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I hope it helps, it looks like three of them were more culpable than John McCain and Glenn.
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The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators, Alan Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald W. Riegle (D-MI), were accused of improperly aiding Charles H. Keating, Jr., chairman of the failed Lincoln Savings and Loan Association, which was the target of an investigation by the Federal Home Loan Bank Board (FHLBB).
After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Alan Cranston, Dennis DeConcini, and Donald Riegle had substantially and improperly interfered with the FHLBB in its investigation of Lincoln Savings. Senators John Glenn and John McCain were cleared of having acted improperly.
All five of the senators involved served out their terms. Only Glenn and McCain ran for re-election, and they were both re-elected.
Circumstances
See also: Savings and Loan crisis
The U.S. Savings and Loan crisis of the 1980s and 1990s was the failure of 747 savings and loan associations (S&Ls) in the United States. The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. taxpayer.<1>.
The concomitant slowdown in the finance industry and the real estate market may have been a contributing cause of the 1990-1991 economic recession. Between 1986 and 1991, the number of new homes constructed per year dropped from 1.8 million to 1 million, the lowest rate since World War II.<2>
The Keating Five scandal was prompted by the activities of one particular savings and loan: Lincoln Savings and Loan Association of Irvine, California. Lincoln's chairman was Charles Keating, who ultimately served five years in prison for his corrupt mismanagement of Lincoln.<3> In the four years since Keating's American Continental Corporation (ACC) had purchased Lincoln in 1984, Lincoln's assets had increased from $1.1 billion to $5.5 billion.<4> Such savings and loan associations had been deregulated in the early 1980s, allowing them to make highly risky investments with their depositors' money, a change of which Keating took advantage.<4>
Corruption allegations
Keating had made contributions of about $1.3 million to various U.S. Senators, and he called on those Senators to help him resist regulators, when Lincoln Savings and Loan was being investigated by the Federal Home Loan Bank Board (FHLBB). Lincoln had become burdened with bad debt resulting from its past aggressiveness, and its investment practices were being investigated and audited by the FHLBB:<5> in particular, whether it had violated "direct investment" rules, which prohibited savings and loans from taking ownership positions in certain financial entities and instruments;<6> Lincoln had directed FDIC-insured accounts into commercial real estate ventures.<4> It appeared as though the government might seize Lincoln for being insolvent.<6> The investigation was, however, taking a long time.<5> Keating was asking that Lincoln be given a lenient judgment by the FHLBB, so that it could limit its high risk investments and get into the safe (at the time) home mortgage business, thus allowing the business to survive. A letter from audit firm Arthur Young & Co. bolstered Keating's case that the government investigation was taking a long time.<7>
By March 1987, Keating and DeConcini were asking McCain to travel to San Francisco to meet with regulators regarding Lincoln Savings; McCain refused.<7><6> DeConcini told Keating that McCain was nervous about interfering.<6> Keating called McCain a "wimp" behind his back, and on March 24, Keating and McCain had a heated, contentious meeting.<7>
On April 2, 1987, a meeting with Edwin J. Gray, chairman of the FHLBB, was held in DeConcini's Capitol office, with Senators Cranston, Glenn, and McCain also in attendance.<6> DeConcini started the meeting with a mention of "our friend at Lincoln."<6> Gray told the assembled senators that he did not know the particular details of the status of Lincoln Savings and Loan, and that the senators would have to go to the bank regulators in San Francisco that had oversight jurisdiction for the bank. Gray did offer to set up a meeting between those regulators and the senators.<6>
On April 9, 1987, a two-hour meeting<4> with three members of the FHLBB San Francisco branch was held, again in DeConcini's office, to discuss the government's investigation of Lincoln.<7><6> Present were Cranston, DeConcini, Glenn, McCain, and additionally Riegle.<6> The regulators felt that the meeting was very unusual and that they were being pressured by a united front, as the senators presented their reasons for having the meeting.<6> McCain said, "One of our jobs as elected officials is to help constituents in a proper fashion. ACC is a big employer and important to the local economy. I wouldn't want any special favors for them.... I don't want any part of our conversation to be improper." Glenn said, "To be blunt, you should charge them or get off their backs," while DeConcini said, "What's wrong with this if they're willing to clean up their act? ... It's very unusual for us to have a company that could be put out of business by its regulators."<6> The regulators then revealed that Lincoln was under criminal investigation on a variety of serious charges, at which point McCain severed all relations with Keating.<6> Glenn continued to help Keating after that revelation, by setting up a meeting with then-House Majority Leader Jim Wright, which turned out to be the only questionable thing Glenn did throughout the whole affair.<8>
The San Francisco regulators finished their report in May 1987 and recommended that Lincoln be seized.<6> But in the meantime, M. Danny Wall had succeeded Gray as chair of the FHLBB; Wall was more sympathetic to Keating and took no action on the report, saying its evidence was insufficient.<4><6> In September 1987, the Lincoln investigation was removed from the San Francisco group and in May 1988, a new audit of Lincoln began in Washington.<6>
News of the meetings first appeared in National Thrift News in September 1987, but was only sporadically covered by the general media through April 1989.<9> When the former chairman of the FHLBB went public about the Senators' assistance to Keating, that set off a series of investigations by the California government, the United States Department of Justice, and the Senate Ethics Committee. The Ethics Committee's investigation focused on all five senators, who soon became known as the "Keating Five". The initial charges against the five Senators were brought by Common Cause, a public interest group, and the Senate’s inquiry subsequently lasted 22 months.<10>
Lincoln ultimately failed, was seized by the FHLBB in April 1989,<4> sticking taxpayers with a bill for $2 billion. Keating was hit by a $1.1 billion fraud and racketeering action, filed against him by the regulators.<4> Asked whether his contributions had bought him influence, Keating said: “I want to say in the most forceful way I can: I certainly hope so.”<11>
Keating's relationship with McCain came under particularly intense press scrutiny. McCain and Keating had become personal friends following their initial contacts in 1981.<7> Between 1982 and 1987, McCain had received $112,000 in lawful<12> political contributions from Keating and his associates.<13> In addition, McCain's wife Cindy McCain and her father Jim Hensley had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators. McCain, his family, and their baby-sitter had made nine trips at Keating's expense, sometimes aboard Keating's jet. Three of the trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay. McCain did not pay Keating (in the amount of $13,433) for some of the trips until years after they were taken, when he learned that Keating was in trouble over Lincoln.<6><14>
Conclusion of investigation
The Senate Ethics Committee's report regarding the Keating matter came out in August 1991, and addressed each of the five senators.<15>
Cranston: severely reprimanded
The Senate Ethics Committee ruled that Cranston had acted improperly by interfering with the investigation by the FHLBB.<15> He had received more than a million dollars from Keating, had done more arm-twisting than the other Senators on Keating's behalf, and was the only Senator officially rebuked by the Senate in this matter.<16>
Cranston was given the harshest penalty of all five Senators. In November of 1991, the Senate Ethics Committee voted unanimously to reprimand Cranston, instead of the more severe measure that was under consideration: censure by the full Senate. Extenuating circumstances that helped to save Cranston from censure were the fact that he was suffering from cancer, and that he had decided to not seek reelection, according to the Chairman of the Ethics Committee, Democratic Senator Howell Heflin of Alabama. The Ethics Committee took the unusual step of delivering its reprimand to Cranston during a formal session of the full Senate, with almost all 100 Senators present.<10>
Cranston was not accused of breaking any specific laws or rules, but of violating standards that Heflin said “do not permit official actions to be linked with fund-raising.” The Ethics Committee officially found that Cranston’s conduct had been “improper and repugnant”, deserving of "the fullest, strongest and most severe sanction which the committee has the authority to impose." The sanction was in these words: "the Senate Select Committee on Ethics, on behalf of and in the name of the United States Senate, does hereby strongly and severely reprimand Sen. Alan Cranston.”<10>
After the Senate reprimanded Cranston for repugnant conduct, Cranston took to the Senate floor to deny key charges against him. In response, Senator Warren Rudman of New Hampshire, the Republican Vice-Chairman of the Ethics Committee, charged that Cranston’s response to the reprimand was “arrogant, unrepentant and a smear on this institution," and that Cranston was wrong to imply that everyone does what Cranston had done. Alan Dershowitz, serving as Senator Cranston's attorney, alleged that other Senators had merely been better at “covering their tracks.”<10> Likewise, political historian Lewis Gould has written that, “the real problem for the 'Keating Three' who were most involved was that they had been caught.”<17>
Riegle and DeConcini: criticized for acting improperly
The Senate Ethics Committee ruled that Riegle and DeConcini had acted improperly by interfering with the investigation by the FHLBB.<15>
DeConcini later charged that McCain had leaked to the press sensitive information about the investigation that came from some of the closed proceedings of the Ethics Committee.<6> McCain denied doing so, although one congressional investigator concluded that McCain had been one of the main leakers during that time.<6>
Glenn and McCain: cleared of impropriety but criticized for poor judgment
The Senate Ethics Committee ruled that the involvement of Glenn in the scheme was minimal, and the charges against him were dropped.<15> He was only criticized by the Committee for "poor judgment."<18>
The Ethics Committee ruled that the involvement of McCain in the scheme was also minimal, and he too was cleared of all charges against him.<16><15> McCain was criticized by the Committee for exercising "poor judgment" when he met with the federal regulators on Keating's behalf.<6> The report also said that McCain's "actions were not improper nor attended with gross negligence and did not reach the level of requiring institutional action against him....Senator McCain has violated no law of the United States or specific Rule of the United States Senate."<12> On his Keating Five experience, McCain has 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."<6>
Several accounts of the controversy contend that McCain was included in the investigation primarily so that there would be at least one Republican target.<19><20><21><8> Glenn's inclusion in the investigation has been attributed to Republicans who were angered by the inclusion of McCain, as well as committee members who thought that dropping Glenn (and McCain) would make it look bad for the remaining three Democratic Senators.<19><21> Democrat Robert S. Bennett, who was the special investigator during the scandal, suggested to the Senate Ethics Committee that it pursue charges against neither McCain nor Glenn, saying of McCain, "that there was no evidence against him."<20> The Vice Chairman of the Ethics Committee, Senator Warren Rudman of New Hampshire, agreed with Bennett, but the Chairman, Senator Howell Heflin of Alabama, did not agree.<8>
Regardless of the level of their involvement, both senators were greatly affected by it. McCain would write in 2002 that attending the two April 1987 meetings was "the worst mistake of my life".<22> Glenn has described the Senate Ethics Committee investigation as the low point of his life.<5>
Reactions
Not everyone was satisfied with the Senate Ethics Committee conclusions. Fred Wertheimer, president of Common Cause, which had initially demanded the investigation, thought the treatment of the senators far too lenient, and said, "The U.S. Senate remains on the auction block to the Charles Keatings of the world."<23> Joan Claybrook, president of Public Citizen, called it a "whitewash".<23> Jonathan Alter of Newsweek said it was a classic case of the government trying to investigate itself, labelling the Senate Ethics Committee "shameless" for having "let four of the infamous Keating Five off with a wrist tap."<24> Margaret Carlson of Time suspected the committee had timed its first report to coincide with the run-up to the Gulf War, minimizing its news impact.<23>
Aftermath
Cranston left office in January of 1993, and died in December of 2000. DeConcini and Riegle continued to serve in the Senate until their terms expired, but they did not seek re-election in 1994. DeConcini was appointed by President Bill Clinton in February, 1995 to the Board of Directors of the Federal Home Loan Mortgage Corporation. <25>
Glenn did choose to run for re-election in 1992, and it was anticipated that he would have some difficulty winning a fourth term in the Senate. However, Glenn handily defeated Lieutenant Governor R. Michael DeWine for one more term in the Senate before retiring in 1999.
After 1999, the only member of the Keating Five remaining in the U.S. Senate was John McCain, who had an easier time gaining re-election in 1992 than he anticipated,<26> and who ran for president in 2000 and became the Republican presumptive nominee in 2008. McCain survived the political scandal by, in part, becoming friendly with the political press, and in part by not letting the controversy detract from his work as a senator.<26>
The scandal was followed by a number of attempts to adopt campaign finance reform—spearheaded by U.S. Sen. David Boren (D-OK)—but most attempts died in committee. A weakened reform was passed in 1993. Substantial campaign finance reform was not passed until the adoption of the McCain-Feingold Act in 2002.
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