Their Brand is Collapse (time to discuss McCain and Keating)

[ProSense]

September 15, 2008 10:36

Their Brand is Collapse

Posted by Joe Klein

John McCain is up with an ad touting his "experience" to deal with the financial crisis. But no specific experience is cited--which is attributable to the fact that McCain has been a happily orthodox Republican when it comes to financial regulation these past 26 years. He's against it. He's against Washington telling you how to run your business. The unseen hand of the market and all that...

This has been the long-standing Republican bait and switch--scaring small businesses with the threat of new regulations if the Democrats win, commiserating with larger businesses about the evils of environmental and plant safety rules, while lifting as many regulations as possible governing the financial titans whose credit should be at the heart of new economic development. But that hasn't been happening: the financial titans have been going for the quick buck rather than the sound one. Money and creativity have been redirected during the Reagan-Bush era away from substantive loans to real businesses into a Ponzi scheme of borrowing by investment bankers, so they could engage in the most irresponsible, if lucrative (for them) speculative lending imaginable...In this sense, the mortgage crisis was a perfect metaphor for Republican financial governance: Investment banks like Lehman--R.I.P.--took loans to invest money in...bad loans. In this case, the loans were bad mortgages. This is called throwing good money after bad.

Actually, John McCain has excellent experience--a ringside seat--in the vagaries of this experiment in greed and anarchy. He was a member of the Keating Five. This was the signature scandal of the Savings and Loan crisis, twenty years ago. It concerned the insider help that five Senators gave Charles Keating and his Lincoln Savings and Loan, in return for contributions and gifts. The deregulation of S&Ls--community banks dedicated to local mortgages (like George Bailey's bank in "It's A Wonderful Life")--enabled slick operators like Keating to make reckless loans in new areas where they had no expertise. The final tab to the taxpayers was $165 billion.

McCain wasn't the worst offender in the scandal. He was included in the Five to make it bipartisan (the other four were Democrats). But he knew Keating, partied with him, made inquiries on his behalf. He once told me that his role in the scandal was harder on him, in some ways, than being a prisoner of war "Because my honor was called into question."

more

The Keating $50,000

Published by Massie Ritsch on September 3, 2008

Individuals at a law firm founded by Charles H. Keating, Jr., who symbolized how political influence contributed to the collapse of savings and loans in the 1980s, have bundled at least $50,000 to John McCain's presidential campaign since June, the nonpartisan Center for Responsive Politics has calculated, making the Cincinnati-based firm McCain's sixth-largest contributor during that period. McCain was among "The Keating Five," a group of senators who benefited from more than $1 million in campaign contributions connected to Keating and personally intervened with government regulators to allow his S&L to make risky investments that ultimately defrauded thousands of investors and cost taxpayers $3.4 billion.

In amounts ranging from $200 to $2,300, about 30 partners and employees of the legal firm Keating, Muething and Klekamp, as well as their family members, have contributed $50,200 to McCain's 2008 campaign. All but two of the contributions came in July, and all but three of those July donations were logged on July 31, suggesting they were delivered at the same time. As with any bundle of campaign contributions, it's difficult to determine which donor was the "bundler," the person who solicited the contributions on the campaign's behalf. McCain's online roster of bundlers, which purports to name any individual bundling $50,000 or more for the campaign, does not associate any of McCain's major fundraisers with the Keating firm.

<...>

Charles Keating, who went to prison for defrauding investors, is now 84, according to reports, and appears to be uninvolved in the law firm he helped found more than 50 years ago. The only Keating in the recent bundle of contributions to McCain's campaign is $1,000 contributor William J. Keating, Jr., who is listed as a partner in the firm and appears to be Charles Keating's nephew. William J. Keating, Sr., Charles Keating's brother, was a Republican congressman from Ohio.

A political benefactor and friend of McCain, Charles Keating was chairman of Lincoln Savings and Loan Association, which collapsed under the financial weight of highly risky real estate investments. Lincoln was able to make those investments thanks to deregulation of savings and loan associations in the '80s. Keating's friends in Congress helped personally fend off a crackdown by regulators that might have prevented the failure of Lincoln and hundreds of other S&Ls. The Senate ethics committee investigated the Keating scandal and reprimanded McCain, the only Republican among the five senators, for his "poor judgment." McCain has acknowledged as much, and the sting of the scandal led to his sponsorship of campaign finance reforms years later.

The Poison Pill: McCain’s Secret Effort To Scuttle Lobbying Reform

Damning: Enron and housing crisis-linked lobbyist writes McCain's housing policy

[karynnj]

1. McCain is so NOT a reformer

He will claim the Keating 5 stuff was a long time ago and he was less guilty than others. Having that lobbyist write his housing policy is interesting.

[ProSense]

4. He used campaign finance reform to rebrand himself,

but as we know, he made a mockery of his own legislation.

[Rosa Luxemburg]

2. I'm sure Keating's coming!

[Neshanic]

3. Agree completely...but some here are stuck in lipstick land.