(CNN) — Republican vice presidential nominee Sarah Palin denied Saturday that she had abused her power as Alaska’s governor, a conclusion reached by a state investigator in a report released the day before.
“If you read the report, you will see that there was nothing unlawful or unethical about replacing a cabinet member,” Palin said as boarded her campaign bus in Pittsburgh, Pennsylvania. “You got to read the report.”
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?
WASILLA, Alaska — Gov. Sarah Palin lives by the maxim that all politics is local, not to mention personal.
So when there was a vacancy at the top of the State Division of Agriculture, she appointed a high school classmate, Franci Havemeister, to the $95,000-a-year directorship. A former real estate agent, Ms. Havemeister cited her childhood love of cows as a qualification for running the roughly $2 million agency.
Ms. Havemeister was one of at least five schoolmates Ms. Palin hired, often at salaries far exceeding their private sector wages.
When Ms. Palin had to cut her first state budget, she avoided the legion of frustrated legislators and mayors. Instead, she huddled with her budget director and her husband, Todd, an oil field worker who is not a state employee, and vetoed millions of dollars of legislative projects.
And four months ago, a Wasilla blogger, Sherry Whitstine, who chronicles the governor’s career with an astringent eye, answered her phone to hear an assistant to the governor on the line, she said.
“You should be ashamed!” Ivy Frye, the assistant, told her. “Stop blogging. Stop blogging right now!”
Ms. Palin walks the national stage as a small-town foe of “good old boy” politics and a champion of ethics reform. The charismatic 44-year-old governor draws enthusiastic audiences and high approval ratings. And as the Republican vice-presidential nominee, she points to her management experience while deriding her Democratic rivals, Senators Barack Obama and Joseph R. Biden Jr., as speechmakers who never have run anything.
But an examination of her swift rise and record as mayor of Wasilla and then governor finds that her visceral style and penchant for attacking critics — she sometimes calls local opponents “haters” — contrasts with her carefully crafted public image.
Throughout her political career, she has pursued vendettas, fired officials who crossed her and sometimes blurred the line between government and personal grievance, according to a review of public records and interviews with 60 Republican and Democratic legislators and local officials.
Go read the entire article. This woman, who will be just a heartbeat away from the Presidency, is beginning to scare me more than Dick Cheney.
Considering how petty and vindictive she can be, if elected, it wouldn’t surprise me in the least to see her somehow attempt to engineer circumstances requiring McCain to resign, so that that she takes over the White House, OR quitting in a huff at the first sign that things aren’t going her way, to keep her name high in the American public consciousness … so that she can oust run for the top slot in 2012.
Sarah Palin is not for reforming government. She’s for manipulating it to serve her own personal agenda, and who cares about anyone or anything else.
ST. PAUL, Minn. - Alaska Gov. Sarah Palin and her Republican supporters held back little Wednesday as they issued dismissive attacks on Barack Obama and flattering praise on her credentials to be vice president. In some cases, the reproach and the praise stretched the truth.
Some examples:
PALIN: “I have protected the taxpayers by vetoing wasteful spending … and championed reform to end the abuses of earmark spending by Congress. I told the Congress ‘thanks but no thanks’ for that Bridge to Nowhere.”
THE FACTS: As mayor of Wasilla, Palin hired a lobbyist and traveled to Washington annually to support earmarks for the town totaling $27 million. In her two years as governor, Alaska has requested nearly $750 million in special federal spending, by far the largest per-capita request in the nation. While Palin notes she rejected plans to build a $398 million bridge from Ketchikan to an island with 50 residents and an airport, that opposition came only after the plan was ridiculed nationally as a “bridge to nowhere.”
When she was running for governor in 2006, Palin said she was insulted by the term “bridge to nowhere,” according to Ketchikan Mayor Bob Weinstein, a Democrat, and Mike Elerding, a Republican who was Palin’s campaign coordinator in the southeast Alaska city.
So she was for the bridge before she was against it.
And while she did cancel the bridge project after she was elected, $223 million in funds had already been allocated to Sarah Palin’s Alaska, were delivered and accepted by Sarah Palin’s Alaska, and have yet to be returned to the Federal Government by Sarah Palin’s Alaska.
And while Mayor of Wasilla, she hired the town’s first ever lobbyist, who secured over $27MM in Congressional earmarks for the town; earmarks which were specifically condemned by Senator McCain.
I guess she was for earmarks, before she was against them.
PALIN: “There is much to like and admire about our opponent. But listening to him speak, it’s easy to forget that this is a man who has authored two memoirs but not a single major law or reform — not even in the state senate.”
THE FACTS: Compared to McCain and his two decades in the Senate, Obama does have a more meager record. But he has worked with Republicans to pass legislation that expanded efforts to intercept illegal shipments of weapons of mass destruction and to help destroy conventional weapons stockpiles. The legislation became law last year. To demean that accomplishment would be to also demean the work of Republican Sen. Richard Lugar of Indiana, a respected foreign policy voice in the Senate. In Illinois, he was the leader on two big, contentious measures in Illinois: studying racial profiling by police and requiring recordings of interrogations in potential death penalty cases. He also successfully co-sponsored major ethics reform legislation.
Gosh! Look at that! Major legislation co-sponsored in a bi-partisan manner!
That major ethics reform legistion? That’s the FEDERAL FUNDING ACCOUNTABILITY AND TRANSPARENCY ACT OF 2006, introduced on 4/6/2006 by Senator Tom Coburn (R-OK), with three initial co-sponsors: Barack Obama (D-IL), Thomas R. Carper (D-DE), and JOHN S MCCAIN (R-AZ).
I guess Governor Palin doesn’t consider ethics reform legislation co-sponsored by her running mate to be a major legislation … I guess because Senator Obama’s name is on the bill as well.
PALIN: “The Democratic nominee for president supports plans to raise income taxes, raise payroll taxes, raise investment income taxes, raise the death tax, raise business taxes, and increase the tax burden on the American people by hundreds of billions of dollars.”
THE FACTS: The Tax Policy Center, a think tank run jointly by the Brookings Institution and the Urban Institute, concluded that Obama’s plan would increase after-tax income for middle-income taxpayers by about 5 percent by 2012, or nearly $2,200 annually. McCain’s plan, which cuts taxes across all income levels, would raise after tax-income for middle-income taxpayers by 3 percent, the center concluded.
Obama would provide $80 billion in tax breaks, mainly for poor workers and the elderly, including tripling the Earned Income Tax Credit for minimum-wage workers and higher credits for larger families.
He also would raise income taxes, capital gains and dividend taxes on the wealthiest. He would raise payroll taxes on taxpayers with incomes above $250,000, and he would raise corporate taxes. Small businesses that make more than $250,000 a year would see taxes rise.
A small business that makes more than $250,000 a year is doing pretty well, when you consider that “making money” means net profit … i.e., profit after all expenses and overhead, profit after payroll, profit after all of those expenses that can be written off, reducing the business’s tax burden.
And did you know that Palin supported RAISING the sales tax in Wasilla, in order to build a $14.7MM sports center in her hometown of 8000 people?
So she was for higher taxes before she was against them.
PALIN: “To the families of special-needs children all across this country, I have a message: For years, you sought to make America a more welcoming place for your sons and daughters. I pledge to you that if we are elected, you will have a friend and advocate in the White House.”
I wonder if this is a recent flip-flop on Gov. Palin’s part, since the birth of her own child with special-needs. Thus far, since she has been in office, Gov. Palin has actually slashed funding for schools for special-needs kids by 62%.
The Budget for Fiscal Year 2007 (pre-Palin) allocated nearly $8.265MM dollars for early development and special needs schools. In 2008 and 2009, that amount was cut to a mere $3.156MM dollars per year. Perhaps Gov. Palin will allocate some of that $223 million she accepted (and has yet to return) for the “Bridge to Nowhere” to education.
So she was against supporting special-needs children before she was for it.
PALIN: “America needs more energy … our opponent is against producing it.”
So, rather than attempting to drill our way out of the mess we’re currently in (a strategy that even noted REPUBLICAN oilman T. Boone Pickens says won’t work), Obama chooses to invest in renewable energy, creating more jobs and cleaner home-grown energy in the United States (because we’re not buying the wind and sun from China or the Middle East). Senator McCain and Gov. Palin prefer to drill off the coast of California, and in the Alaska National Wildlife Reserve … a strategry which will add a mere 3% to the world’s oil supply when the United States currently uses 25% of the oil produced, and our needs are growing faster than we’ll be able to increase production.
PALIN: “Before I became governor of the great state of Alaska, I was mayor of my hometown.
And since our opponents in this presidential election seem to look down on that experience, let me explain to them what the job involves.”
Apparently, it’s increasing spending and long-term debt. In fiscal 2003—the last fiscal year Palin approved the budget—the total government expenditures of Wasilla, excluding capital outlays, were $7.05MM dollars. In fiscal 1996—the year before Palin took control of the budget—the expenditures were only $4,317,947, an increase of 63 percent.
In addiiton, in fiscal 2003—the last fiscal year Palin approved the budget—the long-term debt was $18.64MM dollars. In fiscal 1996—the year before Palin took control of the budget—there was no general obligation debt … none … zip, zero, nada.
So she was against fiscal responsibility before she was for it …
You are well advised to be suspicious of Jim Ochowicz. I first met him in 1978 when he was competing in the Red Zinger stage race in Colorado and I was the chief timer. There was a particularly difficult stage from Aspen to Vail over Independence Pass where Ochowicz apparently finished third. Trouble was, he had come off the back of the main field and was never seen again until he crossed the the finish line well ahead of the field! He got caught that time but probably didn’t learn from it.
Thomas Weisel Partners was fined another $1.75 million this past year by the NASD for “engaging in improper initial public offering (IPO) allocation practices …”
