get him the government action he (Keating) desired. McCain was helpful to Keating and got others in government to be helpful to Keating. That's enough for me.
From the Rolling Stone article
To finance his campaign, McCain dipped into the Hensley family fortune. He secured an endorsement from his mentor, Sen. Tower, who tapped his vast donor network in Texas to give McCain a much-needed boost. And he began an unethical relationship with a high-flying and corrupt financier that would come to characterize his cozy dealings with major donors and lobbyists over the years.
Charlie Keating, the banker and anti-pornography crusader, would ultimately be convicted on 73 counts of fraud and racketeering for his role in the savings-and-loan scandal of the 1980s. That crisis, much like today's subprime-mortgage meltdown, resulted from misbegotten banking deregulation, and ultimately left taxpayers to pick up a tab of more than $124 billion. Keating, who raised more than $100,000 for McCain's race, lavished the first-term congressman with the kind of political favors that would make Jack Abramoff blush. McCain and his family took at least nine free trips at Keating's expense, and vacationed nearly every year at the mogul's estate in the Bahamas. There they would spend the days yachting and snorkeling and attending extravagant parties in a world McCain referred to as "Charlie Keating's Shangri-La." Keating also invited Cindy McCain and her father to invest in a real estate venture for which he promised a 26 percent return on investment. They plunked down more than $350,000.
McCain still attributes the attention to nothing more than Keating's "great respect for military people" and the duo's "political and personal affinity." But Keating, for his part, made no bones about the purpose of his giving. When asked by reporters if the investments he made in politicians bought their loyalty and influence on his behalf, Keating replied, "I want to say in the most forceful way I can, I certainly hope so."
THE KEATING FIVE
In congress, Rep. John McCain quickly positioned himself as a GOP hard-liner. He voted against honoring Martin Luther King Jr. with a national holiday in 1983 — a stance he held through 1989. He backed Reagan on tax cuts for the wealthy, abortion and support for the Nicaraguan contras. He sought to slash federal spending on social programs, and he voted twice against campaign-finance reform. He cites as his "biggest" legislative victory of that era a 1989 bill that abolished catastrophic health insurance for seniors, a move he still cheers as the first-ever repeal of a federal entitlement program.
McCain voted to confirm Robert Bork and Clarence Thomas to the Supreme Court. In 1993, he was the keynote speaker at a fundraiser for a group that sponsored an anti-gay-rights ballot initiative in Oregon. His anti-government fervor was renewed in the Gingrich revolution of 1994, when he called for abolishing the departments of Education and Energy. The following year, he championed a sweeping measure that would have imposed a blanket moratorium on any increase of government oversight.
In this context, McCain's recent record — opposing the new GI Bill, voting to repeal the federal minimum wage, seeking to deprive 3.8 million kids of government health care — looks entirely consistent. "When jackasses like Rush Limbaugh say he's not conservative, that's just total nonsense," says former Sen. Gary Hart, who still counts McCain as a friend.
Although a hawkish Cold Warrior, McCain did show an independent streak when it came to the use of American military power. Because of his experience in Vietnam, he said, he didn't favor the deployment of U.S. forces unless there was a clear and attainable military objective. In 1983, McCain broke with Reagan to vote against the deployment of Marine peacekeepers to Lebanon. The unorthodox stance caught the attention of the media — including this very magazine, which praised McCain's "enormous courage." It was the beginning of a beautiful friendship. McCain recognized early on how the game was played: The Washington press corps "tend to notice acts of political independence from unexpected quarters," he later noted. "Now I was debating Lebanon on programs like MacNeil/Lehrer NewsHour and in the pages of The New York Times and The Washington Post. I was gratified by the attention and eager for more."
When McCain became a senator in 1986, filling the seat of retiring Republican icon Barry Goldwater, he was finally in a position that a true maverick could use to battle the entrenched interests in Washington. Instead, McCain did the bidding of his major donor, Charlie Keating, whose financial empire was on the brink of collapse. Federal regulators were closing in on Keating, who had taken federally insured deposits from his Lincoln Savings and Loan and leveraged them to make wildly risky real estate ventures. If regulators restricted his investments, Keating knew, it would all be over.
In the year before his Senate run, McCain had championed legislation that would have delayed new regulations of savings and loans. Grateful, Keating contributed $54,000 to McCain's Senate campaign. Now, when Keating tried to stack the federal regulatory bank board with cronies, McCain made a phone call seeking to push them through. In 1987, in an unprecedented display of political intimidation, McCain also attended two meetings convened by Keating to pressure federal regulators to back off. The senators who participated in the effort would come to be known as the Keating Five.
"Senate historians were unable to find any instance in U.S. history that was comparable, in terms of five U.S. senators meeting with a regulator on behalf of one institution," says Bill Black, then deputy director of the Federal Savings and Loan Insurance Corporation, who attended the second meeting. "And it hasn't happened since."
Following the meetings with McCain and the other senators, the regulators backed off, stalling their investigation of Lincoln. By the time the S&L collapsed two years later, taxpayers were on the hook for $3.4 billion, which stood as a record for the most expensive bank failure — until the current mortgage crisis. In addition, 20,000 investors who had bought junk bonds from Keating, thinking they were federally insured, had their savings wiped out.
"McCain saw the political pressure on the regulators," recalls Black. "He could have saved these widows from losing their life savings. But he did absolutely nothing."
McCain was ultimately given a slap on the wrist by the Senate Ethics Committee, which concluded only that he had exercised "poor judgment." The committee never investigated Cindy's investment with Keating.
The McCains soon found themselves entangled in more legal trouble. In 1989, in behavior the couple has blamed in part on the stress of the Keating scandal, Cindy became addicted to Vicodin and Percocet. She directed a doctor employed by her charity — which provided medical care to patients in developing countries — to supply the narcotics, which she then used to get high on trips to places like Bangladesh and El Salvador.
Tom Gosinski, a young Republican, kept a detailed journal while working as director of government affairs for the charity. "I am working for a very sad, lonely woman whose marriage of convenience to a U.S. senator has driven her to . . . cover feelings of despair with drugs," he wrote in 1992. When Cindy McCain suddenly fired Gosinski, he turned his journal over to the Drug Enforcement Administration, sparking a yearlong investigation. To avoid jail time, Cindy agreed to a hush-hush plea bargain and court-imposed rehab.
Ironically, her drug addiction became public only because she and her husband tried to cover it up. In an effort to silence Gosinski, who was seeking $250,000 for wrongful termination, the attorney for the McCains demanded that Phoenix prosecutors investigate the former employee for extortion. The charge was baseless, and prosecutors dropped the investigation in 1994 — but not before publishing a report that included details of Cindy's drug use.
Notified that the report was being released, Sen. McCain leapt into action. He dispatched his top political consultant to round up a group of friendly reporters, for whom Cindy staged a seemingly selfless, Oprah-style confession of her past addiction. Her drug use became part of the couple's narrative of straight talk and bravery in the face of adversity. "If what I say can help just one person to face the problem," Cindy declared, "it's worthwhile."
FAVORS FOR DONORS
In the aftermath of the Keating Five, McCain realized that his career was in a "hell of a mess." He had made George H.W. Bush's shortlist for vice president in 1988, but the Keating scandal made him a political untouchable. McCain needed a high horse — so his long-standing opposition to campaign-finance reform went out the window. Working with Russ Feingold, a Democrat from Wisconsin, McCain authored a measure to ban unlimited "soft money" donations from politics.
The Keating affair also taught McCain a vital lesson about handling the media. When the scandal first broke, he went ballistic on reporters who questioned his wife's financial ties to Keating — calling them "liars" and "idiots." Predictably, the press coverage was merciless. So McCain dialed back the anger and turned up the charm. "I talked to the press constantly, ad infinitum, until their appetite for information from me was completely satisfied," he later wrote. "It is a public relations strategy that I have followed to this day." Mr. Straight Talk was born.
http://www.rollingstone.com/news/coverstory/make_believe_maverick_the_real_john_mccain/page/7
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