McCain during the Keating 5 Ethics investigaton (source: http://blueline.harvarddems.com/?p=18)

McCain during the Keating 5 ethics investigaton (source: http://blueline.harvarddems.com/?p=18)

In the 1980s, John “I-fought-ethical-misconduct-and-undue-influence” McCain was a newly minted U.S. Senator from Arizona. He was elevated to that post from his seat in the U.S. Congress with the support of Arizona residents.

Well, that support — and a lot of help from a certain fellow named Charles Keating.

For those not up on their American disaster capitalism history, Keating was the chair of the Lincoln Savings and Loan Association and one of McCain’s most fervent supporters and fundraisers.

The Lincoln S&L collapsed under the weight of some pretty bad real estate deals, including a shopping mall McCain’s wife and father-in-law had invested in.

The collapse was eventually paid off by American taxpayers, to the tune of $2 billion, the most expensive bailout in American history up to that point.

Learning of the impending crash and being told by regulators that Keating was facing criminal action, McCain backed away from his friend. And when the crash happened and his ties went public — including a meeting where regulators felt McCain and four other Senators (including Michigan’s Don Riegle) were pressuring them — McCain denied any wrongdoing.

In 1989, a newspaper in Arizona reported the investment by McCain’s wife and her father in a failed shopping mall. The newspaper also reported that the McCains had taken several trips to Keating’s Bahamas hideaway.

Oh yeah, the trips were paid for by Keating. McCain paid Keating back, but his involvement with Keating was eventually ruled by a Senate Ethics investigation as “poor judgment.”

And thus this bit of the “maverick’s” history was relegated to the footnotes of his mounting presidential ambitions.

Well, almost. OpenSecrets.com is reporting Keating’s law firm is McCain’s sixth-largest bundling donor.

Individuals at a law firm founded by Charles H. Keating, Jr., who symbolized how political influence contributed to the collapse of savings and loans in the 1980s, have bundled at least $50,000 to John McCain’s presidential campaign since June, the nonpartisan Center for Responsive Politics has calculated, making the Cincinnati-based firm McCain’s sixth-largest contributor during that period.

Now to be fair, Keating himself is 84 and did his 50 months for defrauding investors thus paying his debt to society (ignoring that $2 billion bailout). And he himself has not donated to McCain.

The only Keating in the recent bundle of contributions to McCain’s campaign is $1,000 contributor William J. Keating, Jr., who is listed as a partner in the firm and appears to be Charles Keating’s nephew. William J. Keating, Sr., Charles Keating’s brother, was a Republican congressman from Ohio.

One would think that with a name like Keating so burnt into history in connection with a scandal with McCain, the folks at McCain/Palin would have said “thanks but no thanks” to the bundled donations. Evidently, the McCain camp is banking on us to forget that $2 billion “poor judgment” of McCain’s, even after Democratic nominee Barack Obama’s campaign said the Keating 5 scandal was not off limits in the presidential race.

This somewhat old scandal may not have traction here in the U.S. where we tend to forget history.

But let’s be honest, a $2 billion bailout for a friend’s failed S & L is a big deal and it shows the kind of cronyism we have watched in the Bush administration over the last eight years.

The Obama campaign has said the scandal is not off limits, but who knows when they will use it to raise serious questions about McCain’s judgment and his ability to effect change. But here’s one observer who hopes it’s VERY soon.