Remember the Keating Five scandal from the 1980s, the one John McCain once said would probably be on his tombstone? Well, it involved failed savings and loans, shady deals with politicians and, well, John McCain. A reminder from Slate, circa 2000:
In early 1987, at the beginning of his first Senate term, McCain attended two meetings with federal banking regulators to discuss an investigation into Lincoln Savings and Loan, an Irvine, Calif., thrift owned by Arizona developer Charles Keating. Federal auditors were investigating Keating's banking practices, and Keating, fearful that the government would seize his S&L, sought intervention from a number of U.S. senators.
At Keating's behest, four senators--McCain and Democrats Dennis DeConcini of Arizona, Alan Cranston of California, and John Glenn of Ohio--met with Ed Gray, chairman of the Federal Home Loan Bank Board, on April 2. Those four senators and Sen. Don Riegle, D-Mich., attended a second meeting at Keating's behest on April 9 with bank regulators in San Francisco.
Regulators did not seize Lincoln Savings and Loan until two years later. The Lincoln bailout cost taxpayers $2.6 billion, making it the biggest of the S&L scandals. In addition, 17,000 Lincoln investors lost $190 million.
In November 1990, the Senate Ethics Committee launched an investigation into the meetings between the senators and the regulators. McCain, Cranston, DeConcini, Glenn, and Riegle became known as the Keating Five.
(Keating himself was convicted in January 1993 of 73 counts of wire and bankruptcy fraud and served more than four years in prison before his conviction was overturned. Last year, he pleaded guilty to four counts of fraud and was sentenced to time served.)
McCain defended his attendance at the meetings by saying Keating was a constituent and that Keating's development company, American Continental Corporation, was a major Arizona employer. McCain said he wanted to know only whether Keating was being treated fairly and that he had not tried to influence the regulators. At the second meeting, McCain told the regulators, "I wouldn't want any special favors for them," and "I don't want any part of our conversation to be improper."
But Keating was more than a constituent to McCain--he was a longtime friend and associate. McCain met Keating in 1981 at a Navy League dinner in Arizona where McCain was the speaker. Keating was a former naval aviator himself, and the two men became friends. Keating raised money for McCain's two congressional campaigns in 1982 and 1984, and for McCain's 1986 Senate bid. By 1987, McCain campaigns had received $112,000 from Keating, his relatives, and his employees--the most received by any of the Keating Five. (Keating raised a total of $300,000 for the five senators.)
After McCain's election to the House in 1982, he and his family made at least nine trips at Keating's expense, three of which were to Keating's Bahamas retreat. McCain did not disclose the trips (as he was required to under House rules) until the scandal broke in 1989. At that point, he paid Keating $13,433 for the flights.
And in April 1986, one year before the meeting with the regulators, McCain's wife, Cindy, and her father invested $359,100 in a Keating strip mall....
Fast forward to today, and another person who is "more than a constituent" has an interesting relationship to a bank on the fritz:
Andrew K. McCain, son of Arizona senator and GOP presidential candidate John McCain, has resigned two high posts in the banking industry.
McCain stepped down from the boards of Silver State Bancorp and Silver State Bank of southern Nevada for "personal reasons," the Las Vegas Review-Journal reported. Silver State would not comment further.
McCain had served on the board of Silver State Bank, originally Choice Bank, and Silver State Bancorp since February 2008, having been a director with Choice Bank starting in 2006.
McCain's current posts include Vice President and CFO of Hensley & Company, the beer distributorship which his stepmother Cindy chairs, and chairman-elect of the Greater Phoenix Chamber of Commerce.
Shares of Silver State Bancorp, of which Andrew McCain owns 1,226, closed at $1.28 a share on Friday. The stock's 52-week high on Nasdaq (symbol SSBX) is $24.10. Will the media pursue?
| Labels: 2008 election, bank failures, John McCain, Keating Five |
