Friends of Liberty: Breaking down the facts on McCain's role in the Keating Five scandal

BY ABDON
M. PALLASCH Political Reporter

October 6,
2008

Here are the truths and
falsehoods regarding Sen. John McCain's role in the Keating Five savings and
loan scandal:

1) John McCain was
"exonerated" of any role in the scandal.

False.

The Senate Ethics
committee censured McCain, saying he "exercised poor judgment in intervening
with the regulators."

Bob Bennett, the
high-powered Democratic attorney who headed the investigation, said he
recommended McCain and Democratic Sen. John Glenn be dropped from the inquiry
because he found them far less culpable than the other three senators. But the
Senate's Democratic majority refused his recommendation because it would have
taken the only Republican out of the inquiry.

2) McCain's actions in
meeting with federal regulators cost Americans $2 billion.

Partially True

After McCain and the
other senators met twice with regulators, they backed off their plans to close
Keating's savings and loan. Former regulator William Black, one of the people in
on that meeting, said the cost to taxpayers of that biggest-ever failure of a
savings-and-loan grew from $1 billion to $3.4 billion during those two years.
Bennett said the other senators were more culpable than McCain and kept up the
pressure on regulators even after that second meeting, while McCain dropped the
effort.

3) McCain paid back the
$13,433 to Keating for nine corporate and charter jet flights McCain and his
family took to Keating's home in the Bahamas, among other places, from 1984 to
1986 but which McCain initially failed to disclose as required.

True.

4) McCain was the only
one of the five senators to "throw Keating out of his office."

True, but that was
before the two meetings.

5) Keating and friends
donated $112,000 to McCain's campaigns over the years.

True.

6) McCain's wife and
father's company invested $359,000 in a Keating shopping center

True. In a conference
call Monday, McCain's attorney John Dowd said McCain was not aware of his wife's
investment. But the Washington Post reported that McCain admitted knowing about
the investment during Senate hearings on the issue.

6) When told federal
regulators were preparing to recommend criminal charges against Lincoln Savings
and Loan, McCain backed off his pressuring of regulators. McCain expressed
contrition about his role and became an advocate for campaign finance
reform.

True.