At one time, John McCain said the worst thing that ever happened to him, Vietnam included, was the so-called Keating 5 scandal. "The Vietnamese," he would...
At one time, John McCain said the worst thing that ever happened to him, Vietnam included, was the so-called Keating 5 scandal. “The Vietnamese,” he would say, “didn’t question my honor.”
Among McCain’s earliest benefactors in Arizona was Lincoln Savings and Loan chief Charles Keating Jr., who filled McCain’s campaign coffers with more than $100,000 and hosted the McCains multiple times at his vacation home in the Bahamas.
Keating expected his largesse to be rewarded, and when federal regulators began looking into Lincoln’s questionable lending practices and investments in the late 1980s, he turned to five senators whose coffers he had lined — Alan Cranston of California, Donald Riegle of Michigan, John Glenn of Ohio and both Arizona senators, Dennis DeConcini and McCain.
McCain attended two meetings with regulators at Keating’s request. McCain’s view was that he was seeking information on behalf of a constituent who was an important employer in his state. The regulators’ view was that they were being pressured to act favorably for Keating.
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Lincoln’s collapse, the biggest of many savings and loan failures, cost taxpayers $2.6 billion. Keating spent four years in jail, before his sentence was overturned on a technicality, and the Keating 5, as the senators came to be known, lived under an ethical cloud for years.
During the investigation, McCain revealed he and his wife, Cindy, had not reimbursed Keating for thousands of dollars in flights on his company jet to the Bahamas. The McCains blamed each other, reported McCain biographer Robert Timberg, causing the first rift in their marriage.
Then, The Arizona Republic published a report about an investment that Cindy McCain had made with her father in a shopping-mall project owned by a Keating company.
In 1991, McCain, along with his four Democratic colleagues, was found guilty by the Senate Ethics Committee of using “poor judgment” for attending the meetings with regulators on Keating’s behalf.
“I watched John just crumble,” Cindy McCain told Timberg. “I’ve seen the glow go out of him. This is a guy who could reach for the stars, and now he can’t — or he won’t.”