It all started in March 1987. Charles H Keating Jr., the flamboyant developer and anti-porn crusader, needed help. The government was poised to seize Lincoln Savings and Loan, a freewheeling subsidiary of Keating's American Continental Corp.

As federal auditors crawled all over Lincoln, Keating was not content to wait and hope for the best. He'd spread a lot of money around Washington, and it was time to call in his chits.Now Keating had a job for DeConcini. He wanted him to organize a meeting with the regulators. The message: Get off Lincoln's back. Eventually, DeConcini would set up a meeting between five senators and the regulators. One of them was John McCain.

McCain knew Keating well. His ties to the home builder dated to 1981, when the two men met at a Navy League dinner where McCain was the speaker.

By 1987, McCain had received about $112,000 in political contributions from Keating and his associates.

McCain had also carried a little water for Keating in Washington. While in the House, McCain, along with a majority of representatives, co-sponsored a resolution to delay new regulations designed to curb risky investments by thrifts like Lincoln.

Despite the dust-up, McCain attended not one but two meetings with the regulators. McCain later explained that he thought it was the right thing to do, because Keating was a constituent.

McCain would live to regret it.

''Did you lean on regulators for Charlie Keating?''

''Did you get campaign contributions in exchange for your cooperation?''

''Why did you protect Keating?''

Together, the five senators had accepted more than $300,000 in contributions from Keating, and their critics added a new term to the American lexicon:

Keating Five.

As the S&L failure deepened, the sheer magnitude of the losses hit the press. Billions of dollars had been squandered. The Keating Five became shorthand for the kind of political influence that money can buy. The five senators were linked as the gang who went to bat for an S&L bandit.

S&L ''trading cards'' came out. The Keating Five card showed Charles Keating holding up his hand, with a senator's head adorning each finger. McCain was on Keating's pinkie.

As the Keating investigation dragged through 1988, McCain dodged the body blows. Most landed on DeConcini, who had arranged the meetings and had other close ties to Keating, including $50 million in loans from Keating to DeConcini's aides.

But McCain made a critical error.

In spinning his side of the Keating story, McCain adopted the blanket defense that Keating was a constituent and that he had every right to ask his senators for help. In attending the meetings, McCain said, he simply wanted to make sure that Keating was treated like any other constituent.

Keating was far more than a constituent to McCain, however.

On Oct. 8, 1989, The Republic revealed that McCain's wife and her father had invested $359,100 in a Keating shopping center in April 1986, a year before McCain met with the regulators.

The paper also reported that the McCains, sometimes accompanied by their daughter and baby-sitter, had made at least nine trips at Keating's expense, sometimes aboard the American Continental jet. Three of trips were made during vacations to Keating's opulent Bahamas retreat at Cat Cay.

McCain also did not pay Keating for the trips until years after they were taken, when he learned that Keating was in trouble over Lincoln. Total cost: $13,433.

On that score, McCain admitted he had fouled up. He said he should have reimbursed Keating immediately, not waited several years. His staff said it was an oversight, but it looked bad, McCain jetting around with Keating, then going to bat for him with the federal regulators.

Meanwhile, Lincoln continued to founder.

In April 1989, two years after the Keating Five meetings, the government seized Lincoln, which declared bankruptcy. In September 1990, Keating was booked into Los Angeles County Jail, charged with 42 counts of fraud. His bond was set at $5 million.

During Keating's eventual trial, the prosecution produced a parade of elderly investors who had lost their life's savings by investing in American Continental junk bonds.
'THE ULTIMATE SURVIVOR'
In November 1990, the Senate Ethics Committee convened to decide what punishment, if any, should be doled out to the Keating Five.

Robert Bennett, who would later represent President Bill Clinton in the Paula Jones case, was the special counsel for the committee. In his opening remarks, he slammed DeConcini but went lightly on McCain, the lone Republican ensnared with four Democrats.

''In the case of Senator McCain, there is very substantial evidence that he thought he had an understanding with Senator DeConcini's office that certain matters would not be gone into at the meeting with (bank board) Chairman (Ed) Gray,'' Bennett said.

''Moreover, there is substantial evidence that, as a result of Senator McCain's refusal to do certain things, he had a fallout with Mr. Keating.''

McCain, the ultimate survivor, had dodged another missile.

Among the Keating Five, McCain received the most direct contributions from Keating. But the investigation found that he was the least culpable, along with Glenn. McCain attended the meetings but did nothing afterward to stop Lincoln's death spiral.

Lincoln's losses eventually were set at $3.4 billion, the most expensive failure in the national S&L scandal.

In the end, McCain received only a mild rebuke from the Ethics Committee for exercising ''poor judgment'' for intervening with the federal regulators on behalf of Keating. Still, he felt tarred by the affair.

''The appearance of it was wrong,'' McCain said recently. ''It's a wrong appearance when a group of senators appear in a meeting with a group of regulators, because it conveys the impression of undue and improper influence. And it was the wrong thing to do.''

McCain noted that Bennett, the independent counsel, recommended that McCain and Glenn be dropped from the investigation.

''For the first time in history, the Ethics Committee overruled the recommendation of the independent counsel,'' McCain said. ''I'm sure it had nothing to do with the fact that I was the only Republican of the five and the Democrats were in the majority (in the Senate).''

But McCain owns up to his mistake:

''I was judged eventually, after three years, of using, quote, poor judgment, and I agree with that assessment.''

http://www.wmsa.net/People/john_mccain/ariz-republic_chap_V_1999.htm

Gramm thinks the system works just fine. After all, she pocketed an estimated $2 million as an Enron director.

http://dir.salon.com/story/tech/feature/2004/01/28/wendy_gramm/

For his work, Gramm and two other lobbyists collected $750,000 in fees from UBS’s American subsidiary.

Phil Gramm joins UBS Warburg
Texas Republican, who fought corporate reform act, to advise clients on corporate finance issues.
October 7, 2002

So it came as a relief Tuesday when UBS, the European bank hit hardest by the credit crunch, announced that it would sell $15 billion of subprime mortgage debt and cut 5,500 jobs as part of a massive cleanup.

Now UBS is digesting a net loss of $10.9 billion and write-downs on mortgage-backed securities of $19 billion in the first quarter, bringing the total to about $38 billion since the beginning of the crisis.

http://www.iht.com/articles/2008/05/06/business/ubs.php

then this story should REALLY go viral.

You're out of order! You're out of order! The whole thread is out of order! They're out of order! You, you sonofabitch, you! You're supposed to *stand* for somethin'!

Hold it! Hold it! I just completed my opening statement!

It happens every day. How is this news?

How about coming up with something creative against McCain?

How about people start to stop denying what this means in terms of McCain's judgment ? This is a man that will assemble a team to lead the nation, and he's been burnt once by bad judgment.

he's been burnt once by bad judgment.

McCain came THIS close to winding up in front of a judge and jury due to his involvement with Keating.

WASHINGTON - As William K. Black watches John McCain move toward the Republican presidential nomination, he thinks of a day 21 years ago that he considers one of the most troubling of his life.

Black, a senior federal savings and loan regulator at the time, attended a meeting at which he felt McCain and four other senators pressured federal regulators to back off from investigating the troubled Lincoln Savings and Loan.

"I remain very upset that what they did caused such damage," said Black, now a professor at the University of Missouri at Kansas City, recalling how Lincoln's bankruptcy cost the government $3 billion. Moreover, he said he believes McCain intervened partly because his wife had invested money with Lincoln chairman Charles Keating, a campaign contributor who let the McCains use his home in the Bahamas.

The story of how the "Keating Five" senators allegedly pressured regulators to lay off a failing Arizona S&L became a major scandal, and marked a turning point in McCain's life - the near-death of his political career followed by his eventual rebirth as a crusader for campaign finance reform.

The events of 1987, when McCain met with regulators, and 1991, when the Senate Ethics Committee concluded that he used "poor judgment" in the matter, are only dimly remembered by many.

But McCain's emergence as the likely GOP nominee, combined with the rising volume of anti- lobbying rhetoric in the presidential campaign, has brought renewed attention to the Keating Five case, prompting questions about what McCain learned from it, what he's accepted was wrong, and whether he now is stepping back from some of his own scrutiny of his past errors.

McCain also has faced fresh criticism for pushing the Federal Communications Commission to make a decision in a 1999 case affecting another major campaign donor, Paxson Communications. Responding to recent coverage of that case, his campaign issued a statement last week saying the Arizona senator has "never done favors for special interests."

That declaration appeared at odds with McCain's previous acknowledgment that he made errors in the Keating Five case, which he called in his 2002 autobiography the "worst mistake of my life." The McCain campaign was asked repeatedly over a weeklong period to reconcile the two statements, but declined to respond to that or other questions related to the Keating episode.

McCain has also seemed to soften his earlier statements about being influenced by political donors and lobbyists. In 2000, McCain told the Globe: "People give money to buy access. We're all tainted by this system. . . . They have access, and therefore they have influence. It corrupts the system. And I'm a victim of it, too." But at a press conference on Feb. 21, McCain said: "The question is . . . do they have excess or unwarranted influence? And certainly no one ever has, in my conduct of my public life and conduct of my legislative agenda."

Black, however, maintains that the Keating case was a textbook example of politicians, McCain among them, serving a major donor. And Dennis DeConcini, a former Democratic senator from Arizona and another of the Keating Five who hosted the key meeting in his office, said in an interview that McCain has gotten a relatively "free ride" even though DeConcini insists that McCain was the "most culpable" of the senators because he had the closest relationship with Keating.

"This was an institution that is probably the worst institution in America," Black said, referring to Lincoln. Instead of trying to help "bring it under control, five US Senators were pushing us in the opposite direction."

McCain, in his autobiography, said he regrets staying at the meeting. He wrote that he should have left when one of the regulators said the meeting was "very unusual" and that he "really shouldn't have come back" after learning that the regulators were sending the matter to the Justice Department.

Months later, questions emerged about why McCain did not reimburse Keating for all the Bahamas vacations. McCain said he thought that his wife, Cindy, had written checks for a number of trips, but documentation could not be found for any except the 1986 trip. McCain agreed to pay $13,433.

In addition, the Arizona Republic reported that Cindy McCain and her father had invested $359,100 in a shopping mall for which Keating was the principal backer. When reporters questioned the investment, John McCain wrote in his autobiography, he "shouted at them, cursed them, and eventually slammed the phone down on them. It was ridiculously immature behavior."

In 2000, the Globe reported that McCain, in 1999, had pushed the FCC to act on Paxson's request for permission to buy a television station; in that case, McCain had received $20,000 in Paxson donations and flew aboard a Paxson jet. McCain's actions raised questions at the time about whether he had learned from his Keating experience. McCain stressed that he never suggested how the FCC should rule on the matter.

McCain has said he has learned the importance of avoiding the appearance of impropriety. He said in his autobiography he would not intervene with regulators or advocate "anything for any purpose that doesn't serve an obvious public interest." He eventually renounced the practice of flying on corporate jets, but has stood by his general support of deregulation of financial institutions.

During both his 2000 and 2008 campaigns, McCain has said on many occasions aboard his "Straight Talk Express" campaign bus that he learned from the Keating experience and that it turned him into a proponent of campaign finance reform. Nonetheless, on a recent campaign swing, he acknowledged he would be forever linked to the scandal. The Keating Five, he said, "will be on my tombstone."

http://www.boston.com/news/nation/articles/
2008/02/28/amid_mccains_new_status_old_scandals_stir/?page=3

Gramm, who is now a vice chairman of financial services company UBS, began advising McCain in 2005 when the Arizona senator indicated he planned to run for President.

Since then, McCain has adopted much of Gramm’s anti-tax, anti-regulatory agenda. Most strikingly, McCain shifted to support Bush’s tax cuts, which McCain had voted against in 2001 and 2003. He now vows that, if elected President, he would make them permanent.

Yet Gramm’s influence over McCain’s economic agenda – and the checkered political-business history of Gramm and his wife Wendy – have largely escaped media scrutiny.

Gramm received more than $34,000 in campaign contributions from Enron and served as one of the company’s key legislative allies in Washington, including his help in 2000 removing federal oversight from energy trades on electronic platforms.

At the height of the Enron scandal in January 2002, Gramm’s press secretary Larry Neal told The New York Times that Gramm did not “recall a conversation” he apparently had with Enron’s chairman Ken Lay in 2000 to discuss that Enron legislative priority.

An internal Enron e-mail dated Aug. 10, 2000, under the subject “CFTC Reauthorization” – sent by Enron’s top lobbyist Richard Shapiro to Steve Kean, Enron’s executive vice president – said the company needed to get Lay on the phone with Gramm so the bill could be passed.

“The bill is not moving quickly in the Senate due to Senator Phil Gramm's desire to see significant changes made to the legislation (not directly related to our energy language),” Shapiro said.

“Last week at the [2000] Republican Convention, I asked the Senator about the bill and he said they were working on it, but much needs to be changed for his support. More telling perhaps, were Wendy Gramm's comments that she would rather the current bill die if a better bill can be passed next year.

“What this means is that we must, at the least, remove Senator Gramm's opposition to the bill to move the process and more importantly seek to gain his support of the legislation.”

Shapiro added: “However, with less than 20 or so legislative days left, we need Senator Gramm to engage.

“A call from Ken Lay in the next two weeks to Senator Gramm could be an impetus for Gramm to move his staff to resolve the differences. Gramm needs to fully understand how helpful the bill is to Enron.

“Let me know your thoughts on this approach. I am prepared to assist in coordinating the call and drafting the talking points for a Ken Lay/Sen. Gramm call.”

Several other internal Enron e-mails briefed company staffers on the status of Gramm’s position and Enron’s lobbying of the senator. Gramm finally removed a “hold” on the bill in December 2000, reintroduced the bill under a different number, and forced a vote on it without floor debate.

On Jan. 14, 1993, in the final days of the first Bush administration, Wendy Gramm – as chairwoman of the Commodity Futures Trading Commission – pushed through a key regulatory exemption removing energy derivatives contracts and interest-rate swaps from federal oversight.

That was a major financial boon to Enron, where Wendy Gramm landed five weeks later as a member of the board of directors. She also became a member of the audit committee that signed off on another one of Enron’s fraudulent schemes, partnerships that hid the company’s growing debt.

Even after Enron had collapsed in fall 2001, Sen. Gramm continued to resist congressional efforts at tightening up the rules.

In 2002, despite the accounting scandals at Enron, WorldCom and other major companies, Sen. Gramm objected to the Sarbanes-Oxley corporate reform bill designed to hold executives accountable for inaccuracies in financial reports.

Now, the Gramm family’s anti-regulatory agenda is returning via McCain’s presidential campaign.

As Fortune’s editor-at-large Shawn Tully wrote, “economic conservatives should take heart. McCain’s chief economic adviser – and perhaps his closest political friend – is the ultimate pure play in free market faith, former Texas Sen. Phil Gramm. … Most of [McCain’s] current positions are vintage Gramm indeed.” [Fortune, Feb. 19. 2008]

The first test of McCain’s commitment to Gramm’s anti-regulatory purity may come in the looming battle over the “Enron loophole” that the farm bill seeks to close.

http://www.spartacuslives.org/node/19996

Texan's lobbying success becomes liability for McCain
McCain's friendship with Loeffler dates back to when they both served in Congress in the early 1980s. The two men also were strong supporters of former Texas GOP Sen. Phil Gramm when he ran unsuccessfully for president in 1996. Loeffler served as the national finance chairman for Gramm's presidential effort.

When the issue of Loeffler's lobbying came up last year, McCain brushed aside those concerns and told reporters the Texan was "very highly regarded. I don't have to recite his credentials."

Bruce Buchanan, a government professor at the University of Texas, said McCain can't afford to tarnish his reputation.

"It is difficult for him to hang onto what makes him attractive, which is his reputation for integrity and non-lobbyist operations, while constantly having to field questions about these ties to lobbyists," he said. "The bottom line here is (McCain) has to pay a price, and Mr. Loeffler has to fall on his sword."

http://www.chron.com/disp/story.mpl/nation/5790879.html

There's no question John McCain is getting a free ride from the mainstream press. But with the power of YouTube and the blogosphere, we can provide an accurate portrayal of the so-called Maverick. We can put the brakes on his free ride!

Since we first released The Real McCain a year ago, Brave New Films' REAL McCain series has garnered close to two million views, with over 13,000 comments and tens of thousands more in petition signatures! Clearly, John McCain's record is something the public wants to discuss, and yet the corporate media is doing nothing to present the truth. We feel obliged to continue countering the mainstream media's love of McCain. And so we thought it was high time for a sequel: The Real McCain 2

According to Cliff Schecter, author of The Real McCain: Why Conservatives Don't Trust Him And Why Independents Shouldn't:

"It is dangerous for a democracy when a presidential candidate can lie with impunity, change positions on a whim, and physically and verbally threaten others and virtually none of it is reported by a besotted media eagerly awaiting the next moment when he might slap their backs in friendship."

The mainstream press may not do their job, but we can surely do ours. It is crucial that we alert the public to the REAL McCain, and it is crucial we act now, before it's too late.

http://www.alternet.org/election08/85744/

TAMPA, Fla.--Barack Obama sharpened his criticism today of Republican rival John McCain's use of campaign advisers with lobbying connections, arguing that the Arizona senator's conduct of his presidential campaign contradicted principles that McCain espoused in his earlier crusades to reform lobbying influence in Washington.

"John McCain then would be pretty disappointed with John McCain now," Obama declared at a rally in Tampa, Fla., that drew 15,000 people to a local sports arena.

Obama noted that his rival had introduced legislation in 1996 to prohibit presidential campaigns from using funds to pay staff that were registered federal lobbyists and that McCain argued at the time that lobbyists presented a "conflict of interest" for presidential campaigns.

Obama charged McCain has "hired some of the biggest lobbyists in Washington to run his campaign."

McCain campaign manager Rick Davis was a lobbyist but took a leave from his firm two years ago. Senior adviser Charlie Black has been a prominent Washington lobbyist but has severed ties with his lobbying firm.

Randy Scheunemann, McCain's chief foreign policy adviser, has lobbied for foreign governments and once lobbied McCain's Senate office on behalf of the country of Georgia. Scheunemann was a registered foreign agent until March, when he ended his registration several months after joining the McCain campaign.

The Obama campaign does not allow lobbyists to be paid staff members. But it does permit lobbyists to work as volunteers.

http://weblogs.baltimoresun.com/news/politics/blog/2008/05/
obama_mccain_lobbyist_ties_con.html

John McCain, Hypocrite
by Doug Ireland


John McCain, the media's darling, has found a clever way around his own campaign finance reform law to take big corporate bucks in furtherance of his political ambitions while carrying water for the corporate mammoth providing the dough. But the national press is ignoring the story.

The Associated Press first ran the story of John McCain's odorous but lucrative Senatorial service to the communications giant Cablevision on the afternoon of March 7. But, while some local papers in McCain's home state (like the East Valley Tribune) have run the story, nothing has as yet made it into the print editions of the New York Times, the L.A. Times, the Washington Post, or any of the half-dozen other big city dailies I checked (although, if one searches the hundreds of AP stories available on the Post's website on its Politics page by clicking on "Latest Wire Reports," one can find it there--but how many readers would bother to do that?) One notable exception: the Kansas City Star.

http://www.commondreams.org/views05/0309-35.htm

Mr. Clean?

CQ reader TR points me to a breaking news item from the AP that alleges a conflict of interest for Senator John McCain. After a non-profit group closely associated with McCain and which pays a six-figure salary to one of his aides received $200,000 in donations from Cablevision, McCain wrote a letter of support to the FCC pushing Cablevision's regulatory positions:

Sen. John McCain pressed a cable company's case for pricing changes with regulators at the same time a tax-exempt group that he has worked with since its founding solicited $200,000 in contributions from the company.

Help from McCain, who argues for ridding politics of big money, included giving the CEO of Cablevision Systems Corp. the opportunity to testify before his Senate committee, writing a letter of support to the Federal Communication Commission and asking other cable companies to support so-called a la carte pricing.

McCain had expressed interest in exploring the a la carte option for years before Cablevision advocated it, but did not take a formal position with regulators until after the company's first donation came in. Cablevision is the eighth largest cable provider, serving about 3 million customers in the New York area.

Cablevision made two $100,000 donations to The Reform Institute in 2003 and 2004. The Reform Institute employs Rick Davis, who also works on McCain's staff as his chief political advisor, and they pay him $110,000 per year. The Reform Institute has often supported McCain, paid for events highlighting him and his agenda, presumably including campaign finance reform.

McCain told the AP that he sees nothing wrong with this arrangement:

"If it was a PAC (political action committee) or if it was somehow connected to any campaign of mine, I would say to you, that's a legitimate appearance of conflict of interest. But it's not," McCain told The Associated Press.

"There's not a conflict of interest when you're involved in an organization that is nonpartisan, nonprofit, nonpolitical."

http://www.captainsquartersblog.com/mt/archives/004010.php

Consider just one McCain story that never drew the roaring gang of cable and print hacks who would surely show up if someone named Clinton (or Edwards or even perhaps Obama) had done the same thing. It is the story of an entity that the Arizona senator founded, known as the Reform Institute.

Created after his failed presidential run in 2000, the Reform Institute is a hybrid between a domestic issues think tank and a tasty sugar teat for campaign staffers. Among its senior fellows is former Mexican Cabinet member Juan Hernandez, who also heads the McCain campaign's outreach to Hispanic voters. Other Reform Institute employees have included lobbyist and political consultant Rick Davis, long a member of the McCain inner circle and now his campaign manager.

The sweetest aspect of the Reform Institute -- aside from its commitment to research on immigration reform, campaign finance and other liberal concerns that the senator no longer finds so relevant -- is that its own financing is not subject to the regulations and disclosures of federal election law. In practice, that has meant not only that the McCain crowd could sop up subsidies from foundations run by liberal Democrats but that corporate donors with issues before the Commerce Committee could chip in a few bucks, too. Or a few thousand bucks, or even 50,000 bucks or more, like the executives of Cablevision (under the name CSC Holdings) and Echostar, communications firms with substantial issues at stake before McCain's committee.

Then there was that contribution from American International Group, whose executives had been quite concerned in 2000 about McCain's vow to stop AIG from profiting illicitly on insurance overcharges ripped off from the Boston "Big Dig" project. Sen. John Kerry got most of the blame for the demise of McCain's reform bill, which would have banned insurance giants like AIG from overcharging federal projects and reaping windfalls from investing that money. But it was actually McCain who killed his own bill -- and nobody seems to have checked back to discover that AIG later donated more than $50,000 to the Reform Institute. How much more? That might be a relevant question now, notably because Maurice "Hank" Greenberg, the McCain backer who ran AIG in those days, has since been forced to relinquish the company under threat of criminal prosecution.

These are precisely the kind of questions now aimed elsewhere -- at former President Bill Clinton's foundation, to take one prominent and appropriate example. The national press corps may never direct such skepticism toward their pal McCain, but it takes true willpower to resist reporting on a soft-money operation called the Reform Institute.

http://www.salon.com/opinion/conason/2008/02/01/mccain_problems/

The other four members of the Keating Five (which included Arizona’s other Senator, Dennis DeConcini) were all Democrats and three had their careers ended by the scandal.

John McCain's Gramm Gamble
The GOP presidential nominee is relying on the ex-senator who helped bring you the mortgage crisis and Rick Perry.

Still, Gramm’s first foray into lobbying at the state level bombed: His efforts to sell so-called “dead peasants” insurance to the Teacher Retirement System of Texas went nowhere. Under the dead peasants scheme, UBS would have sold TRS annuities and life insurance policies on retired teachers and kept the proceeds when teachers died.

His company’s proposal to sell the Texas Lottery is still alive. His protégé Perry (Aggies Gramm and Perry became close when both bolted the Democratic Party in the early 1980s) startled legislative leaders in 2007 when the governor proposed selling the lottery to private investors for between $14 billion and $20 billion. By investing that money, UBS argues, the state could earn hundreds of millions more in interest than the $1 billion earned annually now.

Perry first learned of the idea from Wilson, who, according to The Dallas Morning News, passed along Gramm’s interest in the subject. There are other UBS connections as well: The investment bank employs Perry’s son, Griffin, and retains former Perry spokesman Ray Sullivan as a lobbyist.

In 2007, lawmakers ignored the lottery sale idea. But Lt. Gov. David Dewhurst gave interim charges to both the State Affairs and Finance committees to study the proposal. And Texas House Appropriations Chair Warren Chisum, a Republican from Pampa, has told reporters “[proponents of the sale] are already here visiting with folks to lay out their case.” Senate State Affairs Chairman Robert Duncan, the Lubbock Republican who plans to hold hearings in August, confirmed this, saying lobbyists are “circling their wagons since the issue is in play.”

A huge obstacle will be making the numbers work—which, according to a recent report by campaign watchdog Texans for Public Justice—would require a huge expansion of gambling operations.

UBS estimated that the Texas Lottery could be worth between $10 billion and $16 billion if per capita sales increased 2 percent a year; a 7 percent annual growth would make the lottery’s value as high as $24 billion. But the group’s report noted, “These projections assume that Texas could match the per capita sales rates of lotteries in Maryland, Georgia, and Virginia. Yet part of what drives higher sales in those states are games now prohibited in Texas. ... The UBS proposal also suggests the Texas Lottery could boost sales by moving into interactive television and the Internet.” In short, the Wall Street consensus is that maximizing the value of the Texas Lottery requires an expansion of gambling into new games and new venues, and even into cyberspace.

While convincing the Legislature to expand gambling is an enormous crapshoot, if anyone is connected enough to do it, it’s Gramm. No one can tout a free market ideology that happens to benefit friends and family better than he.

On January 10, Gramm introduced Perry at the annual banquet of the Texas Public Policy Foundation, a conservative think tank.

At first blush, Gramm’s homage might seem to be the obligatory appearance of a dutiful husband (Gramm’s wife, Wendy, serves as the foundation’s board chair), or a loyal Perry friend.

Gramm’s remarks at Austin’s Sheraton Hotel to a friendly crowd of 500 loyal conservatives revealed just how deeply involved and powerful the former senator remains in the Perry administration and the Republican Party, both in Texas and nationwide. Pronouncing Perry the “greatest governor” of his lifetime, Gramm ticked off a list of reasons that spoke volumes about not only his subject, but himself.

Predictably, he praised Perry for no new taxes and passage of the Republican redistricting bill.

More revealing was his praise of Perry for seeking “private sector solutions” to government problems. Translation: cha-ching.

Perry was equally effusive about Gramm when he responded to his old friend’s introduction. “Americans made a huge mistake in 1996,” he declared. “I can’t fathom where we would be ... had Phil Gramm led this country for eight years.”

When it comes to the economy, a McCain victory in November might make that dream come true.

http://www.texasobserver.org/article.php?aid=2767