The references to the "Keating Five" in varioius posts has promted me to go back and refresh my dimming memory.  Here is the story.

 

the 'five' were Senator John McCain, Senator John Glenn, Senator Alan Cranston, Dennis DeConcini, and Don Riegle (4 Dems and a Rep).

 

In 1989 they were accused of corruption by improperly aiding the Chairman of the Board (Charles Keating) of the Lincoln Savings and Loan Association.  In the failure about 21,000 investors loss their total savings investment.  it cost the Federal Trueaury $160 billion (and the taxpayers absorbed  about $125 Billion of that amount).

 

Because of that, the housing starts the next year dropped from almost 2 bmillion to about 1 million and that was a major contributor to the 1991 recession. 

 

This all has a da ja vu quality to it, doesn't it?

 

The Senate Ethics Committee determined that 3 of the 'Keating Five'  had substantially and improperly interfered with the Federal Home Loan Bank Board in its investigation of Lincoln Savings.  McCain and Glenn were criticized by the Senate Ethics Comittee for having exercised "poor judgment".

 

There were a couple of 'sticky wickets'.   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, creating disastrous consequences

 

 The senators' initial defense rested on Keating being one of their constituents; McCain said, "I have done this kind of thing many, many times," and this was  like "helping the little lady who didn't get her Social Security."  

 

 Washington lawyers  were hired by some of them  (including Glenn and  for McCain).  The others feared that to do so would give the appearance their political careers were in jeopardy

 

So that is the Cliff notes version  whenever you hear McC's name in connection with another investment boondoggle- "The Keating Five"

 

ski