By Erin Sherbert
By Erin Sherbert
By Leif Haven
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By Kate Conger
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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.
Hensley also needed a federal liquor license to operate his beer distributorship. Federal officials could not explain how Hensley -- convicted of federal liquor violations -- would have been able to get the "basic permit" required for liquor wholesalers. Such permits can remain in effect for many decades. It is extremely unlikely that a person with a similar conviction today would get a federal liquor license, according to the Bureau of Alcohol, Tobacco and Firearms.
Today, Phoenix-based Hensley & Company, the nation's fifth-largest beer wholesaler, is a privately held business that 79-year-old James Hensley still controls. Now one of the wealthiest men in Arizona, Hensley built the Budweiser distributorship into at least a $200 million-a-year business, with annual sales of about 20 million cases of beer.
James Hensley controls nearly all of the voting stock, and most of the rest of the closely held shares in the firm are placed in trusts for his grandchildren or owned by his daughter, 45-year-old Cindy Hensley McCain, wife of U.S. Senator and presidential hopeful John McCain.
In the late 1970s, John McCain was at a crossroads, both personally and professionally. His marriage to his first wife, Carol, was falling apart; the two were in the midst of a number of trial separations. And McCain, who would never fully recover from injuries he sustained in Vietnam, finally accepted the fact that he would never fly again. He liked his job as the Navy's liaison to the U.S. Senate, but it had done more to whet his appetite for politics than satisfy his career goals.
Then he met beer heiress Cindy Lou Hensley, an event that transformed his life. She was 25, he was 42.
McCain retired from the Navy in 1980, got divorced, and married Cindy Hensley. Although Hensley wealth has helped propel McCain's political career, the senator doesn't have direct access to the Hensley fortune because of an agreement the couple signed before their marriage.
Still, Hensley's power and money have been instrumental in McCain's political success. At its peak, McCain's pay as a naval captain was about $45,000. His first job in Arizona was as a public affairs agent for Hensley & Company. He was paid $50,000 in 1982 to travel the state, touting the company's wares. But he was promoting himself as much as he was Budweiser beer. A better job description might have been "candidate."
That same year, Cindy drew more than $700,000 in salary and bonuses from Hensley-related enterprises as her husband campaigned for the U.S. House of Representatives. The Hensleys loaned John's campaign more than $160,000, about a third of what he raised in the hotly contested race.
McCain was considered an outsider to many rank-and-file Republicans in the conservative First District, which had been left open by retiring House Minority Leader John Rhodes. McCain benefited not only from Hensley money, but also from his father-in-law's friendship with Darrow Duke Tully, the publisher of the largest daily newspaper in the state. Tully was enamored with McCain's military record and gave McCain copious free space on the editorial pages of the defunct Phoenix Gazette and an entrée to the power structure in Phoenix.