The Keating 5 were 5 US Senators accused of corruption in 1989 as part of the larger Savings and Loan crisis.
Savings and loan association
The Keating Five were five United States Senators accused of corruption in 1989, igniting a major political scandal as part of the larger Savings and Loan crisis of the late 1980s and early 1990s. The five senators – Alan Cranston (Democrat of California), Dennis DeConcini (Democrat of Arizona), John Glenn (Democrat of Ohio), John McCain (Republican of Arizona), and Donald W. Riegle, Jr. (Democrat of Michigan) – were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., Chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln.
Lincoln Savings and Loan collapsed in 1989, at a cost of over $3 billion to the federal government. Some 23,000 Lincoln bondholders were defrauded and many investors lost their life savings. The substantial political contributions Keating had made to each of the senators, totaling $1.3 million, attracted considerable public and media attention. After a lengthy investigation, the Senate Ethics Committee determined in 1991 that Cranston, DeConcini, and Riegle had substantially and improperly interfered with the FHLBB's investigation of Lincoln Savings, with Cranston receiving a formal reprimand. Senators Glenn and McCain were cleared of having acted improperly but were criticized for having exercised "poor judgment".
A savings and loan association (or S&L), also known as a thrift, is a financial institution that specializes in accepting savings deposits and making mortgage and other loans. The terms "S&L" or "thrift" are mainly used in the United States; similar institutions in the United Kingdom, Ireland and some Commonwealth countries include building societies and trustee savings banks. They are often mutually held (often called mutual savings banks]citation needed[), meaning that the depositors and borrowers are members with voting rights, and have the ability to direct the financial and managerial goals of the organization like the members of a credit union or the policyholders of a mutual insurance company. While it is possible for an S&L to be a joint-stock company, and even publicly traded, in such instances it is no longer truly a mutual association, and depositors and borrowers no longer have membership rights and managerial control. By law, thrifts can have no more than 20 percent of their lending in commercial loans — their focus on mortgage and consumer loans makes them particularly vulnerable to housing downturns such as the deep one the U.S. has experienced since 2007.
At the beginning of the 19th century, banking was still something only done by those who had assets or wealth that needed safekeeping. The first savings bank in the United States, the Philadelphia Saving Fund Society, was established on December 20, 1816, and by the 1830s such institutions had become widespread.
The United States of America (USA), commonly referred to as the United States (US), America, or simply the States, is a federal republic consisting of 50 states, 16 territories, a federal district, and various overseas extraterritorial jurisdictions. The 48 contiguous states and the federal district of Washington, D.C., are in central North America between Canada and Mexico. The state of Alaska is the northwestern part of North America and the state of Hawaii is an archipelago in the mid-Pacific. The country also has five populated and nine unpopulated territories in the Pacific and the Caribbean. At 3.79 million square miles (9.83 million km2) in total and with around 316 million people, the United States is the fourth-largest country by total area and third largest by population. It is one of the world's most ethnically diverse and multicultural nations, the product of large-scale immigration from many countries. The geography and climate of the United States is also extremely diverse, and it is home to a wide variety of wildlife.
Paleo-indians migrated from Asia to what is now the US mainland around 15,000 years ago, with European colonization beginning in the 16th century. The United States emerged from 13 British colonies located along the Atlantic seaboard. Disputes between Great Britain and these colonies led to the American Revolution. On July 4, 1776, delegates from the 13 colonies unanimously issued the Declaration of Independence. The ensuing war ended in 1783 with the recognition of independence of the United States from the Kingdom of Great Britain, and was the first successful war of independence against a European colonial empire. The current Constitution was adopted on September 17, 1787. The first 10 amendments, collectively named the Bill of Rights, were ratified in 1791 and guarantee many fundamental civil rights and freedoms.
Financial services are the economic services provided by the finance industry, which encompasses a broad range of organizations that manage money, including credit unions, banks, credit card companies, insurance companies, accountancy companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises.
As of 2004, the financial services industry represented 20% of the market capitalization of the S&P 500 in the United States. The U.S. finance industry comprised only 10% of total non-farm business profits in 1947, but it grew to 50% by 2010. Over the same period, finance industry income as a proportion of GDP rose from 2.5% to 7.5%, and the finance industry's proportion of all corporate income rose from 10% to 20%.
Savings and loan crisis
Charles Humphrey Keating, Jr. (born December 4, 1923) is an American athlete, lawyer, real estate developer, banker, and financier, most known for his role in the savings and loan scandal of the late 1980s.
Keating was a champion swimmer for the University of Cincinnati in the 1940s. From the late 1950s through the 1970s, he was a noted anti-pornography activist, founding decency organizations and serving as a dissenting member on the President's Commission on Obscenity and Pornography.
The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of about 747 out of the 3,234 savings and loan associations in the United States. A savings and loan or "thrift" is a financial institution that accepts savings deposits and makes mortgage, car and other personal loans to individual members – a cooperative venture known in the United Kingdom as a building society. In 1995, the RTC had closed 747 failed institutions, worth a book value of $402 billion, with an estimated cost of $160 billion. In 1996, the General Accounting Office estimated the total cost to be $370 billion, including $341 billion taken from taxpayers.
William K. Black wrote that Paul Volcker as Chairman of the Federal Reserve helped create a criminogenic environment for the Savings and Loans in 1979 by doubling the interest rate (to reduce inflation): S&Ls made long-term loans at fixed interest using short-term money. When the interest rate increased, the S&Ls could not attract adequate capital and became insolvent. Rather than admit to insolvency, some CEOs of S&Ls became "reactive" control frauds by inventing creative accounting strategies that turned their businesses into Ponzi schemes that looked highly profitable, thereby attracting more investors and growing rapidly, while actually losing money. This had two effects: it meant that the fraud continued longer and substantially increased the economic losses involved, and it attracted "opportunistic" control frauds who were looking for businesses they could subvert into Ponzi schemes. For example, Charles Keating paid $51 million from Michael Milken's junk bond operation for Lincoln Savings and Loan, which at the time had a negative net worth exceeding $100 million.
In financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries. Most financial institutions are regulated by the government.
Broadly speaking, there are three major types of financial institutions:
House and Senate career, until 2000
2000 presidential campaign
Senate career, 2001–present
2008 presidential campaign
Cultural and political image
John Sidney McCain III (born August 29, 1936) is the senior United States Senator from Arizona. He was the Republican presidential nominee in the 2008 United States election.