Obama Campaign Goes for McCain's "Keating Five" Involvement

[Randy]

From the Huffington Post:

Update 12:30pm Monday, October 6:
The Obama campaign has released the full video of "Keating Economics: John McCain and The Making of a Financial Crisis." Watch it below:

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The Obama campaign, in an effort to combat increasingly negative attacks by the McCain camp, is launching an aggressive, multi-pronged effort to highlight McCain's involvement in the "Keating 5" savings-and-loan scandal:

Sen. Barack Obama (D-Ill.) on Monday will launch a multimedia campaign to draw attention to the involvement of Sen. John McCain (R-Ariz.) in the "Keating Five" savings-and-loan scandal of 1989-91, which blemished McCain's public image and set him on his course as a self-styled reformer.


Pushing back against what it calls McCain's "guilt-by-association" tactics, the Obama campaign is e-mailing millions of supporters a link to a website, KeatingEconomics.com, which will have a 13-minute documentary on the scandal beginning at noon Eastern time on Monday. The overnight e-mails urge recipients to pass the link on to friends.

The Obama campaign, including its surrogates appearing on radio and television, will argue that the deregulatory fervor that caused massive, cascading savings-and-loan collapses in the late '80s was pursued by McCain throughout his career, and helped cause the current credit crisis.

The Obama camp released this 30-second trailer for a 13-minute video highlighting McCain's connection to the scandal that will be released in full tomorrow at 12pm EST on the website keatingeconomics.com.


A former federal regulator with intimate knowledge of the savings-and-loan scandal recently told HuffPost's Seth Colter Walls that McCain is repeating mistakes from the Keating era:

William Black -- a deputy director of the Federal Savings and Loan Insurance Corporation during the "Keating Five" scandal that nearly ended McCain's political career -- says the Arizona Republican's chief errors at the time were underestimating the importance of regulation and relying too heavily on slanted advice from captains of industry.


"In the S&L crisis, he took his advice from the worst [kind of] criminal. Charles Keating is the person he went to for his policy advice," Black said. "Now, he certainly is getting advice from Phil Gramm, Carly Fiorina, Rick Davis -- the whole group of economic and top political advisers are lobbyist types. He just doesn't seem to get it, ever, that the advice is going to favor their clients. Even if they just stop being lobbyists, you can't just turn that off instantly. It's their mind state that develops. ... The biggest lesson is that, when you deregulate and de-supervise, you create an environment where control fraud emerges. You hyper-inflate bubbles; you get criminalization."

McCain's "Keating 5" Scandal Involvement To Be Highlighted By Obama Campaign



Wasn't sure they were going to go for it, but considering how much the Republicans have been trying to make Bill Ayers stick... it's no surprise the Obama Campaign finally "went there"

 

[Elysian]

they've also been all over Obama about rezko, so i think with the tactics mccain is trying to use, keating 5 is fair game.

 

[Drew]

It's also a no-win for him. Yes, he was technically cleared of all guilt... But the committee concluded that he had "exersized poor judgement" and reprimanded him for it. If he's running against Obama on an "experience" ticket, and accusing Obama of poor judgement on fioreign affairs, it's way too obvious of a counter attack.

Part of me has to wonder just how much control McCain has over Palin these days anyway, because in a number of cases McCain is saying one thing and Palin is plowing blithely ahead. Does she just not get the party memos anymore?

 

[The Trooper]

Persoanlly, I think there's no need to tread that path at the moment. Obama is doing well in the polls, and that trend continues despite the negative ads from McCain. Obama's camp stands up and spends a week complaining that McCain is using negative attacks and smear tactics and saying there's no place in the election for it...

...then 5 minutes later does the exact same thing, looking like a hypocrite. Unless the negative ads were affecting opinion - and the polls show no indication of that - I don't see the need to contradict yourself and make yourself look like a hypocrite for seemingly little to no return on the effort.

 

[Randy]

Looks like the AP picked up on this as well:

WASHINGTON - Nearly two decades later, John McCain is still haunted by his role in the Keating Five scandal.
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His role in the 1980s banking scandal is featured in a new Barack Obama attack video. McCain's presidential campaign quickly moved to limit any damage.

The Republican senator's lawyer in the case, John Dowd, told reporters in a conference call Monday that McCain had been the victim of "a political smear job" by Senate Democrats.

When a reporter noted that McCain himself has spoken contritely about his role, Dowd responded, "I'm his lawyer and I have a different view of it."

McCain said his reputation was so tarnished by the Keating case that he compared his ordeal — in some ways — to the torture he suffered as a prisoner of war.

"I faced in Vietnam, at times, very real threats to life and limb," McCain told The Associated Press in a written statement last March. "But while my sense of honor was tested in prison, it was not questioned. During the Keating inquiry, it was, and I regretted that very much."

The Obama video was released after Alaska Gov. Sarah Palin, McCain's running mate, criticized Obama's association with Bill Ayers, a founder of the Vietnam-era radical group the Weather Underground.

The Keating Five were four Democratic senators, and Republican McCain, who accepted contributions from Charles Keating Jr., a real estate speculator and savings and loan owner. His institution failed and cost many investors in uninsured financial products their life savings.

Once close to Keating, McCain received $112,000 from him, his family and associates. The senator and his family also flew in Keating's plane to the Bahamas and — in the events that triggered the Senate investigation — took up his cause with financial regulators as they were investigating the businessman. Keating eventually went to prison. McCain eventually repaid $112,000 to the U.S. Treasury and reimbursed Keating for the trips.

The irony of the Keating case is that McCain received the mildest ethics committee rebuke of the five senators in 1991, and was kept as a defendant because he was the only Republican. The special counsel in the case had recommended that McCain and one of the Democrats be dropped as defendants. But Democrats, who controlled the Senate, refused to take all the heat for the scandal and all five remained in the case to the end.

McCain, in his book "Worth the Fighting For," lamented that the senators "were now a two-word shorthand for the entire savings and loan debacle and the rotten way American political campaigns are financed."

He also wrote: "My popularity in Arizona was in free fall. ... I expected a rough, and quite possibly unsuccessful re-election campaign in 1992. To the extent I was known nationally anymore, it was as one of the crooked senators who had bankrupted the thrift industry."

Dowd, in his conference call, wouldn't tolerate a hint of an apology for McCain's actions.

"John was the only senator who threw Charlie Keating out of his office," he said, reminding reporters of a well-publicized confrontation. Keating had called McCain a wimp for failing to do more to influence financial regulators on his behalf.

McCain is the only Keating Five defendant still in the Senate. The senators were accused of trying to intimidate regulators on behalf of Keating, who along with his associates, raised $1.3 million combined for the campaigns and political causes of the five.

The investigation ended in early 1991 with a rebuke that McCain "exercised poor judgment in intervening with the regulators." But the ethics committee also determined McCain's actions "were not improper nor attended with gross negligence."

The committee said more than one year had passed — a "decent interval" — between the last contributions Keating raised for McCain and the two 1987 meetings he attended with banking regulators.

None of the five senators was punished by the Senate.

"The appearance of wrongdoing, fair or unfair, can be potentially as injurious as actual wrongdoing," McCain told the AP in March, reflecting on what he said were his lessons from the scandal. "Also, when questions are raised about your integrity or for that matter anything involving your public career, even, for example, a controversial position on the issues, it is best not to hide from the media or public."

Keating went to prison for more than four years after a federal fraud conviction. The conviction was reversed on appeal after he argued that jurors improperly had knowledge of a prior state conviction on related charges. He was to be retried in federal court but instead pleaded guilty to four federal fraud counts. Keating admitted he siphoned nearly $1 million from his S&L's insolvent parent company. He was sentenced to time he already had served.

McCain revisiting Keating 5 banking scandal again - Yahoo! News

 

[eaeolian]

...then 5 minutes later does the exact same thing, looking like a hypocrite. Unless the negative ads were affecting opinion - and the polls show no indication of that - I don't see the need to contradict yourself and make yourself look like a hypocrite for seemingly little to no return on the effort.

Don't kid yourself. There's still posturing to be done, and this is the Obama campaign's way of informing McCain's campaign that they're not going to take the "Swift Boat" tactics lying down. I suspect it may get ugly, because McCain's got no chance otherwise.

 

[Randy]

take the "Swift Boat" tactics lying down.

Kerry tried to "take the high road" on that one for a while, and it festered until it ultimately sank in. His credibility took a hit from it, and his reluctance to directly engage made him look weak, or like he might've actually been guilty of what they accused him of.

The concept of "I can hit you, but you can't hit me back" just because you "pledge" not to is used in every campaign *federal, state, and local* I've ever seen. It was inevitable that this fight would get dirty, no matter who was leading or by how much.

 

[xXxPriestessxXx]

To me, there is a difference in smear tactics and presenting relevant facts to a voting populace. This Keating 5 deal is very relevant considering the current state of our economy.

 

[Uber Mega]

With the Obama campaign doing well in polls, is this them going in for the kill? As he recently stated (and I like this): "We don't throw the first punch, but we'll throw the last".

 

[The Trooper]

Don't kid yourself. There's still posturing to be done, and this is the Obama campaign's way of informing McCain's campaign that they're not going to take the "Swift Boat" tactics lying down. I suspect it may get ugly, because McCain's got no chance otherwise.

Oh, no doubt. With McCain's back against the wall now, he'll be grabbing mud and slinging it on anyone that gets close. I was just saying with his current poll numbers and the the opinion swing, I don't see a need to spend the money/time there unless things take a drastic turn.

 

[Drew]

Oh, no doubt. With McCain's back against the wall now, he'll be grabbing mud and slinging it on anyone that gets close. I was just saying with his current poll numbers and the the opinion swing, I don't see a need to spend the money/time there unless things take a drastic turn.

Just getting it out there is probably enough, IMO. Like I said previously, I'd never even heard about the "Keating Five" until someone (Mike?) mentioned it a few months ago here, and the under-30 vote is going to be a huge factor this election. If McCain can convince enough of us he's a champion of reform then he might be able to dampen Obama's lead, but this is the sort of reminder that makes it tough to do so.

...and, strangely, almost makes Obama look principled. Bear with me, but it's obviously something that Obama and his team were aware of, yet they're only choosing to bring it up now, almost a full year after McCain was the known nominee. There's the sense, arguably, that Obama was trying not to get dirty until Palin started harping on Ayers and Wright, and that maybe Obama really was trying to stay on the high road.

Do I believe this? Who knows. I talked to my buddy involved in the campaign, and his answer was something like, "basically, we were hoping we wouldn't have to go down that road." That just might be the party line they're feeding him/everyone, or it may actually be true, but it's a very believable one.

 

[eaeolian]

Oh, no doubt. With McCain's back against the wall now, he'll be grabbing mud and slinging it on anyone that gets close. I was just saying with his current poll numbers and the the opinion swing, I don't see a need to spend the money/time there unless things take a drastic turn.

I think it's prudent, given the history of this tactic on the American people. Interesting (and timely) reading on this subject...

 

[Drew]

I think it's prudent, given the history of this tactic on the American people. Interesting (and timely) reading on this subject...

Yikes.

Their second conclusion was even more disturbing. Subjects who identified as politically conservative were not only immune to the effects of having a lie corrected, the correction made them even more likely to believe a lie. So, for instance, one group of conservative subjects was presented with a news story that depicted President Bush claiming weapons of mass destruction had been found in Iraq. A second group of conservatives was presented with the same thing, along with a paragraph noting that Bush's statement was untrue. The second group was more likely than the first to believe that Iraq possessed WMDs. The very fact of the press challenging their beliefs seems to have made conservatives more likely to embrace them. If this finding is broadly correct, then the media's newfound willingness to fact-check McCain will only succeed in rallying the GOP base to his side.

 

[The Trooper]

I live with it every day. I have a set of in-laws (who were staying at my house as we watched the VP debate together) that are die-hard, "the media hates my party" Republicans. They refuse to believe anything negative about Bush/McCain/Palin, despite the evidence.

On an interesting note, my brother-in-law was out in DC campaigning for Obama and registering voters (he's a volunteer) right before he came over. You can imagine the wonderful dinner conversations we had...

 

[thadood]

Yikes.

That quote is absolutely horrifying.