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McCain Pushed for Land Deal for Keating Associate

According to McClatchy, six years after the Keating Five scandal, Sen. John McCain pressured U.S. Forest Service employees to approve a potentially lucrative land swap that would have benefited some big donors — including a former associate of Charles Keating Jr.

The story began when a plan to purchase a 2,154-acre property just north of Phoenix, Ariz. and convert it into a golf course surrounded by several hundred luxury homes was scuttled due to opposition from local environmentalists. According to McClatchy, John Lang, the developer who sought to buy the property, known as Spur Cross Ranch, enlisted McCain’s help to arrange a land swap to trade the plot for 1,700 acres of land in the Tonto National Forest, just outside the wealthy community of Scottsdale’s city limits. The property’s owners included Carl Lindner — who, with Keating, had been accused by the Securities and Exchange Commission of fraud in 1979.

Correspondence obtained by McClatchy and interviews with former Forest Service officials show that McCain not only explored a three-way swap involving state and federal land, but also sought support for the federal Land and Water Conservation Fund to buy Spur Cross.

Forest Service Chief Mike Dombeck and his underlings objected both to surrendering lands in the Tonto forest, which bordered the ranch, and to managing a large Spur Cross park in Maricopa County. They said the ranch would rate as a low priority for the Conservation Fund.

[Forest Service Southwest Regional Chief Eleanor] Towns said that, while she was still head of the Forest Service’s national real-estate office in early 1998, Lang and Scottsdale Mayor Samantha Campana stopped by her office and raised the idea of a swap. Assuming her new job a short time later, she said, she mentioned Lang’s visit in an introductory chat with McCain, who told her to use her “best professional judgment” in considering trading forestlands for Spur Cross.

But Towns said that after she took over the regional post in the spring of 1998, McCain aide Deb Gullett phoned her several times to press for an exchange.

“She was aggressive, she was at times rude and she was hell bent on getting that land exchange done,” said Towns, who’s now retired. “She said, ‘The senator wants this land exchange done.’”

Hearing those words, Towns said, she told Gullett of McCain’s instruction to use her best judgment, said that if he intended otherwise he should phone himself and slammed down the phone…

In the summer of 1998, McCain sent letters asking the Arizona Land Trust and the U.S. General Services Administration to identify properties that could be swapped.

His office also circulated draft legislation that would’ve forced the Forest Service to yield unspecified lands in a complicated exchange that would bypass the usual environmental impact study.

Jack Fraser, a leading conservationist who since has died, later said in a letter to McCain that his draft bill “was a sweetheart deal for the developer but . . . would have been a nightmare for the public interest.”

According to the article, McCain dropped his interest in the deal when the Scottsdale city council voted against the deal.

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 [Lindner's] Great American [Insurance Company'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.

It is no secret in the Mountain West, where the federal government owns vast amounts of land, that land swaps often provide a vehicle for legislators to do favors for friends and contributors. A land deal that benefited a close business associate was at the heart of the controversy that led to the indictment of Rep. Rick Renzi (R-Ariz.) on 35 felony counts.

This isn’t the first land swap in which McCain’s involvement has drawn attention. The New York Times reported in April that McCain’s actions have repeatedly benefited Donald R. Diamond, a longtime donor, including McCain’s assistance in a land deal in California that ultimately netted Diamond a $20 million profit.

Moreover, as the McClatchy article notes, these incidents call into question McCain’s assertion in his 2002 book, “Worth the Fighting For,” that he has never intervened with federal regulators since Keating Five, and he only involves himself when there is a clear public interest.

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