Alcohol industry ties may test McCain
Concerns on taxes, drinking age raised
Source: Boston Globe
By Michael Kranish, Globe Staff
March 9, 2008
The Anheuser-Busch distribution plant stretches for acres, capped by a giant Budweiser sign gleaming in the desert sun. It is here that much of the fortune of Senator John McCain's family is made. His wife, Cindy, is chairwoman of the board. His son from his first marriage, Andrew, is chief financial officer. McCain himself once served as the company's chief publicist.
McCain, acknowledging the appearance of a conflict of interest, has recused himself from voting in Congress on alcohol-related matters ranging from the drinking age to the beer tax.
But if McCain were to become president, he would be obliged to either sign or veto bills related to the alcohol industry. And while some public-interest groups have applauded McCain for trying to avoid a conflict in Congress, some industry watchdogs are concerned that if McCain is elected president, he may have to pass judgment on a new series of alcohol-related measures.
Already, the beer industry is lobbying heavily to rescind a 1991 beer-tax hike. There is also a movement to lower federal guidelines on the drinking age.
"It would not be helpful to have a president from Anheuser-Busch," said George Hacker, director of the alcohol policies project at the Center for Science in the Public Interest, a nonprofit advocacy group. Hacker said he fears federal regulators might become aware of McCain's industry ties and therefore go easy on beer distributors.
McCain's spokeswoman, Jill Hazelbaker, said she could not speculate on how the McCain family would handle the business if he became president. Officials at Hensley & Co., the family-owned beer distributorship overseen by Cindy McCain, declined interview requests.
Jan Baran, the former general counsel of the Republican National Committee, said there is no legal requirement to divest any assets.
"Obviously he is going to want to exercise the power of presidency, but he is not going to want to make any acts that unjustly enrich himself or his family," Baran said.
An analysis published last September by Roll Call, a Capitol Hill newspaper, calculated John and Cindy McCain's assets at $44 million, making McCain the ninth wealthiest member of Congress. While McCain has a prenuptial agreement that he will not control his wife's assets, the Senate financial disclosure form lumps spousal assets together.
The alcohol lobby is one of the most influential in Washington. Although McCain has recused himself on alcohol issues, he has not refused the industry's money. Out of all candidates for all federal offices in 2008 - the White House, Senate, and House - McCain has received more alcohol industry money than all but two.
The top recipient was Senator Hillary Clinton of New York, with $210,750, followed by former New York City mayor Rudy Giuliani with $186,725 and McCain with $152,725, according to the nonpartisan Center for Responsive Politics. In addition, the analysis showed that McCain was the top recipient among federal candidates of money from Anheuser-Busch, the company that supplies beer to his wife's firm, providing $15,200.
Hazelbaker said McCain believes there was no problem in taking the money because he has done no favors for the industry.
"Senator McCain has always recused himself from considering or voting on legislation that would impact the beer industry or the alcohol industry in general," Hazelbaker said.
Such inaction on a major issue is unusual for McCain. During his time as chairman or top Republican on the Senate Commerce Committee, he has sought to crack down on the tobacco industry with a variety of programs aimed at cutting underage use of tobacco.
McCain has a personal awareness of the dangers of excessive drinking. He has often told of his hard-drinking days of his youth, but his family and campaign staff said he now rarely, if ever, drinks alcohol. McCain wrote in his 1999 autobiography, "Faith of My Fathers," about how his father, the late Admiral John S. McCain Jr., had a drinking problem.
"My father returned from the war with a great appetite for drink, which he overindulged until the very last years of his life . . . drinking changed his personality in unattractive ways. When he was drunk, I did not recognize him," McCain wrote.
The next president could have a major impact on an array of alcohol issues. In addition to the industry's effort to halve the beer tax, there are also proposals to change the way federal government pressures states to maintain tough drinking laws.
Currently, states cannot receive all of their federal transportation funds unless they set a blood-alcohol limit of .08 for drivers and a minimum drinking age of 21 years. But the alcohol industry wants the federal government to give states more leeway to choose their own limits.
Last October, McCain was asked by a student in South Carolina whether he favored lowering the drinking age. He responded that he was "divided on the issue," noting that people can fight for their country at 18 but can't drink legally until 21. Later, McCain told reporters that it was a "tough decision" but that he supported keeping the 21-year drinking age.
But John McCardell, founder of a Vermont-based group called Choose Responsibility, which favors lowering the drinking age, said he plans to press the issue no matter who becomes president.
McCardell, the former president of Middlebury College, said the current law "has driven alcohol out of public places, and simply driven it into unsafe environments."
In past battles over alcohol issues, Hensley & Co. - founded by Cindy McCain's father, James Hensley, and her uncle - has weighed in on behalf of the industry. James Hensley said in a 1988 interview that he was "legislatively involved very heavily" in battling what he called "neo-Prohibitionists."
The history of the firm, as detailed by in an exhaustive article in 2000 in the Phoenix New Times, "swirls with bygone accounts of illicit booze, gambling, horse racing, decei,t and crime."
James Hensley was convicted of filing false liquor records in 1948 but later granted a license to sell alcohol wholesale in Arizona in the 1950s, which led to the establishment of Hensley & Co., which rapidly became one of the nation's most successful Anheuser-Busch distributors.
John McCain has benefited from the Hensley business from the beginning of his relationship with the former Cindy Lou Hensley. The two met in 1979 at a party in Hawaii at a time when McCain was still married to his first wife, Carol. McCain divorced Carol and married Cindy in May 1980.
McCain soon moved to his new wife's hometown of Phoenix. McCain was promptly hired as vice president of public relations at Hensley & Co., giving him a platform not just to tout beer, but also himself. He traveled around the state in what became a warm-up for launching his political career.
When a congressional seat opened up in a nearby district in 1981, Cindy bought a home there so that her husband would qualify as a resident. McCain loaned himself $167,000 to run for Congress in 1982, an amount that Arizona newspapers reported was made possible due to his wife's wealth. He won the election, and every one that followed. Cindy McCain became chairwoman of the company upon her father's death in 2000.
Like all beer companies, Hensley & Co. was affected by the decision by Congress in 1991 to double the beer tax. Now the beer industry, led by Anheuser-Busch, is pushing what it calls a "beer tax rollback" from the current level of $18 per barrel to $9.
"We think it's extremely unfair to continue to tax our industry at this level," said Michael Roche, Anheuser-Busch's vice president for national affairs.
In Arizona, meanwhile, the state is in the midst of a historic crackdown on drunken driving. The Arizona Legislature last year voted to require that certain offenders have Breathalyzers installed in their cars so they can only start the engines if they're sober.
State Representative David Schipira, a Democrat who sponsored the Breathalyzer measure - and who once briefly worked as a McCain aide - said McCain never talked about alcohol issues during the time Schipira spent in McCain's Senate office or during debate over the recent state measure.
"I don't think I've ever seen him do anything on DUI," Schipira said.
Beer industry lobbyists pushed hard to kill the Arizona measure, but it went into effect last September.
