McCain-Keating Scandal Quietly Emerges as Campaign Issue in Final Stretch

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John McCain's role in the Keating savings & loan scandal of the 1980s appears to be quietly emerging as a campaign issue in the final stretch of the 2008 presidential race.

McCain and four other Senators - known collectively as the "Keating Five" - were accused in 1989 of improperly aiding Arizona banker Charles Keating in efforts to hamper regulatory intrusions on the industry's risky investment practices. McCain, who had received over $100,000 in campaign contributions from Keating, was officially rebuked only for "poor judgment," though his true culpability in the matter may run much deeper than the official charge suggests. At the very least, McCain's history in this matter casts doubt on his claims to be a "maverick reformer," though it is a card that Democrats including Barack Obama have thus far been shy about bringing into play.

The Obama campaign broke its silence on the matter yesterday in response to whining from the McCain campaign that the news media has been biased in favor of Obama. Obama spokesman Bill Burton invoked the Keating affair while hitting back at the McCain campaign for suggesting that Obama had received a pass from the press, saying that McCain had seen little scrutiny of his association to Keating despite being "centrally involved" in America's "last major financial regulatory crisis, resulting in a huge bailout." Senior Obama strategist Robert Gibbs, meanwhile, had the following to say to reporters asking if the Obama campaign planned to make Keating an issue: "If we're going to talk about what's fair game in terms of people in a relationship, I don't see how... that wouldn't be important" (Huffington Post, Politico).

Back in May, Obama himself said that the Keating scandal was not off limits, but has since said little or nothing directly about it. Speaking recently on the sad state of the US economy, Obama briefly referred to the savings and loan crisis of the 1980s, but without directly referring to McCain or Keating. Yesterday's more direct comments from the Obama campaign follow recent statements from Senator Sherrod Brown of Ohio strongly suggesting that the Keating affair is indeed on the table:

"It is not so much [McCain's] economic proposals but his economic record.... His main adviser is Phil Gramm -- he was his mentor in the Senate -- and you just tie it all together. Of course John McCain supported the oil industry, he has oil lobbyists working for him. Of course John McCain supported these trade agreements, he has got Wall Street people working for him... It is all wrapped up together. John McCain is a creature of these interest groups in Washington. He is no maverick and, from the Keating Five on, his ethics have been questionable. He's not a maverick and Barack has got to just keep hammering on that."

In a clip from their new documentary video, THIRD TERM, media group Progressive Accountability also ties John McCain's actions in the savings and loan scandal of the 1980s to his current response to the US financial crisis. More from THIRD TERM can be seen at the Progressive Accountability website.