McCain and the “Keating Five”

I have been wondering how long it would take for the “Keating Five” scandal of the late 1980’s to become part of the Presidential campaign rhetoric. In his Column September 27 in The Oakland Press (http://de.theoaklandpress.com/Default/Skins/OPDigital/Client.asp?Skin=OPDigital&Daily=OLP&AppName=1) Bill Press takes McCain to task for his role in the Keating Five scandal. Because this column doesn’t appear on Press’ web site as of today, and you need a subscription to access the Oakland Press online, I’m reproducing most of the column here:

Take this to the bank, if you can still find one open for business: Two months from now, we will look back and assert that the week of Sept. 15 was the week John McCain lost the presidential election of 2008.
Why? Because that’s when Wall Street collapsed, causing real economic pain to tens of millions of Americans and exposing the failure of those conservative, unfettered free-market economic policies John McCain has championed his entire career.
This isn’t the first time McCain has been caught at a financial crime scene. Remember his first appearance on national radar? When the dust cleared from the 1980s failure of 747 savings and loans, there stood so-called reformer John McCain, right in the middle of it all: One of five senators investigated for pressuring the Federal Home Loan Bank Board to drop its investigation of crooked Lincoln Savings and Loan owner Charles Keating.

This is not the first time Bill Press has been caught at a journalistic crime scene. To lump McCain with DiConcini, Riegle and Cranston is just plain inaccurate. According to the Wikipedia entry for the Keating Five scandal,

After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings. Senators John Glenn and John McCain were cleared of having acted improperly but were criticized for having exercised "poor judgment".

The Wikipedia entry goes on to report on a meeting on April 9 1987 between Senators Cranston, DeConcini, Glenn, McCain, and Riegle and three members of the Federal Home Loan Bank Board San Francisco Branch:

The regulators then revealed that Lincoln was under criminal investigation on a variety of serious charges, at which point McCain severed all relations with Keating.
It seems likely, if not perfectly clear, that McCain was simply trying to get the investigation of Keating, a constituent and admittedly a friend, off dead center.

At one point in the meeting McCain said "To be blunt, you should charge them or get off their backs."

Press continues

Suddenly, in response to this week’s disastrous economic news, and in one of the most daring flipflops of American politics, McCain is trying to reinvent himself as the champion of government regulation, promising to push for new regulations on financial institutions.

This is not quite accurate. It appears that the reason the negotiations in Congress on the $700 billion bailout failed was that McCain sided with the House Republicans who were pushing for a lower level of government intervention – loans instead of government takeovers, and possibly repeal of the “Mark to Market” rule and the Sarbanes-Oxley act.

But it’s too late for McCain to change his spots.

Suppose McCain is changing his spots. If he is changing based on the lessons of hard experience, let’s congratulate him for learning from experience.
McCain was implicated in the Keating scandal and interviewers and Barack Obama ought to question him about his involvement and what he learned from it. If his answers are satisfactory he shouldn’t be defeated for his peripheral involvement in a scandal 20 years ago.