THE BASIS POINT

Failed Silver State Bank Seized by FDIC Today, McCain’s Son Resigned In July

Amidst the two political conventions and the Fannie/Freddie takeover, one economic-political story slipped through the cracks: On Friday, Silver State Bank in Henderson, Nevada, became the 11th failed bank to be taken over by the FDIC in 2008. John McCain’s son Andrew McCain was a board member and served on the bank’s audit committee. Though there seems to be no indication of any wrongdoing by Andrew McCain, news reports say it recalls the S&L corruption scandal that even John McCain calls “the asterisk” on his political record. According to Reuters:

The FDIC said the Silver State — a subsidiary of Silver State Bancorp — had $2 billion in assets and $1.7 billion in deposits as of June 30. The failure is expected to cost the FDIC deposit insurance fund between $450 million and $550 million. The FDIC estimated there was about $20 million in uninsured deposits.

Andrew McCain, whom Senator John McCain adopted in a previous marriage, sat on Silver State’s board in February and served on the audit committee, bank regulatory filings show. He resigned in July due to “personal reasons,” the bank said. He previously served as a director of Choice Bank in Scottsdale, Arizona, from 2006 to April 2008 when Choice Bank merged with Silver State. There was no indication of any wrongdoing by Andrew McCain involving Silver State’s failure.

His involvement in the bank during the current credit and housing problems is a reminder of his father’s alleged role in the massive savings and loans scandal decades ago. In the late 1980s John McCain was one of five senators known as the “Keating Five.” They were investigated by Congress over their alleged roles in the crisis, which resulted in a U.S. taxpayer bailout. They were accused of aiding Charles Keating, who was the chairman of the failed California-based Lincoln Savings and Loan Association.

Here’s more reporting on John McCain’s ties to corrupt bankers at the center of the S&L scandal by the media in his home state.