Keating Five and John McCain

(posted here in full)

MCCAIN CAMPAIGN ADVISERSMCCAIN CAMPAIGN ADVISERS HOLD A NEWS 
TELECONFERENCE ON THE KEATING FIVE

Source: Washington Transcript Service

10-06-2008

MCCAIN CAMPAIGN ADVISERS HOLD A NEWS TELECONFERENCE ON
THE KEATING FIVE
OCTOBER 6, 2008
SPEAKERS: JOHN DOWD,
PARTNER,
AKIN GUMP STRAUSS HAUER & FELD LLP
BRIAN ROGERS, MCCAIN CAMPAIGN SPOKESMAN
[*]
ROGERS: Hey, everybody. Thanks for joining us today. We have a
conference call today to discuss Senator McCain and the Keating Five. And
to set the record straight we have Senator McCain's attorney, John Dowd,
partner at Akin Gump.
With that, Mr. Dowd will make some opening comments and then take
some questions.
John?
DOWD: Good afternoon. This is John Dowd. I'm a partner at Akin
Gump Strauss Hauer & Feld. And I represented John McCain before the Senate
Ethics Committee during the period of November 1990 through January 1991.

Just a couple of key points I think that everyone ought to keep
in mind is that from the time the initial allegations were made by the
New York Times and Archibald Cox, John was completely open, both with the
public and with the Senate, and in particular the Senate Ethics Committee.

He fully cooperated. He and his wife Cindy produced all
documents requested by Bob Bennett, who was the special counsel. He gave
interviews. He gave sworn testimony by way of deposition. And he testified
at the hearing conducted by the Senate Ethics Committee.
Probably the key -- the key points for John is he was the only
Republican in that hearing, and so it had some political overtones, given
that a number of Democrats were in deep trouble. So that colored the 
hearings,
except that it was helpful to have Bob Bennett as the special counsel to
call things straight.
And the bottom line was that John had not violated any rule of
the Senate or any law of the United States.
DOWD: Charlie Keating and Continental, you should recall, were
constituents of John. We had a bank that employed some 2,000 people in
Arizona, so he had to pay attention to it.
But he -- he resisted all the importunings of Mr. Keating to
negotiate with the bank board, and the importunings of the senior senator,
DeConcini, to negotiate with the bank board and get more involved.
He did make inquiries. The Senate committee cleared him
completely and terminated the investigation. They only found that they
thought it was poor judgment for him to intervene with the regulators.

That's not something that, as his counsel, I accepted. I think
what he did was perfectly appropriate, given the criticism of -- by a very
prominent accounting firm of the way in which the board was handling 
Continental.

But, in any event, that's the net of it, and I'm happy to respond
to any questions you have.
QUESTION: Hi. Mr. Dowd, you said that you felt that the -- the
poor judgment finding went too far. Is that right?
DOWD: Yes, I do.
QUESTION: Yes. Senator McCain doesn't seem to think that. In
what he's written, he, you know, has been pretty contrite about the whole
thing.
How do you square those two?
DOWD: Well, I'm -- I'm his lawyer, and I have a different view
of it.
I think the merits were very clear, as to why he had questions.
And when he met with Mr. Gray and the regulators, he was very careful.
He said he had some questions to ask.
Mr. Gray couldn't answer his questions. It turned out Mr. Gray
was prepared and had information to answer his questions but refused to
do so.
DOWD: But Mr. Gray, the regulator, had no difficulty with
Senator McCain asking questions based upon a very serious letter from 
Ernst
& Young about how things were being conducted.
So I don't regard that as poor judgment to ask a question based
upon professional views. He didn't get any answers, and -- because Mr.
Gray, I guess, declined to -- to provide them, but he had -- he had the
information available, which we discovered during the hearing.
So I understand why John feels the way he does. I think he was
-- this was an embarrassing and humiliating matter. But we should forget
that John is the only senator among all the senators that essentially 
threw
Charlie Keating out of his office and broke off all relations with him.
And he did that before there was any accusations of impropriety or bad
judgment.
QUESTION: Well, part of the issue seems to be the atmosphere
that was created by the five senators, you know -- you know, going to talk
to -- to regulators; you know, the five senators banding together to 
present
this; one-twentieth of the Senate, as someone said, showing up on Charlie
Keating's behalf.
Is that acceptable Senate behavior?
DOWD: Well, I don't -- I don't think it's unacceptable Senate
behavior, but I think John was mindful of that and -- and was somewhat
uncomfortable.
On the other hand, he had an obligation to the 2,000 constituents
in Arizona to find out what was going on.
You know, there's -- there's -- there are two very legitimate
views as to -- as to how this goes -- you know, was carried out. But I
don't know of any rule of the Senate that requires them to do so.
And, you know, in hindsight, after all was said and done with the
regulators and the RTC, the Supreme Court of the United States had to 
reverse
some of their behavior.
DOWD: So I'm not sure they were so right in the first place.
But, given that, I think they were concerned about the appearance
of five senators exercising their power, being senior senators, et cetera.
To me, that's one view, but that doesn't make it the final view.
QUESTION: I know that you were discussing the Keating
investigation specifically. But is it your position that Senator McCain
never did anything on behalf of Mr. Keating in his congressional career?
And I mean specifically, I guess, if you would address his tenure in the
House?
DOWD: No, that isn't -- that isn't my position.
I was asked to address the Keating -- the Keating Five. I mean,
Charlie Keating was an important constituent in Arizona that employed 
2,000
people, and that's a constituent you -- you pay attention to.
No one has -- I'm not aware of any impropriety by Senator McCain
on any other occasion.
QUESTION: It's funny to be revisiting this after 20 years or so.
DOWD: That's right.
QUESTION: But let me just ask you about his role, as a House
member, in the vacations and the reimbursement. I was just re-reading
the examination by Howell Heflin of the senator on the accounting 
procedures.

Do you think that that was in any way a conflict? I -- you know,
I understand completely how he was exonerated and what the ruling of the
committee was and how it was just a matter of, quote, "poor judgment" --
exercising poor judgment, but not anything that was remanded to the 
Senate.

QUESTION: But, if you can take off your lawyer's hat and just
take on the hat of an advocate for John McCain, is that an issue that 
should
be of concern?
DOWD: No, I don't think it should be a concern, because he
believed, I think, in good faith, that he had reversed Keating for the
plane flights. And in 1989, when it was -- when he learned that he had
not, he not only reimbursed them but he reported it to both the House and
Senate committees.
So no one knew about it except John. That's an act of integrity
and honesty, et cetera.
So I don't -- I, frankly, think, and I felt at the time, that it
was poor judgment by Senator Heflin to raise something that was within
the jurisdiction of the House Ethics Committee. And I regard it as, sort
of, a cheat shot and beyond the jurisdiction of the Senate Ethics 
Committee.

But, be that as it may, I think John handled it appropriately.
When he discovered that they had not fully reimbursed for the flights and
other costs, he made it -- he did it voluntarily, and then he reported
himself. And that's exactly what people expect of members of the Senate
and House to do.
QUESTION: Hi, Mr. Dowd.
Just quickly, for the record, what was the findings of the other
senators, in addition to John McCain, on the -- from the Senate Ethics
Committee?
DOWD: I don't -- I don't -- if I can get back to you, I can give
you that. I have the report of the committee, but I don't remember. All
I know is -- what I do remember and have before me is that John was, 
except
for the finding of poor judgment, exonerated by the committee.
I think Cranston was referred, and it seems to me there was some
other issues as to Riegle and DeConcini, but I don't want to be 
inaccurate.

But if you will -- if you will send me an e-mail, I'll get back
to you on that. Because I do have a copy of the report and I can give
it to you.
ROGERS: We'll get his e-mail for you.
QUESTION: Could you just describe the personal relationship
between Senator McCain and Mr. Keating?
DOWD: Well, they were -- they were friends. They had known each
other socially since, I believe, the early -- as early as '80 and '81.
And -- so they were -- they were social friends and then Keating raised
this business about Continental with John. And Keating was a contributor
to both the House and Senate races, as documented by the Senate report.

QUESTION: What about the investments of the Hensley family with
Keating? Did that play a role at all in this?
DOWD: It was part of the inquiry, but it did not -- John was
unconnected to that and unaware of it at the time, and did not participate
in it.
But it was a matter that Bob Bennett and the committee looked
into, and I think we satisfied them that that was all appropriate and 
arm's
length.
QUESTION: Hey, just how would you describe John McCain's role in
this? Was he a stooge, was he set up, was he manipulated?
Secondly, does this issue surprise you cropping now, now that
we've got the specter Bill Ayers on the Obama side?
DOWD: Well, I'll answer the last first.
No, it doesn't surprise me that it's come up. But I -- you know,
there was -- as Bob Bennett will tell you, there was no merit to the 
allegations
against John, and he should not have gone to a hearing, and the committee
should have so ruled. But, you know, Senator Mitchell was the majority
leader and Howell Heflin was his stooge, and he was doing what he was told
because they had -- the rest were Democrats in the hearing. So it's, sort
of, a classic political smear job on John.
On the other hand, I think, you know, the merits are the merits,
and Bob Bennett will tell you that John had not done anything wrong.
DOWD: If anything, he had taken a number of affirmative actions,
such as the -- you know, the plane trips when he was a House member; when
he discovered that he hadn't reimbursed, he not only reimbursed, but he
disclosed that to both the House and the Senate. Which is a terrific act
of integrity and I doubt if you'd find any member of the House or Senate
today that would do the same thing.
And then, he faced the issue squarely when it was brought up.
And the evidence bore out that he was -- he was honest about what he had
done. And he tried to be very careful in the handling of it. And when
he discovered that -- that Keating was pushing too hard, he threw Keating
out of his office and ended all relations with him.
So he put his -- he put his oath first, like he always does.
ROGERS: This is Brian.
One other issue on -- you know, you mentioned that this coming up
while discussing Barack Obama's relationship with William Ayers. I think
it provides a -- a useful -- a useful contrast.
As Mr. Dowd says, John McCain was open and honest and faced this
issue squarely when confronted with it. We've seen the opposite from 
Barack
Obama in his relationship with William Ayers. He described Mr. Ayers as,
quote, "a guy who lives in my neighborhood," in a debate last spring, when
clearly the relationship is much deeper than he let on.
Even Senator Obama's top campaign adviser, David Axelrod, said
that they were, quote, "certainly friendly. And they have a long history
going back to 1995."
So I think that there is a useful -- a useful contrast between
the way that these two men have handled and talked about and faced these
issues that they've -- that they've encountered over time. And I think
it speaks to John McCain's integrity and character and honesty and 
provides,
again, a useful contrast.
With that, thank you, Mr. Dowd.
And thanks for everybody for getting on the call.
DOWD: If there's a follow-up, let me know and I'll be happy to
get that information for them.
ROGERS: Will do, John.
Thank you, guys.
END