By STEPHEN LABATON
Published: January 7, 2000
Eleven years ago, Senator John McCain defended himself against ethics accusations for his ties to a corrupt savings association and a campaign contributor by saying that he had performed a legitimate constituent service when he met with regulators who were preparing to seize the institution.
''I have done this kind of thing many, many times,'' Mr. McCain, an Arizona Republican, said in 1989, explaining that helping Charles H. Keating Jr., who had lent him his company jet and whose associates had contributed $112,000 to his campaign, was like ''helping the little lady who didn't get her Social Security.''
Ultimately, a Senate ethics inquiry concluded that Mr. McCain had exercised poor judgment but had not violated any rules. The senator would go on to make reform of the political system a central part of his agenda.
While it was a seminal case, the Keating investigation never persuaded the Senate to adopt clear standards for when legitimate constituent services crossed the line into undue influence of a regulatory matter. The line remains murky.
The issue re-emerged for Mr. McCain this week when he faced questions about his intervention at the Federal Communications Commission in a case that involved a contributor to his presidential campaign.
''It is a very difficult area to write bright-line rules,'' said Robert S. Bennett, the Washington lawyer who was special counsel to the ethics panel during its investigation of five senators with ties to Mr. Keating.
Tension is inevitable, Mr. Bennett said, in a system that encourages political contributions from people with interests before the government and also relies on lawmakers to ride herd on federal agencies that can be arrogant and bureaucratic.
''The problem will always be with us as long as these guys are required to raise tons of money and are allowed to receive them from those who have business before their committees,'' he said. ''What happens is that when your political opponent accepts a contribution from someone with interests before Congress, that's called unethical. But when you yourself receive the money, you claim you are engaging in the time-honored tradition of constituent service.''
Mr. McCain, the chairman of the Senate Commerce Committee, has repeatedly written to urge the F.C.C. to complete its reviews on several license applications affecting many of his largest contributors. In some cases, his letters were written a few months after the applications were filed; in others, it was years later.
Campaigning in New Hampshire, Mr. McCain defended his actions today. He said the Commerce Committee had jurisdiction over 80 percent of the nation's businesses, so there would be a ''natural suspicion'' about any decision that ultimately helped supporters.
''It renews my vigor for campaign finance reform,'' he said.
In recent weeks Mr. McCain had sent two letters to the communications commission demanding that members vote on two license transfers in a case that ultimately benefited Paxson Communications Inc., whose executives and lobbyists have been major contributors. The letters are among many he has sent to the commission regarding regulatory cases involving his fund-raisers and contributors.
moreMcCain lied his way out of that crisis, no doubt, and then went on to use campaign finance reform to rebrand himself. Of course, he's done every thing he can think of to skirt his own law.
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."
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Obama adviser:
The financial crisis has also raised an uncomfortable specter from McCain’s past: The last American financial meltdown, the savings and loan crisis of the late 1980s and early 1990s. Then, McCain fought regulation while cultivating friends in the savings and loan industry, and narrowly escaped an end to his political career in the indictment of a wealthy supporter, Charles Keating.
McCain has gotten away with this for years because people keep looking the other way. People should definitely be talking about McCain's involvement as a Keating Five member and his role in the
Gramm-Leach-Bliley bill.