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Obama to Attack McCain on Role in "Keating 5" Scandal, Despite Previous Statement it isn't "Germane"

October 06, 2008 12:05 AM

On Monday the Obama campaign will start hitting Sen. John McCain, R-Ariz., on his role in the late 80s/early 90s Keating 5 scandal, despite previous indications by Sen. Barack Obama, D-Ill, made months ago, that the scandal was not "germane" to the presidency because McCain had apologized for his role.

Coming off two events -- Alaska Gov. Sarah Palin attacking Sen. Barack Obama, D-Ill., for his controversial associate William Ayers, and Wall Street's financial crisis -- the idea put forward by the Obama campaign is: ‘You want to discuss questionable associates, Sen. McCain? Let’s discuss questionable associates.’

In an email sent to supporters Sunday evening with the subject line "What they don't want to talk about," Obama campaign manager David Plouffe wrote that, "During the savings and loan crisis of the late '80s and early '90s," Plouffe wrote, "McCain's political favors and aggressive support for deregulation put him at the center of  the fall of Lincoln Savings and Loan, one of the largest in the country. ...The McCain campaign has tried to avoid talking about the scandal, but with so many parallels to the current crisis, McCain's Keating history is relevant and voters deserve to know the facts -- and see for themselves the pattern of poor judgment by John McCain"

Monday at noon at the website "Keating Economics.com," the Obama campaign will launch a 13-minute film it is calling a “documentary” called "Keating Economics: John McCain and the Making of a Financial Crisis."

A 35-second preview can be seen HERE.

“Fraud is the creation of trust and its betrayal,” says William Black, former deputy director of the Federal Savings and Loan Insurance Corporation, in the video. “The Keating Five involved all the things that have brought the modern crisis. Senator McCain has not learned the lessons, and has continued to follow policies that are going to produce a disaster.”

Black was in attendance at an April 9, 1987 meeting when McCain, Sens. Dennis DeConcini, D-Ariz., Alan Cranston, D-Calif., John Glenn, D-Ohio, and Don Riegle, D-Mich. – soon to be nicknamed the “Keating Five” -- met with Federal Home Loan Bank Board regulators to dissuade them from seizing Lincoln Savings and Loan, part of the empire of Charles Keating, a contributor to their campaigns.

The Senate Ethics Committee ultimately cited McCain for “poor judgment” in meeting with those regulators on Keating’s behalf, though his actions was also deemed "not improper nor attended with gross negligence." Keating ultimately went to prison for fraud and McCain became active in campaign finance reform, almost a form of public penance.

"The appearance of it was wrong," McCain later told the Arizona Republic. "It's a wrong appearance when a group of senators appear in a meeting with a group of regulators because it conveys the impression of undue and improper influence. And it was the wrong thing to do...I was judged eventually, after three years, of using, quote, poor judgment, and I agree with that assessment."

Allies of McCain's would later say that McCain was only included in the group because Democrats wanted the scandal to be bipartisan. ''McCain was going to remain their Republican hostage, no matter what,'' wrote former Sen. Warren Rudman, R-NH, in his memoir, ''Combat.''

The new "Keating Economics" website attacking McCain on the scandal says: “The Keating scandal is eerily similar to today's credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain's judgment and values have placed him on the wrong side of history.”

Obama didn't use to hold such a strong opinion on the controversy. Before the Democratic primary in Oregon in May, Obama appeared at an event alongside Rep. Peter DeFazio, D-Ore., who said of McCain, "he says we need less regulation. Hello! Wall Street mortgage meltdown, Bear Stearns taxpayer bailout, Enron, but, you know, 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."

Obama was that month asked about DeFazio's remarks, and he distanced himself from them.

"Congressman DeFazio obviously delivered a speech that wasn’t, uh, wasn't my speech," Obama said. "I don’t have any doubt that John McCain's public record about issues that he's apologized for and written about is not germane to the presidency."

That said, Obama noted that he "was just asked previously about a whole host of issues and associations that were a lot more flimsy than John McCain's relationship to Keating Five. What I've said is, you know, I can't quarrel with the American people wanting to know more about that and me having to answer questions about that."

Asked about Obama's previous implication that he wouldn't attack McCain on the Keating 5 scandal, Obama spokesman Bill Burton said, "John McCain once said he would run a respectful and honorable campaign -- but now his campaign says that he wants to turn the page on the economy and make character assaults.  That’s his choice.  But on this issue, his involvement in the Keating scandal is relevant to the economic crisis we find ourselves in."

Plouffe wrote in his email that the "point of the film and the web site is that John McCain still hasn't learned his lesson...It's no wonder John McCain would rather spend the last month of this election smearing Barack's character instead of talking about the top priority issue for voters."

-- Jake Tapper and Sunlen Miller

UPDATE: McCain-Palin campaign spox Brian Rogers emails: "The difference here is clear: John McCain has been open and honest about the Keating matter, and even the Democratic special counsel in charge recommended that Senator McCain be completely exonerated. By contrast, Barack Obama has been fundamentally dishonest about his friendship and work with the unrepentant terrorist William Ayers, whose radical group bombed the Pentagon and the U.S. Capitol. Nor has Barack Obama come clean on his close friendship with Tony Rezko, a felon convicted on bribery charges who subsidized the purchase of Barack Obama’s home. It's obvious that Barack Obama is frantically attacking because he knows that most voters find these kinds of friendships, and the failed judgment they expose, to be unacceptable for our next president."

October 6, 2008 | Permalink | Share | User Comments (717)

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Does McCain have an issue with race? Why would you feel so strongly against having Martin Luther King Day? How is that a bad thing?

"John McCain voted against the creation of the holiday to honor King, and later defended Arizona Republican Governor Mecham's rescinding of the state holiday in honor of King created by his Democratic predecessor. After his opposition grew increasingly untenable, McCain reversed his position,"

Posted by: Todd | Oct 11, 2008 10:06:47 PM

Months ago the Bush Administration was not asking of $700 billion to bail us out of financial crisis caused by deregulation.

Months ago was McCain had not signed his soul over to rightwing smear machine. The same people that said McCain had an illegitimate BLACK child when he ran againt George Bush


Posted by: MrUniteUs | Oct 11, 2008 12:41:40 PM

Go klondike kate!

You are right on! Well said! My problem with this whole election is not all, but most well-intentioned Obama groupies won't spend the time necessary to really look into this candidates background!

If, however, you corner them with facts, names, places & times.... they reach into the deck and pull the "race card" to shut you down! Guess what? It ain't working anymore!

Posted by: J King | Oct 7, 2008 8:22:22 PM

"Race is the issue here. Many of you would rather have someone who looks like you that has the educational background of trailer trash than a man that's a Harvard grad with vision. Grow up and educate yourself."
_________
Bunch of bull!

Bush had a terrific college education!
and it got us no where. He was swarmed on by the masses for his charm and chants of change.... just like the curreent bozo!

Frankly, I am tired t i r e d
T I R E D of being classified as a racist because I'm not turned on by
Obama!

I saw and heard snippets of little children sweetly singing about him... and movie scenes of other little children singing about Hitler came to mind.

I hear his voice and immediately position the words "LET ME BE PERFECTLY CLEAR.." in front of whatever follows,

I envision the oval office entrenched in Obama's questionable compadres....none of whom are black.... and I am alarmed!

I see little in his past that shouts "accomplished"... except, perhaps the pro-vote on partial birth abortions and the decision to let those living babies expelled from a mother's womb during a botched up surgery.... die without succor....

In Chicago, I see low cost housing development begun under his first senatorship eight or nine years ago...
still unfinished and uninhabitable.
(Acorn?).

I think Obama would not have come as far as he has had he NOT been black.

I know that whoever wins this election will be faced with economic chaos....

I think Obama is a wuss.

Hillary would have been the strongest canadidate.... but

Next best is

McCain!

Not much in the way of glitz...
but much more substance
in the way of GRITZ!

Posted by: klondike kate | Oct 7, 2008 7:36:32 PM

"I cant wait, if NOBAMA gets elected to watch the middle class fall on there face because of his tax plan. The country will go into a depression. If Obama wins you all will be in a heep of trouble in the middle class. Serves you right."

Making a prophesy out of the present. Brilliant. We're already IN a depression! We've been slippng into it for two years. But thanks for sharing...at least we know who you plan to blame all this on.

Posted by: Man in The Yellow Hat | Oct 7, 2008 6:31:57 PM

I've watched all the televised debates so far. As a Midwesterner and first time homeowner, my vote is for Obama. He looks out for the middle class and will help me keep the "American" dream alive and not wonder if foreclosure is on the horizon or where my next "homeless" address will be. Shame on the country if Gov. Palin had to step in and run the country (not Alaska).

Posted by: JDR | Oct 7, 2008 4:30:14 PM

"Military re-enlists are higher now than they have ever been in years. (WSJ) If our military is so unhappy why re-enlist? Still this is not the point."


I suppose that's why they've been raising the bonuses to re-enlist...all time high, eh? That also explains the "stop-loss' special forces have been under for about two years now. All time high, eh? Also, the army has failed to reach it's enlisitment quoto again this year. All...time...high...re-enlistment, eh? and how about that investigation that recruiters are trying to maker their quotas by enlisting "unqualified" recruits, including mentally ill, criminally unqualified and people lacking diplomas.

I think someone might be playing hard and loose with the reality of the military situation.

BTW, I'm still waiting for that all encompassing military endorsement of McCain. so far, they've been sitting o nhteir hands for BOTH candidates. we heard more from the military (albiet negatively) regarding Kerry than McCain has garnered.

Posted by: Dexter | Oct 7, 2008 4:04:27 PM

AmerVtrn...
You are right! I voted for Bush..twice and he kept our rear ends safe for almost 8 years! I'm not thrilled with Bush. He made plenty mistakes, but Bush is not the point & if you think so you are swallowing Obama camp spin!
For the record! Military re-enlists are higher now than they have ever been in years. (WSJ) If our military is so unhappy why re-enlist? Still this is not the point.

Obama has been "manufactured!" He is a slick product like Coca-Cola, nothing more! You and other good Americans need to read up on David Axelrod, Obamas "image" maker to see how he molded Obama. He is mere smoke & mirrors, my friend!

You may not be thrilled with the McCain/Palin ticket, I'm not either... but they are the best we have in this election & they are certainly better than voting for a closet socialist & a guy who has several known communist and terrorist alliances. I pray to God the truth about Obama is exposed as it "may" open eyes of all who are looking for Camelot.

Posted by: J King | Oct 7, 2008 3:45:12 PM

Obama - Ayers link

Posted by: Real Story | Oct 7, 2008 3:40:23 PM

Spot on, Lawrence.

Posted by: Kilroy | Oct 7, 2008 3:10:09 PM

For all you so-called supporters of McCain, sure you want to continue his policies to include the war. My suggestion is that if you suppport McCain then you should be drafted in the army and sent to fight in Iraq and Afghanistan. Most of you clowns support the war in words only but if there was any possibility that you'd have to go, you'd wuss out.

Posted by: Lawrence | Oct 7, 2008 3:04:25 PM

"I urge all voters to GOOGLE Khlaid Al-Mansour's connection to Obama and then decide whether you can vote for Obama!!"

I urge you to Google the Saudi Royal family and their connection to the Bush's, as well as the radical schools that CREATED Osama Bin Laden that they still refuse to shut down in Saudi Arabia...and decide HOW you put this clown in. Twice.

Posted by: Dexter | Oct 7, 2008 2:22:24 PM

Okay, Obama is a lawyer and Biden is a lawyer. Isn't it the lawyers that messed this whole country up in the first place, including all the ones we have there now in office? That's the single least trusted profession in the country according to polls for the last 10 years, and yet we have naive people all over the country thinking (it's a miracle - they are going to tell the truth now?). Just because they say they will do something - DOESN'T mean they will! They get paid high salaries to lie professionally and twist words so you can't understand what they are saying. Then they deceive people into thinking they sound so intelligent, so they get elected. WOW - That's really what we need in office right now. What a JOKE! Let's see a list of how they have ever helped you. But please start by listing the Bill you got from them. They are good at taking your money - just where they belong - in Washington. People wake up!

Posted by: Geo | Oct 7, 2008 2:19:49 PM

Want the Draft and the total collapse of the United States? Then vote for McCain and Palin: THE BRIDGE TO NOWHERE.

Posted by: disgusted | Oct 7, 2008 2:18:56 PM

Justtooright said: "This is the Obama's normal statement: "I had NO idea that my staff or cabinet members were doing this illegal action. I didn't know they would do such a thing or what they believed." No, Obama you seem to NOT know your friends very well. For such a smart man, he doesn't try to get to know anything on his friends' values or what they believe in...which is the destruction of our nation. (Example: Wright, Pflager and Ayers.) Obama, "Look, I didn't know Kim Jong Ill(sp?) wanted to blow us up! I just wanted to be concerend about fairness and take away your money!"

As far as your post, it's a good point. I disagree on the conclusion, but at least you made a point based on the topic at hand. So go ahead and blast me. You got a free shot coming for me mistaking you for another poster.

Posted by: Dexter | Oct 7, 2008 2:18:38 PM

It's about time. Put in adulterer too!

Posted by: me | Oct 7, 2008 2:16:56 PM

I urge all voters to GOOGLE Khlaid Al-Mansour's connection to Obama and then decide whether you can vote for Obama!!

Posted by: virginia | Oct 7, 2008 2:16:55 PM

This is the Obama's normal statement: "I had NO idea that my staff or cabinet members were doing this illegal action. I didn't know they would do such a thing or what they believed." No, Obama you seem to NOT know your friends very well. For such a smart man, he doesn't try to get to know anything on his friends' values or what they believe in...which is the destruction of our nation. (Example: Wright, Pflager and Ayers.) Obama, "Look, I didn't know Kim Jong Ill(sp?) wanted to blow us up! I just wanted to be concerend about fairness and take away your money!"

Posted by: justrighttoo | Oct 7, 2008 12:56:44 PM

Dexter: Thanks for your brilliant assessment of the situation: “The government lied about inventing the HIV virus as a means of genocide against people of color. The government lied.” How is that taken out of context? April 2003: “The government gives them the drugs, builds bigger prisons, passes three-strike laws and wants them to sing God Bless America. No! No No! God Damn America … for killing innocent people. God **** America for threatening citizens as less than humans. God **** America as long as she tries to act like she is God and supreme.” How is that taken out context? “They will not only attack you if you try to point out what’s happening in white America. U.S. of KKK A.” How is that taken out of Context? And Obama said in his book he used Rev. Wright as a sounding board for his ideas and views? Again how is that taken out of context? Reverse these statements to be Anti-Black America and you would be outraged calling for any official tied to these people to be fired. Was Imus also taken out of Context? he was a radio host and everyone called for his head and wanted to boycott the TV station that aired his show, His views were not the views of the station but somehow the station was held accountable! And as for the financial connection four banks and Obama has economic advisors from all four on his advisory staff and took large campaign contributions from all four and all four were run illegally and collapsed and cost tax payers a lot of money. And we are going to trust this man and these advisors to help our economy? They could not even keep a business out of Financial wrong doing and keep them from collapsing how are they going to lead a country? Pushing high risk Sub-prime loans and lack of oversight lead to this problem and at least on this issue the Republicans and John McCain got it right and said it would be a Economic Disaster if we did not have more regulations and oversight!

Posted by: batesba74 | Oct 7, 2008 12:56:39 PM

Dude, I'm with you about concern over a candidates associations. But I also realize that if you had that much scruntiy on ANY of the former three presidents, you'd never sleep at night.

I'm not saying your concern is misplaced, I'm jsut saying this is a tempest in a teapot compared to what we've seen i nthe past 25 years.

But to paint a person's personal convictions with those of others is just illogical. Afterall, being a Bush supporter, does that make you a draft dodger, AWOL, useless spoiled brat, too? Well does it? Clueless, stubborn, inept, arrogant? Are you jealous of your younger brother? Is oyur younger brother smarter and better lookign than you? Are you a reoovering alcoholic who sniffed Peru up your nose YET...managed to keep that off limits as a campaign issue?

Then get off of the Ayers and Wright bandwagon....but keep a wary eye out for similar behavior.

Posted by: Kilroy | Oct 7, 2008 12:51:42 PM

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