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Senator’s image as reformer born in crisis October 23, 2008

Posted by trouble97018 in McCain, News, Politics, Repiglicans.
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Courtesy of MSNBC/The Washington Post

 

Facing the biggest crisis of his political career in late 1989, John McCain telephoned Jay Smith, an old friend and strategist, and asked him to come to a damage-control session in McCain’s Washington office.

McCain was under investigation for his connection to a pushy savings-and-loan operator named Charles H. Keating Jr., and Smith worried that the senator had created an appearance of impropriety because of his uncharacteristically guarded response to the accusations and his stubborn refusal to talk to reporters about them. The solution, he told McCain and his aides, was to hold a news conference. Take every question, Smith said. Say nothing is off limits. Let McCain be McCain.

Others in the room remember press secretary Victoria Clarke arguing against Smith’s recommendation. “I don’t think he can pull it off,” she said of McCain, and then, with the senator just a few feet away, she raised a disastrous possibility: “I think he will lose his temper.”

“I don’t think that’s true, ” Smith said, turning in his chair toward McCain. “What do you think?”

“I can do it,” McCain said.

Smith wasn’t surprised — he knew he had been appealing to McCain’s instinct to get on the offensive. As much as he loathed the media now for what he regarded as their unfairness, McCain liked the idea of walking into the lions’ den and taking on the enemy.

Some of his advisers thought his vacillation over what to do about the Keating controversy reflected an internal conflict of their boss — between his philosophical preference for public openness and his private fury anytime he felt his dignity trampled, an anger that sometimes revealed itself in his walling himself off from anyone who crossed him. But as the Keating crisis played out, they concluded that to frame the shifting tides of his nature this way was to miss the real point about McCain: that, at his best and worst, he was driven mostly by defiance in the face of pressure.

“If people tell him he can’t do something, John’s instinct often is to do it and prove them wrong,” Smith says.

If anything at all was slowly changing in McCain, it was the new priority he assigned to pragmatism, accommodation and self-preservation, a trio of concepts that his once-rebellious father had tried to instill in him during McCain’s Naval Academy days, and that the son had scorned. Under the stress of his political nightmare now, he exhibited the first signs of a self-reevaluation.

The means and manner of McCain’s political resuscitation during the weeks that followed provided a window to his emerging style amid controversy — his zest for the big gamble, the aggressive push-back while his similarly beleaguered Keating Five colleagues took refuge behind closed doors, his deftness in recasting himself as a chastened reformer and his skill in turning a potentially disastrous setback to his advantage.

Oddly, the crisis some thought would destroy him proved to be fortuitous. While the Keating episode was the most searing moment of his career, his response to it launched him into the national spotlight. Ever since, he has been on the long, if bumpy, ascension that led him to the Republican presidential nomination.

Later those same instincts helped make his recovery possible in the wake of his crushing loss to George W. Bush for the 2000 presidential nomination. In both crises, he proved himself to be a resilient and resourceful fighter, a dangerous politician to underestimate.

 

Mistakes of ‘appearance’
No other blow in McCain’s life had stung him as much as the Keating bludgeoning. “At least the North Vietnamese didn’t question my integrity,” he famously snapped at two Arizona reporters when asked how the fallout from the scandal compared with the torment he suffered as a prisoner of war in Hanoi.

When it came to Keating, McCain had a unique public relations mess that had little to do with the $112,000 in contributions he had received from the magnate during his first three campaigns. “Of the five senators before you, then-Representative McCain had the closest personal friendship with Charles Keating,” Robert Bennett, chief counsel of the Senate ethics committee, informed panel members. Bennett, who would later represent the presidential nominee in his battles with the New York Times, added that McCain had been given gifts from Keating that the other senators hadn’t: “Senator McCain was also the only one to receive personal as well as political benefits from Charles Keating.”

During his early years as a congressman in the 1980s, McCain had vacationed, along with his wife, Cindy, young daughter Meghan and a babysitter, on Keating’s estate at Cat Cay in the Bahamas. On several occasions, Keating flew the family down to the vacation site aboard the aircraft of his corporation, American Continental, after which McCain seemingly violated congressional rules in not promptly reimbursing the corporation.

 

In 1989, McCain finally paid about $13,000 to American Continental to cover the expense of his family’s previously unreimbursed airfare to the island, later saying that the delay resulted merely from an oversight. But, politically speaking, the timing could hardly have been worse. By then, federal regulators had seized the savings and loan under Keating’s control and news had broken of a Justice Department investigation of the S&L.

Aware of the fallout that might come from the news that he had run afoul of congressional rules in not swiftly paying his friend’s company, McCain turned to his wife, who generally handled the family’s household bills, in hopes that she might find canceled checks proving that the McCains had reimbursed American Continental for some, if not all, of the flights at issue.

Complicating McCain’s public relations problems, stories surfaced that Cindy and her father, Jim Hensley, the owner of a successful Anheuser-Busch beer distributorship in Phoenix, had invested in a real estate deal with Keating. While McCain had played no role in their investment in an Arizona shopping center built by a subsidiary of American Continental, the deal triggered questions among reporters and Senate investigators about his motives and possible conflicts of interest.

It was a dark period. “John was deeply down,” Maine senator and future defense secretary William S. Cohen remembers. “He was upset a lot of the time with himself. . . . He’d made a mistake, obviously — mistakes of ‘appearance,’ as he said, in going to the meetings [with federal regulators]. . . . But something like riding on a plane with Keating: He’d never given that a second thought — his father-in-law knew Keating, after all. He had this sense of outrage over what some people were saying about him. . . . He felt more wounded by that whole experience than anything else that had ever happened in his life. He said to me one day, ‘They’ve inflicted more pain on me than the North Vietnamese did’ — that was the essence of it. . . . [Virginia Sen. John W.] Warner and I tried pumping him up and saying, ‘You’ll get through this okay; it’ll be okay.’ But it was hard.”

During the last half of 1989, McCain turned for advice to former Arizona senator Barry Goldwater, his predecessor, with whom his relationship had experienced ups and downs. McCain sent Goldwater a private note, asking whether the legend could recommend a way to handle the Keating controversy.

Goldwater, who had been reluctant to issue a public defense of McCain, was characteristically blunt, offering a bit of encouragement but little else. “I’ve been wracking my brain to come up with some advice to give you, but frankly, I can’t find any,” he wrote in a letter to McCain, a copy of which is in the Goldwater Papers collection at the Arizona Historical Foundation. “My suggestion is, sort of lay off it, you’ve explained it to everyone who would listen, and now I think your job is to get a hell of a lot of work done for Arizona that will stand out more predominantly, than what has happened to you with Mr. Keating. That’s about it, John. Work your ass off. . . . I think you can do it.”

 

By then, Keating’s Lincoln Savings and Loan had collapsed under crushing debt, to be taken over by the federal government, which covered Lincoln’s losses at a cost of about $3 billion to American taxpayers. More than 20,000 bondholders had lost more than $200 million in savings. The outspoken critics of Keating’s five senatorial friends had grown to include some of the regulators from the Federal Home Loan Bank Board whose initial concerns about Keating had gone unheeded.

Before the ethics committee hearings even began in late 1989, the regulators leveled accusations of improper conduct against the five senators, who had accepted a total of more than $1.3 million in campaign money from Keating. At the start of the hearings, the senators sat dourly alongside one another in a long row, a visual suggestive of co-defendants in a rogues’ docket.

That image and the words “taxpayers’ billions” had a damning effect: Although some of the targeted senators had yet to see it, three of them — Democrats Dennis DeConcini of Arizona, Alan Cranston of California and Donald W. Riegle Jr. of Michigan — were already effectively finished in electoral politics, never again to run for public office. The committee determined in 1991 that the three had improperly interfered with the bank board’s investigation of Lincoln, with Cranston receiving a sharply worded reprimand. The committee exonerated the fourth Democratic senator involved, Ohio’s John Glenn, a revered former astronaut who had taken $200,000 in contributions from Keating. But while Glenn would win reelection once more, his career was never quite the same, the committee concluding that he had exercised “poor judgment” in meeting with regulators at Keating’s behest.

 

It was the same decision that the panel reached about McCain. But, though the committee treated McCain and Glenn identically, their political fates could scarcely have been more different. Among the five senators, only McCain’s career genuinely recovered — and eventually thrived — in the wake of the crisis.

 

Article Continues @ Sourced Site.

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