October 6th, 2008
10:15 AM ET
10 years ago

Obama camp raises McCain’s ties to Charles Keating

The Obama camp is highlighting McCain's ties to Charles Keating.

The Obama camp is highlighting McCain's ties to Charles Keating.

(CNN) - After months of avoiding references to the decades-old “Keating Five” scandal that nearly derailed John McCain’s political career, Barack Obama’s campaign is highlighting the Republican presidential nominee’s ties to Charles Keating, an Arizona businessman who went to prison during the aftermath of the savings and loan crisis of the 1980s.

The campaign is releasing a new 13-minute “documentary” about the scandal, and sending a message to supporters that ties McCain to the federal bailout that followed.

A preview of the new Web video, "Keating Economics: John McCain and the Making of a Financial Crisis," shows clips of McCain's hearings before the Senate Ethics Committee two decades ago, as the narrator says "the Keating Five involved all the things that have brought the modern crisis” and that McCain "has not learned the lessons and has continued to follow policies that are going to produce a disaster."

Watch: 'Keating 5' dogs McCain

McCain was one of five senators, dubbed the "Keating Five," who met with regulators on behalf of Charles Keating, the owner of Lincoln Savings and Loan.

Listen: McCain aides fight back over Keating on a campaign conference call

In a message to supporters Sunday, Obama campaign manager David Plouffe tied McCain to the lack of oversight that led to the savings and loan crisis of that era, and the massive federal bailout package that resulted. "During the savings and loan crisis of the late '80s and early '90s, McCain's political favors and aggressive support for deregulation put him at the center of the fall of Lincoln Savings and Loan," Plouffe writes. "More than 23,000 investors lost their savings. Overall, the savings and loan crisis required the federal government to bail out the savings of hundreds of thousands of families and ultimately cost American taxpayers $124 billion."

The Obama campaign had largely avoided mentioning the disgraced Arizona financier for most of the year. After an Obama backer referenced the Keating Five scandal this spring, the campaign appeared to distance itself from the comment — but Obama signaled it might be fair game later in the year: "I was just asked previously about a whole host of associations that are a lot more flimsy than John McCain’s relationship to Keating Five," he told reporters.

Two weeks ago, as controversy over deregulation and financial oversight began to dominate the public consciousness and the McCain campaign started to step up its attacks over Obama’s associations with controversial Chicago figures, Obama spokesman Bill Burton raised the issue for the first time since May. The McCain camp had accused the New York Times of supporting Obama's presidential bid; Burton responded by sending reporters a list of investigative stories the paper had run about the Illinois senator, complaining that McCain’s relationship with Keating had not come up for similar scrutiny over the course of the campaign.

The Senate Ethics Committee investigated and cleared McCain in 1991, but said that he showed poor judgment in his efforts for Keating, who had been a major contributor to his campaign. McCain later turned over $112,000 in campaign contributions from Keating to the U.S. Treasury.
The documentary will be released online at noon.

The move comes two days after Gov. Sarah Palin accused Obama of "palling around with terrorists who target their own country" because he was supported by Bill Ayers, a founding member of the Weather Underground.

Responding to the new attacks over McCain’s history with Keating, the GOP nominee’s spokesman Brian Rogers raised those links again.

"John McCain has been open and honest about the Keating matter, and even the Democratic special counsel in charge recommended that Senator McCain be completely exonerated,” said Rogers. “By contrast, Barack Obama has been fundamentally dishonest about his friendship and work with the unrepentant terrorist William Ayers, whose radical group bombed the Pentagon and the U.S. Capitol. Nor has Barack Obama come clean on his close friendship with Tony Rezko, a felon convicted on bribery charges who subsidized the purchase of Barack Obama's home. It's obvious that Barack Obama is frantically attacking because he knows that most voters find these kinds of friendships, and the failed judgment they expose, to be unacceptable for our next president."

Filed under: Candidate Barack Obama • John McCain
soundoff (188 Responses)
  1. Bruce

    NOW is the PERFECT TIME to point out McCain has a history of being involved in Bank DeREGULATION. His hands are dirty with the GREED of the banking industry. As President he would once againg give the RICH more and let the poor get porrer.


    Obama is a man with a plan. A Visoin for the future. He knows the road will be hard but knows Americans can over come the hardships brought upon them by BUSH.

    October 6, 2008 10:17 am at 10:17 am |
  2. nancy

    if mccain wants to turn this campaign dirty so be it. if he and palin can dish it out...you better be able to take it too. shame on them for running a immature, sleezy and lying campaign. cant handle the issues that americans care about...turn to sleeze. this will only backfire more for mccain and the polls will get worse. the very thought of palin in the white house if something happens to mccain is the deal breaker for most of us. very scary.

    October 6, 2008 10:17 am at 10:17 am |
  3. Glenn; North Carolina

    After all the mud that has been slung at Sen. Obama about Rev. Wright, Tony Resko, and everything else including questioning his heritage all I can say is this:

    It's about time he gave a little of what he's been taking for all of these months! I just wonder how long it will be before Sen. McCain comes out with a poor pitiful Ex-POW commercial. Sen. McCain's matra seems to be when you can't attack, play on the sympathies of the people. That's how I want my leadership to act! Let's ignore the issues and go after the individual. That's just sad.

    October 6, 2008 10:18 am at 10:18 am |
  4. Kendra

    Good for Obama! Remember John, mud slings BOTH ways! And with GW in office it's been raining! Hate to see them go negitive but we can not afford another swiftboated president.

    October 6, 2008 10:18 am at 10:18 am |
  5. P.

    Wow, the McCain camp is getting pathetic... They're rehashing things that are old news. The Obama camp has to respond equivalently with accusations, or else run the risk of appearing weak. It's too bad that John McCain is forcing BOTH parties to take the low road.

    October 6, 2008 10:18 am at 10:18 am |
  6. Johnson in St. Louis

    I thought the Republicans were going to start looking forward and not back. Well so far everything they have said is from Senator Obama's past and refuse to focus on the present. I don't blame one bit for the Obama campaign to bring this up, only I hope they use truthful things and don't go the low road as the GOP has done and use false or distorted claims.

    October 6, 2008 10:18 am at 10:18 am |

    I personally like to "nice" Obama, but sometimes youhave to deal with smear tatics. Its about the principle. But that fact that Obama is talking about real issues, and using real eveidence not just snippets and excerpt and disecting them negatively that makes me proud.

    Obama/ Biden '08

    October 6, 2008 10:18 am at 10:18 am |
  8. michael

    McCain you lost all the honor you had in my book..you may have served your country honorably then but you are not serving it honorably now. You have not honored yourself in thid campaign..you have disgraced yourself.

    October 6, 2008 10:18 am at 10:18 am |
  9. Dale

    McCain says he was exhonorated of all charges.

    But we all know he was guilty.

    October 6, 2008 10:18 am at 10:18 am |
  10. atlantan

    About time. People want to hear about the economy, not about this kind of stuff, but if the GOP is going to sling the mud, Obama needs to fight back.

    Obama got some support from someone who did terrible things 40 years ago – things which Obama has said he does not in any way approve of or support.

    Keating 5 is something John McCain himself did – not somebody who supported his campaign. Keating 5 is all about John McCain supporting deregulation, which led to the collapse of a business, which had to be bailed out by the federal government. Sound familiar?

    As for Palin, she is trashing Obama for something a supporter of his did, while she and her hubby are refusing to answer subpoenas. Hello??? Where I come from, that lands you in JAIL.

    I will take someone with questionable supporters over two people who are themselves questionable!!!

    October 6, 2008 10:18 am at 10:18 am |
  11. PIPKIN

    the mcain campain , is really pathetic!!!!!!!!!! no one cares about this kind of garbage.. and he shouldnt even want to walk this treadmill.. considering his ties with the keating five!!!!!!!!!! i want to hear about how i'm going to be able to have affordable healthcare.. and my taxes not be raised.. anyone who falls for this trick.. needs to vot for the sorry mcain.. campaign... they are desprate.. they have nothing else to go on but old stories.. and we wont even go there about sarah palin.. past.....

    October 6, 2008 10:18 am at 10:18 am |
  12. PA for Obama

    Ha!Ha! The battle begins....GO OBAMA GO....get back at him for his lies/accusations and most importantly bring race into this picture. Has he not heard for EEO.... McCain lacks any kind basic principles. You are a shame to this country and take your hunter Palin with you.

    Obama 08

    October 6, 2008 10:18 am at 10:18 am |
  13. Jerome

    These smear ads are not going to work this time GOP. Economy, Economy, Economy. GOP have no plan and are trying to change the subject. It will not work, America is smarter and wiser this time around. No more Bush/McCain/Palin

    October 6, 2008 10:19 am at 10:19 am |
  14. Time to strike back

    So how does it feel jonnie boy ? Now the gloves are really off! By the way .. new polls released today.. Obama 51% , McShame..43% (From the very conservative Rasmussen!)..
    Your ship is sinking GOP swiftboaters.
    OBAMA in 30 days !

    October 6, 2008 10:19 am at 10:19 am |
  15. Debra, Alton




    October 6, 2008 10:19 am at 10:19 am |
  16. numnuts

    Wow! All supporting comments for Obama... Is there anyone left in America with a dissenting view!? Great job CNN, you've got the best political team liberal money can buy!!

    October 6, 2008 10:19 am at 10:19 am |
  17. Crik in OH

    That's right. Fight fire with fire.

    The republicans take it to the low road and even though you might want to take the high road, it does not lead to the white house any longer. It didn't work for Kerry or Gore.

    Give it right back to them Obama!

    Obama/Biden '08

    October 6, 2008 10:19 am at 10:19 am |
  18. Paul

    Exactly...and McCain has the guts to try to question Obama's judgement...

    October 6, 2008 10:19 am at 10:19 am |
  19. Farrell, Houston, Tx

    It's about time Americans see the reason why John McCain has avoided the financial crisis and used Palin to smear Obama, he didn't want people to know about his involvement with the Keating 5 but Arizonians will never forget. Now investigate McCain's involvement with Silver Bank of Arizona where his son was CEO and left 2 months prior to it's calaspe in August '08 and investors lost millions; John McCain was in Arizona every weekend during this time. FACT.

    October 6, 2008 10:19 am at 10:19 am |
  20. Randy

    I was waiting for them to bring this up. McCain has spent so much time talking about Obama's character rather than the issues, its about time someone called McCain on the stuff in his past. This cost the tax payers billions of dollars to bail out these institutions, and John McCain was at the heart of it. But this wouldn't have come out if he hadn't started trying to label everyone as un-american who doesn't vote for him

    October 6, 2008 10:19 am at 10:19 am |
  21. Doug R.

    This needs to be highlighted and brought to the table. He should be asked about it during the Presidential debates. At the very minimum, he owes an explanation to the American people. Why does McCain become outraged when this issue is brought up??
    McCains receiving disability income also needs to be brought up. To be eligible for disability income, one must be nearly permanently disabled and unable to work. McCain needs to return every penny of disability income he has ever received in his life.

    October 6, 2008 10:19 am at 10:19 am |
  22. insanity

    it's funny how the McCain campaign is trying to wiggle out of the same dirt they're throwing out.
    The fact is, relationship with Ayres is really a non issue unless you suggest that Obama's judgment is flawed for having any form of contact with Ayres.. I find that stupid, but let's use the same standard to McCain.
    Applying that standard to McCain, you can prove that McCain's judgment is even more flawed for accepting favors from Keating, and also not having the judgment to discern between good and bad actions.

    I say McCain's judgment is downright dangerous.

    October 6, 2008 10:19 am at 10:19 am |
  23. john

    Where is the Fact Check on this one??? The independent investigator of the Keating Five scandal, Bob Bennett (an admitted Democrat), said the only thing he found McCain guilty of was being an honorable man.

    The Obama campaign will stop at nothing to try and smear a great American. I don't know how they sleep at night.

    October 6, 2008 10:20 am at 10:20 am |
  24. BM

    John McCain and Palin are lying crooks. Neither have released their tax records over the last ten years. They both have skeletons in their closets and the nerve to point a finger at Obama just proves how deperate they are.
    Refusing to honor a supoenae, both Palin and the first dude tells anyone with a brain that they will do worst if they are elected. They feel that they are above the law.

    October 6, 2008 10:20 am at 10:20 am |
  25. Dutch-VA

    "Poor Judgement" is what the Senate Ethics Committee said McCain examined. Ain't much change since then.


    October 6, 2008 10:20 am at 10:20 am |
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