Reply #22: Keating Five

[Ian David]

Keating Five
From Wikipedia, the free encyclopedia

The Keating Five were five United States Senators, who were accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), Donald W. Riegle (D-MI), were accused of improperly aiding Charles H. Keating, Jr., chairman of the failed Lincoln Savings and Loan Association, which was the target of an investigation by the Federal Home Loan Bank Board.

After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings, while John Glenn and John McCain had been only minimally involved. The Committee recommended censure for Cranston and criticized the other four for "questionable conduct."

All five of the senators involved served out their terms, but only Glenn and McCain ran for re-election (and were subsequently re-elected).

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Corruption allegations

Gray testified that several U.S. senators had approached him and requested that he ease off on the Lincoln investigation. It came out that these senators had been beneficiaries of $300,000 (collective total) in campaign contributions from Keating. McCain received $112,000 by 1987 from Keating and Keating's relatives and employees to McCain's Senate campaign, more than any of the other Senators. <1> In September 1987 National Thrift News was the first media outlet to break the story.<2> In October 1989 The Arizona Republic reported that in addition to campaign contributions, McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. The paper also reported that the McCains, sometimes accompanied by their daughter and baby-sitter, had made at least nine trips at Keating's expense, sometimes aboard the American Continental Corporation (parent of Lincoln) jet. Three of the trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay. McCain also did not pay Keating for some of the trips until years after they were taken, after he learned that Keating was in trouble over Lincoln. <3> Lincoln Savings and Loan's collapse is said to have cost taxpayers $3.4 billion <4>.

This allegation set off a series of investigations by the California government, the United States Department of Justice, and the Senate Ethics Committee. The ethics committee's investigation focused on five senators: Alan Cranston (D-CA); Dennis DeConcini (D-AZ); John Glenn (D-OH); John McCain (R-AZ); and Donald W. Riegle, Jr. (D-MI), who became known as the "Keating Five".

More:
http://en.wikipedia.org/wiki/Keating_five