You may have heard of the Keating Five scandal but not know much about it. Given the size of the scandal, that's a bit curious. Maybe it's the fact that four of the five Senators were Democrats that explains why the Obama campaign and the Democratic National Committee have been fairly quiet about it. All five Senators were dinged by the impotent Senate Ethics Committee in 1991, three for substantial and improper interference with a Federal Home Loan Bank Board (FHLBB) investigation, two with exercising poor judgment. They all finished their terms, but only two stood for re-election and both won. The only Republican in the group was John McCain.
Here's the gist (from the Wikipedia account):
he U.S. Savings and Loan crisis of the 1980s and early 1990s was the failure of 747 savings and loan associations (S&Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. taxpayer.The accompanying slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990-1991 economic recession. Between 1986 and 1991, the number of new homes constructed per year dropped from 1.8 million to 1 million, the lowest rate since World War II.
[snip]
The core allegation of the Keating Five affair is that Keating had made contributions of about $1.3 million to various U.S. Senators, and he called on those Senators to help him resist regulators. The regulators backed off, to later disastrous consequences.
Beginning in 1985, Edwin J. Gray, chair of the Federal Home Loan Bank Board (FHLBB), feared that the savings industry's risky investment practices were exposing the government's insurance funds to huge losses.[6] Gray instituted a rule whereby savings associations could hold no more than ten percent of their assets in "direct investments", and were thus prohibited from taking ownership positions in certain financial entities and instruments.
Lincoln had become burdened with bad debt resulting from its past aggressiveness, and by early 1986, its investment practices were being investigated and audited by the FHLBB:[8] in particular, whether it had violated these direct investment rules; Lincoln had directed FDIC-insured accounts into commercial real estate ventures. By the end of 1986, the FHLBB had found that Lincoln had $135 million in unreported losses and had surpassed the regulated direct investments limit by $600 million. (Wikipedia)
The sordid details are at the link. The relevance of this to current events is obvious. John McCain has been there before. He has a history.
Yes, McCain had company. They were Democrats. What they all did was corrupt. But McCain is the only one running for President, and more importantly, running for President on a self-righteous claim he is above such corruption. He is a hypocrite. His dishonesty is not new behavior.
Politics
Comments
Thank you for reminding the kids of this history revere.
Posted by: bikemonkey | October 1, 2008 4:16 PM