The Los Angeles Times asks what could be a campaign ending question

An excellent article by the Los Angeles Times raises these questions for the first time:

LAT Brings up Issues about McCain Family Beer Distributor Lobbying the Bush Administration against Mothers against Drunk Driving (MADD)


Also Point to Severe Conflict of Interest should McCain win the Presidency.


Andrew McCain is active point man for company business interests.

Here is the link to the article

http://www.latimes.com/news/la-na-hensley22-2008jun22,0,457384.story?track=rss

By Ralph Vartabedian
Los Angeles Times Staff Writer

Here are some excerpts - headings are mine.


1) Hemsley & Co fights bitter battle against MADD:


The company has argued against such groups as Mothers Against Drunk Driving in fighting proposed federal rules that would require alcohol content information on every package of beer, wine and liquor.

Its executives, including McCain's son Andrew, have written at least 10 letters in recent years to the U.S. Treasury Department, have contributed tens of thousands of dollars to a beer industry political action committee and hold a seat on the board of the politically powerful National Beer Wholesalers Assn.

The company has also run afoul of health advocacy groups that have tried to rein in appeals to young drinkers. Hensley, for example, distributes caffeinated alcohol drinks that public health groups say put young and underage consumers at risk by disguising the effects of intoxication.


2) Election of McCain would create massive conflict of interest


Hensley, founded by Cindy McCain's late father, holds federal and state licenses to distribute beer and lobbies regulatory agencies on controversial alcohol issues that involve public health and safety.

The involvement of his wife and children in federal regulatory issues could create a conflict of interest for a future McCain administration, according to advocacy groups and political analysts. McCain has recused himself for many years on alcohol issues in the Senate, recognizing the potential conflict. As president, however, McCain would face far more difficulty distancing himself from an issue with such broad scope.

Cindy McCain holds the title of chairwoman in the company and controls about 68% of the privately held company stock with her children and the senator's son, according to records at the Arizona Department of Liquor Licenses and Control. Cindy and John McCain keep their finances separate, and he has no interest or role in Hensley.

In an interview in May, she said she "knows everything that is going on," communicating with her executive team every day. She added that she does not need to be physically at the company headquarters to be in charge. So far, she has given no hint of what changes, if any, she envisions in the future.



3) McCain Campaign refuses to look at issue until after they are elected

If her husband is elected president and she retains her current role at Hensley, she would set a precedent for outside corporate activity by a first lady.

The McCain campaign Friday issued a statement about the issue saying that "any decisions going forward will be made when John McCain wins the election and takes office, and not before." Hensley executives declined to comment on the matter. Political analysts said they are astounded that the presumptive Republican nominee has not already addressed the issue.

"You can't run a beer company out of the White House," said Samuel Popkin, a political science professor at UC San Diego. "You can't run any company from the White House. McCain is leaving a live hand grenade on the table, a major embarrassment."

President Lyndon B. Johnson is generally credited with being the first elected U.S. official to execute a blind trust. When Johnson took office in 1963, concerns were raised about his family's ownership of KTBC, a radio and television station in Austin, Tex., that was the cornerstone of the family's wealth. Johnson's staff urged him to sell the station, but for sentimental and financial reasons the president and the first lady were reluctant to part with it. Lady Bird Johnson had bought KTBC in 1943, and the shares were in her name.

The task of finding a solution fell to Sheldon Cohen, then a 36-year-old tax partner at Arnold, Fortas & Porter, the law firm co-founded by Abe Fortas, a Johnson confidant. During the Kennedy Administration, Cohen had created the first ever blind trusts for several cabinet undersecretaries, including a State Department official who owned shares in Latin American business interests. For the Johnsons, Cohen devised a blind trust based on the standard grantor trust, under which the owner still owns the assets and can revoke the instrument at any time. In 1964, Johnson appointed Cohen commissioner of the Internal Revenue Service.

Under the terms of the trust document, Lady Bird Johnson temporarily transferred control of her shares of KTCB to two Texas lawyers who were old family friends. She gave the trustees complete discretion over the shares, including the right to sell them, though they didn't. (Cohen says that if there was any unstated agreement by the lawyers not to sell the shares, he wasn't aware of it.) The Johnsons kept direct control only of the family ranch, some additional property in Texas, and an undisclosed amount of tax-free municipal bonds.

LYNDON JOHNSON ESTABLISHED A PRECEDENT that his successors have generally followed. But it wasn't until 1978 and the passage of the Ethics in Government Act that blind trusts were formally introduced as an option for officials in the executive branch looking to sidestep potential conflicts of interest. The act said that trustees must be independent of the official and that assets transferred into the trust must be free of restrictions on their sale or transfer. It further stipulated that the official was to receive no information from the trustee, apart from quarterly updates on the cash value and net income or loss of the trust and any other data the official might need to complete his tax returns. To enforce these and other rules, the act created the Office of Government Ethics, now an independent federal agency.