Reply #44: McCain was one of the Cheating Keating Five

[UpInArms]

and Keating was an anti-porn crusader who went after Larry Flynt and when he was charged with his bank scam, he hired Alan Greenspan as his economic consultant

http://en.wikipedia.org/wiki/Charles_Keating

Charles Humphrey Keating Jr. (born December 4, 1923 in Cincinnati, Ohio) is an American lawyer, politician and banker. In 1999, he was convicted of fraud as a result of his central involvement in the savings and loan scandal of 1989. He is also noted as a vehement anti-pornography campaigner.

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Failure of Saving & Loan, the Keating Five

In 1972, Keating began to work for American Financial Corp., a company involved in insurance and banking. Four years later he moved to Phoenix, Arizona to run the real estate firm American Continental Corporation, a spin-off of American Financial Corp. In 1984, American Continental Corporation bought Lincoln Savings. 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.

Some regulators noted the danger and pushed for more oversight, but Congress refused. Some of this may be due to the Keating Five, five Senators (Dennis DeConcini, Alan Cranston, John Glenn, Don Riegle and Keating's good friend John McCain) who had received some $300,000 from Keating in the 1980s as political contributions. They later met twice with regulators who were investigating American Continental Corp., in an attempt to end the investigation. (In 1990, they would be rebuked to various degrees by the Senate Ethics Committee.)

In 1985, Keating hired Alan Greenspan as an economic consultant, in an effort to convince an oversight agency to exempt Lincoln Savings from certain regulations. Greenspan delivered a favorable report, writing that Lincoln Savings was "a financially strong institution that presents no foreseeable risk to depositors or the government." (Greenspan produced similar favorable reports on numerous other banks that also failed soon after.) The agency ultimately declined the request.

American Continental Corporation, the parent of Lincoln Savings, went bankrupt in 1989; more than 21,000 mostly elderly investors lost their life savings, in total about $285 million, largely because they held securities backed by the parent company rather than deposits in the federally insured institution, a distinction apparently lost on many if not most of them until it was too late. The federal government covered almost $3 billion of Lincoln's losses when it seized the institution. Many creditors were made whole, and the government then attempted to liquidate the seized assets through its Resolution Trust Corporation, often at pennies on the dollar compared to what the property had allegedly been worth and the valuation at which loans against it had been made.

In 1989, Keating, when subpoenaed to testify before the House Banking Committee, invoked his right against self-incrimination under the Fifth Amendment to the United States Constitution.<1><2>

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