With a little help from Google...
Why is John McCain's role in the Savings & Loan meltdown of the 1980s and the subsequent billion bailout not being discussed, when his actions then contributed to what's happening now?
To review: John McCain was one of the Keating Five, senators who received hundreds of thousands of dollars in gifts from Charles Keating, chair of Lincoln Savings & Loan. On his behalf, they met with and pressured regulators of the Federal Home Loan Bank Board not to investigate and punish Lincoln for its risky practices in real estate and junk bonds, and its illegal concealment of losses. The bank then collapsed and was bailed out at taxpayers' expense for $2 billion. Charles Keating eventually served five years in jail for corruption.
McCain backed away from Keating after criminal proceedings against him began, but McCain had received over $100,000 from Charles Keating and his agents -- and that doesn't include Cindy McCain's $300,000 investments in Keating's properties.
Sources: Wikipedia (for now) Arizona Republic Phoenix New Times
The problem was much bigger than Lincoln Savings & Loan. McCain and the other Keating Five had championed the deregulation of banking, removed regulations in place since the Depression, and lobbied on behalf of banks allowing them to make risky investments, especially in real estate and in the mortgage industry. This led to the collapse of 747 savings & loans banks, and the US government was forced to step in with a $125 billion dollar bailout of the banking industry.
Despite getting burned, McCain continued to be an active proponent of deregulation on behalf of the banking industry, and had an active role in deregulation as Chairman of the Commerce Committee 1997-2001 and 2005-2007. In an article from earlier THIS MONTH
, McCain not only praised banking deregulation, but wanted American health care to be modeled on the new, improved, deregulated Wall Street: "Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking,
would provide more choices of innovative products less burdened by the worst excesses of state-based regulation." -- John McCain qtd in Huffington Post
So McCain did not learn his lesson during the Savings & Loan collapse -- even though he was investigated by the House Ethics Committee for his relationship with Charles Keating, and received a reprimand for bad judgment! For fifteen years McCain has continued to advocate deregulation and minimal government oversight, allowing banks to make the same sorts of risky investments that caused the 1980s collapse and government bailout of the banking industry.
And here's the real kicker.
McCain's campaign co-chair, Sen. Phil Gramm, has been THE "premier lobbyist"
on behalf of Wall Street banking firms, who as recently as Dec 2007 successfully lobbied to prevent Congress from bailing out homeowners caught by the mortgage crisis. Phil Gramm is rumored to be McCain's pick for Secretary of Treasury.
Meanwhile, the banking bailout bill being pushed on Congress by the Bush Administration will give UNPRECEDENTED powers to the Secretary of Treasury -- without oversight
-- to dispose of the banking bailout dollars -- our $700 billion, and probably more than that by the time this is all over -- as he sees fit.
Are you worried yet?