justice,'' he said. ''Not maybe, we're sending one. This is an extraordinarily serious matter. It involves a whole range of imprudent actions. I can't tell you strongly enough how serious this is. This is not a profitable institution.''
'What can we say to Lincoln?'' Glenn asked.
''Nothing,'' Black responded, ''with regard to the criminal referral. They haven't, and won't be told by us that we're making one.''
''You haven't told them?'' Glenn asked.
''No,'' said Black. ''Justice would skin us alive if we did. Those referrals are very confidential. We can't prosecute anyone ourselves. All we can do is refer it to Justice.''
Black said McCain probably went because Keating was close to being the political godfather of Arizona and McCain still had plenty of ambition.
''Keating was incredibly powerful,'' Black said. ''And incredibly useful.''
Keating accomplished his goal. He had bought some time.
The Keating Five card showed Charles Keating holding up his hand, with a senator's head adorning each finger. McCain was on Keating's pinkie.
As the Keating investigation dragged through 1988, McCain dodged the body blows. Most landed on DeConcini, who had arranged the meetings and had other close ties to Keating, including $50 million in loans from Keating to DeConcini's aides.
McCain adopted the blanket defense that Keating was a constituent and that he had every right to ask his senators for help. In attending the meetings, McCain said, he simply wanted to make sure that Keating was treated like any other constituent.
Keating was far more than a constituent to McCain, however.
On Oct. 8, 1989, The Republic revealed that McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators.
The paper also reported that the McCains, sometimes accompanied by their daughter and baby-sitter, had made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. Three of trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay.
McCain also did not pay Keating for the trips until years after they were taken, when he learned that Keating was in trouble over Lincoln. Total cost: $13,433.
Sen. Hothead came out in all his glory.
''You're a liar,''' McCain snapped Sept. 29 when a Republic reporter asked him about business ties between his wife and Keating.
''That's the spouse's involvement, you idiot,'' McCain said later in the same conversation. ''You do understand English, don't you?''
He also belittled the reporters when they asked about his wife's ties to Keating.
''It's up to you to find that out, kids.''
And then he played the POW card.
''Even the Vietnamese didn't question my ethics,'' McCain said.
In April 1989, two years after the Keating Five meetings, the government seized Lincoln, which declared bankruptcy. In September 1990, Keating was booked into Los Angeles County Jail, charged with 42 counts of fraud. His bond was set at $5 million.
During Keating's eventual trial, the prosecution produced a parade of elderly investors who had lost their life's savings by investing in American Continental junk bonds.
Robert Bennett, who would later represent President Bill Clinton in the Paula Jones case, was the special counsel for the committee. In his opening remarks, he slammed DeConcini but went lightly on McCain, the lone Republican ensnared with four Democrats.
Among the Keating Five, McCain received the most direct contributions from Keating. But the investigation found that he was the least culpable, along with Glenn. McCain attended the meetings but did nothing afterward to stop Lincoln's death spiral.
Lincoln's losses eventually were set at $3.4 billion, the most expensive failure in the national S&L scandal.
McCain also looked good in contrast to DeConcini, who continued to defend Keating until fall 1989, when federal regulators filed a $1.1 billion civil racketeering and fraud suit against Keating, accusing him of siphoning Lincoln's deposits to his family and into political campaigns.
In the end, McCain received only a mild rebuke from the Ethics Committee for exercising ''poor judgment'' for intervening with the federal regulators on behalf of Keating.
''For the first time in history, the Ethics Committee overruled the recommendation of the independent counsel,'' McCain said. ''I'm sure it had nothing to do with the fact that I was the only Republican of the five and the Democrats were in the majority (in the Senate).''
Whether McCain really learned that lesson is debatable. As chairman of the Senate Commerce Committee, he received hundreds of thousands of dollars from companies affected by the committee's work, and he has repeatedly been criticized for intervening with regulators on behalf of businesses whose employees gave him money, including Paxson Communications and AT&T.
Nor was McCain paying close attention to appearances when he set up the Reform Institute, which is dedicated to curbing the influence of special interest money yet depends on special interest money to fund its operations. According to The New York Times, McCain "defended the large donations as a necessary part of advocacy work, and drew a distinction between the progressive agenda of the Reform Institute and political efforts to which campaign finance laws apply." Unlike them, he said, the institute is "nonpartisan and issue-oriented."
In any case, the Reform Institute helps keep McCain in the public eye and burnishes his image as a reformer, thereby enhancing his presidential prospects. The senator seems to be taking advantage of one of those terrible "loopholes" in campaign finance law that allows people to engage in unfettered political speech.
Meanwhile, he is determined to close other people's loopholes. His odious Bipartisan Campaign Reform Act of 2002 already prohibits "nonpartisan and issue-oriented groups" from criticizing politicians close to an election, and it may lead to regulation of bloggers and online journalists. Unsatisfied by this impressive assault on the First Amendment, McCain wants to ban the so-called 527 groups that raised such a ruckus in the last presidential campaign.
McCain describes the danger they pose this way: "Some billionaire decides he or she doesn't like you in office, and they decide to form a 527 and contribute $10 million or $20 million and dive-bomb into your state or district. That should alarm every federally elected member of Congress."
During the Keating Five scandal, McCain was suspected of trying to keep himself in office by doing a favor for a campaign donor. Chastened by this experience, he is now trying to keep himself and his colleagues in office by silencing potential critics. In Washington this is considered progress.
Remember the Keating Five?
McCain’s own standards would have hung him.
Mr. Levin is also president of the Landmark Legal Foundation.
April 5, 2001 9:15 a.m.
For too long, McCain has been given a free pass by the media, which promotes campaign-finance reform to silence other voices, and by his Republican colleagues, who are concerned about alienating McCain given the GOP's tenuous majority in the Senate.
In John McCain's America, any politician who accepts a large contribution or gift from a donor, and then takes steps consistent with the donor's interests — even though there is no legal quid pro quo — is corrupt. Well, then, by his own standard, McCain is corrupt.
McCain was one of the so-called "Keating Five" senators. He was investigated by the Senate Select Committee on Ethics in 1991 regarding the acceptance of favors from Lincoln Savings & Loan Association (Lincoln) and its owner, Charles H. Keating, Jr. Simply put, the issue was whether McCain and the other senators used their official positions to attempt to pressure Federal Home Loan Bank Board officials to go easy on the troubled institution. Eventually Lincoln went bust, costing depositors and taxpayers millions.
In its final report (November 20, 1991), here is what the Senate Select Committee on Ethics concluded about McCain's conduct:
"Mr. Keating, his associates, and his friends contributed $56,000 for Senator McCain's two House races in 1982 and 1984, and $54,000 for his 1986 Senate race. Mr. Keating also provided his corporate plane and/or arranged for payment for the use of commercial or private aircraft on several occasions for travel by Senator McCain and his family, for which Senator McCain ultimately provided reimbursement when called upon to do so. Mr. Keating also allowed Senator McCain and his family to vacation with Mr. Keating and his family, at a home provided by Mr. Keating in the Bahamas, in each of the calendar years 1983 through 1986.
"…[F]rom 1984 to 1987, Senator McCain took actions on Mr. Keating's behalf or at his request. The Committee finds that Senator McCain had a basis for each of these actions independent of the contributions and benefits he received from Mr. Keating, his associates and friends.
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http://tinyurl.com/b2rmq
The John McCain of old should be thankful that his political fate wasn't determined by John McCain the reformer.
After the honeymoon
The national media have given John McCain their unconditional love. As he tests the presidential waters, that's about to change.
Don't Quote Me by Dan Kennedy
John McCain In the summer of 1994, Senator John McCain found himself in a familiar place: deep trouble. The Arizona Republican's wife, Cindy, had been caught stealing from the international children's relief agency she ran in order to feed her addiction to painkillers. Already humiliated, she faced prosecution, maybe even prison. And John McCain -- who had nearly been driven from office several years earlier over his involvement in the Keating Five savings-and-loan scandal -- again faced the prospect of his political career's coming to an unwanted end.
What happened next may surprise anyone whose knowledge of McCain is based solely on his most recent incarnation as the media's favorite campaign-finance-reformin', tobacco-fightin' war hero.
He stopped talking to the Arizona Republic. And he kept his mouth shut for many months.
McCain's vow of silence was prompted by an editorial cartoon by the Republic's newly minted Pulitzer Prize winner, Steve Benson. A spaced-out Cindy McCain was standing in the midst of a group of what appeared to be starving African children. Holding one up by the ankle, she was depicted as saying, "Quit your crying and give me the drugs." In the background was a van labeled CINDY McCAIN'S VOLUNTARY MEDICAL TEAM.
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Cindy McCain reached an agreement with prosecutors that allowed her to avoid prison. And by 1996, John McCain was once again talking to his adopted home state's newspaper of record; the cartoon, he admitted, was "incredibly painful" for him.
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Keating Five scandal, his messy divorce from his first wife, and his current wife's misuse of charitable funds. "He's got a great media gift, but I think he's also incredibly thin-skinned when he's challenged," says Slate's David Plotz, who wrote a piece last year arguing that McCain is better suited to Senate bomb-throwing than he is to presidential leadership. Adds Harry Jaffe, a national editor for Washingtonian magazine: "He's a pugnacious guy. He's easily pissed off. And he doesn't suffer assholes, or reporters who he thinks are assholes."
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In his first Senate campaign, he referred to a retirement community called Leisure World as "Seizure World." Last year he got caught joking (if such a vile outburst can be categorized as humor), "Why is Chelsea Clinton so ugly? Because Janet Reno is her father and Hillary Clinton is her mother." In both instances he issued public apologies.
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Yet the liberal media slobber all over McCain. The notably cynical Michael Lewis melted in his 1996 presidential-campaign coverage for the New Republic and in a 1997 profile for the New York Times Magazine. The Wall Street Journal's Al Hunt has fallen at McCain's feet. CBS legend Mike Wallace has even said he'd quit 60 Minutes to take a job as McCain's press secretary.
James Carroll, in a 1996 New Yorker piece on McCain's and Senator John Kerry's efforts to investigate -- and then debunk -- the myth that American POWs were still being kept in Vietnam, swooned over being flattered by McCain (like McCain, Carroll is the son of a prominent military officer), even as he acknowledged the possibility that such flattery was more calculated than sincere. ("The bald statement cried out to be taken as a savvy politician's shameless appeal to a writer's narcissism, but my every instinct told me something else.")
Esquire actually titled a 1998 cover piece "John McCain Walks on Water." (The article, by Phoenix alumnus Charles Pierce, was somewhat more nuanced than that.)
Locally, Boston Globe editor Matt Storin was expressing his admiration for McCain as far back as the 1996 Republican National Convention in San Diego. Globe political columnist David Nyhan, an inveterate liberal, is smitten with McCain the way he was with Lamar Alexander four years ago, calling McCain "the brightest light in the shadowy Senate cave."
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. Both Timberg and Lewis, for example, give McCain a virtual pass on the Keating Five scandal, arguing that McCain refused Keating's demand that he intervene with regulators. That may be true. But it's also true that Keating, whose sleazy operations cost taxpayers some $2.6 billion, had a hand in $112,000 worth of contributions to McCain's House and Senate campaigns. And of the five senators Keating corruptly tried to influence, McCain was the only one who ever went on vacation with him.
Actually, make that three vacations.
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Boston Globe Washington-bureau chief David Shribman puts it this way: "McCain has one attribute that reporters not only like but worship: he calls them back at the speed of sound. That's not necessarily an attribute of presidential leadership, but it's invaluable to a desperate, ink-stained wretch on deadline. But I've never known anyone to vote with their Rolodex, so the value of that may be overestimated."
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Amy Silverman is a reporter for the Phoenix New Times -- an alternative weekly in Arizona that has been unsparing in its criticism of McCain. (Silverman once wrote that McCain -- who, she says, hasn't returned her calls for years -- "is a mean-spirited, hot-tempered, opportunistic, philandering, hypocritical political climber who married a comely beer heiress and used her daddy's money to get elected to Congress in a state he can hardly call home.") She wonders whether McCain's 15 minutes in the national media came too early to do him any good. The puff pieces of 1996, '97, and '98, in other words, are likely to give way to more-probing pieces in 1999 and 2000.
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"I think he's a very complicated guy," says Jeff Barker, the Arizona Republic's Washington reporter and a prime victim of McCain's cartoon-inspired freeze-out. "He's willing to take principled stands that are above politics, but he's also very political. I'm not sure that either the Arizona press or the national press really has a handle on him."
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