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attaboy · 08-10-2008, 11:34 AM

Quote:

Originally Posted by Begbie

The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald W. Riegle (D-MI), were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB).The FHLBB subsequently backed off taking action against Lincoln.

Lincoln Savings and Loan collapsed in 1989, at a cost of $2 billion to the federal government. Some 23,000 Lincoln bondholders were defrauded and many elderly investors lost their life savings. The substantial political contributions that Keating had made to each of the senators, totalling $1.3 million, attracted considerable public and media attention.

McCain was exonerated; freed from any question of guilt.

Quote:

''I found nothing in my investigation which caused me to question Senator McCain's integrity,'' said Robert Bennett, the Washington lawyer who was special counsel to the ethics panel during what is called the Keating Five investigation. Mr. Bennett, more recently, has been one of President Clinton's lawyers.

Senator McCain had taken $112,000 in Keating-related campaign donations, trips aboard Mr. Keating's corporate jet and family vacations at the executive's Bahamas hideaway. While legal, these gifts made his attendance at the meetings with federal regulators all the more questionable. (The other four senators had also taken large contributions from Mr. Keating, some of them far more than Mr. McCain.)

Before the controversial meetings, Mr. Keating had called Senator McCain a wimp, because he would not intervene for him more aggressively with the regulators, and the two men never spoke to each other again. And once the regulators told the senators that there was a criminal referral on the Keating case, Mr. McCain dropped the matter entirely. (Mr. Keating was eventually convicted on state and federal fraud charges and served four years in prison. He now lives in Arizona.)

But Senator McCain was the only Republican embroiled in the affair, and Democrats on the panel would not release him, even at the urging of his friend Mr. Rudman, who was then a senator and the senior Republican on the committee.

''McCain was going to remain their Republican hostage, no matter what,'' Mr. Rudman wrote in his memoir, ''Combat.'' The ethics investigation took two years to complete, which taught Mr. McCain he could not rely on the go-along-get-along ethos of the Senate in an era of growing partisan rancor.

Senate Inquiry In Keating Case Tested McCain - New York Times

McCain didn't pressure the regulators like the three Democrats. Three of the democrats didn't seek re-election. The word was they needed a Republican in the net so it wouldn't solely be a Democrat scandal. Begbie's post proves the effectiveness of the 'include a Republican' strategy: "accused of corruption"