McCain beer ties might brew conflicts

By Ralph Vartabedian

Los Angeles Times

Hensley, one of the nation's major beer wholesalers, has brought the family of Cindy McCain wealth, prestige and influence in Phoenix, but it could create conflicts for her husband, Sen. John McCain, if he is elected president.

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

It has opposed groups such as Mothers Against Drunk Driving (MADD) 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 to the U.S. Treasury Department, contributed tens of thousands of dollars to a beer-industry political-action panel and hold a seat on the board of the powerful National Beer Wholesalers Association.

The company also has 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.

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.

For years, McCain has recused himself on alcohol issues in the Senate. As a president, however, he would face far more difficulty distancing himself from such a broad issue.

Cindy McCain is chairwoman of Hensley and controls about 68 percent of the privately held company stock with her children and the senator's son from his first marriage, 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.

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

On Friday, the McCain campaign issued a statement saying "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 the presumptive Republican nominee has not addressed the issue.

"You can't run a beer company out of the White House," said Samuel Popkin, a political-science professor at the University of California, 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."

Public-interest groups that lobby on alcohol issues say it would be inappropriate for the family to continue running or owning the company, if McCain is elected.

Indeed, apart from its potential to create a conflict of interest, the mere ownership could turn off some social conservatives and those who object to alcohol use.

Hensley's lobbying has put the company at the center of a battle that has raged between the beer and liquor industries since Prohibition ended.

Under federal law, liquor is taxed more heavily than beer and must contain a label that discloses alcohol content by percentage or proof. Beer and wine containers have no such disclosure requirement.

Public-interest groups have petitioned the Treasury Department to require every container of beer, wine or liquor to carry a label telling how much alcohol is in one serving.

But the beer industry has claimed it would confuse consumers, and the Treasury Department withdrew the alcohol-content disclosure from any future label requirement.

Hensley executives also have contributed heavily to the National Beer Wholesalers Association, which operates the nation's seventh-largest political-action committee and has opposed the label.

McCain has avoided problems in the Senate by recusing himself on alcohol issues, the Distilled Spirits Council said.

"Senator McCain has been very, very fair to this industry," said Frank Coleman, senior vice president for the council. "He stays an arm's length away from issues that benefit the family business."

But a president cannot recuse himself or his administration from public-policy issues as broad as alcohol, which is regulated by such departments and agencies as Treasury, the Federal Trade Commission, Health and Human Services and Transportation, among others.

"It is going to be a very difficult high-wire act for the McCain family," said Bruce Lee Livingston, executive director of the Marin Institute, a nonprofit watchdog group in San Rafael, Calif.

Aside from the labeling issue, Hensley has begun distributing products known as flavored malt beverages, which critics call "alcopops" that mask the taste of alcohol.

What exactly Cindy McCain can do is not clear, but public-interest groups say she should separate herself and her husband from Hensley.

"I believe she would have to put that stuff in a blind trust of some kind," said Charles Hurley, the CEO of MADD, "where she would not be involved."

Other experts question whether a blind trust would go far enough.

Copyright © 2008 The Seattle Times Company