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This afternoon, John McCain joined in a summit with his rival Barack Obama and President George W. Bush, after “suspending” his campaign and rushing back to Washington to help rescue the American economy. As pundits and the public argue over whether this is the patriotic act of a true statesman or the desperate stunt of a political operator, McCain hopes they will forget what it really is for him: pure deja vu. McCain has already been here and done this, back in the roaring eighties, when he was in the thick of another financial meltdown that yielded a huge government bailout—and the worst scandal of his own political career.

The savings and loan crisis developed along lines remarkably similar to the current sub-prime crisis: A flurry of deregulation gave S&Ls the capabilities of major commercial banks without the corresponding oversight and regulation. S&Ls proceeded to make high-risk investments, including thousands of unsound mortgages during a housing boom. The government looked away—until the bottom fell out and the S&Ls started to fall like dominoes. Then it stepped in with a bailout of then-unprecedented levels, which added to ballooning deficits and ushered in years of recession.

When the S&L scandal unfolded, Barack Obama was working as a community organizer in Chicago, and George W. Bush was busy running a series of failed oil ventures and managing his baseball team in Texas. But John McCain was already in Congress—and in the S&L mess up to his neck.

The story of McCain’s hinky financial dealings is told by Stephen Pizzo, Mary Fricker, and Paul Muolo, in their excellent book on the scandal, Inside Job. As they describe it, one day in 1987, Senator Dennis DeConcini (D-Ariz.) asked Ed Gray, head of the Federal Home Loan Bank Board (and a former press aide to Ronald Reagan) to stop by his Washington office. When Gray arrived he was unexpectedly was ushered into a meeting attended not only by DeConcini but also by Senators John McCain, John Glenn (D-Ohio), and Alan Cranston (D-Calif.).

All of these men had received substantial campaign contributions from Charles Keating, the colorful California developer (and anti-porn crusader) who owned American Continental Corporation and its subsidiary, Lincoln Savings and Loan. From 1982 through 1987, McCain had received $112,000. All four could also claim Keating as a constituent: Lincoln Savings was headquartered in California, and ACC was incorporated in Ohio and headquartered in Phoenix.

At the time, Keating’s operations were under investigation for questionable dealings and there was widespread suspicion in Congress that Gray’s Home Loan Bank Board might end up seizing them.

The four got right to the point: Why were Gray’s examiners in San Francisco giving Keating such a hard time? It was noted that Lincoln, which had 24 branches, had started off making a lot of home loans—then suddenly stopped making them. “What do you want?” Gray asked.

DeConcini offered a deal: We’ll assure you that they’ll make more home loans and get into the basic business of home lending if you do something —you have to withdraw the equity risk regulations. These regulations required S&Ls involved in direct lending to set aside additional cash reserves in case there were big losses.

Gray was taken aback. Here he was facing four senators trying to negotiate business with him on behalf of a savings and loan that was in a regulatory procedure. Everyone in and out of government in Washington knows that politicians are not permitted to interfere with the regulatory process—though of course, they often do.

Gray refused to make deals, telling the senators if they had more questions to talk to the president of the San Francisco Federal Home Loan Bank Board. And sure enough, a few days later DeConcini asked the San Francisco officials to come to Washington to discuss “the Lincoln problem.” Gathered at DeConcini’s office were McCain, Glenn, Cranston, and Michigan Democrat Don Riegle from the Senate Banking Committee. At this meeting, Jim Cirona, the San Francisco FHLBB president, was confronted by DeConcini, who said the federal bank regulators were out to get Keating. Then McCain, apparently trying to be cute, said, “ACC is a big employer and important to the local economy….I wouldn’t want any special favors for them…I don’t want any part of our conversation to be improper.”

But since the whole thing was improper, McCain proceeded in his unctuous way to suggest the regulators’ examination of Keating’s operations was taking too long. Maybe things would work better if there were “voluntary” instead of mandatory guidelines, he suggested.

At first incredulous at being put in this position by the senators, Cirona’s team finally lost it, and told them they were sending a criminal referral on Lincoln to the Justice Department. This appeared to have a sobering effect, and the meeting ended. The San Francisco officials recommended that the government take control of Lincoln to stop its unsound lending practices, but it stayed in business for two more years—long enough to push high-risk investments on thousands of elderly investors, who lost their life savings when ACC finally went under in 1989. One member of the House Banking Committee, which investigated Lincoln, called it “a legal bank robbery.”

After the scandal broke, Keating said to reporters: “One question, among many raised in recent weeks, had to do with whether my financial support in any way influenced several political figures to take up my cause. I want to say in the most forceful way I can: I certainly hope so.”

But McCain initially insisted, ”I have done this kind of thing many, many times” for various constituents, and compared what he’d done for Keating’s firms to ”helping the little lady who didn’t get her Social Security.” Later–echoing the language, but not the tone, of his coy quips in the meeting with the FHLBB–he would admit that “The appearance of it was wrong. It’s a wrong appearance when a group of senators appear in a meeting with a group of regulators, because it conveys the impression of undue and improper influence. And it was the wrong thing to do.”

The senators who had defended the miscreants became briefly notorious as the “Keating Five,” implicated in influence peddling as part of one of the most crooked ripoffs in modern history. Three of them ended their political careers, but McCain and Glenn escaped with a scolding from the Senate Ethics Committee for “poor judgment,” and emerged relatively unscathed.

The scandal, never well understood by the public, seems to have been quickly forgotten. And astonishingly, it has thus far failed to gain much traction in the presidential election, in spite of the striking parallels between then and now. So twenty years later, a once scandal-ridden John McCain leads the charge up Capitol Hill to defend the American public from what he calls the “villains” of Wall Street.