LA Times ignored McCain's alleged role in Keating Five scandal

››› ››› ERIC HANANOKI

In an article about Sen. John McCain's early political career, the Los Angeles Times' Richard A. Serrano described Charles H. Keating Jr. as "[a]nother influential friend" who "raised more than $100,000 for McCain." Serrano noted that Keating eventually went to prison for his role in a savings and loan scandal, but did not mention McCain's own alleged involvement in the scandal, or that Keating's relationship to McCain reportedly extended beyond simply raising money for his congressional campaigns.

In a May 30 Los Angeles Times article about Sen. John McCain's early political career, staff writer Richard A. Serrano wrote that "[a]nother influential friend [of McCain] was financier Charles H. Keating Jr. The Phoenix resident raised more than $100,000 for McCain. (Keating went to prison in the 1990s for his role in the failure of Lincoln Savings & Loan.)" Yet while noting Keating's role in the Lincoln Savings & Loan scandal, the Times ignored McCain's own alleged involvement; a Senate Ethics Committee investigated allegations that McCain -- along with four Democratic senators, together called the Keating Five -- had exerted improper influence when he met with federal bank regulators on behalf of Keating. The committee found that while McCain didn't break any rules, he "exercised poor judgment in intervening with the regulators."

Moreover, contrary to the Times' suggestion, Keating was not simply a fundraiser for McCain. As The New York Times noted, Keating "gave Mr. McCain free rides on his private jet, a violation of Congressional ethics rules (he later said it was an oversight and paid for the trips). They vacationed together in the Bahamas. And in 1986, the year Mr. McCain was elected to the Senate, his wife joined Mr. Keating in investing in an Arizona shopping mall." In a November 15, 1990, article (accessed via the Nexis database), the Los Angeles Times itself noted Keating's close relationship with McCain, stating that McCain took "nine trips to the Bahamas on Keating's plane before he was elected to the Senate in 1986. He and his wife stayed at Keating's vacation home during three of the trips and his wife invested money in a Keating venture."

Similarly, in a March 1, 2007, article about the Keating Five, The Arizona Republic reported that while during the investigation of the Keating affair, McCain "had adopted the blanket defense that Keating was a constituent. ... Keating was no ordinary constituent to McCain." From the March 2007 article:

He had adopted the blanket defense that Keating was a constituent and that he had every right to ask his senators for help. In attending the meetings, McCain said, he simply wanted to make sure that Keating was treated like any other constituent.

Keating was no ordinary constituent to McCain.

On Oct. 8, 1989, The Arizona Republic revealed that McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators.

The paper also reported that the McCains, sometimes accompanied by their daughter and baby-sitter, had made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. Three of the trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay.

McCain also did not pay Keating for some of the trips until years after they were taken, after he learned that Keating was in trouble over Lincoln. Total cost: $13,433.

When the story broke, McCain did nothing to help himself.

"You're a liar," McCain said when a Republic reporter asked him about the business relationship between his wife and Keating.

"That's the spouse's involvement, you idiot," McCain said later in the same conversation. "You do understand English, don't you?"

He also belittled reporters when they asked about his wife's ties to Keating.

"It's up to you to find that out, kids."

The paper ran the story.

The Republic further reported that McCain admitted in 2002 to having exhibited "ridiculously immature behavior" during the 1989 interview with the Republic, and that shortly after the Republic interview, McCain acknowledged that he "said he should have reimbursed Keating immediately, not waited several years."

Additionally, in the May 30 Los Angeles Times article, Serrano wrote that during McCain's 1982 race for a U.S. House of Representatives seat, McCain's father-in-law, James Hensley, "put him on the payroll as a public relations man for the statewide beer distributorship, giving him the opportunity to meet business executives and gain access to fundraiser lists -- crucial for a political novice." However, Serrano didn't note that Hensley and his business associates reportedly did more than simply give McCain a job with access. The Associated Press reported on April 4:

Within a few years of marrying Cindy Hensley, the daughter of a multimillionaire Anheuser-Busch distributor, John McCain won his first election. He was new to Arizona politics and fundraising in the 1982 race for the House of Representatives, and his campaign quickly fell into debt. Personal money -- tens of thousands of dollars in loans to his campaign from McCain bank accounts -- helped him survive.

Anheuser-Busch's political action committee was among McCain's earliest donors. Cindy McCain's father, James Hensley, and other Hensley & Co. executives gave so much money that the Federal Election Commission ordered McCain to give some of it back. His campaign used Hensley office equipment such as computers and copiers, and Cindy McCain personally paid some of the campaign's bills.

The AP article added, "The [McCain] campaign gradually reimbursed Hensley for use of its equipment and Cindy McCain for her expenses."

From the May 30 Los Angeles Times article:

Colleagues recall how he [McCain] ignored the searing desert heat -- and the risk of skin cancer -- as he campaigned, refusing to wear a hat or tote an umbrella to ward off the sun. His knuckles rapped on 15,000 or so doors that summer. "Let's go hit the bricks!" he liked to say.

It was by no means a solo effort.

His father-in-law put him on the payroll as a public relations man for the statewide beer distributorship, giving him the opportunity to meet business executives and gain access to fundraiser lists -- crucial for a political novice.

McCain also leaned on his Washington connections, old friends such as Sens. William S. Cohen (R-Maine), Gary Hart (D-Colo.) and John G. Tower (R-Texas), his political mentor. All were important in securing endorsements for McCain.

Most fortuitous of all was the fact that the veteran Republican officeholder in the Phoenix area, Rep. John J. Rhodes, had decided to retire -- leaving the 1st Congressional District wide open.

[...]

The candidate also was aided by his friendship with Arizona Republic Publisher Darrow "Duke" Tully, who touted himself as a war hero and was eager to spread McCain's story across his pages. The two were so close that Tully was named godfather to John and Cindy McCain's first child.

(Tully resigned from the paper after it was learned that he had fabricated his war achievements; it turned out he had never served in the military.)

Another influential friend was financier Charles H. Keating Jr. The Phoenix resident raised more than $100,000 for McCain. (Keating went to prison in the 1990s for his role in the failure of Lincoln Savings & Loan.)

"John McCain had some pretty powerful friends at that time," said Donna Carlson, a state legislator and one of the three Republicans who squared off against him in the 1982 primary.

Carlson had moved to the Phoenix area about 15 years before McCain and worked to build her Arizona resume. She was a county committeewoman and a state representative. Before that she headed a local GOP women's group. When Rhodes stepped down, she figured it was her turn to move up. Two other candidates jumped in, which threatened to split the important Mormon vote.

Posted In
Government, Ethics
Network/Outlet
Los Angeles Times
Stories/Interests
John McCain, 2008 Elections
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