FEC Investigating McCain Contributions

Have you noticed how often John McCain and other Republicans project their own sins onto Barack Obama? This appears to be the case once again with their accusations regarding accepting excessive donations. The FEC is investigating the issue–investigating John McCain that is. From The Trail:

While the Republican Party is pushing the Federal Election Commission to investigate the possibility that Democrat Barack Obama collected excessive contributions, its own candidate is facing scrutiny on the same subject.

The FEC sent a letter to Sen. John McCain’s campaign treasurer Sept. 30 demanding the candidate turn over more information about “contributions that appear to exceed the limits.”

The letter is accompanied by a nine-page list showing scores of overages from McCain’s August campaign finance report, including nearly $13,000 from Texas rancher Ray R. Barrett Jr.; $9,200 from an Iraqi security consultant, H. Carter Andress; and $5,000 from Joseph F. Davolio, an executive at a major national liquor, beer and wine distributor.

“Please inform the Commission of your corrective action immediately in writing and provide photocopies of any refund checks and/or letters reattributing or redesignating the contributions in question,” the letter from the FEC’s senior campaign finance analyst, Leah S. Palmer, says. “The acceptance of excessive contributions is a serious problem.”

McCain’s Dishonorable Ad

It pretty much goes without saying, but McCain’s latest ad, Dishonorable, attacking Obama for a comment on Afghanistan and for a funding vote, both distorts Obama’s statement and his vote. Factcheck.org has the report. Of course when you are a maverick like John McCain, you can invent your own facts and are not bound by reality (and its well-known liberal bias).

McCain Campaign Flip-Flops on Response to Keating 5 Scandal

John McCain’s campaign is flip-flopping on their response to the Keating 5 scandal as Ben Smith explains:

I’d always thought McCain’s great strength in defending the Keating affair was that he’d acknolwedged making a huge mistake, and spent his career repenting by recasting himself as a reformer.

So when his campaign puts his lawyer on the line with reporters to contest the details of a congressional inquiry that, largely, let McCain off the hook, doesn’t that cloud the sin-confession-atonement dynamic a bit?

In Halperin’s account, McCain lawyer John Dowd described McCain’s “former relationship with Charles Keating as ‘social friends,'” and called the situation a “classic political smear job on John.”

Dowd also “thinks that the committee went too far in suggesting that McCain’s intervention with regulators was poor judgment,” Halperin writes.

But if so, what’s this giant mistake that transformed McCain into a reformer?

McCain can’t have it both ways. Previously he stated this was a huge mistake but now his campaign denies that it was a mistake.

Bringing Keating into the mix shows how trivial McCain’s smears based upon  Ayers and Rezko are. McCain had a much closer relationship with Keating than Obama ever had with Ayers. While there is little doubt that Rezko wanted favors from Obama in a matter similar to how McCain received favors from Keating, there are some important differences between the two. While Keating did a lot for McCain, Rezko did very little if anything for Obama. Secondly, while Obama did nothing for Rezko (regardless of what Rezko might have hoped for), McCain did intervene to try to help Keating.

If McCain wants to drag out old scandals, there is no comparison between the Keating 5 and the debunked accusations involving Ayers and Rezko. While these smears might play well with McCain’s partisan backers, few others are likley to fall for them.

A Pictorial Guide To The Candidates


Sometimes pictures help explain it better. From kdoug at Daily Kos.

Obama Video on Keating 5 Scandal Released


Earlier I posted a preview of a documentary from the Obama campaign on the Keating 5 scandal along with some information. The full video is now posted above. The site keatingeconomics.com contains additional information on the scandal and John MCain’s role. Obama is bringing up the Keating 5 scandal in response to McCain’s decision to launch a smear campaign against Obama based upon long-debunked attacks regarding Ayers and Rezko. The decision of McCain to launch these smears is just another step for a campaign which has been dishonest since McCain decided to hire the same people who launched the successful smears against him in 2000.

Marc Ambinder provides an annotated rundown of McCain’s speech today attacking Obama, concluding: “Americans
don’t know that McCain is going to reform broken institutions. They
don’t know that he’s done it before. They don’t know that he’s going to
deliver relief to the middle class. They don’t, en masse, trust McCain
in this area. They trust Obama.” This is ultimately why McCain’s plans to resort to further smears won’t work. Voters are far too concerned about the economy to worry about whether Obama knows a 60’s radical, and this type of attack won’t alter the belief that Obama can better handle the financial crisis than McCain. 

Hillary Campaigning For Obama

USA Today has a report on Hillary Clinton campaigning for Obama:

Democrat Hillary Rodham Clinton has raised more than $8 million for former rival Barack Obama’s presidential campaign since July and plans to barnstorm the country for even more cash, as the New York senator works to show she is aggressively helping the candidate who cut short her White House bid.

“I am using every tool that I have to help Democrats win,” Clinton told USA TODAY. She was between fundraising events in Texas and California that brought in another $1.5 million for Obama and congressional candidates on Friday and Saturday.

Later this month, Clinton will headline Obama fundraisers in Chicago, Philadelphia and Little Rock along with 11 events to raise money for Democratic congressional candidates and state parties…

The former first lady said in the interview late Friday that her goal is straightforward: “We have a lot to repair in America, and I believe that Democratic leadership is essential to fixing the damage that we are going to inherit.”

Clinton down plays the idea of her supporters backing McCain:

Clinton rejected the idea of further defections from her camp. “The vast majority of people who voted for me will vote for Sen. Obama,” she said. “They understand that … we desperately need a Democratic administration to take the reins of the economy and turn it around.”

Alexander Heckler, a Fort Lauderdale lawyer who raised more than $100,000 for Clinton, said talk of dissension between the Clinton and Obama fundraising camps is overrated.

McCain Plan Would Cut Medicare

Those who have analyzed John McCain’s health care plan (such as here and here) have noted that he provides tax breaks to some while the plan fails to help very many of the uninsured. The Wall Street Journal reports that, in order to keep his health care plan budget neutral, John McCain plans to cut Medicare and Medicaid.

John McCain would pay for his health plan with major reductions to Medicare and Medicaid, a top aide said, in a move that independent analysts estimate could result in cuts of $1.3 trillion over 10 years to the government programs.

The Republican presidential nominee has said little about the proposed cuts, but they are needed to keep his health-care plan “budget neutral,” as he has promised. The McCain campaign hasn’t given a specific figure for the cuts, but didn’t dispute the analysts’ estimate.

Between his support for Medicare cuts, as well as partial privatization of Social Security, which would reduce money coming into the program to pay current retirees, why exactly is it that McCain is doing well among elderly voters?

Sarah Palin and Aerial Hunting of Wolves


Sarah Palin continues to be criticized for her support of arial hunting, as described in the above video. I’ve previously posted this ad from The Defenders Action Fund. Humane Society Legislative Action Fund, which has never before endorsed a presidential candidate, has endorsed Obama, citing both Obama’s record on protection of animals and Palin’s record which “is so extreme that she has perhaps done more harm to animals than any other current governor in the United States.”

Obama To Use Keating 5 In Response to McCain’s Smears About Obama’s Past


John McCain plans to launch a new series of smears against Barack Obama this week based upon distorted accounts of association with others. This is a rather desperate move on McCain’s part considering both his own history and the extremists Sarah Palin has associated with. While Obama would prefer to stick with discussion of the issues, he cannot ignore the lessons of the Swift Boat Liars and other Republican smears of the recent past. If McCain wants to make the campaign about the past, it is time to take a closer look at John McCain’s past.

At noon on Monday, Obama’s campaign will be releasing a thirteen minute documentary on John McCain’s role in the Keating 5 scandal entitled Keating Economics: John McCain and the Making of a Financial Crisis. The point of the documentary is to show that John McCain “still hasn’t learned his lesson,”  and “this time, McCain’s bankrupt economic philosophy has put our economy at the brink of collapse and put millions of Americans at risk of losing their homes.”

A preview of the documentary is above. The full video will be available after noon at keatingeconomics.com. Background information is currently available, including this information:

The ABCs of John McCain, Charles Keating & The Savings & Loan (S&L) Crisis

During S&L Crisis, 747 Savings & Loans Banks Failed, Costing US Taxpayers $124 Billion; Deregulation Allowed Riskier Investments By S&Ls, Leading To Widespread Collapses And Fraud. In the 1980’s and early 1990’s the US economy was badly shaken by the failure of 747 savings and loan (S&L) institutions that had to be taken over and bailed out by the federal government. In total, the failures cost taxpayers $124 billion. One of the main causes for the epidemic of failures was the unregulated expansion of S&L’s, which had traditionally only dealt with home loans, into more exotic and riskier investments. When many of those investments failed, the institutions collapsed. [Chicago Tribune, 7/3/98, Los Angeles Times, 9/17/08]

S&L’s Risky Investments With Federally-Insured Money Led To Call For More Regulation. In the early 1980’s, Charles Keating’s American Continental Corporation purchased a California S&L named Lincoln. At that time, S&Ls like Lincoln were able to go beyond their traditional purpose of offering home loans and engage in riskier forms of investment. Since the deposits of S&Ls were insured by the federal government, regulators began to take notice of the investments being made by Keating and at other S&Ls. The Federal Home Loan Band Board (FHLLB), which had regulatory authority over the S&Ls, began to worry about the risks of this trend, and proposed a “direct investment” regulation to limit the money S&Ls could direct to these riskier investments. [Senate Ethics Committee Keating Five Investigation, 1990]

At Keating’s Request, McCain Wrote 5 Letters, Supported Bill To Forestall Direct Investment Rule. Keating was unhappy with the direct investment rule and began actively lobbying against it. Senate Ethics Committee Special Counsel Robert Bennett explained during the 1990 Keating Five hearings that John McCain wrote at least five letters to regulators, Treasury and White House officials to argue against these proposed restrictions on risky investments by S&Ls. Bennett said that “In 1984 and ‘85, then Congressman McCain wrote several letters to Chairman [Edwin] Gray [of the Federal Home Loan Bank Board] and White House officials urging them to postpone promulgation of the direct investment rule… There is evidence that Senator McCain did so at the urging of Mr. Keating or other representatives of Lincoln.” McCain’s work for Keating also included signing onto a bill to delay the direct investment rule in 1984 [Senate Ethics Committee Keating Five Investigation, 1990; HCONRES 363, 98th Congress]

With New Regulations In Place, Officials Began Investigation That Found That Keating’s Lincoln S&L Had Operated As Massive Fraud. After the direct investment rule was enacted the Federal Home Loan Bank Board began a more vigorous investigation into Lincoln’s practices, beginning to uncover a vast web of fraud and accounting irregularities designed to embezzle money to Keating and his family and friends. Top regulator William Black later said that Lincoln “operated like a Ponzi scheme, or financial pyramid dependent on an ever-increasing churning of assets.” Black said, “Its parent, Keating’s American Continental Corp., was no more than a shell that siphoned dividends from Lincoln and distributed them through inflated salaries to Keating, his family members and associates.” [Senate Ethics Committee Keating Five Investigation, 1990; Associated Press, 12/5/90]

Keating Asked McCain And Other Senators To Whom He Had Contributed To Intervene With Regulators. In the most well-known episode of the scandal, Charles Keating asked five U.S. Senators including McCain to intervene with regulators from the Federal Home Loan Bank Board on his behalf. The Senators attended two meetings with the regulators in 1987. Reports of the meetings and the fact that Keating had contributed heavily to those Senators led to an investigation by the Senate Ethics Committee in 1990 into what became known as Keating Five scandal. [Senate Ethics Committee Keating Five Investigation, 1990; Chicago Tribune, 6/14/90; Los Angeles Times, 5/30/89]

Keating Admitted He Was Trying To Buy Influence. Keating was asked if his contributions bought him influence with the Senators, to which Keating replied, “I want to say in the most forceful way I can, I certainly hope so.” [Los Angeles Times, 5/30/89]

Ethics Committee Special Counsel Said McCain Had Closest Relationship to Keating. Robert Bennett, the Special Counsel for the Senate Ethics Committee said during the 1990 hearings: “of the five senators here before you, Senator McCain had the closest personal friendship with Charles Keating. Their friendship predated Senator McCain’s political career. Senator McCain also was the only one who received personal as well political benefits from Charles Keating.” [Senate Ethics Committee Hearing into the Keating Five]

  • McCain Received $166,000 In Campaign Contributions from Charles Keating and his Associates. “Together with friends and associates, Keating contributed $56,000 to McCain’s first House race, another $56,000 to the second and $54,000 to his 1986 Senate campaign,” contributions that were key to early success as a politician. [New York Times, 5/25/97]
  • McCain Used Keating’s Private Planes on Nine Occasions. “From August 1984 to August 1986, Sen. John McCain and his family flew across the country and to the Bahamas on at least nine occasions at Charles H Keating Jr.’s expense,” often to stay at the Keatings’ exclusive Cat Cay getaway. [Arizona Republic, 10/8/89]
  • McCain Had Direct Financial Ties To Keating. Keating brought in McCain’s wife and father-in-law as the largest investors in an Arizona shopping center investment. Fountain Square Shopping Center was a no-risk investment that virtually guaranteed a 25% return and a “significant tax write-off” through a tax shelter technique available to the wealthy that was soon outlawed. When reporters first questioned the deal, McCain said to reporters “It’s up to you to find that out, kids.” [Arizona Republic, 10/8/89]
  • McCain Originally Denied Reports of Connection. “When the story broke, McCain did nothing to help himself. ‘You’re a liar,’ McCain said” when asked about the investments. He challenged reporters saying, ‘It’s up to you to find that out, kids.’” [Arizona Republic, 3/1/2007]

McCain Rebuked By Senate Ethics Committee For Exercising “Poor Judgment.” In 1990, the bipartisan (three members of each party) Senate Ethics Committee rebuked McCain “for exercising ‘poor judgment’ for intervening with the federal regulators on behalf of Keating.” [Arizona Republic, 3/1/2007]

Keating’s S&L Was Declared Insolvent; $3.4 Billion Bailout Most Expensive in Meltdown. Federal regulators declared Lincoln Savings and Loan insolvent. It ended up costing taxpayers $3.4 billion to clean up the mess and cover federally-insured deposits at Lincoln, making it the most expensive failure in the entire S&L meltdown. [Washington Post, 11/29/92; New York Times, 2/21/08]

Keating Also Bilked 23,000 Investors – Many Elderly – With Junk Bonds. As his deeds unraveled under the scrutiny of regulators and civil and criminal court cases, it became clear that he had sold worthless junk bonds to 23,000 investors, many of them elderly retirees who had thought their investments were insured and lost their lost savings to Keating’s crimes. [Associated Press, 2/23/08]

Keating Was Found Guilty of 73 Counts of Fraud, Lost Two Criminal And One Civil Case. “a federal jury convicted him of 73 counts of wire and bankruptcy fraud in the collapse of American Continental and Lincoln,” a keystone of the Savings & Loan scandal as Keating “looted” the bank. Keating was also found guilty in civil court and lost a massive class action suit by investors he bilked. [Arizona Republic, 3/1/2007; Associated Press, 4/7/99]