Giving In to the Dark Side

The Obama campaign just happened to have a 13-minute documentary fired up and ready to go on Charles Keating, a wealthy banker friend of John McCain. The high-flying Keating embodied the excesses of Reagan-era deregulation, and when the savings and loan association he chaired went belly-up in 1989, thousands of elderly investors lost their life savings. Intervening on Keating's behalf with a federal bank board almost cost McCain his political career, and by McCain's own account it was the definitive event in his evolution toward becoming the reformer he claims to be today.

McCain went on to sponsor campaign-finance reform legislation and, after losing his bid for the presidency in 2000, founded the Reform Institute, which bills itself as a "multi-issue think tank that champions the national interest …" McCain no doubt saw the institute as an outgrowth of his newfound zeal for breaking the unholy nexus between the special interests and policymakers. But government watchdogs are skeptical, deriding the institute as a phony think tank and noting that Rick Davis, McCain's campaign manager, received a $110,000 salary as the institute's president.

McCain stepped down as a founding co-chairman in 2005, and Davis went on to more lucrative ventures, but the network of contacts established under the umbrella of reform illustrates how Washington works, and why genuine reform—he kind both McCain and Barack Obama promise to bring—is so elusive. Doug Bailey, a Republican consultant and founder of the Hotline, a computerized compendium of political news, doesn't question that McCain was well-intended when he established an institute to promote the notion of reform in our politics. But Bailey points out, as have others, that the organization also provided a hefty salary for Davis and other campaign aides, that it allowed Davis's lobbying clients to put large sums of money, $100,000 a crack, into the Reform Institute knowing it was McCain's pet cause, and that McCain, whether or not he ever became president, still chaired the powerful Senate Commerce Committee. The Reform Institute was housed in the same building in Alexandria, Va., as Davis's lobbying firm and the fledgling McCain campaign. "It may have been well-intended, but it stunk to high heaven," Bailey told NEWSWEEK.

These networks are so embedded in the culture of Washington that the people caught up in them don't see any conflict. McCain deserves credit for holding Senate hearings that exposed the sleaze around disgraced Republican operative Jack Abramoff. It meant taking on his own party and the web of connections Abramoff had built on the right. But what McCain and his allies did wasn't entirely selfless. Abramoff and company were lobbying for a host of Indian tribes that they were ripping off. Another group of lobbyists—from the Rick Davis, Charlie Black, Roger Stone group so closely allied with McCain—were competing with Abramoff for the same business. "It doesn't mean Abramoff shouldn't be in jail, where he is, and it doesn't mean McCain wasn't right to go after him," says Bailey. "But once again, McCain's good intentions work to the personal benefit of his lobbying friends."

McCain was the only Republican among the five senators investigated for improper dealings with Keating, and some GOP loyalists maintain he was included just to spread the partisan blame. A Senate ethics committee cleared McCain of wrongdoing but said that he used poor judgment, a verdict that went to the core of how McCain thinks of himself. McCain believes he exemplifies a code of honor. It is his core value. His confidence in his own integrity allows him to do things that are obvious conflicts, including running a harshly negative campaign. He excuses himself for violating his own standards by explaining that he proposed a series of joint town-hall meetings throughout the summer, and when Obama rejected the idea, he had no qualms about blaming Obama for undermining his high-minded plan and driving his campaign into the gutter.

McCain had a blind spot when it came to the conflict of interest between his business ventures and shared vacations with Keating, the substantial campaign contributions he received from Keating and the contacts he made with bank regulators on behalf of Keating. He told investigators he would have done the same for any constituent absent the donations. He now concedes that in Washington the appearance of a conflict of interest is tantamount to the real thing and calls the Keating episode "the worst mistake of my life." After he defended the flying of the Confederate flag over the South Carolina statehouse in the 2000 primary contest, he came back months later and urged its removal, calling his earlier position a "sacrifice of principle for personal ambition." As his standing in the polls continues to deteriorate, which McCain will we see in the final days? The one who sees the light at the time—or the one who goes to the dark side and then apologizes later?

© 2008