THE 2000 CAMPAIGN: THE ARIZONA TIES; A Beer Baron and a Powerful Publisher Put McCain on a Political Path
When Senator John McCain of Arizona describes the people who shaped his life, he invariably dwells on the influence of his father and grandfather, both distinguished Navy admirals and larger-than-life figures. Less widely known are the roles played by two other powerful men in launching his political career.
Mr. McCain's father-in-law, a wealthy beer baron named James W. Hensley, gave Mr. McCain his first job out of the Navy and helped bankroll his crucial first race for Congress in 1982, enabling Mr. McCain, a political newcomer, to outspend and defeat better-known opponents.
Even today, Mr. McCain's position as one of the wealthiest members of Congress is derived from his wife's share of her family's Anheuser-Busch beer distributorship here and extensive real estate investments through the company, holdings worth more than $10 million.
In his rise to political influence, Mr. McCain, who had no ties to Arizona until he married Cindy Hensley and moved here in 1981, also won the critical blessing of the city's business establishment through his close friendship with another of the state's power brokers, Darrow Tully, the publisher then of the state's dominant newspaper, The Arizona Republic. ''Duke'' Tully led an ad hoc group of business executives and self-appointed political kingmakers known as the Phoenix 40, whose backing helped Mr. McCain in that first Congressional race and assured his Senate victory four years later.
Bruce Merrill, a professor at Arizona State University, who conducted polls for Mr. McCain's first Congressional race, said, ''In 1982, a lot of party leaders felt John was an outsider and he won a narrow victory largely because he had access to family resources and the support of The Arizona Republic.''
Today, Mr. McCain, 63, is running for the Republican presidential nomination as a champion of campaign finance reform and an opponent of special interests. Yet a look at his rapid ascension shows that his early career was founded on special-interest money, and that he might never have emerged from the competitive world of Arizona politics without the steadfast backing of this city's political and business establishment.
Many of those people have remained important benefactors. Hensley family members and employees have contributed more than $80,000 to Mr. McCain's campaigns since 1982, according to federal election records, and he has collected tens of thousands more from businesses in Phoenix.
Despite his family's financial ties to the beer business, Mr. McCain has not supported the liquor industry in Congress and has publicly excused himself from voting on measures affecting the business, according to antiliquor groups.
The Family Beer Business
Mr. McCain had thought of going into politics before moving to Arizona. In 1976, three years after his release from a North Vietnamese prison, he briefly considered running for Congress from Florida, where he was stationed with the Navy.
He was then transferred to Washington as the Navy's liaison to the Senate, and his appetite for politics grew. He was a charming war hero, and a skilled public speaker, and he also built up strong political connections in Washington. Still, as a third-generation Navy man, he had not lived in any one place for long, and he lacked a political base.
That changed after he met Cindy Hensley, his second wife. Mr. McCain went to work in public relations for Hensley & Company, his father-in-law's beer distributorship. It was his first job outside the Navy. People who knew Mr. McCain then said the job was merely a means for him to meet people in the state, and lay the groundwork for his political career.
''Hensley had the Budweiser distributorship for the entire state and he didn't need any PR,'' said William Shover, a retired executive at The Arizona Republic, who met Mr. McCain in those early days. ''They created a job for him.''
Acquaintances describe Mr. Hensley as an astute businessman who never sought the limelight even after he became one of Arizona's richest men. Still, while he could give his only child's husband a job, he could not give him entree into the political and business elite. The liquor industry was never part of the civic hierarchy, and Mr. Hensley's own past was not a ticket to the establishment.
In World War II, Mr. Hensley was a bombardier on a B-17 shot down over the English Channel. After the war, he went to work for Kemper Marley Sr., a rancher who had grown rich and powerful selling liquor after Prohibition.
In 1948, while working for the Marley operation in Tucson, Mr. Hensley and his brother, Eugene, were convicted of filing false liquor records and conspiracy in the illegal distribution of several hundred cases of whiskey. James Hensley received a suspended sentence and Eugene was sentenced to a year in a federal prison camp. Five years later, James Hensley and Mr. Marley were charged with violating federal liquor laws again, but they were acquitted.
In 1955, James Hensley acquired the Anheuser-Busch distributorship for Arizona, and fueled by the state's rapid growth and booming economy, he built it into Arizona's 12th-largest privately held business and one of the nation's largest Budweiser distributorships. The company sold nearly 20 million cases of beer last year and has 500 employees. It also has diversified into real estate holdings throughout Arizona.
The business remains in family hands, but Mr. Hensley, now 80 and in poor health, has gradually withdrawn from the day-to-day operations. He declined to be interviewed for this article.
Mrs. McCain draws an undisclosed salary as the company's vice chairman and a major shareholder, but she is not involved in the daily operations.
Along with contributions to Mr. McCain's campaigns, Hensley & Company employees have been generous contributors to state legislators. In 1992, a former lobbyist accused the company of making contributions to state legislators in the names of its employees, an illegal tactic known as bundling. Company officials denied the accusation, the former lobbyist withdrew it, and no one from the company was charged with any wrongdoing.
Last Domicile Hanoi
After his arrival in Phoenix, Mr. McCain did not have to wait long for his chance at politics. Representative John Rhodes, a veteran Republican from the Phoenix suburb of Mesa, decided not to seek re-election in 1982.
Mr. McCain defeated two longtime Mesa Republicans in the primary, including a state senator, and he went on to win the general election. He defused accusations that he was a carpetbagger by saying the place he had lived longest was Hanoi.
Records show that he outspent his opponents in part through access to his wife's family wealth. He received $11,000 in contributions from Mr. Hensley and company employees. More significantly, though he had little money of his own because he had been a career naval officer, his wife's fortune allowed him to lend $167,000 to the campaign, which was permissible under campaign laws then.
Additional money was raised by another powerful Phoenix businessman who served as a big benefactor, Charles H. Keating Jr., the corrupt savings and loan operator whose ties to Mr. McCain continue to haunt the senator. Years later, Mr. McCain intervened with federal regulators on behalf of Mr. Keating's savings and loan, an episode that has tarnished the senator's reputation as a reformer.
Mr. McCain's wife and father-in-law retained an 8 percent interest in a shopping center project put together by Mr. Keating in 1986 until the project was sold in 1998.
The senator's financial disclosure filing with the Senate indicated that the investment was sold for a profit of between $100,000 and $1 million. But Robert Delgado, president and chief executive of Hensley & Company, said that Mrs. McCain and her father had lost half of the $360,000 they invested and that the transaction was reported as a gain because of complexities in Congressional disclosure requirements.
Mr. Delgado also challenged published reports suggesting that Mr. Keating had set up the investment as a favor to the senator. Mr. Delgado said he himself had proposed the investment after a discussion with one of Mr. Keating's lawyers in 1986.
Still, thanks to her father's business, Mrs. McCain, 45, remains wealthy. She has a 37 percent share of the family business and holds a stake in its profit-sharing and pension plans worth $250,000 to $500,000, a share in the corporate jet valued at more than $1 million and Anheuser-Busch stock worth at least $1 million, according to Mr. McCain's financial disclosure forms. The couple's four children own 23 percent of the company through trusts.
The McCains live behind gates and security cameras in a sprawling house on Central Avenue in Phoenix that once belonged to her parents, who live nearby.
A Friend at the Paper
The Hensley money was not the only key to Mr. McCain's first victory. He gained much-needed credibility from the editorial pages of The Arizona Republic and The Gazette and their publisher, Duke Tully.
Mr. Tully was a far different patron from Mr. Hensley. A swaggering, fun-loving 6-foot-4, he was comfortable with business executives and politicians alike. Mr. Tully, an accomplished pilot, loved to regale people with tales of his exploits flying jet fighters in the Korean and Vietnam wars. His house and office were filled with photographs of him alongside all manner of military aircraft.
''He'd point to his teeth and say, 'See these? They're steel. I lost the others when I crashed,' '' recalled Pat Murphy, a former columnist and editor at The Republic.
Like Mr. McCain, Mr. Tully was a recent transplant, having been hired away from the San Francisco newspapers in 1979 to modernize and improve the two Phoenix newspapers, The Republic and the now-defunct Gazette, both owned by Central Newspapers. So it was natural that Mr. Tully hit it off with Mr. McCain, the former Navy pilot and prisoner of war.
''I was introduced to John at a private club in Phoenix shortly before he married Cindy,'' Mr. Tully said in a telephone interview from his home in Florida. ''He is an extremely likable guy and I had a lot of hero worship for him.''
After Mr. McCain's marriage, the McCains and the Tullys spent a lot of time together socializing and vacationing. Mr. Tully is the godfather of Megan, Mr. McCain's first child with Cindy.
More important for Mr. McCain's career, Mr. Tully's position as publisher meant he was already a fixture among the city's movers and shakers, and he eagerly championed Mr. McCain with the Phoenix 40 as well as on the editorial pages of the newspapers.
''I was a very, very strong John McCain advocate,'' Mr. Tully said. ''He was basically picked by the power structure as the guy who could get it done, and I helped with that.''
The Phoenix 40 was an unofficial group made up of the city's leading businessmen -- bankers, partners from the largest law firms, chief executives and, of course, executives of newspapers. The group was created in the early 1970's by Eugene C. Pulliam, the conservative founder of Central Newspapers and grandfather of former Vice President Dan Quayle.
The goal was to promote policies that its members felt were good for the city and state as Arizona expanded from a quiet rural state to a Sun Belt powerhouse.
It was also the closest thing to a political machine in Phoenix, and anointment by the Phoenix 40 almost invariably translated into victory at the polls.
Mr. Merrill, the Arizona State professor and political observer, said the power was exercised quietly and effectively.
''When you control the major newspaper, the TV stations and the people who make most of the political contributions,'' Mr. Merrill said, ''you have enormous influence''
Mr. Tully harnessed that influence to Mr. McCain's political career from the outset, leapfrogging him over Republicans who had waited patiently for a shot at Mr. Rhodes's seat in 1982.
''There was a lot of resentment among Mesa Republicans, none of whom had ever heard of John McCain until he was suddenly the designated hitter,'' said Terry Goddard, a Democrat and former mayor of Phoenix.
Mr. McCain won a close race for the vacant seat and retained it easily in 1984. When the opportunity arose for his next big step, Mr. Tully was ready again.
In late 1985, Senator Barry Goldwater, the state's revered Republican leader, indicated he was planning to retire, and a huge battle was anticipated for his seat. The leading candidate was expected to be the popular Democratic governor, Bruce Babbitt, who is now secretary of the interior. Mr. Babbitt, however, already had his eye on a run for the presidency, and Mr. Tully and his colleagues threw their weight behind Mr. McCain.
As Mr. Tully explained it last week, the city's elite thought it would be better to have Mr. McCain in the Senate and Mr. Babbitt in the White House.
Mr. Shover, a member of the Phoenix 40, and Mr. Merrill both said the organization's backing of Mr. McCain was instrumental in his Senate victory in 1986.
But the newspaper publisher who had helped so much was not there to savor the victory. The day after Christmas 1985, after rumors began to circulate that Mr. Tully was not all he claimed, he acknowledged that he had never served in the military, and he resigned from the newspaper and left Arizona. But the war hero for whom he had done so much was well launched on his political career.
Posts
No comments:
Post a Comment