In February, when a 35-count federal indictment was filed against three-term Rep. Rick Renzi (R-Ariz.) on charges of wire fraud, money laundering, extortion and conspiracy in connection with his misuse of 2002 campaign funds and the sale of a business associate’s land, he was co-chairman of Sen. John McCain’s presidential campaign in Arizona.
The indictment generated a flurry of negative press nationwide for the Republican presidential nominee because of Renzi’s close ties to the McCain campaign.
Renzi is accused of demanding that an investment group seeking his help on a congressional land exchange buy property near an Army based in Southeastern Arizona owned by his business partner, James W. Sandlin. The investment group bought Sandlin’s land in 2005, generating a $3.5 million windfall, and Sandlin allegedly funneled more than $770,000 back to Renzi.
McCain said in February he didn’t know enough about the indictment to comment, and he has continued to express fondness for Renzi. McCain, however, was drawn into the periphery of the case in May, when it was learned that the FBI had interviewed at least one member of his staff and requested his Senate office turn over documents related to federal land exchanges.
McCain’s connections with Renzi at the time the congressman was accused of committing the crimes are deep and complex.
McCain played a pivotal role in passing Renzi’s most important legislation — the 2003 Fort Huachuca Preservation amendment. The amendment, attached by Renzi to a House defense appropriations bill, angered environmental groups because it exempted Fort Huachuca, a military installation, from the Endangered Species Act and groups say it threatens the ecology of the nearby San Pedro River. McCain backed Renzi’s rider despite criticism from congressional watchdog groups and others that Renzi had a conflict of interest because the amendment would benefit his father’s company, which had significant business at the Army base.
The rider, which was supported by the Army, eliminated the threat that Fort Huachuca would be downsized or closed — which could have hurt the the Southeast Arizona economy and local real estate values, including Sandlin’s property.
After first saying he was opposed to Renzi’s rider because of the exemption from the Endangered Species Act, McCain ultimately backed the amendment with minor revisions, despite Renzi’s appearance of a conflict of interest. The decision has come back to haunt McCain because it seems to undercut his self-professed goal of steering clear of legislation designed to benefit special interests, as well as his credentials as an environmentalist.
"I have carefully avoided situations that might even tangentially be construed as a less than proper use of my office," McCain wrote in his memoir, "Worth the Fighting For."
There is no evidence to suggest that McCain was aware of Renzi’s alleged criminal conspiracy with Sandlin. But McCain brushed aside editorials in Arizona’s major daily newspapers opposed to Renzi’s rider and ignored protests by environmental groups in front of his Tucson office when he decided to support Renzi’s amendment.
Renzi’s Motives Questioned:
Chief among the questions raised was why the then-freshman congressman was pushing so hard to prevent the fort’s closure when the Army base was not in his congressional district. At the time, critics suggested that Renzi’s real motive was to benefit his family’s financial interests. Renzi’s father, the late Maj. Gen. Eugene Renzi, who died in February , was a senior executive with ManTech International, a military intelligence contractor. The company had more than $1.5 billion in current and future contracts at Fort Huachuca, and ManTech’s employees were Renzi’s single largest contributor in his 2002 congressional race — which Renzi won by only 3 percentage points.
Gary Ruskin of the Congressional Accountability Project, a Ralph Nader organization, told Phoenix New Times in September 2003 that Renzi was jeopardizing his credibility in Congress by supporting legislation that could benefit his father’s company. "Doing such things can cause huge political black eyes," Ruskin said, "even if they are not explicitly a violation of House ethics rules,"
Despite the mounting criticism nationally throughout the fall of 2003, McCain backed Renzi’s legislation, something of a reversal for the senator. In 2002, he did little publicly to support a nearly identical measure introduced by 12-term congressman Rep. Jim Kolbe (R-Ariz), whose district includes Fort Huachuca. McCain’s support was key to passage of Renzi’s amendment because the senator was the ranking Republican on the Senate-House Armed Services conference committee dealing with the legislation.
In so doing, McCain ignored his own admonition to the Senate in 2001, when he urged colleagues to refrain from injecting local politics into federal legislation by seeking to protect military bases in their home states from the coming round of base realignments and closings.
McCain apparently ignored other background aspects of Renzi’s amendment. For example, a routine search of congressional and Arizona public records would have revealed the extent of Renzi’s and Sandlin’s relationship. The two had become business partners in August 2001, when Sandlin bought a stake in Renzi’s real-estate development company, Renzi Investments, Inc., which owned land near Kingman, Ariz.
According to the indictment, Sandlin wrote $220,000 in corporate checks to Renzi in 2002. Renzi used most of the money to finance his 2002 congressional campaign, the indictment alleges, to which Sandlin and his wife were among the first contributors, each giving $2,000 in March 2002. While McCain or his staff would not have known about Sandlin’s checks to Renzi, Sandlin’s and his wife’s campaign contributions were public record. (McCain’s presidential and senatorial staffs did not respond to written questions submitted by The Washington Independent on whether McCain was aware in 2003 of the two men’s business relationship.)
Sandlin had been a major real-estate investor near Fort Huachuca and along the nearby San Pedro River, since the mid-1990s. In early 2000, Sandlin paid $960,000 for 460 acres, the site of an alfalfa farm, less than a half-mile from the river. The land became part of a larger environmental controversy over whether groundwater pumping was draining the San Pedro River.
Pro-growth activists worried that Fort Huachuca might be downsized, or closed, because it was fueling rapid population growth in an area entirely dependent on groundwater. The increase in groundwater pumping was threatening to destroy the nation’s only riparian conservation area along the San Pedro River. But downsizing, or closing, the fort might also throw the southeast Arizona economy into recession.
In early 2002, Fort Huachuca began discussions with Sandlin to buy his 460 acres (alfalfa is a water-intensive crop) as part of the Army’s effort to reduce groundwater pumping. But Sandlin rejected the Army’s offer as too low, and negotiations broke off in 2004. The Army and McCain’s Senate staff did not comment on whether the Army alerted McCain in 2003 that it was seeking to purchase Sandlin’s land at the same time the military was lobbying McCain to back Renzi’s rider.
After the Army negotiations broke off, in 2005 Renzi pressured a private investment group to buy the parcel from Sandlin, which it did for $4.5 million. Renzi promised the investors, who included former Interior Sec. Bruce Babbitt, that he would include the property in a bill to swap the alfalfa field for federal land elsewhere in Arizona.Renzi dropped the exchange bill after word spread in Washington that Renzi was giving favorable treatment to a business associate.
In backing Renzi’s amendment, McCain asserted that the fort and the San Pedro River could coexist. But environmental critics didn’t agree, saying that the amendment would doom the river and give the green light to Fort Huachuca to expand. "We thought what Renzi did was outrageous, and that he did indeed have some serious conflicts," said Sandy Bahr, director of the Grand Canyon Chapter of the Sierra Club. "The legislation smelled bad; it was bad; and McCain coming in and helping make it happen was inappropriate."
McCain’s support of Renzi’s amendment angered major environmental groups also because the exemption from the Endangered Species Act removed the fort’s responsibility to reduce ground water consumption by the surrounding civilian community. The exemption removed an important protection for the San Pedro River, home to the second most diverse array of mammals in the world after the Costa Rican cloud forests. McCain has called the San Pedro River a "national treasure," and Congress, in 1986, protected the river’s upper 40 miles by including it in the nation’s first National Riparian Conservation Area under the management of the U.S. Bureau of Land Management.
In hailing congressional passage of Renzi’s amendment in 2003, McCain, ignoring harsh criticisms from environmental groups, said the measure would protect both Fort Huachuca and the river. "I hope this compromise will be a model proving that military, environmental and economic objectives can productively coexist," McCain stated in a press release.
But a month later, without mentioning his support for the Renzi rider, McCain admitted that the San Pedro River was in serious peril saying in the Sierra Vista Herald that, "It’s not a matter of whether it will dry up, it is when it will dry up."
Why did McCain defy his own his admonitions to avoid injecting local politics into federal legislation? Renzi’s connections with the White House may offer one answer. A source familiar with the federal criminal investigation of Renzi, who asked to remain anonymous, said that Renzi’s father was a "very close friend" of Vice President Dick Cheney through his work in the military intelligence community.
That friendship seems to have paid political dividends to Renzi. Both Cheney and President George W. Bush campaigned for Renzi during his 2002 campaign, with Bush making two appearances in Arizona. The White House’s support prompted the Republican National Campaign Committee to spend $2 million on attack ads against Renzi’s Democratic opponent, George Cordova. Renzi later condemned the ads that portrayed Cordova as a liar, cheat and a thief — telling the Arizona Daily Sun that he would seek to replace the GOP leaders who had authorized the ad campaign.
After Renzi’s amendment passed, the congressman took a direct swipe at critics who claimed that the Fort Huachuca Preservation amendment was intended to benefit his father’s business by aiding the base’s growth. "Opponents of this language overreached with a smear campaign that was baseless and malicious," Renzi said in a Nov. 7, 2003, press release. "These slanderous attacks discredited their campaign and gave concerned parties pause over the true motivations behind their intended goals."
A little more than four years later, a federal grand jury indictment lays out what Renzi’s motives allegedly were.
As for McCain’s embrace of a piece of legislation that had, at the least, an appearance of a conflict of interest for Renzi, it is a prime example of Congress failing to police itself, according to Massie Ritsch, communications director for the Center for Responsive Politics.
"When members of Congress evaluate any policy or official action," Ritsch said, "they should be open to the possibility that there might be conflict of interest inherent in it. They shouldn’t be green-lighting anything that is obviously a conflict of interest for the member who brought it to them."