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McCain wipes his slate clean

The senator, once afraid the Keating scandal would haunt him to his grave, now shows signs of outliving it.

Just a decade ago, John McCain thought his political career was over.

"This will be etched on my tombstone," he told his friends, referring to the so-called Keating Five scandal in which he was accused of intervening improperly in government regulatory business on behalf of a big contributor, Charles Keating.

At that point, McCain made a life-altering decision.

Instead of retiring from public life, as many politicians have done in those circumstances, McCain decided to undertake a lengthy uphill battle to erase the Keating name from his tombstone.

It was a journey that culminated this week with a big victory in the New Hampshire presidential primary and his growing popularity elsewhere. Seldom _ if ever _ has an American politician laid so low by scandal been able to stage such a recovery.

How did he do it?

Critics have accused McCain of affecting his political comeback by cynically embracing the cause of campaign finance reform. By transforming himself into a reformer, their theory goes, he was able to dupe the public into forgetting his role in the scandal.

But McCain loyalists insist that his reform impulses were genuinely stirred by the humiliation he felt at being drawn into the political snare of Keating, who openly admitted he was contributing big bucks to politicians to get favored government treatment for his thrift, Lincoln Savings and Loan.

"This was a searing experience for him," recalls former Sen. Warren Rudman, R-N.H., who served on the Senate Ethics Committee that investigated the Keating Five scandal. "He saw what could happen to a good, decent politician as a result of the current campaign finance laws, and he decided to change it. . . . It was his way to seek redemption."

Torrie Clarke, who was McCain's press secretary when the scandal broke, says it served as "a tremendous catalyst for McCain to redouble his efforts to become the kind of reform-minded elected official that he is known to be today."

"I've always said that being a POW was the best thing that ever happened to John McCain as a person and the Keating Five was the best thing that ever happened to him as a public servant," Clarke adds.

McCain often has recalled how he was riding high in his political career in the fall of 1989 when it suddenly came crashing down around him on a Sunday afternoon. After appearing on CBS's Face the Nation, he said, he took a phone call from Clarke, who told him: "We got a bad headline in the Arizona Republic today. It's about Charlie Keating."

The newspaper story was that McCain, who had accepted $112,000 in campaign contributions as well as other favors from Keating, was one of five senators who summoned federal bank regulators to Capitol Hill for a meeting in April 1987, in which they sought to stall the government takeover of Lincoln. When Lincoln finally went belly-up, it cost American taxpayers more than $2-billion to cover the losses.

McCain's initial response was that he, as a senator, often contacted federal regulators on behalf of constituents. Although Lincoln was headquartered in California, Keating was a resident of Phoenix. Also implicated were four Democrats, Alan Cranston of California, Dennis DeConcini of Arizona, Donald Riegle Jr. of Michigan and John Glenn of Ohio.

As the scandal unfolded, it was disclosed that McCain had not only taken campaign contributions from Keating but also had accepted free air transport from him for a family vacation in the Bahamas.

McCain was crushed by the bad publicity.

"At the time, it was the worst thing that ever happened to him _ worse than being a POW," said Rudman.

It was at this point that McCain thought his political career was over. And, in fact, the scandal did end the careers of three other senators. Only McCain and Glenn survived to be re-elected.

One thing that saved McCain's career was the mitigating information that the Senate Ethics Committee received about his role in the scandal. A former McCain aide, Christopher Koch, told the panel that the senator had told Keating explicitly not to expect any help from him with the regulators, and Keating, in response, called the Vietnam war hero "a wimp."

Based on evidence supplied by Koch, Robert Bennett, the committee's special counsel, recommended the committee drop McCain _ and Glenn _ from its investigation. But Democrats on the Ethics Committee blocked the recommendation.

"Democrats realized if McCain and Glenn were gone, there would only be three senators in the dock and all three would be Democrats," Rudman recalls. "It should have been the Keating Three _ not the Keating Five."

In the end, the Ethics Committee issued a mild rebuke of McCain and Glenn in February 1991. Riegle and DeConcini were more severely chastised by the committee, and Cranston was censured by the full Senate.

Despite McCain's light punishment, however, it took him a long time to recover his confidence.

As he did, he pursued a new course. Although McCain had perviously spoken out for government reform, particularly in military procurement, he slowly carved out a role for himself in the Senate as a reformer. He began writing bills advocated by good government groups such as Common Cause, an organization that had urged the Senate to investigate the Keating case.

He mounted his first effort on behalf of campaign finance reform in May 1993, when he offered an amendment designed to restrict senators from spending their campaign funds on personal expenses such as clothing, vacations, cars and country club membership.

But it was not until September, 1995, that he became co-author with Democratic Sen. Russell Feingold of Wisconsin of the legislation that has served as the leading edge of reform efforts in the Congress. Although a similar measure has passed the House, it has never gotten more than 52 votes in the Senate _ not enough to break a GOP filibuster.

Most of McCain's other reform efforts have been similarly unsuccessful, even though they increased his name recognition around the country. His tobacco bill, which would have imposed a $1.10-a-pack tax to combat teenage smoking, died in the Senate. And his crusade against pork-barrel spending has done nothing but generate headlines.

Some observers have noted that by going after pork and campaign contributions, McCain has not only improved his public image but also has struck out against two things that many of his colleagues in the Senate view as sacred. They say McCain has been motivated, in part, by a lingering resentment toward senators who refused to free him from the Keating probe.

Friends say the Arizona senator still harbors some bitterness from that experience, but they insist that was not his motivation.

And while McCain's record since the early 1990s has helped to lay the Keating Five scandal to rest for many years, it is not forgotten. McCain himself has acknowledged he expects it to be raised again in the campaign this year, particularly if he wins the GOP nomination.