Montag
10-27-2008, 09:09 PM
McCain pushed regulators for land swap, despite pledge
Greg Gordon
October 27, 2008
http://www.mcclatchydc.com/226/story/54851.html
excerpt:
WASHINGTON — Years after he resurrected his political fortunes from the Keating Five savings and loan investigation, John McCain promoted an Arizona land swap that would've benefited a former mentor and partner of the scandal's central figure.
The owners of the Spur Cross Ranch, a dramatic 2,154-acre tract of Sonoran desert just north of Phoenix, in the late 1990s sought to sell it to a developer who planned to build a premier golf course surrounded by 390 luxury homes.
Nearby residents and environmentalists, however, wanted to preserve the area's unusual cacti, stone formations and hundreds of Hopi Indian tribal artifacts.
After opposition surfaced, the developer sought McCain's help in forging a land swap with the U.S. Forest Service — a deal that also would benefit the owners of the ranch, including a company controlled by billionaire Carl H. Lindner Jr., an associate of S&L chief Charles H. Keating.
McCain and an aide pushed for the exchange in more than a half dozen sometimes-testy letters and phone calls up and down the Forest Service's hierarchy, according to former agency officials and correspondence. McCain's office even circulated draft legislation that would have overridden the agency's objection to surrendering national forest land. Ultimately, the deal fell apart.
McCain's behind-the-scenes maneuvering on Spur Cross contrasts with his image as a congressional ethics champion and his pledge — made after the Keating scandal in 1991 sullied his reputation — never to intervene with regulators again.
McCain's actions, which went on for nearly two years, also appear at odds with boasts in his 2002 book, "Worth the Fighting For," that he'd never pressured regulators at any time since 1991 and acted only on matters that "serve an obvious public purpose."
McCain said at the time that his efforts were aimed solely at preserving "one of the most pristine and beautiful desert areas in America."
In a statement to McClatchy, McCain campaign spokesman Tucker Bounds denied that the Arizona senator had tried to engineer the exchange and said "he certainly did not try to influence the Forest Service on the land-swap proposal."
Environmentalists contend that McCain seemed to be driven mainly by a desire to "railroad" through a deal benefiting Arizona real-estate developer John Lang and the 70 percent owner of Spur Cross, Lindner's Cincinnati-based Great American Insurance Co.
Some six years after the Senate hearings on the conduct of the Keating Five, Lang and his Pinnacle Group signed a contract to purchase the Spur Cross Ranch.
When he encountered opposition, Lang made a pitch to the Forest Service about swapping Spur Cross for 1,700 acres in the Tonto National Forest, just outside the northern boundary of the affluent community of Scottsdale. When the forest supervisor turned him down, Lang said, he contacted McCain for help.
The sale to Lang appeared to hang on whether a swap for the Tonto tract could be negotiated and whether Scottsdale would agree to annex the newly privatized land. A quickly executed land exchange would have enabled the ranch owners to unload the property before opposition from conservationists depressed its development value.
Bounds said that the senator insisted that all stakeholders agree on any exchange, which gave the Forest Service "an effective veto of the proposal."
However, Eleanor Towns, the Forest Service's southwest regional chief, said in an interview that she was never told the agency could veto the deal and that the Forest Service was left out of most of the discussions.
Bounds, McCain's spokesman, said that the proposed land exchange "was instigated by the adjacent towns of Care Free and Cave Creek and the Hopi Tribe," not by Lang or the landowners.
A spokeswoman for Lindner's Great American Insurance, Anne Watson, said the company never sought McCain's aid and preferred an outright sale to a developer "to maximize the return on our investment."
One of the federal regulators pressured by the Keating Five, William Black, now says that McCain never should've acted to benefit Lindner and instead "should have invoked the 100-foot-pole rule, not the 10-foot-pole rule."
Federal Election Commission records show that in the three years beginning in mid-1997, McCain's Senate campaign and his 2000 presidential campaign received more than $9,000 from Lindner, developer Lang and other backers of the deal. Several donations were made in close proximity to his Forest Service letters. His committees also got more than $25,000 from members of lobbying firms representing Great American's parent, the American Financial Group, on various issues.
This year, the 89-year-old Lindner and his son, Carl H. Lindner III, have raised more than $300,000 for McCain's presidential campaign.
Bounds said any suggestion that he was otherwise motivated is "without basis in fact" and called the campaign donations "irrelevant."
After extensive hearings into the Keating Five affair, the Senate ethics committee cleared McCain of rules violations, but said that he showed "poor judgment" in leaning on the regulators to ease curbs on speculative investments by Keating's S&L. McCain had accepted $112,000 in campaign donations from Keating and his associates and went on family vacations to Keating's Bahamas hideaway.
When the S&L collapsed, it cost taxpayers more than $3 billion.
In 1979, the Securities and Exchange Commission accused Lindner and Keating of defrauding shareholders by diverting assets in a Cincinnati banking and leasing operation to their personal use. The two men signed a court consent order in which Lindner agreed to repay the firm $1.4 million.
Black, the former thrift regulator who's now a University of Missouri-Kansas City law professor, said that McCain should've gone to great lengths to avoid "getting anywhere near people associated with Keating," including Lindner.
Greg Gordon
October 27, 2008
http://www.mcclatchydc.com/226/story/54851.html
excerpt:
WASHINGTON — Years after he resurrected his political fortunes from the Keating Five savings and loan investigation, John McCain promoted an Arizona land swap that would've benefited a former mentor and partner of the scandal's central figure.
The owners of the Spur Cross Ranch, a dramatic 2,154-acre tract of Sonoran desert just north of Phoenix, in the late 1990s sought to sell it to a developer who planned to build a premier golf course surrounded by 390 luxury homes.
Nearby residents and environmentalists, however, wanted to preserve the area's unusual cacti, stone formations and hundreds of Hopi Indian tribal artifacts.
After opposition surfaced, the developer sought McCain's help in forging a land swap with the U.S. Forest Service — a deal that also would benefit the owners of the ranch, including a company controlled by billionaire Carl H. Lindner Jr., an associate of S&L chief Charles H. Keating.
McCain and an aide pushed for the exchange in more than a half dozen sometimes-testy letters and phone calls up and down the Forest Service's hierarchy, according to former agency officials and correspondence. McCain's office even circulated draft legislation that would have overridden the agency's objection to surrendering national forest land. Ultimately, the deal fell apart.
McCain's behind-the-scenes maneuvering on Spur Cross contrasts with his image as a congressional ethics champion and his pledge — made after the Keating scandal in 1991 sullied his reputation — never to intervene with regulators again.
McCain's actions, which went on for nearly two years, also appear at odds with boasts in his 2002 book, "Worth the Fighting For," that he'd never pressured regulators at any time since 1991 and acted only on matters that "serve an obvious public purpose."
McCain said at the time that his efforts were aimed solely at preserving "one of the most pristine and beautiful desert areas in America."
In a statement to McClatchy, McCain campaign spokesman Tucker Bounds denied that the Arizona senator had tried to engineer the exchange and said "he certainly did not try to influence the Forest Service on the land-swap proposal."
Environmentalists contend that McCain seemed to be driven mainly by a desire to "railroad" through a deal benefiting Arizona real-estate developer John Lang and the 70 percent owner of Spur Cross, Lindner's Cincinnati-based Great American Insurance Co.
Some six years after the Senate hearings on the conduct of the Keating Five, Lang and his Pinnacle Group signed a contract to purchase the Spur Cross Ranch.
When he encountered opposition, Lang made a pitch to the Forest Service about swapping Spur Cross for 1,700 acres in the Tonto National Forest, just outside the northern boundary of the affluent community of Scottsdale. When the forest supervisor turned him down, Lang said, he contacted McCain for help.
The sale to Lang appeared to hang on whether a swap for the Tonto tract could be negotiated and whether Scottsdale would agree to annex the newly privatized land. A quickly executed land exchange would have enabled the ranch owners to unload the property before opposition from conservationists depressed its development value.
Bounds said that the senator insisted that all stakeholders agree on any exchange, which gave the Forest Service "an effective veto of the proposal."
However, Eleanor Towns, the Forest Service's southwest regional chief, said in an interview that she was never told the agency could veto the deal and that the Forest Service was left out of most of the discussions.
Bounds, McCain's spokesman, said that the proposed land exchange "was instigated by the adjacent towns of Care Free and Cave Creek and the Hopi Tribe," not by Lang or the landowners.
A spokeswoman for Lindner's Great American Insurance, Anne Watson, said the company never sought McCain's aid and preferred an outright sale to a developer "to maximize the return on our investment."
One of the federal regulators pressured by the Keating Five, William Black, now says that McCain never should've acted to benefit Lindner and instead "should have invoked the 100-foot-pole rule, not the 10-foot-pole rule."
Federal Election Commission records show that in the three years beginning in mid-1997, McCain's Senate campaign and his 2000 presidential campaign received more than $9,000 from Lindner, developer Lang and other backers of the deal. Several donations were made in close proximity to his Forest Service letters. His committees also got more than $25,000 from members of lobbying firms representing Great American's parent, the American Financial Group, on various issues.
This year, the 89-year-old Lindner and his son, Carl H. Lindner III, have raised more than $300,000 for McCain's presidential campaign.
Bounds said any suggestion that he was otherwise motivated is "without basis in fact" and called the campaign donations "irrelevant."
After extensive hearings into the Keating Five affair, the Senate ethics committee cleared McCain of rules violations, but said that he showed "poor judgment" in leaning on the regulators to ease curbs on speculative investments by Keating's S&L. McCain had accepted $112,000 in campaign donations from Keating and his associates and went on family vacations to Keating's Bahamas hideaway.
When the S&L collapsed, it cost taxpayers more than $3 billion.
In 1979, the Securities and Exchange Commission accused Lindner and Keating of defrauding shareholders by diverting assets in a Cincinnati banking and leasing operation to their personal use. The two men signed a court consent order in which Lindner agreed to repay the firm $1.4 million.
Black, the former thrift regulator who's now a University of Missouri-Kansas City law professor, said that McCain should've gone to great lengths to avoid "getting anywhere near people associated with Keating," including Lindner.