McCain Pushed Land Swap That Benefits Backer

A lone rafter floats on Lynx Lake in the Prescott National Forest near Prescott, Ariz. The land exchange will expand the forest. (By Les Stukenberg -- The Daily Courier)

The Yavapai exchange idea surfaced a decade ago as area land values soared. Ruskin and his siblings for years have used the inherited property as a cattle operation.

Development was complicated, because the land was intertwined with federally owned forest, creating what land management officials call "the checkerboard." Ruskin's ranch and the federal property comprise alternating square-mile plots across swaths of northern Arizona.

For the U.S. Forest Service, the tangle of public and private property posed a management headache. For Ruskin and his family, it became an opportunity.

Ruskin said he spent months researching federal land exchanges, and decided the regular process used by the Forest Service would be too complicated to ever get done. The trade he wanted would involve three cities, three national forests, two counties and 15 land parcels. He persuaded then-Rep. J.D. Hayworth (R-Ariz.) to draft a bill proposing the exchange of 35,000 acres of ranch property for 21,000 acres of federally owned Arizona land.

Ruskin set his sights on prime development property astride a major interstate, land adjacent to the Flagstaff airport and a contiguous stretch of the ranch that would allow housing development. He estimated that the ranch land, if subdivided and developed, would easily sell for more than $250 million -- and that had to be calculated into any swap.

At first, the trade appeared to have broad support, but opposition soon developed. Clarkdale Mayor Doug Von Gausig, whose house overlooks the Verde River, said he feared that development would overtax an already fragile water source.

Other critics included a national taxpayer group that questioned the land values. "It was just a bad deal -- a rip-off to the public," said Janine Blaeloch, who heads the Western Lands Project, another opponent of the legislation.

McCain initially withheld support for Hayworth's bill, which failed in 2002. Ruskin saw McCain's restraint as an obstacle. He said Senate staff members warned him that the senator was wary of a swap because "he spent some political capital and got some bricks thrown at him" over the Tonto National Forest deal.

Ruskin, who is a pediatrician by training, said he realized he needed to hire lobbyists "to open communications with McCain's office."

He turned to some of McCain's closest former advisers. In 2002, he sought out Mark Buse, McCain's former staff director at the Senate commerce committee, which the senator chaired.

"I had gone to him to see if he had any advice as to how to deal with McCain," Ruskin said. "We had a couple of meetings and I paid him a little bit." Buse's federal lobbying records do not list the ranch as a client.

That year, lobbying records show, Ruskin also paid $60,000 to Michael Jimenez, another former McCain aide. Wes Gullett, who had worked in McCain's Senate office, managed his 1992 reelection bid, and served as deputy campaign manager for his 2000 presidential run, also lobbied on the bill, documents show. The watchdog group Public Citizen lists Gullett and his wife, Deborah, as bundlers who have raised more than $100,000 for McCain's White House bid. Ruskin also hired Gullett's partner, Kurt R. Davis, another McCain bundler and member of the senator's Arizona leadership team, to work with local officials and "to help with McCain if we needed help." Buse, Jimenez and Gullett did not return calls seeking comment.

Davis said that he and Gullett were not hired just to win over McCain. "Each member has issues that are more important to them. You have to be able to address their individual concerns. We had familiarity with the issues important to McCain." In this case, Davis said, "Senator McCain was very, very engaged and concerned about water issues."

In April 2003, McCain introduced his version of a land-swap bill. But he remained reluctant about the exchange, speaking to opponents and organizing meetings in towns that would be most affected.

Flagstaff Mayor Joseph C. Donaldson, a supporter of the swap, said McCain's hesitation stemmed from his "insistence that the environment be protected." But opponents were baffled by the senator's seemingly contradictory positions. Said Blaeloch: "The bizarre thing to me regarding McCain is, we spent a lot of time with his staff, and we all seemed to be on the same page about the problems with this swap. But somehow, John McCain kept pushing it forward."

Ruskin said a "crucial meeting" occurred on Aug. 4, 2004, when McCain added a provision aimed at appeasing many opponents. It created a management group that would monitor water reserves and document any danger to the Verde River.

The legislation also was revised to mandate that the parcels in the exchange be of "equal value." Forest Service officials say they can adjust the amount of property given to Ruskin to ensure that each side gets an equal share of land. Blaeloch and some other opponents remained concerned that appraisals could still be manipulated. The language helped win Senate passage on July 16, 2005.

Ruskin said he first engaged in confidential discussions with SunCor in 2003. Betts said the company was not "really interested in spending a lot of time on it until we knew if the legislation would pass."

Ruskin said SunCor officials formally expressed interest in October 2005, a month before President Bush signed the bill into law.

In Arizona, SunCor is a subsidiary of Pinnacle West, the state's largest power company. Betts, as Ruskin described him, "politically is a very powerful guy in the state."

Officials from the company and its subsidiaries have accounted for $100,000 in contributions to McCain's political campaigns over the years, records show.

SunCor is now working directly with the Forest Service to complete the swap, which has been delayed by administrative glitches.

As for McCain, some in the Verde Valley say they counted on him to broker a deal that would protect their precious river. Von Gausig now heads the water management commission that McCain added to the bill to gain community support. The Congressional Budget Office estimated it would cost $8 million over five years to fund water studies. But to date, none of that money has been budgeted.

Research editor Alice Crites contributed to this report.