Keating Five Ethics Findings: Cranston Reprimanded, Systemic Corruption Exposed

The Senate Ethics Committee concludes its Keating Five investigation with formal reprimands and rebukes, documenting systematic corruption where five senators traded regulatory intervention for $1.5 million in campaign contributions from Charles Keating. Senator Alan Cranston (D-CA) receives the harshest penalty—a formal reprimand—with the Committee finding his conduct “improper and repugnant” and deserving “the fullest, strongest and most severe sanction” available. Senators Dennis DeConcini (D-AZ) and Donald Riegle (D-MI) are found to have “substantially and improperly interfered” with federal regulators investigating Lincoln Savings and Loan. Senators John Glenn (D-OH) and John McCain (R-AZ) are cleared of improper conduct but criticized for “poor judgment” in meeting with regulators on Keating’s behalf.

The Ethics Committee investigation exposes the quid pro quo at the heart of campaign finance corruption: Keating provided massive contributions, senators pressured regulators to halt enforcement, regulators backed off, and Lincoln’s fraud continued for years until its $2.3 billion collapse. The senators’ April 1987 meetings with Federal Home Loan Bank Board officials directly resulted in regulatory forbearance that allowed Keating’s fraud to expand, costing taxpayers billions and destroying 23,000 bondholders’ savings. Yet despite documented corruption, the Ethics Committee imposes only minimal sanctions: Cranston receives a formal rebuke but no expulsion, other senators face criticism without punishment, and none face criminal charges.

The Keating Five scandal demonstrates that campaign contribution bribery remains effectively legal in American politics when structured as donations rather than cash-filled envelopes. The episode reveals congressional ethics enforcement as theater: exhaustive investigations, stern rebukes, but ultimately no meaningful consequences for senators who trade official acts for campaign money. The lack of serious penalties signals that regulatory capture through campaign finance will continue unchecked, establishing precedent that senators can intervene with regulators on behalf of donors without fearing expulsion or prosecution. The scandal exposes systemic corruption but produces no structural reforms to prevent similar future abuses.