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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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You know Barack should be careful since he's gotten John Glenn to campaign for HIM! And he's part of the Keating 5! Please! He doesn't want to talk about his ACORN days or his campaign gifts from Fannie and Freddie or his advisers from those companies from Goldman Sachs, et al.! Bill Ayers wasn't just a friend! Somehow Obama found the time to write in Ayers' book! How can Obama say with a straight face that he DIDN'T know about Rev. Wright for 20 years? Or being on two Boards with Bill Ayers and having his 1st campaign fundraiser in his house? or NOT knowing about Tony Rezko even though his law firm Davis, Miner, Barnhill and Galland just HAPPENED to represent Rezko's company 'Rezar'? According to the London Times that Rezko's wife purchased a lot adjoining Obama's property for full price! Nadhmi Auchi, an Iraqi born Billionaire gave Rezko $3.5 million three weeks before Obama's new home was purchased! Obama met with Auchi several times with Rezko! Where is Brian Ross investigating this stuff? No, he's investigating Palin buying a tannin bed with her own money! How can ANYONE vote for someone who has shady friends who HATE this country and want to believe Obama will get us out of this mess when HIS friends want the OPPOSITE!

Posted by: justrighttoo | Oct 7, 2008 12:43:55 PM

"Those who would refuse to remember the lessons of the past are condemned to repeat the mistakes. It is not a time for an amateur at the helm. We have been there before.WILL you make the same mistake?For those too young to know or remember. Change for the sake of change is seldom for the better."

We discovered that with Bush. Unfortunately we learned that staying the course sucked, too. So what's one to do except spout rhetoric? Take each candidate point by point and quit comparing someone today with someone 30 years ago who inherited a post-oil embargo economy before being hit by another. But if you insist on comparing apples and oranges...

Taxation didn't cause the economic screw up (though the tax hike WAS most unappreciated). Inflation from rising energy costs did (score one for Bush on that, too).

Unemployment came from large plants shutting down and manufacturing cratered. Threw people out of work
in the areas most densely involved in manufacturing. It's the financial institutions this time. Score one for Bush.

Inflation from rising cost of commodities like sugar took Coca Cola from 25 cents to 50 cents. Food doesn't count in inflation numbers these days, so no comparison to Bush...but hey, who dropped food from inflation calculations anyway?

If you were alive in that time instead of selectively misreading history, you'd have a better grip on the external factors instead of generically blaming the man who just precided over the mess.

And what that has to do with Obama is beyond me but it's that kind of muddled thinking that got two terms of George bush.

Carter DID gut HUMINT (Human Intelligence)in the CIA in favor of technology. Bad move. Bush wrecked the armed forces by forcing them to do 4 and 5 tours. Worst move.

Carter DID preside over a botched rescue attmept in Iran. Unfortunate event but the president doesn't exactly have control over a massive sand storm. Bush got us involved in two wars RIGHT after Rumsfeld said we were abandoning the "two-front war doctrine'. Bush did that and no natural disaster caused it.

so when you campare Carter to Obama, maybe you ought to be looking a little more locally. Change for change sake is seldom good? Dig up Reagan and say that to his face because that's EXACTLY what he ran on. He beat Carter, your whipping boy...the circle of life!

Posted by: Dexter | Oct 7, 2008 12:37:29 PM


Vote Obama !

McCain McPOW McJoke !

Posted by: philosopherkingtomas | Oct 7, 2008 12:17:29 PM

Okay let me see If I understand you correctly John S McCain who was cleared of wrong doing in the Keating five scandal is a reason not to vote for him? He was cleared of wrong doing! But was told he showed poor judgment in this scandal, McCain has never tried to hide from this he learned from it and moved on. So lets take a look at just a small sampling of the Poor Decisions of Mr. Barak H. Obama. Rezko lied about the actual amount of campaign money he received from him took 3 tries to get it right and give back the donations, Rev. Wright a Racist Radical who preached about the evils of America and White America for the 20 years Obama said he was a member. First said he never heard any of these sermons, but later changed his tune and said he had and voiced concern about them? Voiced concern but still attended and lists Rev, Wright as a spiritual advisor and sounding board for new Ideas? It has been reported that Obama attended a sermon during Christmas where the Rev. was preaching another Anti-White sermon and Obama sat nodding his head in agreement? This church published a pro-hamas manifesto and named Louis Farrakhan man of the year. Farrakhan is of the belief as is Rev. Wright that white created the Aids virus to commit genocide against African Americans? Farrakhan is also Anti-Jew. He is friends with Bill Ayres an unrepentant terrorist who was a key member in a group that bombed federal buildings and certain members were linked and convicted to murdering police officers? He say he is not a close friend but he was close enough to launch his State Senate campaign and hold fundraisers at his home. Bill Ayers also hand picked him as chairman of a group he started. Then the recent economic crisis he is connected to Franklin Raines, Johnson who both were CEO's accused of falsifying records to meet certain bonus levels. He Pushed for years for high Risk sub-prime Loans while a member of "Acorn" a Socialist/Marxist group that also has lawsuits against them in 9 states pertaining to voter fraud. He also took 150,000 from Lehman brothers! He also has links to the Pritzker family of Chicago, the 2001 collapse of sub prime-mortgage lender Superior Bank was an embarrassing failure in a corner of their giant business empire.Billionaire Penny Pritzker helped run Hinsdale, Ill.-based Superior, overseeing her family's 50% ownership stake. She now serves as Barack Obama's national campaign-finance chairwoman, which means her banking past could prove to be an embarrassment to her -- and perhaps to the campaign. Superior was seized in 2001 and later closed by federal regulators. Government investigators and consumer advocates have contended that Superior engaged in unsound financial activities and predatory lending practices. Ms. Pritzker, a longtime friend and supporter of Sen. Obama, served for a time as Superior's chairman, and later sat on the board of its holding company. Superior's failure could still cost the federal deposit insurance fund tens of millions of dollars or more. And hundreds of people whose deposits exceeded federal insurance limits, such as Ms. Sweet, are still out millions of dollars, which will be reduced some by future Pritzker settlement payments. I have not even brought up the fact that Obama made the wrong statement 2 times on the Russia/Georgia crisis before agreeing with McCain and Finally getting it right. And Iran he said Iran is not a serious threat? This is his quote " "Iran, Cuba, Venezuela? These countries are tiny compared to the Soviet Union. They don't pose any serious threat to us," he later changes his stance only after Americans said hold on a minute this country is close to creating a nuclear Weapon and you don't consider them a threat? This man is a Danger to our Economy and our Safety. All of his economic advisors are tied to major collapses and his real opinions on foreign policy just are to put it simply naive and dangerous! Will you really sleep better with a Nuclear Iran because Obama says they pose no threat to us? They only need to fire one to cause the largest death toll this country has ever seen.

Posted by: batesba74 | Oct 7, 2008 11:55:54 AM

This no time for an amateur Nor pretty words and rhetoric, even if it makes you feel good. It will not cure the problem.
This is supposed to be an election for president not PR rock star. You are hiring the CEO of Firm USA. Who do you want to run the firm, a manager with over 25 years experience or the newly hired stockboy?
If you complain about Palin's experience to be VP candidate where does that leave Obama? She has more real experience than he has. Or is Obama really running as Biden's VP?

Posted by: AmerVtrn | Oct 7, 2008 11:45:01 AM

Those who would refuse to remember the lessons of the past are condemned to repeat the mistakes. It is not a time for an amateur at the helm. We have been there before.WILL you make the same mistake?For those too young to know or remember. Change for the sake of change is seldom for the better. 1975-76 the U.S. was in turmoil, and people were demanding change. An obscure young man with good credentials(exceptional credentials compared to the aspirants today). 1977, President Carter inherited an economy that was slowly emerging from a recession. After four years of the Carter presidency, both inflation and unemployment were worse than at the time of his inauguration. The annual inflation rate rose from 4.8% in 1976 to 6.8% in 1977, 9% in 1978, 11% in 1979, and hovered around 12% at the time of the 1980 election. Carter had pledged to eliminate federal deficits, the deficit 1979 $27.7 billion, 1980 was nearly $59 billion. Inflation(11-12 percent), and skyrocketing interest rates(21.5 percent). July 1980, Carter received a favorable rating of only 21% in the Gallup Poll. That was the lowest rating any president, including Richard Nixon at the time of his resignation, had received since polling began in 1936.This not to mention the devastated military preparedness and income tax rates. Do we need to re-live this in 2008-2012

Posted by: AmerVtrn | Oct 7, 2008 11:40:12 AM

J King, so anyone who votes for Obama is a fool huh? I'd make a wager that you voted for Bush, now who exactly is the FOOL??

McCain and Palin are not only an embarrassment to America but to the world as a whole and the sooner people like yourself realize this maybe we can be the nation we ONCE were.

The military, my military in which I served 23 years has been wrecked by this administration, with the help of McCain. What in this republican administration has went well. ANSWER:NOTHING!!!

Posted by: Lawrence | Oct 7, 2008 11:18:45 AM

Anyone voting for Obama is a fool! He is the slickest con-man to come along in years. Granted he's smooth as silk, but an empty suit! There's no way you can read available books that are "for" him, neutral or against him and come away feeling comfortable that Obama is a loyal American with solid American ideals. The problem with the electorate in this country is they love to hear bull-crap! Bill Clinton said it best: "it's better to lie big than tell the truth small"
I would have been thrilled to vote for a qualified black man. This guy is nothing more than a siding salesman with a silver tongue. Before you call me a racist, check out books and articles about Axelrod, Obamas image maker and manager. You might learn what you need to know before you vote.

Posted by: J. King | Oct 7, 2008 11:12:25 AM

Obama is cool!!!

Posted by: angerran | Oct 7, 2008 11:05:05 AM

People don't be ignorant. Those of you that voted Bush in office twice want more of the same. I'm starting to think that the McCain supporters are just as uneducated and un-informed as McCain and Sorry Sarah. McCain's a veteran, so what!! I'm a veteran of the Navy, officer as well, and it doesn't qualify me by any means. Better yet I'm probably more qualified than the two of them together.
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.

Barack Hussein Obama "08 & 12"

Posted by: Lawrence | Oct 7, 2008 10:58:28 AM

In case Obama (Mr. Teflon) and his supporters don't know the meaning of "germane", which Barry used very early in his campaign for King of the World regarding any discussion by him or his "handlers" regarding McCain and his role in the now-ancient Keating Five matter was that it wasn't relevant to the campaign for the presidency. Of course, he cries easily as we have witnessed before, so now this ancient tale of woe becomes "relevant" as McCain tries to force out of Barry just who in the hell he is......and where did he come from.......somewhere in Barry's makeup, there's an Invisible Man, all stuff of a much more recent vintage...and still unknown.

Posted by: justj joey | Oct 7, 2008 10:48:51 AM

Yes, Obama, hang in there. McCain's character is not the issue. Yours is. You can see ALL of us.

Posted by: newz4i | Oct 7, 2008 10:42:06 AM

John McCain Supporter: "For two people who have no military service between them and have never worn the uniform, Barack Obama and Joe Biden have a lot of gaul to criticize an 87 year old war hero and first man in space John Glenn."

I had not heard of the John Glenn criticism, so I do not take issue with your defense of Glenn. But, as far as people "not serving" crictizing those who have, you put up with "W" when he attacked McCain in 2000 (who served), Kerry (who served), Gore (who served in a capcity that beat both Cheny and Bush)
so methinks your mock indignation is 8 years too late. Or perhaps just selective outrage.

Once again, letting a spoiled, rich, entitled AWOL brat like George get away with moral failing after failing, but calling into account the very same tactic. It was like when Clinton was looking at impeahment and Speakers Newt and Livingston had to endure the same spotlight of scruntiny for THEIR affairs. Oh yeah, THEN it was foul....

Republicans have double standards. That's sometimes called "duplicity". Hell yeah, we want four more years of that.

Posted by: Kilroy | Oct 7, 2008 10:38:54 AM

RIDICULOUS. McCain was totally exonerated.

People better take the spin off of Obama's campaign and think carefully what this country will turn into if he's elected. The truth is finally being brought out about him. It has nothing to do with desperation. TWO FBI AGENTS came out - one yesterday and one today - to voice their concerns about Obama and Ayres. BE CAREFUL PEOPLE.......and Ayres isn't the only concern. ---

PROSECUTORS SEEK TO DELAY SENTENCING OF TONY REZKO

CHICAGO: Prosecutors seek to delay sentencing for Chicago money man, suggesting felon linked to Barack Obama has secrets to share.


Posted by: Maryland Woman | Oct 7, 2008 10:01:37 AM

Vote John McCain!!!!!

Ohio is proud of John Glenn and John McCain both fighter pilots who served their country when their country was at war.

Barack Obama is dumb as a doorknob to raise Keating 5 and criticize John Glenn. You just put Ohio in the Red state column.

The people of Ohio are proud of John Glenn, a former Marine Corp fighter pilot during World War II. John Glenn was awarded the Congressman Medal of Honor and flew aboard the space shuttle at the age of 77. The Barack Obama campaign should stop criticizing an 87 year old war hero John Glenn by raising the Keating 5 scandal that happened over twenty years ago.

For two people who have no military service between them and have never worn the uniform, Barack Obama and Joe Biden have a lot of gaul to criticize an 87 year old war hero and first man in space John Glenn.

It is also pretty stupid to criticize an Ohio native son when Ohio is in play during this election.

This is what Bill Clinton thought about the Keating 5 Scandal involving Senator Dennis DeConcini and 1st man in space and war hero Senator John Glenn and two other Democrats 4 years later.

Senator DeConcini was appointed by President Bill Clinton in February 1995 to the Board of Directors of the Federal Home Loan Mortgage Corporation.


Vote for John McCain, he respects veterans especially 87 year old fellow fighter pilots.


Posted by: John McCain supporter | Oct 7, 2008 8:34:38 AM

John, John, John! When you are as old as you are you best not try to dig up stuff from the past. We all have stuff in our closets as the saying goes; but McCain is so old that he doesn't have a closet to hide it all. HE HAS 12 HOMES!!!

Posted by: McCrazy = GOP Madness | Oct 7, 2008 7:16:17 AM

Will the Obama cam'pain" also point out that the other 4 out of the keating 5 were democrats?

Posted by: LongT | Oct 7, 2008 6:41:41 AM

More entries for New McCain's New World Dictionary:

Vice President: Someone who is not allowed to talk.
Iraq: A place to burn 10 billions a month.
Maverick: Someone who loves to blame.
Middle class: A class that has no privilege and should be blamed for the economic crisis.
Terrorist: Someone who is dark.
Tax cut: Special privilege for the rich.
Health care: You care for yourself.

Posted by: fun | Oct 7, 2008 3:19:36 AM

Palin/McCain have nerve. Palin was banging two guys who hate the USA and want to secede from the Union... And she says Obama is unpatriotic because his daughter goes to school with the child of a 1960's radical.

Posted by: Thomas Brooks | Oct 7, 2008 3:03:44 AM

McCain is dying of cancer. He will die in the first year. Palin would be president. She has no knowledge, nor ability nor education. We've had 8 years of an ignorant president. It destroyed the country. Why do Republicans want 8 more years of corruption, ignorance and failed policies?

McCAIN IS PATHETIC!

Posted by: Thomas Brooks | Oct 7, 2008 2:58:33 AM

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