Haunted by Spirits

John McCain derived his wealth from his marriage to Cindy Hensley McCain, whose father started his road to riches as a bootlegger. As a politician, the senator has remained beholden to the liquor industry and the family business

Would United States Senator John McCain be a presidential contender if it weren't for his marriage to Cindy Hensley McCain, heiress to the Hensley liquor fortune?

It's doubtful. The senator's wife and -- more important -- his father-in-law, James Willis Hensley, are very wealthy people.

Like his father and grandfather before him, McCain was a career Navy officer. His earning power and his inheritance were modest. At its peak, his pay as a captain was about $45,000.

But he retired from the military in 1980, divorced his first wife, wed Arizona native Cindy Lou Hensley and moved here to plunge into the world of politics. His first job in Arizona was as a public affairs agent for Hensley & Company, one of the nation's largest beer distributors. 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."

In 1982, Cindy drew more than $700,000 in salary and bonuses from Hensley-related enterprises as her husband was elected to the U.S. House of Representatives in his first political campaign.

Today, McCain is ranked the 26th wealthiest member of Congress by Roll Call magazine. There are 535 members in the House and Senate.

From Day 1, Hensley money has enabled McCain to be a full-time politician, free from financial concerns.

This story examines the roots of the Hensley fortune and John McCain's implacable bond to the liquor industry -- how it has enriched him personally and as a politician, and how those ties have dictated his actions on questions of public policy.

John McCain's political allegiances to liquor purveyors and his father-in-law's interests are subtle. That narrative is marked by a pattern of patronage.

The Hensley saga, meanwhile, swirls with bygone accounts of illicit booze, gambling, horse racing, deceit and crime. James Hensley embarked on his road to riches as a bootlegger.


It was December 6, 1945. World War II had ended a few months earlier.

Joseph F. Ratliff was just about to wrap up another day as office manager at United Distributors Company when two of his bosses, Eugene and James Hensley, paid a visit to Ratliff at the company's Tucson liquor distribution warehouse around 5 p.m.

The Hensley brothers were partners 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.

Ratliff had gone to work for United Distributors in September 1944. His job was to oversee shipments of whiskey into and out of the United Distributors' warehouse by keeping track of invoices, filing tax and sales reports with the federal government and monitoring cash flow.

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.

"'Well,' Gene Hensley says, 'It is five o'clock, why don't you go home? It is time to close,'" Ratliff told Assistant United States Attorney E.R. Thurman in sworn testimony in March 1948.

Ratliff went home.

Upon his return to the warehouse the next morning, Ratliff found a disturbing sight.

"When the warehouse man came down and opened the warehouse, I started out through the warehouse to go to the men's room, and I noticed there was two rows of whiskey there the night before that wasn't on the floor that morning. So I went back to the office. I thought we had been robbed."

In his office, Ratliff found another surprise.

"There was a bunch of invoices in my desk that had been made out after I had left the office, apparently," Ratliff testified.

The invoices appeared to be related to the whiskey -- about 50 cases -- that had disappeared from the warehouse overnight.

Ratliff went outside to empty some trash and noticed "a pile of empty whiskey cases out there." Tangled up in the pile of boxes were federal tax serial labels that were supposed to remain with the liquor when sold to a retailer.

Ratliff recognized the handwriting on the invoices as belonging to then-25-year-old James Hensley, who had become general manager of the Tucson operation in June 1945 after a three-year stint in the military. James Hensley had served as a bombardier on a B-17 and was shot down over the English Channel on his 13th mission.

Ratliff wasn't sure what was going on until later that day, when James Hensley returned to his office.

"He came in and paid me for those invoices," Ratliff testified. "Cash sales."

Ratliff dutifully marked the invoices as paid.

The seven invoices prepared by James Hensley -- after the warehouse was closed -- indicated the liquor had been sold and delivered to seven establishments in southern Arizona. The Manhattan Club in Tucson supposedly got eight cases of Seagram's and Walker Imperial. Nu-Way Grocery in the Lowell district of Bisbee was credited with receiving 10 cases, while James Hensley showed the Merchants Cafe in Douglas to have received eight cases. The Blue Room in Douglas was credited with buying 10 cases; Lee Hop Grocery in Tucson got two. The Ar-Jay Store in Tucson, six cases. The Old Tumacacori Bar in Nogales, seven.

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