Last night, at an Obama town-hall event in Oregon, Rep. Pete DeFazio (D-Ore.) was rather candid in his criticism of John McCain, and broached a subject we generally hear very little about.
DeFazio, an Oregon superdelegate who endorsed Obama today and introduced him at the event, went on an extended critique of McCain, saying voters could not “underestimate the threat that John McCain poses in this election to our future.” DeFazio said McCain’s Straight Talk Express should be called the “trojan horse express.”
And then, DeFazio raised the Keating Five, a 1980s savings and loan scandal in which McCain was implicated. The Senate Ethics Committee later concluded that McCain used “poor judgment” in the matter.
“John McCain has already told us he doesn’t know much about economics,” DeFazio told the crowd of 3,000. “He says we need less regulation. Hello? Wall Street, mortgage meltdown, Bear Stears, taxpayer bailout, Enron. But I guess maybe for a guy who was up to his neck in the Keating Five, and savings and loan scandal, less regulation is better for his friends. No, that is not good for the American people.”
After the event, an Obama spokesperson indicated that that the senator’s campaign had no intention of pushing the Keating Five scandal.
“There is more than enough space between Barack Obama and John McCain on the issues, whether it is tax cuts for the wealthiest Americans or a timeline for bringing our troops home, and that is where we will focus our campaign,” Psaki said.
That sounds fine, but does the Keating Five controversy have to be off the table?
Yes, the scandal was a long time ago, and for those who were following politics closely in the mid-1980s, this probably appears to be well-tread ground.
But given McCain’s media-infused reputation as a reformer and champion of political propriety, his decisions in 1986 and 1987 seem to matter quite a bit today.
As William K. Black watches John McCain move toward the Republican presidential nomination, he thinks of a day 21 years ago that he considers one of the most troubling of his life.
Black, a senior federal savings and loan regulator at the time, attended a meeting at which he felt McCain and four other senators pressured federal regulators to back off from investigating the troubled Lincoln Savings and Loan.
“I remain very upset that what they did caused such damage,” said Black, now a professor at the University of Missouri at Kansas City, recalling how Lincoln’s bankruptcy cost the government $3 billion. Moreover, he said he believes McCain intervened partly because his wife had invested money with Lincoln chairman Charles Keating, a campaign contributor who let the McCains use his home in the Bahamas.
The story of how the “Keating Five” senators allegedly pressured regulators to lay off a failing Arizona S&L became a major scandal, and marked a turning point in McCain’s life – the near-death of his political career followed by his eventual rebirth as a crusader for campaign finance reform.
The events of 1987, when McCain met with regulators, and 1991, when the Senate Ethics Committee concluded that he used “poor judgment” in the matter, are only dimly remembered by many.
But McCain’s emergence as the likely GOP nominee, combined with the rising volume of anti- lobbying rhetoric in the presidential campaign, has brought renewed attention to the Keating Five case, prompting questions about what McCain learned from it, what he’s accepted was wrong, and whether he now is stepping back from some of his own scrutiny of his past errors.
McCain has assured Americans that while contributors try to buy access, “The question is … do they have excess or unwarranted influence? And certainly no one ever has, in my conduct of my public life and conduct of my legislative agenda.”
This controversy shows otherwise.
Black, however, maintains that the Keating case was a textbook example of politicians, McCain among them, serving a major donor. And Dennis DeConcini, a former Democratic senator from Arizona and another of the Keating Five who hosted the key meeting in his office, said in an interview that McCain has gotten a relatively “free ride” even though DeConcini insists that McCain was the “most culpable” of the senators because he had the closest relationship with Keating.
If you’ve forgotten the details or need a refresher, this piece is a pretty good primer. Obama wants to take the high ground and steer clear of this humiliating part of McCain’s past, but if the media were anxious to be even-handed in their scrutiny of the candidates’ past, one would like to think the Keating Five scandal could draw at least as much attention as, say, the Rezko story, which appears utterly irrelevant by comparison.