McCain and the Keating Five
Michelle Malsbury, BSBM, MM
October 07, 2008
This season´s election is so important to the American public because our economy is falling down, joblessness across America is nearing 7% and growing each month, banks and lending institutions are failing at record rates, our stock market is slumping, and the remainder of the world is in turmoil as it mirrors what is happening here in the USA. Many factions believe that history repeats itself and if that is true then the Keating Five is an important facet to this election process.
During Ronald Reagan´s Administration financial regulations were slackened. Lending institutions were allowed to engage in risky investments using their depositor´s monies. Many Savings and Loans institutions began buying land and taking a stake in commercial real estate developments largely financed by issuing junk bonds (high yield unsecured bonds). Alan Greenspan said that these risky investments would not be "harmful". Only those crafty banking and investment people truly knew or understood the depth of this disaster. [see any correlations to what has transpired lately?]
The real estate market across America swooned and then took an earnest nose dive as people held their collective breaths wondering if this might become another "Great Depression". [sound like a replay of today?] During this time Lincoln Savings and Loan (of Irvine, CA) was one such organization who engaged in this greedy and unrestricted behavior that would cost their customers (23,000 people total) everything and the US government (aka the taxpayers) $2 Billion dollars to clean up. Normally, one failing S & L would not come under government scrutiny. However, Charles Keating (chariman of Lincoln Savings and Loan) was a major contributor to five Senatorial campaigns to the tune of $1.3 million dollars. Those five Senators were: Al Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald Riegle (D-MI).
In 1984 American Continental Corporation bought Lincoln Savings and Loan, increasing their assets from $1.1 Billion dollars to over $5.5 Billion dollars. This merger allowed them to play an even larger role in the real estate markets. They used FDIC insured accounts to leverage risky commercial real estate ventures. In 1986 they lost $135 million dollars in those risky markets because the real estate market had come to a halt. The FHLBB (Federal Home Loan Bank Board) began an investigation into Lincoln Savings and Loan. President Ronald Reagan had given a place on the board of FHLBB to Lee Henkel Jr., a Atlanta real estate developer and close associate of Charles Keating. By 1987 the economic picture across America was even bleaker [any resonation to today?] and Mr. Henkel had many loans coming due at Lincoln Savings and Loan, he quickly resigned.
Charles Keating was on the hot seat. He asked his pals to whom he had contributed large amounts of money to intercede on his behalf in this investigation. [the Keating Five as they would come to be called] To his credit, Senator McCain was initially reluctant to intervene, but did. [another sign that perhaps his judgment is not as keen as it ought to be] A large investigation was opened by the Senate Ethics Committee to determine if, and to what extent, that these five Senators were involved in using their influence to thwart investigation into the failure of Lincoln Savings and Loan. In 1991 the Senate Ethics Committee determined that Alan Cranston, Donald Riegle, and Dennis DeConcini had interfered with their investigation of Lincoln Savings and Loan. None of those three ran for re-election. Senators McCain and Glenn were sanctioned.
747 Savings and Loans failed during that timeframe. (1980´s-early 90´s) That mess totaled $160.1 Billion dollars and was attributed to our failing real estate market. {do you hear the warning bells and whistles?] The American government bailed out that mess to the tune of $124.6 Billion dollars all paid for by the American taxpayers.
America cannot turn a blind eye and deaf ear to the circumstances that led her into this mess. As American´s we cannot fail to connect the dots nor see how the actions and lack of judgment exercised [both past and present] by Senator McCain helped to precipitate this mess. Don´t we deserve more? Help hold our elected officials accountable. Vote for Barack Obama and Joe Biden in November because that is change we need and can count on!
Reference;
http://en.wikipedia.org
During Ronald Reagan´s Administration financial regulations were slackened. Lending institutions were allowed to engage in risky investments using their depositor´s monies. Many Savings and Loans institutions began buying land and taking a stake in commercial real estate developments largely financed by issuing junk bonds (high yield unsecured bonds). Alan Greenspan said that these risky investments would not be "harmful". Only those crafty banking and investment people truly knew or understood the depth of this disaster. [see any correlations to what has transpired lately?]
The real estate market across America swooned and then took an earnest nose dive as people held their collective breaths wondering if this might become another "Great Depression". [sound like a replay of today?] During this time Lincoln Savings and Loan (of Irvine, CA) was one such organization who engaged in this greedy and unrestricted behavior that would cost their customers (23,000 people total) everything and the US government (aka the taxpayers) $2 Billion dollars to clean up. Normally, one failing S & L would not come under government scrutiny. However, Charles Keating (chariman of Lincoln Savings and Loan) was a major contributor to five Senatorial campaigns to the tune of $1.3 million dollars. Those five Senators were: Al Cranston (D-CA), Dennis DeConcini (D-AZ), John Glenn (D-OH), John McCain (R-AZ), and Donald Riegle (D-MI).
In 1984 American Continental Corporation bought Lincoln Savings and Loan, increasing their assets from $1.1 Billion dollars to over $5.5 Billion dollars. This merger allowed them to play an even larger role in the real estate markets. They used FDIC insured accounts to leverage risky commercial real estate ventures. In 1986 they lost $135 million dollars in those risky markets because the real estate market had come to a halt. The FHLBB (Federal Home Loan Bank Board) began an investigation into Lincoln Savings and Loan. President Ronald Reagan had given a place on the board of FHLBB to Lee Henkel Jr., a Atlanta real estate developer and close associate of Charles Keating. By 1987 the economic picture across America was even bleaker [any resonation to today?] and Mr. Henkel had many loans coming due at Lincoln Savings and Loan, he quickly resigned.
Charles Keating was on the hot seat. He asked his pals to whom he had contributed large amounts of money to intercede on his behalf in this investigation. [the Keating Five as they would come to be called] To his credit, Senator McCain was initially reluctant to intervene, but did. [another sign that perhaps his judgment is not as keen as it ought to be] A large investigation was opened by the Senate Ethics Committee to determine if, and to what extent, that these five Senators were involved in using their influence to thwart investigation into the failure of Lincoln Savings and Loan. In 1991 the Senate Ethics Committee determined that Alan Cranston, Donald Riegle, and Dennis DeConcini had interfered with their investigation of Lincoln Savings and Loan. None of those three ran for re-election. Senators McCain and Glenn were sanctioned.
747 Savings and Loans failed during that timeframe. (1980´s-early 90´s) That mess totaled $160.1 Billion dollars and was attributed to our failing real estate market. {do you hear the warning bells and whistles?] The American government bailed out that mess to the tune of $124.6 Billion dollars all paid for by the American taxpayers.
America cannot turn a blind eye and deaf ear to the circumstances that led her into this mess. As American´s we cannot fail to connect the dots nor see how the actions and lack of judgment exercised [both past and present] by Senator McCain helped to precipitate this mess. Don´t we deserve more? Help hold our elected officials accountable. Vote for Barack Obama and Joe Biden in November because that is change we need and can count on!
Reference;
http://en.wikipedia.org
Print
Email
