Sunday, March 9, 2008

McCain Received $110,000 from Bank Whose Failure Cost US Treasury 2Billion Dollars

How much should it cost to buy the acquiescence of a US Senator in a banking scheme that costs the US Treasury two billion dollars. In John McCain's case, he was warned that a bank with serious financial troubles was seeking exemption from banking rules in order to take even more risks, even though the bank's eventual failure would be paid for by the US taxpayers. But, how could McCain turn his back on his banker friend when "Senator John McCain of Arizona, [] received $110,000 and vacationed with Mr. Keating in the Bahamas four times", according to the New York Times?

According to the New York Times, McCain met with Charles Keating, a "flashy political contributor" from who McCain had received $110,000 in campaign contributions, and then the banking regulators whom McCain supervised reversed course and allowed Mr. Keating to take risks that led to the failure of his bank. Instead of taking action to protect the taxpayers, McCain was caught "intervening with regulators on behalf of Mr. Keating at a time when his Lincoln Savings and Loan Association was on the verge of collapse."

According to the New York Times,
Senator John McCain of Arizona, who received $110,000, and Senator John Glenn of Ohio ($242,000) were deemed guilty only of "poor judgment." It's true that Mr. McCain, who had been Mr. Keating's vacation guest in the Bahamas four times, did nothing for his benefactor after those 1987 meetings. Yet wasn't a Senator also obliged to do something to guard the public against Mr. Keating's increasingly suspicious behavior? New York Times March 1, 1991.
After hearings that held the entire US Senate and the country's attention, the US Senate Ethics Committee found that McCain "exercised poor judgment". The New York Times said,
Today's announcement came after the committee voted unanimously on each Senator, ending a 14-month investigation into whether the lawmakers acted inappropriately in intervening with Federal regulators on behalf of Mr. Keating's Lincoln Savings and Loan Association. Mr. Keating and his associates contributed $1.3 million to the Senators or causes they backed. Lincoln, in Irvine, Calif., was seized by the Government in 1989, a move that is expected to cost taxpayers more than $2 billion. New York Times, February 28, 1991
At the time, John McCain said,
"I'm sure that my political obituary will always have something about the Keating Five in it. I don't see how that could be avoided." New York Times, March 1, 1991

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