MCCAIN AND THE KEATING FIVE

WIKIPEDIA - McCain's upwards political trajectory was jolted when he became enmeshed in the Keating Five scandal of the 1980s. In the context of the Savings and Loan crisis of that decade, Charles Keating Jr.'s Lincoln Savings and Loan Association, a subsidiary of his American Continental Corporation, was insolvent due to some bad loans. In order to regain solvency, Lincoln sold investment in a real estate venture as a FDIC insured savings account. This caught the eye of federal regulators who were looking to shut it down.

It is alleged that Keating contacted five senators to whom he made contributions. McCain was one of those senators and he met at least twice in 1987 with Ed Gray, chairman of the Federal Home Loan Bank Board, seeking to prevent the government's seizure of Lincoln. Between 1982 and 1987, McCain received approximately $112,000 in political contributions from Keating and his associates. In addition, 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. McCain, his family and baby-sitter made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. After learning Keating was in trouble over Lincoln, McCain paid for the air trips totaling $13,433.

Eventually the real estate venture failed, leaving many broke. Federal regulators ultimately filed a $1.1 billion civil racketeering and fraud suit against Keating, accusing him of siphoning Lincoln's deposits to his family and into political campaigns. The five senators came under investigation for attempting to influence the regulators. In the end, none of the senators were convicted of any crime, although McCain was rebuked by the Senate Ethics Committee for exercising "poor judgment" for intervening with the federal regulators on behalf of Keating.

On his Keating Five experience, McCain said: "The appearance of it was wrong. 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."