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 [ Chap V ] [ McCain ] [ Chap VII ]
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By Bill Muller
The Arizona Republic
Oct. 03, 1999 12:12:00

For many politicians, the Keating scandal would have been too much to overcome. But McCain refused to go down easily.

He employed a dual strategy. He would make himself accessible to any reporter anywhere who wanted to talk about the Keating Five, and he wouldn't let the controversy detract from his work as a senator.

McCain grimly marched about the country, struggling to clear his name.

''I have to say, it was not an easy time,'' said Torie Clarke, McCain's former press secretary. ''But because of the strategy he decided to pursue . . . nobody had time to sit around and feel sorry for themselves.''

McCain's hobnobbing with the press had an unexpected side effect. Reporters started to like him.

McCain always returned phone calls. He showed up for his television appearances. He was willing to go off the record to help reporters unearth certain stories. He answered questions bluntly, without much political tap dancing.

For Beltway reporters bored with bureaucrats, McCain was fresh, new and different.

''Everybody in town,'' Clarke said, ''from the makeup artist at the local news station to the producers and directors, every reporter and every editor, loves working with John McCain because he does not stand on ceremony, he has no airs.''

Going into the 1992 election, some thought McCain was in trouble. President Bush was flagging in the polls, and McCain was coming off the Keating scandal. His Democratic opponent was Claire Sargent, a Phoenix community activist. Former Gov. Evan Mecham was running as an independent despite having been impeached and removed from office in 1988.

But McCain's image improved in 1991. Soon after the Persian Gulf War broke out, McCain was in demand. The phone began ringing off the hook the day POWs were taken.

''The Today Show called, and we started on The Today Show at four-something in the morning,'' said Scott Celley, a former aide. ''The last thing I remember him being on was Australian Nightline, which was done here at Channel 10, a few blocks away, at close to 11 p.m. He was on television or the radio every minute of that day.''

McCain became a regular on public affairs shows, using his expertise as a former Navy pilot and POW. McCain quickly became a national authority on foreign affairs.

The din of the Keating Five began to lessen. McCain stayed on message and began to distance himself from the scandal.

In 1992, McCain received 58 percent of the vote in the three-way election, easily winning a second Senate term.

Things did not go as well for Charlie Keating. In January 1993, a federal jury convicted him of 73 counts of wire and bankruptcy fraud in the collapse of American Continental and Lincoln.

Keating was sentenced to 12 years and seven months in prison but served just 50 months before the conviction was overturned on a technicality. In 1999, at age 75, he pleaded guilty to four counts of fraud for siphoning some $975,000 from American Continental before he had declared bankruptcy in 1989. He was sentenced to time served.

In 1995, McCain was lionized in The Nightingale's Song, a book that examined the military and political careers of McCain and four other Annapolis graduates, James Webb, Robert McFarlane, John Poindexter and Oliver North.

Robert Timberg devotes two of his 475 pages to the Keating scandal and says this about it:

''Stripped of the veneer of sleaze that coated the affair, McCain's defense of his actions was solid and credible. It didn't matter. The Keating Five label endured, shabby journalistic shorthand that made up in simplemindedness what it lacked in precision.''

By 1996, McCain was considered a front-runner to be Bob Dole's running mate in the race against Clinton and Al Gore, before Dole picked Jack Kemp.

Today, the Keating Five scandal is barely mentioned. In most national profiles of McCain, it has been reduced to one paragraph.

McCain knows it will never disappear altogether.

''It'll be on my tombstone,'' McCain told 60 Minutes' Mike Wallace. ''One of the Keating Five.''
McCAIN ERUPTIONS
In the early 1990s, despite McCain's battering over Keating, he didn't stop throwing his weight around Arizona.

Some public officials are still stinging from McCain's volcanic temper.

One is Democrat Paul Johnson, the former mayor of Phoenix and an unsuccessful candidate for governor. During Johnson's stint as mayor, he saw McCain's temper up close, and it makes him think twice about McCain becoming president.

''His volatility borders in the area of being unstable,'' Johnson said. ''Before I let this guy put his finger on the button, I would have to give considerable pause.''

Johnson said he got a full dose of McCain's anger when he was in Washington in 1992, dealing with a federal land swap that involved the Phoenix Indian School. He and McCain, who disagreed over the issue, were in a hearing room with other mayors when hostilities broke out.

''He says, 'Start a tape recorder. It's best when you get a liar on tape,' '' Johnson recalled. ''Then I said something back to him, and before you knew it, we were nose to nose and chin to chin. No blows were exchanged, but we were as close to being 14-year-old boys as we possibly could be. . . . Testosterone was flowing all over place.''

Johnson, who also fought McCain's plan for a regional airport, marvels at his wrath.

''Oh, gosh, you never dealt with a more brutal individual,'' Johnson said. ''He was very tough.''

McCain's penchant for bullying state officials essentially destroyed his relationship with Grant Woods, who served as state attorney general from 1990 until 1998.

Woods, son of powerful Mesa contractor Joe E. Woods, was an early McCain staffer. He provided key help in McCain's first run for Congress, mainly by persuading his influential father to support McCain in Mesa over several local candidates.

''The support of Joe Woods in the district was about 100 times more important than the support of Grant Woods,'' the younger Woods said. ''When he went with McCain, it made it OK for the old guard to support McCain rather than one of the locals.''

The Woods-McCain relationship began to chill in 1994 when Woods started investigating bid-rigging allegations surrounding Gov. Fife Symington's government cost-cutting program, Project SLIM. Despite pressure from other Republicans, including McCain, Woods pursued the probe.

Over the years, McCain had become very close to Symington. Even their staffs were tied together. Symington's former chief of staff, Wes Gullett, is McCain's deputy campaign director and is married to McCain aide Deb Gullett.

Others note that McCain called for the scalp of Gov. Evan Mecham, who was impeached and removed from office, but let Symington slide when he was under indictment for bank fraud. Symington later was convicted and resigned, but his conviction was overturned earlier this year.

McCain said the state was operating smoothly under Symington, which was not the case with Mecham. He bristled when it was suggested that he was protecting a friend.

''I really won't answer that kind of insinuation,'' McCain said. ''I do what's best for the state. I do what's best for the country.''

McCain added, ''Of course (Symington) was a friend of mine. I had a friendly relationship with Gov. Mecham before he got into the difficulties.''

Woods said McCain didn't like it when he investigated Symington.

''I think he probably liked to be in the loop,'' Woods said. ''Consequently, when he wasn't, and then I kept investigating Republicans or criticizing Republicans . . . he never could get over that.

''It appeared clear to me that the only way I could return to his good graces was to be a good boy, and I wasn't willing to be a good boy.''

Eventually, McCain and Woods had it out over Symington.

''He just did not approve of me constantly making life difficult for Republicans, and I made it clear that it wasn't going to change, and we weren't going to have any more of these conversations. We haven't talked in a long time.''

Woods ultimately obtained a $725,000 civil settlement in the SLIM case.

Woods said he finds it ironic that McCain, Mr. Maverick in the Senate, didn't want Woods to assume the same role in the Arizona Republican Party.

''I guess it's OK to be the maverick but not tolerate mavericks around you,'' Woods said.
WIFE'S DRUG SCANDAL
By the early 1990s, his political rehabilitation was complete. Nobody on the national stage seemed to care about McCain's foibles.

What McCain didn't know was that the Keating scandal had already claimed another victim, one from McCain's own family.

In August 1994, a group of Valley journalists received a strange phone call from Jay Smith, McCain's political strategist.

They were offered an exclusive in exchange for agreeing to certain terms. They would attend individual interview sessions Aug. 19 and sit on the story until Aug. 22. The five journalists - three print reporters, a television reporter and a radio reporter - agreed.

One by one, they went to the McCain home, where they were told an incredible story.

Cindy McCain told them that she had been a drug addict for three years. From 1989 to 1992, she was addicted to Percocet and Vicodin. Worse, she had stolen pills from the American Voluntary Medical Team, a relief organization that she founded to aid Third World countries.

''More than anything, I wanted to be able to face my children,'' she said at the time, ''for them to know I wasn't lying to them. They're too young to fully understand right now, but someday they will.''

Cindy blamed two back surgeries and the Keating Five scandal - a mix of physical and emotional pain - for driving her to drugs.

Things started to unravel when a Drug Enforcement Administration audit found irregularities in AVMT's records, prompting an investigation, Cindy told the reporters.

In 1992, as the Keating affair surfaced again during McCain's run for a second Senate term, Cindy's parents confronted her about her drug use.

What had been so clear to Cindy's parents was lost on McCain, who said he hadn't noticed his wife's addiction.

''I was stunned,'' McCain said at the time. ''Naturally, I felt enormous sadness for Cindy and a certain sense of guilt that I hadn't detected it. I feel very sorry for what she went through, but I'm very proud she was able to come out of it. For her, it was like the Keating affair had been for me - a searing experience, and we both came out stronger. I think it has strengthened our marriage and our overall relationship.''

To avoid prosecution on drug charges, she would enter a federal diversion program.

In telling her story, Cindy got choked up when she told of federal drug agents knocking on her door, asking about missing pills.

The reporters were sympathetic.

Cindy had always been physically fragile. She suffered two miscarriages early in her marriage to McCain until doctors determined she was a ''DES baby.'' Cindy's mother had been given the drug diethylstilbestrol during her pregnancy.

During the 1940s and '50s, DES was thought to prevent miscarriages. Instead, it caused numerous birth defects, including deformed uteruses in female offspring. Doctors finally detected the problem and took special precautions during Cindy's third pregnancy.

Even so, there were long separations, because Cindy couldn't travel while pregnant. Besides, she preferred Arizona to Washington.

Cindy told the reporters that she finally entered The Meadows, a drug-treatment center in Wickenburg, and went to anti-dependency meetings twice a week.

In 1993, she said, a hysterectomy ended the nagging back pain that had driven her to the painkillers.

So why go public a year later?

''If what I say can help just one person to face the problem, it's worthwhile,'' she said. ''They should know it's OK to be scared. It's OK to talk about it. And there's nothing wrong with staying home, carpooling and potty-training a 3-year-old.''

Given Cindy's heartfelt confession, the handpicked journalists did what Smith expected. They painted Cindy as the victim, a courageous soldier beating back the devil of drug addiction.

But there was far more to the story. The reporters had been the victims of a spin job. It became apparent the next week, as more details came out.

John McCain had organized the interviews to head off a far more negative story, one that centered on a former AVMT employee who accused Cindy McCain in a lawsuit of ordering him to conceal ''improper acts'' and ''misrepresent facts in a judicial proceeding.''

The accuser was Tom Gosinski, who had been fired from AVMT in 1993. It was he who had tipped the DEA to check out Cindy's organization. His lawsuit had been filed as a warning shot - his real allegation was that Cindy McCain had fired him because he ''knew too much'' about her drug use.

The details were in a 212-page report from the Maricopa County Attorney's Office that was about to become public when McCain arranged the interviews.

Ironically, County Attorney Rick Romley entered the fray at the request of McCain lawyer John Dowd, who charged that Gosinski was extorting the McCains by offering to settle the case for $250,000.

By asking Romley to investigate, Dowd helped create a public record that otherwise wouldn't have existed. When the report was released, McCain lost control of the story. Reporters who had been cut out of Cindy's private interview sessions, including those from The Republic, pursued it with new vigor.

Infuriated that his spin had failed to take, McCain refused to talk to reporters who weren't invited to Cindy's private interviews.

Dowd, who would later defend Gov. Fife Symington, put it plainly to a Republic reporter who called him for comment:

''You're not going to talk to Cindy. You're not going to talk to me. You're not going to talk to anybody associated with us. Have you got the message?''

Then he hung up.

Meanwhile, new allegations were surfacing, feeding the press frenzy for fresh angles, especially in light of McCain's silence.

Gosinski alleged that Cindy had asked him to lie to make it easier for her to adopt a baby from Bangladesh.

Backed up by court documents, the McCains denied there was anything improper in the adoption. They noted that the adoption probably saved the girl's life, as her cleft palate would not have allowed her to survive in Bangladesh.

Meanwhile, Gosinski's credibility started to slip. In Romley's report, several AVMT staffers said Gosinski had privately threatened to blackmail Cindy if she ever fired him.

Ultimately, Gosinski's lawsuit was dropped and he was never prosecuted.

The issue hasn't quite died. During a recent campaign swing through South Carolina, a New York Daily News reporter asked Cindy about her addiction.

She replied that she has been drug-free for eight years, but she acknowledged that she will always be in recovery.

''I had a real problem,'' she said, ''and I dealt with my addiction head-on.''

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