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McCain finds a thorny path in ethics effort

The messy process of trying to purge John McCain’s campaign of conflicts of interest has so far focused only more attention on the backgrounds of his advisers.
/ Source: The New York Times

Sorting out the lobbying entanglements of his campaign advisers is proving to be a messy business for Senator John McCain.

On Monday, just days after it issued new rules to address conflicts of interest, the McCain campaign was furiously sifting through the business records of aides and advisers. The new rules were prompted by disclosures that led to the abrupt departure from the campaign of a number of aides who worked as lobbyists, including some with ties to foreign governments.

Mr. McCain’s political identity has long been defined by his calls for reducing the influence of special interests in Washington. But as he heads toward the general election as the presumptive Republican presidential nominee, he has increasingly confronted criticism that his campaign staff is stocked with people who have made their living as lobbyists or in similar jobs, leaving his credentials as a reformer open to attack.

The process of trying to purge the campaign of conflicts that in appearance or reality might violate Mr. McCain’s stated principles or cause him political trouble has so far focused only more attention on the backgrounds of his aides and advisers.

The delicate task of writing and enforcing the new conflict-of-interest policy has fallen to Mr. McCain’s campaign manager, Rick Davis, who was himself a lobbyist until he took a leave of absence from his firm, Davis Manafort, two years ago.

In 2005, Mr. Davis was registered as a lobbyist for corporate clients like the telecommunications company Verizon. Under the campaign’s new rules, issued by Mr. Davis on Thursday, lobbyists who are currently registered either for American companies or for foreign governments or businesses cannot be employed by the campaign. They must also disclose their lobbying work even if they are working for Mr. McCain on a part-time, voluntary basis.

But while Mr. Davis took a leave from Davis Manafort in 2006, the company has developed a specialty in recent years in a type of lobbying for which firms do not have to register — namely, representing the interests abroad of foreign politicians and businessmen.

In recent years, the company’s clients have included the richest man in Ukraine and a former premier of that country whose opponents were supported by Mr. McCain. The Washington Post reported in January that Mr. Davis also set up a meeting in Switzerland in 2006 between Mr. McCain and a Russian businessman, who has been barred from entering this country, apparently because of accusations about past ties to organized crime in Russia. That businessman, Oleg Deripaska, has denied such links.

Another senior McCain campaign aide who has lobbied on behalf of foreign governments over the past seven years is Randy Scheunemann, the chief foreign policy adviser.

Over the past several years, Mr. Scheunemann met several times with Mr. McCain to discuss his clients’ interests. He introduced the senator to the foreign ministers of Albania, Croatia and Macedonia as they tried to win admission to NATO, and a representative of Taiwan as it lobbied for free trade, records show. Mr. Scheunemann also accompanied Mr. McCain to Latvia in 2001 and Georgia in 2006.

Mr. Scheunemann was a registered foreign agent until March, when he ended his registrations for several countries. He had joined the McCain campaign several months earlier.

A campaign spokesman, Tucker Bounds, said he would not comment on questions raised about Mr. Scheunemann or any other campaign advisers.

“We’re not going to get into specifics of volunteers, staffer by staffer, supporter by supporter,” Mr. Bounds said. “We can’t be in a position where we’re litigating the process of the process.

“The campaign has put a very strict policy in place and every member of the campaign is expected to be compliant with it. There may be perfectly good people that have situations that are not reconcilable. They will not be compliant with the policy.”

Senior McCain advisers were hoping the conflict-of-interest policy would quell questions about the number of lobbyists working on behalf of the campaign.

But at a campaign stop on Monday in Oregon, the Democratic presidential front-runner, Senator Barack Obama, said: “It appears that John McCain is very much a creature of Washington. And one of the things that we have said at the outset of this campaign is that if we are going to change policies, we were going to have to change how Washington works. We can’t have special interests dictating what’s happening there.”

The campaign of Mr. Obama, too, includes lobbyists among its unpaid advisers, and staff members who try to help private clients influence government policy.

When asked about the ongoing vetting process in his campaign, Mr. McCain repeatedly told reporters on Monday, “We have enacted the most comprehensive and most transparent policy concerning lobbyist activities, and I challenge Senator Obama to adopt a similar policy.”

But even senior McCain advisers have acknowledged the difficulty of disentangling the complicated web of relationships between lobbyists and candidates. Last week, after Mr. Davis issued the new conflict rules, two other advisers resigned, including Tom Loeffler, the campaign’s general co-chairman, whose lobbying firm had represented Saudi Arabia and Hong Kong, as well as a host of corporate clients.

And it appeared unlikely the resignations would stop there. The campaign’s new policy could affect people at all levels of the McCain operation.

Wayne Berman, the campaign’s deputy finance chairman, has lobbied for the governments of Cyprus and Trinidad and Tobago, along with many other corporate clients. Christian Ferry, who is a lobbyist for Mr. Davis’s firm, is Mr. McCain’s deputy campaign manager.

Susan Nelson, the finance director of the campaign, was as recently as last year a registered lobbyist for the Loeffler Group, for companies, including AT&T that have had business before Mr. McCain on the Commerce Committee. John Green, who has been reported to be coordinating the campaign’s efforts with congressional Republicans, is registered as a lobbyist for Ogilvy Government Relations, Mr. Berman’s firm. Carlos Bonilla, described by the McCain Web site as an economic adviser, is also a registered lobbyist.

The new rules require all staff members, including part-time volunteers, to complete a questionnaire “to identify issues and clients that could be embarrassing for the senator and the campaign.”

In Washington, an entire establishment cycles between campaign work in the even numbered years and lobbying in the odd — a combination pioneered by Charlie Black, who is now serving as a senior adviser to Mr. McCain.

Traveling on Monday with Mr. McCain, Mr. Black said voters would pay little or no attention to the vetting process. “This is complete inside-the-Beltway nonsense,” Mr. Black said. He said he was now in retirement, after stepping down as chairman of his lobbying firm, BKSH & Associates Worldwide, in March, although he had been advising Mr. McCain for months prior to leaving the firm.

The lobbying clout of Mr. Davis, the campaign manager, derives from his longtime Washington connections, which he drew attention to as recently as three years ago.

In January 2005, he apparently pitched executives of Pegasus Capital Advisors, a private investment firm in Cos Cob, Conn., on the idea of putting money into a new firm in which he would be a partner, documents indicate. He told Pegasus Capital’s representatives that experienced “Washington insiders” like him could use their ties to advance the interests of companies seeking federal contracts, according to documents obtained by The New York Times. A spokesman for Pegasus did not respond to a request for comment on Monday.

The proposal never bore fruit. But it came at the same time Mr. Davis was lobbying the Defense Department on behalf of Imagesat, an Israeli company that sells satellite imagery in which Pegasus Capital had invested. He was also then drawing a salary as the part-time president of the Reform Institute, a Washington group Mr. McCain helped found to champion ideals like reducing “the influence of special interests” in politics and government.

Mr. Black also defended Mr. Davis, saying the campaign manager had not taken any money from his lobbying firm since 2006. The two men are working on an unpaid basis for the campaign.

Mr. Black contended that nobody at Davis Manafort had been a registered lobbyist for five years. “Rick Davis and nobody else at his firm, either, has been a registered lobbyist in five years,” he said. “Five years.” But a check of lobbyist records shows associates at the firm have represented clients numerous times as recently as 2005.

The campaign’s new policy appears to provide a loophole for some aides. Under the policy, no one working for the campaign may be a registered lobbyist or represent foreign countries, or be paid for that kind of work. But volunteers are required only to disclose their lobbying work.

But they are not allowed to participate in any campaign conversations about the issues for which they lobby, which would seem to pose a conflict for someone like Mr. Scheunemann. His work as a foreign agent could overlap on any number of issues with his foreign policy advice.

Michael Luo contributed reporting.

This article, , first appeared in Tuesday editions of .