"People Give Money to Buy Access" - McCain and the Lobbyists

On February 21, 2008 the , John Weaver, a top strategist in McCain's 2000 presidential campaign, acknowledged meeting with Iseman at Washington's Union Station to tell her to stay away from McCain. Iseman disputed Weaver's account but confirmed the meeting.

The report, McCain "acknowledged behaving inappropriately and pledged to keep his distance from Ms. Iseman." Weaver subsequently clarified that his concerns had to do with claims that Iseman was making about "strong ties to [McCain's] committee staff, personal staff and to him."

At a news conference on February 22 McCain denied having had a romantic relationship with Ms. Iseman, asserted that aides had not confronted him about her, and claimed no knowledge that John Weaver had asked the lobbyist to keep her distance. Conservative commentators who only a few days earlier had questioned McCain's conservative credentials, calling him a "liberal" and a "Democrat" now rallied to his defense. Both the McCain campaign and the Republican National Committee used the incident as an occasion to try to raise additional funds, and reported a "substantial return" on new email initiatives.

McCain campaign advisors, including Steve Schmidt (a former counselor to Vice President Dick Cheney), Charles R. Black (who is also head of Washington lobbying firm BKSH & Associates), and attorney Bob Bennett, criticized the had previously endorsed McCain for the Republican presidential nomination.)

A hint of the editor Bill Keller not to publish the charges that McCain was "giving special treatment" to "a woman lobbyist who may have helped to write key telecom legislation...." The news item also stated that McCain had hired "DC power lawyer Bob Bennett," without noting that Bennett is primarily a criminal defense attorney, or that he had represented former president Bill Clinton during the Monica Lewinsky investigation.
Bennett was also Special Counsel for the Senate Ethics Committee during its probe of what came to be known as the "Keating 5" in the early 90s (more below). Bennett recommended that McCain and Senator John Glenn be dropped from the committee investigation; they were not.

After the , but that he would recommend against it because McCain is a public figure, making it difficult to win such a suit. Bennett added that a lawsuit would provide an unwanted distraction for McCain in the midst of his presidential campaign.

Commentator and former White House counsel John Dean, in his regular column on FindLaw.com, called Bennett's response "strikingly hasty." Bennett might have placed the magazine published articles purporting to document Goldwater mental unfitness to be president. (In 1965, after losing the election to Lyndon Johnson, Goldwater sued for defamation and won.)

Dean also implicitly questioned why Ms. Iseman does not sue for defamation. She does not have McCain's constraints of being a public figure or running for president. In Dean's view the " Dean concluded:

In sum, it seems that both parties' denials to the or another news organization drops another shoe, or McCain and Iseman take no action to protect their reputations, then this highly suggestive story and these weaker responses will no doubt soon vanish. I can understand McCain's taking that route, but I cannot understand Iseman's current position (as I write this, she is hiding from the news media), if she has in fact been falsely charged. Or perhaps she is talking to a lawyer right now.

By leading off with the report that anonymous McCain advisers were convinced that his relationship with Ms. Iseman "had become romantic" the article, however, was not the implications of romance, however, but the renewed discussion of McCain's continuing relationships with lobbyists, actions he may have taken on behalf of their clients, and their direct or indirect contributions to his campaigns.

That aspect of the Walter V. Robinson reported that McCain had "pressured the Federal Communications Commission to vote on an issue that cleared the way for a major contributor to his presidential campaign to buy a Pittsburgh television station." The deal involved Christian broadcaster Cornerstone Television of Wall, PA taking over the noncommercial license of WQED's sister station WQEX, and then selling its commercial license to Paxson for $35 million. The transaction faced considerable opposition in Pittsburgh, and was the subject of lobbying by competing interests. Representatives of the local community objected to the acquisition of a public television station by a religious broadcaster, and the public opposition delayed FCC approval of the deal for more than two years.

On November 17, 1999, at the request of the lobbyist for Paxson Communications, McCain wrote a letter to William E. Kennard, chair of the Federal Communications Commission (FCC) urging prompt action on Paxson's request for a license. Parties to the Paxson deal were anxious for a quick resolution because the deal was set to expire in mid-December. A second letter was sent to other members of the FCC on December 10. McCain was, at the time, chair of the Senate Commerce Committee, which oversees the FCC. His letters drew a quick response from Kennard:

I must respectfully note that it is highly unusual for the commissioners to be asked to publicly announce their voting status on a matter that is still pending.


I am concerned that inquiries concerning the individual deliberations of each commissioner could have procedural and substantive impacts on the Commission's deliberations and, thus, on the due process rights of the parties.

Georgetown University law professor Angela J. Campbell, who represented opponents of the sale to Paxson, called McCain's action improper, unethical, and asserted that it violated FCC rules and was apparently intended to assist a major contributor. In point of fact, the day before sending his letter McCain used a Paxson corporate jet to travel from New York to Florida, and the day after from Florida to Washington. Paxson and its law firm also contributed a combined $20,000 to McCain's campaign.

The learned of McCain's actions in the Paxson case in the course of researching a related incident. In May of 1999 McCain had sent a letter to the FCC's Kennard accusing the commission of bias concerning merger negotiations between former Bell-system phone companies, SBC Communications and Ameritech. The night before McCain sent the letter, SBC's lobbyist hosted a dinner for McCain that raised nearly $20,000. Later that month Ameritech's chairman cohosted an event that raised $88,000.

In its response to the story the McCain campaign stated that "No representative of Paxson or Alcalde and Fay personally asked Senator McCain to send a letter to the FCC regarding this proceeding." The assertion contradicted a statement by McCain in a deposition taken in 2002 as part of litigation filed by Senator Mitch McConnell, Republican of Kentucky, in connection with the McCain-Feingold campaign finance law. During the deposition, first Amendment lawyer Floyd Abrams asked McCain about the source of some technical information. In his response, McCain stated "I was contacted by Mr. Paxson on this issue." "You were?" Abrams asked. "Yes," McCain said. "Can you tell us what you said and what he said about it?" Abrams inquired. McCain responded:

That he had applied to purchase this station and that he wanted to purchase it. And that there had been a numerous year delay with the FCC reaching a decision. And he wanted their approval very bad for purposes of his business.... I said I would be glad to write a letter asking them to act, but I cannot write a letter asking them to approve or deny, because then that would be an interference in their activities.

The day after the campaign denied that McCain spoke with any "representative," Lowell "Bud" Paxson himself disrupted the statement, saying that he spoke with the senator in his Washington office several weeks before McCain wrote his letters to the FCC. "I remember going there to meet with him, Paxson told the that lobbyist Vicki Iseman had arranged and likely attended the meeting.

On December 15, 1999 the FCC voted 3 to 2 to approve the Pittsburgh TV deal, with the proviso that Cornerston not use the station for "proselytizing." Cornerstone would not accept the restriction, and the deal fell through. A review of the incident by the General Counsel of the FCC found that McCain had violated the commission's rules, albeit inadvertently.

Asked in late 1999 by the about his involvement in the SBC/Ameritech merger McCain said "People give money to buy access. We're all tainted by this system.... [Donors] have access, and therefore they have influence. It corrupts the system. And I'm a victim of it too."

As the words, "essentially running the campaign."

According to Public Citizen, a group that monitors campaign financing, McCain has 59 "bundlers" from the lobbying community -- more than any other candidate. (Bundlers are campaign supporters who raise funds from networks of friends and associates.) Until the he withdrew from the race, the Giuliani campaign could boast the second most bundlers at 33, followed by the Clinton campaign with 19.

McCain's campaign manager, Rick Davis, is co-founder of a lobbying firm that represents Verizon and SBC Communications, among other clients. McCain's chief political adviser, Charles R. Black, Jr., is chairman of BKSH and Associates, a major Washington lobbying firm whose client list has included AT&T, Alcoa, JPMorgan, U.S. Airways, General Motors and United Technologies. Black has admitted that he now conducts much of his lobbying work by phone from McCain's campaign bus, the so-called "Straight Talk Express."

Campaign advisers Steve Schmidt and Mark McKinnon are lobbyists, as well, having represented Land O'Lakes, UST Public Affairs, Dell and Fannie Mae. McCain's top campaign fundraiser is former Texas Republican congressman Tom Loeffler, who now leads a lobbying law firm bearing his name. The Loeffler Group's clients include Saudi Arabia, AT&T, Toyota and the Pharmaceutical Research and Manufacturers of America.

In March 2007 McCain interrupted his presidential campaign to fly to Deer Valley, UT to attend a private schmooze fest with top corporate executives gathered at the luxury resort for an annual leadership conference. McCain's 90-minute "fireside chat" with talk show host Charlie Rose was arranged by James B. Lee, Jr., who is a top McCain fundraiser and Vice-Chairman of J.P. Morgan. Also present were CEOs of General Electric, Sony, Xerox, and other major corporations. Dozens of smaller meetings in New York City followed, organized by Wall Streeters and McCain fundraisers Henry Kravis, John Thain, and Lew Eisenberg. In the aftermath, J.P. Morgan executives alone contributed $56,250 to McCain's campaign.

McCain's relationship with lobbyists extends beyond his presidential campaign. His new Senate chief of staff is Mark Buse, who until last fall represented eBay, Goldman Sachs, Cablevision, Tenneco and Novartis as a lobbyist for ML Strategies.

"The problem for McCain being so closely associated with lobbyists," suggested Citizens for Responsibility and Ethics in Washington's Melanie Sloan, "is that he's the candidate most closely associated with attacking lobbyists." Some have suggested that the high-profile position is essentially a defensive posture dating back decades to the time that McCain and four other senators were accused of trying to influence bank regulators on behalf of Charles Keating, a banker and campaign contributor eventually convicted of securities fraud.

McCain met Keating, a former naval aviator, at a Navy League dinner in 1981 at which McCain was the featured speaker. Keating raised funds for McCain's run for congress in 1982 and 1984, and his 1986 Senate campaign. Over the next five years, Keating and his associates contributed more than $112,000 to McCain's campaigns.

Keating paid for at least nine trips for McCain and his family after his election to congress in 1982, three to Keating's vacation home in the Bahamas. Although House rules required that McCain disclose the trips, he did not do so until 1989 when the scandal broke. McCain eventually paid Keating $13,333 for the trips.

In April 1986, McCain's wife Cindy and her father Jim -- who founded Hensley & Company, the third largest Anheuser-Busch wholesaler -- invested $359,100 in a strip mall project of Keating's.

The San Francisco branch of the Federal Home Loan Bank Board had begun in 1984 to investigate Lincoln Savings and Loan, the California subsidiary of American Continental Corporation (ACC), a home construction company controlled by Keating. As part of a pattern eerily reminiscent of the current subprime mortgage crisis, ACC was using Lincoln's federally insured deposits to invest in commercial real estate and other risky vehicles.

On April 2, 1987, as McCain began his first Senate term, he and Democrats Dennis DeConcini of Arizona, Alan Cranston of California, and John Glenn of Ohio met at Keating's request with Ed Gray, chairman of the Federal Home Loan Bank Board. The four senators were joined by Senator Don Riegle, Democrat of Michigan, at a second Keating-requested meeting, this time with San Francisco bank regulators, on April 9. The attempted intervention was apparently unsuccessful, as the FHLBB sent a criminal referral to the Justice Department the same day, recommending an investigation of forgery, backdating of financial records, and other criminal acts uncovered in the audit of Lincoln in the spring of 1986.

In 1989 ACC went bankrupt. The federal bailout cost taxpayers $3.4 billion. In 1990 the Senate Ethics Committee began an investigation of the five senators, who became known as the Keating 5. Cranston, DeConcini, and Riegle were found to have improperly interfered with the FHLBB investigation. The committee recommended censure for Cranston, and rebuked DeConcini and Riegle. McCain and Glenn were criticized for "poor judgement," but McCain's actions were deemed "not improper." Keating himself was convicted in 1993 of 73 counts of wire and bankruptcy fraud. After serving four years in prison his conviction was overturned. In 2000 he pleaded guilty to four counts of fraud and was sentenced to time served.

After the election of 1994 when Republicans controlled the Senate, McCain began legislative initiatives against the anonymous pet projects known as earmarks. Soon he moved on to target political fundraising, eventually teaming up with liberal Wisconsin Democrat Russ Feingold. Feingold says McCain's vendetta against political fundraising stemmed less from an ideological commitment to good governance that from an old-fashioned sense that the gifts from special interests were "cheating." Many Senate colleagues took umbrage at McCain's "preaching" to them so soon after his own rebuke by the Ethics Committee. Nonetheless, in 2002 Congress passed the McCain-Feingold act, which banned "soft money" -- unlimited contributions from wealthy individuals, corporations, and organizations, made to political parties rather than candidates, to circumvent existing laws.

"Too often the special interest lobbyists with the fattest wallets and best access carry the day," trumpets the McCain campaign web site, noting the Senator's opposition to the "'revolving door' by which lawmakers and other influential officials leave their posts and become lobbyists for the special interests they have aided." Certainly McCain's consorting with lobbyists seems inconsistent with these statements. In perhaps the height of irony, in 2003 and 2004 Rick Davis, who was then McCain's chief political strategist, and is now his campaign manager solicited more than $200,000 in donations from Cablevision for the Reform Institute -- a foundation McCain helped start that has advocated an end to large political donations. Less than a year later, McCain wrote to the FCC in support of Cablevision's position on cable TV pricing.

As the Robinson wrote eight years ago, no less true today:

It is a paradox that underlies McCain's quest for the presidency: As he savages special interests from almost every podium, those interests, ever pragmatic, have lavished attention and donations on the powerful chairman of a committee that has vast reach over the rapidly evolving and often regulated commercial marketplace. If anything, many of the special interests are underwriting McCain's campaign for president - and his rhetorical war against them.

But for campaign audiences who come away believing McCain has constructed a wall to keep influential donors at bay, the Paxson and Baby Bell incidents suggest that McCain remains vulnerable to special interests he says have corrupted Washington.


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