By Jeff Balke
By Aaron Reiss
By Angelica Leicht
By Dianna Wray
By Aaron Reiss
By Camilo Smith
By Craig Malisow
By Jeff Balke
By now, anyone who follows American presidential politics -- heck, anyone who owns a television set -- knows Arizona Senator John McCain's family story. His best-selling memoir, Faith of My Fathers, chronicles the lives of the senator's father and grandfather, distinguished admirals. The book takes readers up through John McCain's own military service, including his five and a half years as a prisoner of war in Vietnam. But Faith of My Fathers ends there, a few years short of John McCain's marriage to Cindy Lou Hensley and the advent of his political career.
Faith is only half the family story.
The rest could be called "Cash of My Father-in-Law," a tale of how beer baron James Willis Hensley's money and influence provided a complement to McCain's charisma and compelling personal story and launched him to a seat in Congress -- and perhaps to the White House.
Most Americans know Cindy Hensley McCain as the smiling blonde at John McCain's side. But what they don't know is that Cindy is John's meal ticket; the seed money for McCain's first congressional race came from her father's beer business -- today one of the largest Anheuser-Busch distributorships in the country.
Both McCain and Hensley declined to be interviewed for this column. But the public record provides a glimpse into Hensley's history and how McCain has benefited from it -- and how Hensley, in turn, benefits from McCain's powerful post as chairman of the Senate Commerce Committee, where the champion of reform in the tobacco and campaign finance areas has virtually turned his back on another subject in need of attention: alcohol regulation.
The story of Hensley's start in the liquor business is not the stuff of presidential campaign commercials, although it might well make a best seller. The family saga swirls with bygone accounts of illicit booze, gambling, horse racing, deceit and crime. James Hensley embarked on his road to riches as a bootlegger.
In 1945, James Hensley returned home to Arizona from the war, and joined his older brother, Eugene, in the liquor business. The brothers partnered with a powerful Phoenix businessman named Kemper Marley who had cornered a large share of Arizona's wholesale liquor business after Prohibition was lifted in 1933.
During and after World War II, the sale of whiskey was tightly regulated by the federal government. Demand for whiskey was high, particularly on the black market, where prices were more than double the regulated market price.
But the Hensleys figured out a way around the rules. According to a federal indictment that led to a 1948 trial, between April 1945 and January 1947 the Hensley brothers made approximately 1,284 false entries in documents related to the sale of thousands of cases of liquor by their two companies, United Sales Company of Phoenix and United Distributors of Tucson.
James and Eugene Hensley were convicted in U.S. District Court on federal charges of conspiracy, "with the intent and design to hide and conceal from the United States of America, the names and addresses of the person or persons to whom the said distilled spirits were sent, and the prices obtained from the sale thereof."
Besides the conspiracy findings, James was convicted on seven counts of filing false liquor records, and Eugene was convicted on 23 counts of filing false statements. Eugene was sentenced to one year in prison, and James to six months. Neither brother testified during the trial. The men were fined $2,000 each; United Sales and United Distributors were also convicted and fined $2,000 apiece.
In 1953, James Hensley once again found himself charged with federal liquor crimes. This time, the government alleged that Hensley and other officers of United Liquor Company and United Liquor Supply Company falsified records to reduce the company's tax bill. But on the opening day of trial, the judge dismissed all charges against Hensley and other individuals. The case continued against the two companies, which were ultimately acquitted.
In the early 1950s, James Hensley joined his brother Eugene in the purchase of Ruidoso Racing Association in south central New Mexico. The venture proved to be more trouble for the Hensley brothers, who became embroiled in a controversy with the New Mexico Racing Commission over hidden ownership.
According to the Albuquerque Journal, the Hensleys misled the racing commission by concealing the fact that a notorious Phoenix bookie -- Clareance "Teak" Baldwin -- held a one-third ownership in the race track. The commission asked the New Mexico State Police to investigate; the probe linked Baldwin to the Hensley's old liquor partner, Kemper Marley. A report from the 1953 probe noted that Marley financed Phoenix gambling operations and that Marley owned "a wire service formerly operated in connection with bookmaking of the Al Capone gang."
James Hensley sold his interest in the race track in 1955, soon after Baldwin's hidden ownership came to light. He returned to Phoenix, where he launched a Budweiser distributorship, a franchise reportedly bestowed upon him by Marley. Marley was never indicted in the 1948 federal liquor-law-violation case that led to the Hensleys' convictions, nor the 1953 case -- despite Marley's controlling financial role in the liquor distribution businesses.
James Hensley's conviction didn't deter the state of Arizona from granting him a wholesale liquor license in the mid-1950s. In subsequent years, the Arizona Department of Liquor Licenses and Control turned a blind eye to repeated liquor-law violations at the company. State liquor regulators did nothing when James Hensley failed to disclose his federal felony conviction on a sworn 1988 disclosure statement to the department and the City of Phoenix.