Charles Keating was sentenced in 1992 to 10 and 12-year
sentences (state and federal). But having served a little over four
years, he was freed in October 1996 from a prison in Tucson
where he was serving his federal charges and in December,
Judge Mariana Pfaelzer ruled that the jurors in Keating”s federal
trial had been contaminated by learning of an earlier state
conviction. Thus his conviction on fraud, racketeering and
conspiracy charges was thrown out because the jury had evidently
discussed the prior action in the California courts.
So, despite finding that the jury in the federal case had based its
verdict on the courtroom evidence, Pfaelzer ruled that the jurors”
exposure denied Keating a fair trial. Doesn”t this just burn you
up?
Well, to compound things, California had ruled earlier in 1996
that Superior Court Judge Lance Ito (you thought you were
finished with this jerk, didn”t you?), who presided over Keating”s
state trial, should have told jurors they could convict Keating only
if the jury felt that the Keating employees, who sold the bonds
that later were worthless, had intended to defraud customers.
Lots of technicalities. Bottom line, Charles Keating was free for
awhile.
But wait, there”s more. In January 1998, California re-instituted
the state convictions. But in April of the same year, Keating was
jailed for five days for violating the terms of his release from
prison by applying for a passport. Keating had wanted one
because he was a consultant on a hotel project in Belize. His
attorney had advised Keating to apply for it so the attorney also
got in trouble with the court.
While in prison, Keating inadvertently took a swig of shampoo
that had been placed in a cup on his food tray and he had to have
his stomach pumped. [Let this be a lesson to you, boys and girls.
When in prison, always ask what is in the cups.and don”t rely on
Bubba.ask the guards.]
Finally, in April 1999, Charles Keating agreed to plead guilty to
four felony counts in a deal that will keep him from returning to
prison. He was sentenced to time he had already served. U.S.
District Court Judge Pfaelzer presided over this last resolution as
well. When Keating was asked what lay ahead he said, “Life.”
As for John McCain, he has said of his Keating Five involvement,
“(The episode) will always be part of my biography.” In 1991,
the five Senators were found by their colleagues to have exercised
poor judgment.
McCain”s story is obviously a familiar one by now. Shot down
over Vietnam in October 1967, he served in the Hanoi Hilton for
over five years before being released in the spring of 1973.
Returning to his home in Arizona, he became a congressman and
then Senator where he built a reputation as an often tough figure
to deal with.
As to his involvement with Charles Keating, when the Keating
Five were being investigated the main focus as it pertained to
McCain”s own role involved a meeting with federal regulators
who were looking into Keating”s Lincoln Savings & Loan. It was
felt that the Senators had put undue pressure on the regulators to
lay off Keating. Fred Wertheimer, head of Common Cause and
an instigator of the investigation, now says, “No question,
McCain was held hostage by the Democrats (the other four of the
“five” were all Dems).”
In his normal blunt style, McCain says, “(For) anybody who takes
a look at my record, the Keating Five will pop out.and rightfully
so. No matter what the tape recording said (of this particular
meeting), my going to (it) created the wrong impression.”
But McCain”s involvement with Charles Keating goes beyond a
few meetings with regulators, or normal constituent service as he
would probably call it. For the rest of this article, I am going to
rely on the Arizona Republic newspaper, a chief nemesis of
McCain”s throughout his career. Let me say up front that I am a
little uncomfortable doing this. I try to research these pieces as
thoroughly as possible and use legitimate sources (95% of which
are books where the authors have also presumably done their
homework). But what follows comes off the Internet.
Understand that McCain had married his current wife, Cindy
Hensley, in 1980. It was his second marriage. Cindy”s father was
a very high-powered figure in Arizona where he ran the largest
Anheuser-Busch distributorship, Hensley & Co. The Hensley”s
were partners of Charles Keating”s.
The Arizona Republic reported in October 1989, “While Senator
John McCain”s wife and father-in-law were investing with Charles
H. Keating, Jr. in a shopping center, McCain was helping
Keating battle Federal regulators who questioned his operation of
Lincoln S&L. Documents show that Sen. McCain”s wife, Cindy,
and father-in-law, James W. Hensley, are the largest investors in
Fountain Spring Shopping Center. Their partnership is managed
by subsidiaries of American Continental Corp., run by Charles
Keating. But John McCain contends there was no conflict in his
helping Keating battle Federal regulators.”
“Senator McCain had more than a constituent relationship with
Keating prior to 1987.The McCains – sometimes with their
daughter and baby sitter – made at least nine trips at Keating”s
expense from August 1984 to August 1986 aboard either
Keating”s American Continental corporate jet or chartered planes
and helicopters owned by Resorts International. Three of the
trips were for vacations at Keating”s luxurious retreat in the
Bahamas.”
Later in the same month, the Republic wrote, “McCain, in a radio
talk-show appearance last week, condemned disclosures of his
family”s ties to Keating as æirresponsible journalism.” And the
way he dealt with unpleasant questions was to bully the
questioners.”You”re a liar,” McCain snapped September 29
when an Arizona Republic reporter asked him about business ties
between his wife, Cindy McCain, and Keating.”That”s the
spouse”s involvement, you idiot,” McCain sneered later in the
same conversation. ”You do understand English, don”t you?””
When you read the Arizona Republic transcripts you certainly
come away with a picture of the bullying candidate that
sometimes expressed himself during the presidential campaign. I
was a McCain supporter but, as I mentioned in my “Week in
Review”s,” there is a reason why campaigns are long. You hope
that over time you begin to better understand the personalities of
the candidates. I can”t say I”m as enamored of McCain as I once
was.
As for his role with Keating, it”s self-evident. McCain himself has
never tried to hide it. Keating was a convicted felon, responsible
for acts of financial cruelty. It is noble that McCain owned up to
his role in the shenanigans. But was that enough? Why is it that
our politicians who express the desire to reform the campaign
finance system in this country only seem to do so after “making a
mistake?” Heck, I”m calling Arnold Palmer and seeing if I can
draft him.
Sources: See Parts I and II of this series.
Next week, so who was this Ponzi guy anyway?
Brian Trumbore
