Reply #4: Cindy McCain's Business Relationship With Charles Keating [View All]

[Ichingcarpenter]

First, as was well documented in a 20,000 word profile by the Arizona Republic on John McCain back in 1999, it was Cindy's own money that was used to get McCain elected to Congress in the first place:

Many have told the tale of John McCain winning the 1st Congressional District by wearing out three pairs of shoes. McCain's footwear definitely took a beating during the race, but it was more greenbacks than soles that swept McCain into the U.S. House of Representatives in 1982.

McCain's first campaign benefited from his wife's personal wealth, some of which had been tied up in a trust set up in 1971 by her parents, Jim and Marguerite ''Smitty'' Hensley.

In 1981, the trust expired and was dissolved, giving Cindy McCain a half interest in Western Leasing Co., a truck-leasing business controlled by her father, said Trevor Potter, general counsel to the McCain 2000 campaign and former chairman of the Federal Election Commission.

In 1982, Cindy McCain received $639,000 from Western Leasing, according to a financial disclosure report filed by McCain. Potter said that figure reflects Cindy's income on paper, not the actual cash she received, which was about $250,000.

In any case, that same year, the McCains lent $169,000 of their own money to the campaign. Western Leasing, in part, made those loans possible, Potter said.

''Her financial assets played a part in allowing them to loan money to the campaign,'' Potter said. ''And her financial assets included the income from Western Leasing.'' (Page 19)

Cindy McCain was no ordinary bystander to her husband's political career. It was her own money that helped to get him elected in the first place.

But even more significant is her involvement in the scandal of McCain's career -- The Keating Five.

In spinning his side of the Keating story, McCain adopted the blanket defense that Keating was a constituent and that he had every right to ask his senators for help. In attending the meetings, McCain said, he simply wanted to make sure that Keating was treated like any other constituent.

Keating was far more than a constituent to McCain, however.

On Oct. 8, 1989, The Republic revealed that McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators.

...When the story broke, McCain did nothing to help himself. When reporters first called him, he was furious. Caught out in the open, the former fighter pilot let go with a barrage of cover fire. Sen. Hothead came out in all his glory.

''You're a liar,''' McCain snapped Sept. 29 when a Republic reporter asked him about business ties between his wife and Keating.

''That's the spouse's involvement, you idiot,'' McCain said later in the same conversation. ''You do understand English, don't you?''

He also belittled the reporters when they asked about his wife's ties to Keating.

''It's up to you to find that out, kids.''

And then he played the POW card.

''Even the Vietnamese didn't question my ethics,'' McCain said.

The paper ran the story a few days later. At a news conference, McCain was a changed man. He stood calmly for 90 minutes and answered every question.

On the shopping center, his defense was simple. The deal did not involve him. The shares in the shopping center had been purchased by a partnership set up between McCain's wife and her father. (Page 27)

But it only got worse for Cindy's personal and financial involvement with Keating.

From a December 1989 Newsday story:

The Senate Ethics Committee will seek a detailed study of a real estate partnership involving developer Charles Keating Jr. and the wife of Sen. John McCain (R-Ariz.), according to Senate sources.

Involved is an investment by Cindy McCain and her father, James Hensley, in a $15-million Phoenix, Ariz., shopping center. The $359,000 investment, made through a Hensley company subsidiary in which Cindy McCain had 41 percent ownership and her father 51 percent, makes them the largest single investors in the project originally financed, built and managed by Keating. The investment by the senator's relatives was made in 1986 after Keating was already in a bitter feud with federal regulators alarmed over his operation of Lincoln Savings and Loan.

Ultimately, the Ethics Committee reprimanded McCain for his involvement in the Keating 5, calling it an exercise in "poor judgment."

But the fact that Cindy McCain's own money was tied-up in business dealings with Keating himself provides an even more compelling reason for her to now publicly reveal her finances and business relationships.>>>> More


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