Sunday, November 02, 2008

McCain To S&L Looter: "I'm yours until death do us part."

New Republic

McCain First, Second, And Always

Should he have been expelled from the Senate?
Exclusive evidence reveals the Keating Five story you've never heard.

By Sahil Mahtani
The New Republic
Published: Saturday, November 01, 2008

One day in early March 1986, John McCain, an Arizona congressman, sat down to write a letter. McCain had heard that a long-time friend and donor, Charles Keating, was upset for being listed as a member of McCain's campaign finance committee when a more prominent position would seem more appropriate. So McCain apologized. Needlessly it turned out, for "Charlie," as he signed his letter, would reply a few days later: "John, don't be silly. You can call me anything...I'm yours until death do us part."

Three years later, McCain and four other senators would be called to the carpet for this loyalty, which was accompanied by a total of $1.3 million in contributions from Keating. Senators Alan Cranston, Dennis DeConcini, John Glenn, John McCain, and Donald Riegle were being investigated by the Senate Ethics Committee for helping Keating's company, Lincoln Savings and Loan, resist regulators. That lack of regulation precipitated Lincoln's collapse that year--part of the larger savings-and-loan collapse--at a cost of about $3 billion to the federal government.

This episode has been invoked in the current campaign first as a parable against Reagan-era financial deregulation, which McCain supported and which was a significant factor in the collapse of savings and loans institutions; and second, as a reminder that McCain himself was rebuked by the Senate Ethics Committee for "poor judgment" after a 14-month investigation.

Yet the Ethics Committee's was not the only investigation into the scandal. There were two other probes at the time that got barely any public attention--both of which largely focused on McCain himself. These were probes into illicit leaks about the proceedings of the Ethics Committee--leaks that repeatedly benefited McCain and hurt his Keating Five colleagues. One of those senators described the leaks at the time as a "violation of ethical behavior at least as serious as anything of which we senators have been accused."

The leaks, if they were coming from a senator, were also illegal. All five senators--including McCain--had testified under oath and under the U.S. penal code that the leaks did not come from their camps. The leaks were also prohibited by rules of the Senate Ethics Committee; according to the rules of the Senate, anyone caught leaking such information could face expulsion from the body. These, then, were not the usual Washington disclosures: Discovered, they could have stopped the career of any Washington politician in his tracks.

The two investigations into the leaks suggested McCain's involvement but were officially inconclusive. New evidence, obtained in recent weeks, again points back to the McCain camp.

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