Obama or 527s Must Tell Keating Five Story

It foreshadows McCain's ethical collapse, his coziness to fat cats, and his economic non-policy.

Time for the Obama campaign or some independent groups to raise John McCain's sordid role in the Keating Five scandal. And by "raise" I mean repeat over and over and over again because it is a messaging twofer.

First, the Keating Five scandal provides a point of origin and touchstone for the dishonest and dishonorable way McCain is running his campaign, which has finally become a central point of attack for the Obama campaign. Second, the Savings & Loan scandal also goes to the heart of McCain's anti-regulation, surround yourself with Washington lobbyists, pass-the-buck-to-a-commission approach to our current economic and financial crisis, another point of attack for the Obama campaign.

We have seen again and again in modern U.S. politics that to create a compelling narrative of any candidate's major character flaws, his opponents or the media need to find early hints of that flaw, what I call the quest for foreshadowing (see below). That was why the Swiftboat ads were so devastating to Kerry, as they all-too-successfully offered an alternative negative narrative to the actual story of Kerry's heroic military history. That was the whole reason Gore's opponents worked so hard to keep bringing up past examples of supposed lies and exaggeration, like the myth that he claimed to have invented the Internet, so that they could leap on any seeming exaggeration or misstatement during the 2000 campaign and use it as evidence he was a serial exaggerator or liar.

As for Keating Five, journalist David Sirota on The Rachel Maddow show Tuesday night (here) is the first person I've heard frame this issue the right way (starting at about 2:00):

SIROTA: [McCain is] an ideological conservative who is against regulation. So for him to now run out there and say that he's suddenly the guy who's going to regulate the economy and regulate Wall Street is beyond absurd. And I think we have to look at his history. Let's remember that McCain's formative economic experience was in the last crisis, the S&L crisis where he was one of the Keating Five. In that scandal he was somebody who used his Senate position to effectively intervene and press regulators to not get involved and regulate that scandal.

MADDOW: Well, is there a risk as this economic debacle that we are involved in right now starts to resemble the S&L scandal that the Keating Five issue is actually going to be on the table? Obama and Biden have stayed away from it thus far. Some outside groups have touched on it in a very minor way but I think 99 out of a 100 Americans would have no idea what the Keating Five was or what John McCain's role was in it.

SIROTA: ... I think older Americans might remember the S&L scandal. I think explaining that McCain was involved in that scandal, used his office in that scandal again to press regulators to get out of that scandal, to not essentially regulate the financial industry. It's completely relevant. It's completely important because it's the last example that we have, it's actually the only example that we have, of what John McCain would do with a public office with a crisis like this.

Precisely. McCain sided with his fat cat contributors back then, and he's doing it again today.

The other crucial point to hammer home is that McCain acted unethically back then and he is acting unethically today with his dishonest and dishonorable campaign. Obama is finally starting to make a good case about McCain's dishonor and his corruption -- and I was very glad to see Senator Claire McCaskill repeat and expand upon the dishonor and dishonesty message on Maddow Tuesday night.

But what the public needs to see to really absorb this message is the back story. They think McCain has a long history of being a high-integrity maverick, which makes it hard to sell the notion that he is suddenly changed. But McCain has no such history. Quite the reverse.

If you read the whole sordid story here (excerpted below), you'll see there is no reason for the Obama campaign to steer clear of Keating. Obama has already been directly attacked for his connection with Chicago businessman and political fund raiser, Tony Rezko -- and he no doubt will be again. But McCain was, as we'll see, infinitely closer to then Arizona businessman and political fund raiser, Charles Keating -- and McCain, unlike Obama, actually did something wrong.

Keating was the chair of Lincoln Savings and Loan Association of Irvine, California, and he "ultimately served five years in prison for his corrupt mismanagement of Lincoln." Lincoln had become "burdened with bad debt resulting from its past aggressiveness, and by early 1986, its investment practices were being investigated and audited" by the Federal Home Loan Bank Board (FHLBB) over whether it had violated rules limiting certain kinds of risky, direct investments. [Hmm. That certainly sounds familiar.] "Lincoln had directed FDIC-insured accounts into commercial real estate ventures. By the end of 1986, the FHLBB had found that Lincoln had $135 million in unreported losses and had surpassed the regulated direct investments limit by $600 million."

The core allegation of the Keating Five affair is that 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. The regulators backed off, to later disastrous consequences.

In 1991, the Senate Ethics Committee found that McCain had exercised "poor judgment" for meeting with federal regulators on Keating's behalf. Others members of the Keating Five were found to have acted improperly. Many independent observers thought all five got off lightly, especially McCain, who had far closer ties to Keating than the others:

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." Joan Claybrook, president of Public Citizen, called it a "whitewash." 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." 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. One of the San Francisco bank regulators felt that McCain had gotten off too lightly, saying that Keating's business involvement with Cindy McCain was an obvious conflict of interest.

McCain's incredibly close ties with Keating foreshadow his incredibly close ties with lobbyists today, especially with the oil industry, whose polluting policies McCain flip-flopped to embrace this year and whose lobbyists McCain now has running his campaign. As the Washington Post put it in July, "[Oil] Industry Gushed Money [to McCain] After Reversal on Drilling," which found that "Oil and gas industry executives and employees donated $1.1 million to McCain" in June -- three-quarters of which came after his June 16 speech in which he "made a high-profile split with environmentalists and reversed his opposition to the federal ban on offshore drilling."

Now consider just how cozy Keating was to McCain:

McCain was the closest socially to Keating of the five senators.... Between 1982 and 1987, McCain had received $112,000 in political contributions from Keating and his associates. 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.

So McCain's unethical behavior today in his campaign, his cozy relationship with lobbyists and industry fat cats whose agenda he pushes, is nothing new. The Obama campaign should be running an ad on this, and surrogates should be talking about it. And if they won't, then independent groups must. It is a crucial back story that undercuts McCain's entire image as an ethical reformer who can clean up Washington.

The Keating Five story foreshadows everything McCain has become. And foreshadowing is a central component of successful political messaging.

The reason foreshadowing works, and the reason we see so much of it in popular culture and political coverage, is that we believe people's individual lives have a pattern--a circularity, a consistency. We see that repetition ourselves, in our own lives--we see the people around us making the same decisions, the same mistakes, over and over again, and, if we achieve some wisdom and self-awareness in our own lives, we realize we repeat ourselves, too. As one example, in Getting the Love You Want, one of the basic texts for couples' therapists, Harville Hendricks explains that perhaps the single most reliable indicator for why someone falls in love with you is that your negative qualities match those of their opposite sex parent or caregiver. Thus do we tend to relive the same story as our parents.

Consider an example well-known to social scientists--the "Linda-the-bank-teller problem." Two researchers gave students the following description of a hypothetical person:

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

They then had the students rank several statements about Linda on a 1-to-8 scale with 1 being the least probable and 8 being the most probable. Two of the 8 statements were as follows:

• Linda is a bank teller. (T)
• Linda is a bank teller and is active in the feminist movement. (T&F)

From a purely logical or statistical perspective, statement T must be more probable than statement T&F, since the latter statement presupposes the former is true. And yet when either graduate and medical students with statistical training or Ph.D. candidates in Stanford Business School's Decision Science Program were given this question, more than four-fifths in each group ranked T&F as more probable than T. They thought it was more likely that Linda was a bank teller and a feminist than just a bank teller alone. This result caused a big stir among social scientists, but should not be that surprising to us. We think in terms of a whole person, and we try to scratch out a consistent story from whatever facts we get. The original description doesn't match Linda-the-bank-teller that well, but makes more sense for Linda-the-feminist-bank-teller. Our thinking processes are not purely logical, especially when we are judging other people. As one student remarked after the statistical mistake was pointed out to them, "I thought you only asked for my opinion."

The Jesuits have a maxim, "Give me the child until he is seven, and I will show you the man." Director Michael Apted built an entire series of movies around this idea, that the child foreshadows the man (or woman). He started with Seven Up, the brilliant 1964 film that began to track the lives of 14 British youngsters, followed by films that revisit them every seven years, the most recent being 49 Up. The films show that even seven-year-olds can demonstrate a prophetic view of how their lives will unfold, and that there is indeed much of the child in the adult and vice versa.

Politicians and the media believe that the public believes in foreshadowing. Why else do so many politicians spend so much time telling their story, crafting a story of humble beginnings? Why do so many journalists spend so much time retelling the politicians' stories? Why do so many journalists spend so much time digging up specks of dirt from the distant past, looking for an event or a symbol that casts a shadow over-or perhaps eclipses entirely-a politicians' entire career?

And since the media is increasingly focused on personalities and entertainment, on storytelling and drama, the pressure to find (or invent) foreshadowing will only grow more intense. The media bards want an epic song to sing, and the best politicians want to write the lyrics. To repeat a story President Bush told from an October 30, 2004 campaign speech:

"Sometimes I'm a little too blunt-I get that from my mother. [Huge Cheers] Sometimes I mangle the English language-I get that from my dad. [Laughter and Cheers]." At a Social Security rally with her son in March 2005, Barbara Bush shared with the audience the story of a stubborn child, concluding, "So, now you can see where the President's tenaciousness comes from -- which people also seem to admire so much. It's what you want in a president; it's not what you want in a six-year-old."

Give me the child until he is six, and I will show you the president. And even in this case, we have the ironic transformation, whereby a supposedly positive character trait identified early on, tenaciousness, has in fact become perhaps Bush's defining character flaw.

To sum up, foreshadowing works in life for the same reason it works in art: People like straightforward stories and coherent characters. They like a beginning, middle, and end that somehow connect. If the golden rule of speechmaking is "Tell 'em what what you're going to tell 'em; then tell 'em; then tell 'em what you told 'em," then the golden rule of political storytelling is, "Tell them where you came from, then tell them who you are, then tell them what you're going to do" -- but make certain that it's all part of the same story and the same extended metaphor.

McCain acted unethically back then, and he's acting unethically now. He was too cozy with corporate fat cats back then, and he is too cozy with corporate fat cats now. McCain pushed for less regulatory oversight of the financial industry back then -- and that has been his history ever since. The best messages, the truest messages, write themselves.

If you're not attacking, you're losing.

Comments

[mimigrammy]

Keating Five is one of those experience issues that must be relived for the benefit of the American Electorate. John McCain and his sarrogates love to hammer home the fact that it is he who has the experience in this race. I say, "YES IT IS", and McCain's record of experience should be talked about, talked about and talked about. Since the Keating Five scandal John McCain has failed to use his influence as a senior legislator to put forth any legislation that would address the issues of Keating Five and the situations that have put us in the financial mess we now find ourselves in as a country. Failure to properly regulate is what led to the worst scandal and abuse of the taxpayer since the 1980's and John McCain has done nothing but advocate for more of the same since the Keating Five matter. AMERICAN'S DESERVE TO KNOW THE TRUTH ABOUT JOHN MCCAIN.

[Bladernr1001]

That was a pretty long post....and not once was DEMOCRAT Senator Alan Cranstons's name mentioned. Both parties were represneted in the Keating 5.

Don't try to tell me a Democrat would have handled these things better...they are all crooks.

[kotipup]

Sen Alan Cranston is not running for President of the United States.

[mimigrammy]

The Democrats involved in the Keating Five matter are not running for President, JOHN MCCAIN IS.

[sandrarita]

I am naive about some of the terminology being used, but if it's advisable to reveal it, will somebody please tell me what the 527s are?

[kotipup]

If I understand correctly, 527s are like political action groups. They are independent groups that champion certain causes/ways of thinking. They are able to raise and spend as much money as they want to or can, unlike political candidates who have limits on the donation amount per person that they can accept. They can then spend that money supporting or tearing down a particular candidate. There are probably other posters who understand this much better than me, and can explain it better.

[sandrarita]

thank you.

[laylahb]

It's all about timing. Trust me, they'll use it. They will use it when the launch codes are input. I can't wait. The ad is essentially done. They just have to add the 2008 sound-bites.

I hope they use newsclips of little old ladies all 20,000 of them, crying about losing their life savings through Keating's blatantly fraudulent actions. We have to have the shots of Keating with his arms around McBush, the jet, the compound in the Bahamas. Oh, of course, we can't run the ad without the shot of McBush, John Glenn, Pete and the other two with their right hands raised before the Senate Hearing.

[proudem]

When I took the LSAT I had to take a course in logic. I was surprised at how conditioned I was to believe illogical statements. Logic should be taught in schools very early. It helps to condition students to think critically...just a thought

[hockeymom huh]

Quadman-
I read the same wiki article, and the POINT is that of MISJUDGEMENT. He made a bad judgement call then and it could easily happen again.

[cynicism101]

Uhh, no - actually it cant ...

After this event, John McCain championed campaign finance reform. After several failed attempts to push this reform upon the entrenched DC stronghold, it was finally pushed through in 2002. The McCain-Feingold Act made the unethical activities committed by Cranston, Deconcini, and Riegle illegal under federal election law.

Got an example of anything your guys did to actually make corruption illegal?

[quadman]

Yeah, a freshman Senator with two years under his belt, that sounds vaguely familiar by the way. Poor judgement remains poor judgement if the behavior doesn't change. As noted already, McCain was the lynchpin for campaign finance reform just a few years after Keating 5. There are people in this world who sadly don't believe in redemption. Are you comfortable with BHO's stand on the Illinois born alive act?

I would be much more comfortable associating myself with those who recognize their mistakes and then try to make things better (see McCain and Ted Kennedy), than to associate with those who insist they haven't made any

[mimigrammy]

The Keating Five matter is not about Campaign Finance, it is about regulatory practices that were misused and abused for the benefit of people like Keating. McCain knows that. The Campaign Finance Reform legislation did nothing for regulatory practices. It was a diversion used by McCain put him in the position of appearing as though he was doing "something", when in reality "he has done nothing" to address the disease that was taking over our financial systems then and has grown to the point we now find ourselves.

[hockeymom huh]

When I out about the Keating Five I wasn't at all surprised since McCain is clueless about economics and always votes according to friends.

[cowboycliff]

Hey, sorry if this seems off topic, but after the vid, go to the one called " Sleazy McCain and Ms. Mooselini." It is powerful and might appeal to many McCain supprters and undecided voters who have failed to see the light.

[Thomas54]

Has anyone noticed just how many of THE VERY RICH are coming out and now supporting McCain? Why just today, TRUMP came out to support McCain. Then there was the socialite billionaire that was also for Hillary that is also now endorsing McCain. Obama has made no bones, of the fact that these people will start being taxed, and having to pay their fair share. And they are getting scared. Maybe they would actually have to start paying some real money they've acquired for years now; making ALOT of money on the markets and the American consumers. Wow, if they actually had to pay some taxes, perhaps their net worth would go from 850 million to 847 million.. or whatever. These people have had basically a free ride for years now, using non profit foundations and brilliant accountants and off shore accounts, to twart paying anything. The middle class is tired of paying the bulk and getting squeezed to the point of death. ITs time for the very wealty corporations and individuals to pay their fair share. YES, its time for a big change.

[fivestring]

I've been waiting for the 'Keating 5' business to finally hit the fan. McCain was scolded by a committee of his peers for his poor judgment. McCain is spending a lot of TV money these days telling us how HE is the one with the judgment to run this country when he has been told previously by his fellow senators that he doesn't have the judgment to run his own senatorial office and keep his nose clean. This little Keating business cost us taxpayers a lot of money and this bit of history shouldn't fall to the revisionists.

[quadman]

Yeah Joseph,

Go ahead and state how two of the Keating 5 (McCain and Glenn) were officially cleared of any wrong-doing in the fiasco, while the other three, all Dems, had political careers ruined or ended because of their shady acts.

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

[cynicism101]

Quad - you're not completely correct.

One of those three hardly had their career ended via involvement in Keating 3. Deconcini found his way to the board of directors of Freddie Mac (thanks to an appointment from WJC) ... and now he's a prominent DC lawyer/lobbyist.

[quadman]

I am from AZ and it killed his political career as I stated.

[quadman]

Freddie Mac board. Hmmmm, I wonder how much he has fleeced the taxpayers.

[AZM]

Republicans are very effective at covering up shenanigans. How many people remember Neal Bush, brother of George Bush, who participated in the downfall of Silverado Bank in Colorado back in the '80s?

[cynicism101]

Yes, PLEASE bring the Keating 5 to the forefront. Only, let's bring the FACTS into the discussion, and then we can get the scandal renamed correctly - Keating 3.

The investigation was led by Democrats, and looked into dealings with 4 Dems and 1 Republican. At the time of the scandal, assertions were made that John McCain was wrongly implicated exclusively for partisan reasons ... ie, we can't demonstrate that only Democrats were complicit.

One Democrat, the former astronaut John Glenn, and the Republican John McCain were both cleared of any wrong doing. I repeat - the Democrat led investigation CLEARED John McCain.

Now - let's focus on the three who were found complicit in wrong doing. Two retired from public life. The other, Dennis Deconcini - after demonstrating his total lack of trustworthiness and integrity in financial and banking matters, well, President Clinton overlooked all those short comings and appointed him to the board of directors of Freddie Mac. The same Freddie Mac who has sunk incredible amounts of campaign contributions into the coffers of Senator Obama. So much so, that in 3 short years, Obama has received more from Freddie/Fannie than any other politician over the last 20 years, sans one individual - Sen Chriss Dodd, the guy chairing the Senate team responsible for monitoring Fannie/Freddie.

[jacqmac]

The S&L SCANDAL has many faces. MANY of them are still in Washington. Bush (brother), Bush, Bush, McCain to name a few. Now -I seem to remember that McCain said with ALL HIS HEART that he would pick his friends more carefully and that he' d see that what happened would NEVER HAPPEN AGAIN! Never say NEVER! Here we are on Monday and McCain is saying 'SEND ME TO THE WHITE HOUSE AND I"LL MAKE SURE THIS DOESN'T HAPPEN AGAIN." I didn't believe it the first time and I don't believe it now. This scandal has been going on for nearly 20 years. Aided and abetted by a Republican MAJORITY in House and Senate. Okay--and John McCain hangs out with the Easter Bunny?? He doesn't HANG OUT with them really-but he sure does listen to them when they jingle the change in their pockets! The absolute GUTTING of the NEW DEAL has taken place on BUSH'S watch!
And McCain's 'suggestion'? Another addition to the 'alphabet soup'-probably overseen by one of his campaign lobbyist staffers. CAN John McCain run a major corporation? NO! CAN John McCain RUN the government? NO! He's too close-he's too 'old boy' and he's to comfortable in his past glory to get up to 21st Century speed.
Obama/Biden '08

[lfvaugn3]

let the one's do not know of the real john mccain scandal bring it to life again, john mccain is not fit for the office, say no to this liar.

[RealityCheck101]

McCain's overall record is one of honor. He was a first term Senator during the Keating Five scandal and only met with Keating because he felt obligated to because of the campaign contributions. However, he did not push for legislation to help Keating, in fact he told Keating to suck it. The only reason he got caught up in that storm is because of his ties with Keating and the fact that he was present at the meeting with the four other Senators. The ethics committee got it right and exonerated him. They were fair when they said he exercised poor judgement and he has talked extensively about how he regretted what happened. McCain in fact sponsored a bill called McCain-Feingold which cleaned up campaign finance. And you can't just put the negative tag on deregulation. Yeah, he is a deregulator as most Republicans. Some regulations go to far and put a stranglehold on the economy. This new crisis was caused by repealing the Glass-Steagall act. Guess who signed it: WILLIAM JEFFERSON CLINTON. Also, you had these guilty liberals like Barney Frank who were pushing banks to hand out loans to low income workers without any money down. Now I'm not blaming those poor people or liberals in general. This problem is bipartisan and it will take a bipartisan leader to fix these challenges like McCain who worked on campaign finance reform with one of the most liberal Senators in Russ Feingold.

[KateinAZ]

Realitycheck you NEED a reality check! Any one want to find the tape of McCain and Deconcini having to publicly apologize for their rolls in that mess?

[cynicism101]

Anyone with the press release showing WJC appoint Deconcini to the board of directors at Freddie Mac AFTER deconcini was actually found COMPLICT in the Keating 3?