Editor's note: This is the third installment of a series examining the investment holdings and affiliations of the likely 2008 presidential candidates. Click here for our story on Sen. Barack Obama and here for our look at Rudy Giuliani.
With his "Straight-Talk Express" bus rolling through New Hampshire again last weekend, Arizona Sen. John McCain jump-started efforts to recreate the magic of his previous presidential bid, when he won an early battle by railing against the influence of money in politics.
McCain's unlikely victory in the Granite State in 2000 propelled him to political stardom and shocked the Republican establishment, but he could not survive the retaliation from the party's favorite, George W. Bush, that would follow. This time around, McCain is an early favorite to win it all in 2008 with backing from the same G.O.P. war chest that once helped bankroll his defeat.
When it comes to his own money and politics, McCain is hard to pin down. Public filings put his family's net worth at anywhere from $25 million to $38 million, making McCain the seventh-richest sitting senator. The only asset listed under the senator's name alone, however, is a checking account with
valued at $15,000 to $50,000.
In the latest installment of its investigation into the investments and business affiliations of the major presidential candidates for 2008,
looks beyond McCain's lone checking account to his family's assets, which are also disclosed to the public and available at
While McCain and his wife, Cindy, also have two joint bank accounts, each valued at $15,000 or less, the rest of the McCain fortune is held in the name of Cindy and their dependent children through a vast network of investments.
"Most of the McCains' holdings appear to be in pooled investment vehicles, like funds, trusts and limited liability corporations," says Christian Hviid, vice president and director of asset allocation with Genworth Financial Asset Management. "That strategy has a couple of side benefits for a presidential candidate in that it removes any appearance of a conflict of interest in terms of holding corporate stock. That said, you lose transparency because it's very hard to see what's really going on in that type of structure."
McCain, a decorated Vietnam veteran and one-time prisoner of war, has spent almost all his life outside of military service representing Arizonans in Congress. In 2006, he took home a Senate salary of $165,200 and a pension from the Navy of $56,496.
Royalties from his various book deals and a 2005 TV movie about his captivity in North Vietnam all go to charity, along with some honorarium income from things like his weekly radio commentaries. The senator contributes to organizations like the Fallen Heroes Fund, the Pat Tillman Foundation and The Imus Ranch, a retreat in New Mexico for kids with cancer run by radio shock jockey Don Imus.
The bulk of the McCains' wealth comes from the senator's wife, whose late father ran an
distribution business in Phoenix called Hensley & Co. at a time when that city's economy took off and many Arizonans got rich.
"John McCain's income and assets over his lifetime have consisted mainly of his government salary from serving in Congress and his pension from serving in the Navy," says Matthew David, a spokesman for McCain. "The remaining assets in his family are from the Hensley Corp. and his wife, Cindy."
McCain's wife is now the chairman of Hensley, and she draws a salary of an undisclosed amount from the company. She has a retirement plan through Hensley that is tied up in shares of Anheuser-Busch and a series of mutual funds.
Cindy McCain also is a major shareholder in Hensley, with a stake valued at over $1 million. The company holds a diverse portfolio of stocks, bonds and various other assets, like a 1% stake in the Arizona Diamondbacks major league baseball franchise and a company plane.
The company's portfolio holds positions in a number of companies, largely consisting of blue-chip names like
, among many others.
One of Hensley's largest positions is in
US Airways Group
, where its stake was recently valued between $100,000 and $250,000.
McCain, who sits on the Senate Subcommittee on Aviation Operations, Safety, and Security, has long been vocal on a variety of issues affecting the airlines. He has been particularly supportive of his hometown airline America West, which bought US Airways out of bankruptcy in 2005 to become US Airways Group.
Michael Boyd, president of an aviation consulting firm called The Boyd Group, says McCain was "jumping up and down" in the late 1990s, when he was chairman of the Commerce Committee, to grant non-stop flights for America West between Phoenix and Washington, D.C. The airline was later a recipient of a landmark federal loan package granted after the terrorist attacks of 2001, which was repaid.
The airline industry has been a major campaign donor for McCain, and Phoenix-based America West has made several contributions to him since his 2000 presidential bid through its political action committee, according to the
Center for Responsive Politics, a nonpartisan organization that tracks money and influence in U.S. politics.
"McCain has been very supportive of America West, and he should be because it's his hometown team," says Boyd. "I would question whether he should have any financial interest in the carrier given his position in the Senate."
Still, there is nothing to suggest that his wife's indirect financial interest in US Airways poses a conflict of interest for McCain.
"Hensley & Co. owns stock in US Airways, and Cindy McCain is a shareholder in Hensley," says McCain's spokesman. "This arrangement is entirely permissible by Senate ethics rules."
Massie Ritsch, communications director with the Center for Responsive Politics, says it's not unusual for senators to own stock in companies over which they have political influence and it does not break any rules.
"McCain's own net worth, including his wife's wealth, is vast enough that I wouldn't think one particular holding that is owned indirectly would influence his decision-making in any way," says Ritsch.
The McCains also have exposure to the real estate market through ownership of a secluded, million-dollar property in Sedona, Ariz., with a home and two guest houses.
One piece of property owned by Cindy McCain that is adjacent to their residential property, lost value last year, which is likely a reflection of the U.S. real estate market slowdown that has been particularly severe in parts of Arizona. The land was worth between $500,000 and $1 million at the end of 2005. It was recently disclosed as being worth $100,000 to $250,000.
Cindy McCain also has a blind trust managed by
that holds between $500,000 and $1 million in assets. Approved by the Senate ethics committee, the trust allows her to own stocks without any knowledge of what she is investing in. The trust is also revocable, which means it can be dissolved at any time.
McCain has seven children, three of which are from a previous marriage. He discloses that his dependent children have millions of dollars in assets through a long series of
mutual funds and a series of limited liability corporations with names like Wild Creek Enterprises LLC, Dream Catcher Family LLC, Wild River LLC and Wild Rapids LLC.
"These are independent investment vehicles that people often use to pass on wealth to their children in a way that has tax advantages and other protections," says Hviid. "They probably come from Cindy McCain's parents."