John McCain may wish he could fully put the Keating Five scandal behind him, but it appears that his actions during that investigation may continue to raise eyebrows.
A brief overview: In 1990 McCain had to testify along with four other senators before the Senate Ethics Committee regarding their dealings with Charles Keating, the central figure in the S & L collapse that deprived thousands of families of their life savings. McCain had contacted federal regulators investigating Keating, a big McCain donor and close personal friend of McCain, and he had attempted to deter them from investigating Keating further. McCain’s primary defense was that he was unaware of what he was doing, being somewhat green about the economy and financial matters. In the end, the committee censured McCain for “bad judgment” but no further criminal action was taken against him.
The New Republic has reported on two potential new problems for the Arizona senator which I will summarize as follows (their story is here):
1) There is evidence to suggest that John McCain improperly leaked information to investigators to implicate the other four senators involved while mitigating his liability. If so, this would be against the rules of the Ethics Committee, and he would be “subject to expulsion” from the Senate. These leaks were the subject of two separate probes…focusing on John McCain, because each time the leaks seemed to benefit McCain and harm the other senators. New evidence has surfaced: a reporter in possession of this evidence says he firmly believes that McCain was the source of the leaks…so does the original investigator…and a senator supporting McCain’s campaign wrote a letter which states that McCain was responsible. The letter was from Senator Warren Rudman to Senator Howell Helfin and it clearly states that McCain was responsible for leaking the information…the investigator, Clark “Bud” Hall showed this letter to McCain and later reported that all McCain would say was “you’re crazy,” “you’re crazy, man, you’re crazy” for about fifteen minutes. There were nine leaks in all, containing information only discussed in the secret committee hearings, and containing information only known to those present.
For detail on the substance of the leaks, their timing, and the impact they had on the proceedings, please give the National Review article a read…it’s worth it.
2) It also appears that McCain was not entirely honest and forthcoming regarding his financial dealings with Charles Keating. In February 1990, McCain told the Ethics Committee: “Other than the Fountain Square project there were no other financial dealings between him or his family and ACC.” The Fountain Square project was a property deal invested in by Keating and McCain’s family jointly…and the ACC stands for American Continental Corporation, which was Charles Keating’s company.
However, in 1983, a company owned by Cindy McCain and her father bought a property owned by ACC in Mesa, Arizona…and then sold it back to ACC two months later for the exact same price. Here are the property records. There is no explanation in the record of why such an odd, seemingly inexplicable, transaction occurred. McCain neither informed the Ethics Committee of this transaction, nor did he report it on his personal financial transaction disclosure which requires him to document “any interest in property held during calendar year 1983 in a trade or business or for investment or the production of income, which had a fair market value exceeding $1,000 as of the end of the year.” This deal, for property worth $75,000 and performed by his wife and father-in-law, through their company in which he held shares…clearly qualifies, in my estimation.
Now…while it is unlikely that this new information will cause legal action to be taken against Senator McCain, it should give us pause. This man, who claims to put “Country First” and who decries all “gifts” and “special favors” and “consorting with lobbyists“…well, he himself does not have the best track record with regard to his judgment. As Huffpo reported on the subject of the McCain/Keating relationship, “McCain had a close relationship with the Savings and Loan chair, having taken free flights (which he later reimbursed) and received $166,000 in campaign contributions from 1982 through 1986. The two had exchanged notes of friendship as well. After McCain wrote a note apologizing to Keating for listing him as a member of his campaign finance committee – a snub of a post for the long-time donor – Keating replied by writing: “John, don’t be silly. You can call me anything…I’m yours until death do us part.“”