The current economic crisis demands that we understand John McCain’s attitudes about economic oversight and corporate influence in federal regulation. Nothing illustrates the danger of his approach more clearly than his central role in the savings and loan scandal of the late ’80s and early ’90s.
John McCain was accused of improperly aiding his political patron, Charles Keating, chairman of the Lincoln Savings and Loan Association. The bipartisan Senate Ethics Committee launched investigations and formally reprimanded Senator McCain for his role in the scandal — the first such Senator to receive a major party nomination for president.
At the heart of the scandal was Keating’s Lincoln Savings and Loan Association, which took advantage of deregulation in the 1980s to make risky investments with its depositors’ money. McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry — actions that allowed Keating to continue his fraud at an incredible cost to taxpayers.
When the savings and loan industry collapsed, Keating’s failed company put taxpayers on the hook for $3.4 billion and more than 20,000 Americans lost their savings. John McCain was reprimanded by the bipartisan Senate Ethics Committee, but the ultimate cost of the crisis to American taxpayers reached more than $120 billion.
The Keating scandal is eerily similar to today’s credit crisis, where a lack of regulation and cozy relationships between the financial industry and Congress has allowed banks to make risky loans and profit by bending the rules. And in both cases, John McCain’s judgment and values have placed him on the wrong side of history.
Okay, so that’s the Obama story … now, what are the facts?
The Facts: Keating was sentenced to prison and required to pay more than $1 billion in civil penalties after being convicted on fraud, racketeering and conspiracy charges centered around his running of Lincoln Savings and Loan, which he bought in 1984. On April 14, 1989, Lincoln was seized by the government at an eventual taxpayer cost of $3.4 billion, then the most expensive thrift bailout in history. Lincoln and Keating became national symbols of the savings-and-loans collapse of the ’80s — much as lending firms Fannie Mae and Freddie Mac have symbolized the current financial meltdown.
McCain had been friends with Keating since the early ’80s — their families vacationed together several times, according to previous CNN reporting. Keating was an early financial supporter of McCain’s political career and donated to his campaigns repeatedly over the years. Keating’s first company, American Continental, was headquartered in Arizona, the state McCain represents. McCain became one of the so-called “Keating Five” — five U.S. senators investigated over accusations they tried to interfere in a federal investigation of Keating’s role in the savings-and-loan’s collapse.
In January 1985, while in the U.S. House, McCain co-sponsored a resolution that would have delayed the effective date of proposed government limits “on direct investment in real estate, service corporations, and equity securities by federally insured savings and loan associations.” He was one of the early sponsors, although a majority of Congress eventually signed on to sponsor it. The legislation would have impacted Keating’s business, but would have regulated the entire industry, not specifically Lincoln Savings and Loan.
McCain also wrote several letters to government regulators and other officials regarding the issue. One, dated Jan. 30, 1985, to White House chief of staff James Baker, called the proposed regulations “unwise,” saying the effort “flys (sic) in the face of our recent efforts to remove the hand of government from the affairs of private enterprise.”
On April 9, 1987, McCain and the other senators attended a meeting with federal regulators investigating Keating. McCain has since said he regrets doing so. “He asked me to help him,” he said during an October 2002 interview with Chicago’s WGN-AM radio station. “I said I wouldn’t do certain things. He called me a wimp. I threw him out of my office, but I still went to a meeting with four other senators with a group of regulators.”
McCain testified that he never asked for anything inappropriate during the meeting, and the Senate ethics committee found that, after regulators said the firm was being investigated not just for insolvency, but on criminal grounds, McCain took no further action on Keating’s behalf. In the end, the committee recommended McCain and Sen. John Glenn be dropped from the probe — although McCain was rebuked by the Senate for using “poor judgment” in his relationship with the millionaire banker.
The Verdict: True. McCain did push to delay regulations that would have cracked down on savings-and-loans practices and intervened on Keating’s behalf, although he was cleared of wrongdoing in the “Keating Five” case.
Why should we believe that John McCain’s judgment is any better now, than it was 20 years ago?
» by flahute in: Word Play on August 30th, 2008 at 19:14:56 UTC |
Kind of wish I had received this before posting recent reactionary blog posts … but will be something to keep in mind going forward.
THE POWER OF AN AUTUMN LEAF
In working with the setting sun or confused world, the attitude of the warrior is like an autumn leaf floating down a river. It doesn’t change its color, and it doesn’t struggle with the river. It goes along with it. This has a natural effect, because the brook or the river has never carried such an autumn leaf before. The setting sun world will be uncertain what to do with this leaf. So by simply being there, you make people think twice, automatically.
It puts people on the spot when you don’t react to them. You don’t fight back when they attack you, but you just remain as an autumn leaf, whatever they do. This is the gentle way of working. If there are hundreds of thousands of autumn leaves coming down a small brook, then the appearance of the brook will be changed by them altogether. The joke is on the setting sun people, and they have to think twice. They might smile and pretend to laugh, but really they will be crying, weeping. So you see, an autumn leaf has a great deal of power over the world of the setting sun. Such little leaves could stop the flow of water altogether. If there are enough powerful autumn leaves, that is possible. It has been done in the past.
From CONQUERING FEAR: THE HEART OF WARRIORSHIP, forthcoming from Shambhala Publications in 2009.
This article, in its original form, appeared in the final edition of the Bridgestone Owner’s Bunch (BOB) Gazette, in 1994.
What is the most frustrating thing that can happen to a cyclist?
I think one of them is being forced to walk. One weekend, late in the summer of 1994, I had that experience.
Since my weekly mileage had been rather low, I felt the need to push myself, and went on an 80-miler. I left my Nob Hill apartment about noon, made my usual stops at Il Fornaio on Union Street for paninis and at City Cycle (across the street) for Gu while on my way to and through the Presidio to the Golden Gate Bridge. From north end of the Bridge, I dropped into Sausalito and rode through Mill Valley, then climbed Camino Alto to drop into Corte Madera.
By then, the weather had warmed due to the Bay Area’s lovely microclimates, so I took off my arm and leg warmers and stuffed them into a jersey pocket.
I worked my way through Fairfax, around Nicasio Reservoir, through Samuel P. Taylor State Park, and several small towns you haven’t heard of unless you live in the Bay Area, and eventually reached what is locally called the Paradise Loop, around the peninsula that forms Tiburon.
That day, Paradise proved to be anything but. It was almost 6 o’clock, and the fog was starting to roll back in, so I reached back and discovered that my my arm and leg warmers had disappeared.
“Not a problem,” I thought. “It’s a short loop. I’ll finish before it gets really cold.”
Climbing the first short hill on Paradise Drive, I began to hear a “tick-tick-tick” noise coming from my rear wheel. After stopping and looking vainly for the source, I hopped back on my bike and continued on. A few miles later, I was riding a flat.
“Still not a problem,” I thought. I whipped out my spare tube, wrestled off the tire and replaced the tube, and off I rode, discarding my old tube. A mile or so later, I had another flat.
I know, I know … it’s never a good idea to discard a punctured tube, especially not mid-ride. And no, I didn’t just toss it on the side of the road … I threw it away in one of the garbage cans at the end of a driveway.
“This could be a problem,” I thought. I remove the wheel, wrestled with the tire again, and removed the tube. I had forgotten one of the cardinal rules of flat repair and didn’t check my tire for sharp objects. This time, I found a wire embedded so deep that I had penetrated the tube twice. The “tick-tick-tick” noise was the wire hitting the brake calipers as the wheel turned.
I patched both holes, replaced the tube, and off I rode.
Psssssshhhhh…
“This is definitely a problem,” I thought. Again I removed the wheel, wrestled with the tire, and removed the tube. This time I was looking at a valve stem partially torn away from the tube. I was 20 miles from home, with no spare tube and a useless patch kit, and I was at least 5 miles from payphone (this was in 1994, before the now-ubiquitous cell phone).
I took off my shoes and socks and started walking.
Mmmmm … barefoot walking on asphalt, when it’s in the 60s and temperatures dropping by the minute. FUN!
Around 7 o’clock, it got foggy and windy. Fifteen or twenty minutes later, after several people passed without a second glance-even a few riding (gasp!) Bridgestones-a guy on a titanium wonderbike (again, still a relative rarity back then) rolled by and asked if I needed help.
“Yeah! Gotta spare tube?” I shouted back.
“No patch kit?” he asked. So I told him what happened.
“Hmmm,” he replied. “I only have spare sew-ups. In a pinch you can stretch one on a clincher rim, as long as you’re careful cornering. Want to try it?”
At that point, I would have tried a mountain bike tire and a Band-Aid if there was a chance it would get me home. He gave me a brand-new Vittoria CX, which we stretched over the rim. Sure enough, it worked, and off I rode.
While heading up the other side of the Tiburon Peninsula on my way back towards Mill Valley, my saviour passed me going the other direction, turned around, and joined me.
“How’s it holding up?” he asked.
“Pretty well, so far,” I replied, so we continued to ride and chat for a while. I promised to send the tire back to him, and eventually we went our separate ways.
At this point, I had been out for about eight hours, had three flats, and had lost a layer of clothing. The Bay’s famous fog and winds were out in full force, and I couldn’t face the climb back up to (and then the ride across) the Bridge; luckily, I still had time to catch the last ferry from Sausalito back into the City, and made it home without further incident.
Who was my benefactor? His name was Chris Cameron, then an advertising director for Mountain Bike magazine.
Sure hope he doesn’t mind having his name put out there, some 13 years after the original incident; and I wonder what he’s up to these days. Still riding, I hope.
I’ve always felt that BOBness is an attitude, not limited to cyclists, and is definitely not acquired just by joining the Bridgestone Owner’s Bunch or becoming a member of Rivendell Cycle Works.
To me, a BOB is a person who understand there are more important things about cycling than just the latest equipment (or the rejection of same) and training times.
Cycling is not about racing; it’s not about how quickly you can climb your local mountain; it’s not about how far you can ride; it’s not about fenders and 32mm wide tires and matching Carradice bags; and it’s definitely not about what kind of bike you own, be it lugged steel, aluminium, titanium or even carbon fibre.
The most important thing about riding a bike is simply that … just riding. As individuals, we shouldn’t let magazines (not even the Rivendell Reader) dictate our attitudes about equipment.
BOBness is part of the psyche; part of the soul
Among other things, it’s a willingness to help a stranger without expecting any more than a thank you in return.
In my opinion, Chris’s actions that late summer afternoon in 1994 epitomize this attitude.
Recent experiences in other parts of my life make me think back to that day; and one thing that I’ve come to realize is that there was almost an almost Zen-like (or at least my interpretation of Zen) quality I once had towards bicycles; a quality I’d like to rediscover.
I’ve been giving some thought to resigning my position with my current team, to just going back to riding for enjoyment. When I joined the team 3 years ago, it’s because the attitude was of having fun … riding bikes and drinking beer; and it really didn’t matter how we did in competition. It seemed for a long time that there was a slot saved in second-last (or NQDFL) for a Cutthroat rider.
These days, I’ve lost my joy of riding. The team is doing better at races, people actually train, and it seems like much of the fun has gone out of it, especially for me.
For the past couple of years, I’ve not ridden my bikes much at all … a lot of which has been due to dealing with various life issues, such as depression and divorce, but also because it just isn’t as fun as it once was …
Most of the time I do ride, it’s by myself; because I don’t have to worry about holding people back, or the ride turning into a mini-race.
There is a time and a place for racing, but does racing or training to race have to be a part of every ride? I don’t think so …
On the other hand, I know people who totally reject racing as well … for them cycling is still all about the equipment, but in the opposite direction of the racers; cycling is about fenders and bags and wool and seersucker, or about fixed-gears and brakes (or no brakes).
And it really shouldn’t be about any of it … or it should be about all of it.
Oh, I’ll still ride cyclocross (since what I do can’t really be called “racing”), simply because it’s such a blast … and I love that the Utah Cyclocross series is a situation where I can have a positive impact by helping make it possible for those who want to race to do so.
No decisions about the team just yet … just a long ramble.
Addendum: Call me a hypocrite if you will, but despite all the above rambles, I still think that recumbents are sick and wrong.
