A Look Back at the 'Keating Five'
As campaign attacks intensify in the presidential race, Sen. Barack Obama's campaign is highlighting the connections of his opponent, Sen. John McCain, to the "Keating Five" scandal that dominated headlines in the late 1980s and early 90s and which McCain once called "the most difficult experience in my political life."
The Illinois Democrat's campaign produced a 13-minute documentary on McCain's connection to the scandal entitled "Keating Economics: John McCain and the Making of a Financial Crisis."
After the documentary was posted on the Obama campaign's Web site this afternoon, keatingeconomics.com, the McCain campaign immediately responded, saying that the Senate ethics investigation treated McCain unfairly and that McCain has been more open about his relationship with Keating than Obama has about his ties with the '60s-era radical William Ayers, The Post's William Branigin and Michael Abramowitz report.
John Dowd, a partner at Akin Gump Strauss Hauer Feld and McCain's attorney before the Senate Ethics Committee in 1990 and 1991, called the old inquiry a "classic political smear job."
"And the bottom line was that John had not violated any rule of the Senate or any law of the United States," Dowd said during a conference call with reporters.
In August, after Republican strategists highlighted Obama's ties to convicted Chicago businessman Antoin "Tony" Rezko, the Democratic National Committee threatened to "escalate the fight further" by referencing the "Keating Five."
After the jump, a look back at the "Keating Five" scandal:
March 1987: Arizona savings-and-loan executive Charles H. Keating Jr. stops by McCain's office and asks the senator for a favor: He asks McCain to attend a meeting and act as his negotiator with the chief federal thrift regulator, whose examiners were questioning more than $600 million in investments at Keating's Lincoln Savings and Loan in Irvine, Calif.
McCain says he would attend the meeting to make sure Lincoln was being treated fairly. But it would be improper, he told Keating, to offer the government a deal.
"I could see him getting more and more angry," McCain told The Post, until Keating stalked out of the office.
April 1987: A 2-hour meeting between five senators, including McCain, Keating and four federal regulators from the Federal Home Loan Bank of San Francisco ends inconclusively. The regulators were questioning what they regarded as overly aggressive, risky lending and investing practices by Lincoln in the Southwest.
January 1989: The House Banking Committee holds hearings on the abrupt decision a year before by regulators in Washington to wrest responsibility for Lincoln from federal regulators in California.
April 1989: The Federal Home Loan Bank Board takes control of Lincoln.
September 1989: Federal banking regulators file the biggest bank fraud lawsuit ever, accusing Keating and his associates of directing a racketeering scheme that cost the taxpayers $1.1 billion.
October 1989: McCain pays back $13,433 to Keating's company for nine corporate and charter jet flights the senator and his family took from 1984 to 1986 but which McCain failed to disclose.
November 1989: The FBI opens an investigation of the role the five senators played in intervening with regulators on Keating's behalf in 1987.
December 1989: The Senate Select Committee on Ethics opens its investigation into the senators and Keating.
September 1990: A 42-count criminal indictment against Keating is unsealed.
November 1990: "Keating Five" congresional hearings begin.
February 1991: The Senate Ethics Committee rules that it found no violations by McCain, Sens. John Glenn (D-Ohio), Dennis DeConcini (D-Ariz.) and Donald W. Riegle Jr. (D-Mich.). However, the panel criticized McCain's and Glenn's judgment and, in a more serious rebuke, said DeConcini and Riegle engaged in conduct that "gave the appearance of being improper."
The panel announces it did find evidence of ethics rule violations by Sen. Alan Cranston (D-Calif.).
A day after the Senate Ethics ruling, McCain announces that he plans to give the U.S. Treasury $112,000 that he received in campaign contributions from Keating.
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