There were no documented meetings where Rezko blatantly asked Obama for more money.]

http://news.yahoo.com/s/nm/20080516/pl_nm/usa_politics_mccain_developer_dc_1

McCain action helped Arizona developer: report 1 hour, 15 minutes ago

WASHINGTON (Reuters) - Presumptive Republican presidential candidate John McCain secured millions in federal funds for a land acquisition program that provided a windfall for an Arizona developer whose executives were major campaign donors, according to a USA Today report.

McCain, an Arizona senator, inserted $14.3 million in a 2003 defense bill to buy land around Luke Air Force Base in Glendale, Arizona, in a provision sought by SunCor Development, the largest of 50 landowners near the base, the newspaper reported on its Web site Thursday, citing public records.

Upset with a state law that restricted development around the base, SunCor representatives met with McCain's staff to lobby for funding, USA Today reported, citing the company's president at the time, John Ogden.

The Air Force later paid SunCor $3 million for 122 acres near the base -- three times its assessed value and twice the military's estimated value, the newspaper said.

USA Today said its analysis of campaign finance data compiled by the nonpartisan CQ MoneyLine shows that McCain's campaigns have received $224,000 since 1998 from donors connected to SunCor's parent company Pinnacle West, including $104,100 for his current presidential run.

Two current and one retired Pinnacle executives are fundraisers for McCain's presidential campaign.

McCain has made fighting special interest projects on Capitol Hill a centerpiece of his White House bid.

McCain campaign spokesman Brian Rogers told the newspaper the senator's ties to SunCor had nothing to do with his support for the base project.

Rogers said the Air Force had a legitimate need for the land and asked for money to buy it in a March 2002 budget planning document, USA Today reported.

Asked about the newspaper's report, Rogers told Reuters: "This is absurd."

"This project was requested by the Air Force and supported by virtually everyone in AZ (Arizona) politics -- Governor Napolitano, the entire congressional delegation, etc. -- but that's not even mentioned in this story. It's shameful," Rogers said in an email.

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McCain Pushed Land Swap That Benefits Backer

By Matthew Mosk
Washington Post Staff Writer
Friday, May 9, 2008; A01

PRESCOTT, Ariz. -- Sen. John McCain championed legislation that will let an Arizona rancher trade remote grassland and ponderosa pine forest here for acres of valuable federally owned property that is ready for development, a land swap that now stands to directly benefit one of his top presidential campaign fundraisers].

Initially reluctant to support the swap, the Arizona Republican became a key figure in pushing the deal through Congress after the rancher and his partners hired lobbyists that included McCain's 1992 Senate campaign manager, two of his former Senate staff members (one of whom has returned as his chief of staff), and an Arizona insider who was a major McCain donor and is now bundling campaign checks.

When McCain's legislation passed in November 2005, the ranch owner gave the job of building as many as 12,000 homes to SunCor Development, a firm in Tempe, Ariz., run by Steven A. Betts, a longtime McCain supporter who has raised more than $100,000 for the presumptive Republican nominee. Betts said he and McCain never discussed the deal.

The Audubon Society described the exchange as the largest in Arizona history. The swap involved more than 55,000 acres of land in all, including rare expanses of desert woodland and pronghorn antelope habitat. The deal had support from many local officials and the Arizona Republic newspaper for its expansion of the Prescott National Forest. But it brought an outcry from some Arizona environmentalists when it was proposed in 2002, partly because it went through Congress rather than a process that allowed more citizen input.

Although the bill called for the two parcels to be of equal value, a federal forestry official told a congressional committee that he was concerned that "the public would not receive fair value" for its land. A formal appraisal has not yet begun. A town official opposed to the swap said other Yavapai Ranch land sold nine years ago for about $2,000 per acre, while some of the prime commercial land near a parcel that the developers will get has brought as much as $120,000 per acre.

In an interview, Betts said there is "absolutely no" connection between his contributions to McCain's presidential bids and the deal involving rancher Fred Ruskin and the Yavapai Ranch Limited Partnership. While his company's possible involvement was discussed casually before the bill's passage, Betts said SunCor did not sign on to the project until afterward. "At no time during the consideration of this legislation was there any involvement by officials of SunCor," McCain spokesman Brian Rogers said in a written response to questions [read the campaign's full answers].

Betts is among a string of donors who have benefited from McCain-engineered land swaps. In 1994, the senator helped a lobbyist for land developer Del Webb Corp. pursue an exchange in the Las Vegas area, according to the Center for Public Integrity. McCain sponsored two bills, in 1991 and 1994, sought by donor Donald R. Diamond that yielded the developer thousands of acres in trade for national parkland.

In the late 1990s, McCain promoted a deal in Arizona's Tonto National Forest involving property part-owned by Great American Life Insurance, a company run by billionaire Carl H. Lindner Jr., a prolific contributor to national political parties and presidential candidates.

With the federal government owning vast stretches of Arizona land, and with pressure to meet increasing housing demands, McCain now views land swaps as beneficial, Rogers said. "He certainly recognizes that there have been well-documented abuses of legislative land exchanges, but every land exchange bill introduced by Senator McCain has been written with the highest regard for the public interest."

As McCain positions himself as a champion of environmental causes, observers of the Yavapai Ranch swap say it shows a paradox in the senator's positions. At times, he has fought to protect the delicate desert ecosystem. But when wildlife concerns have thwarted development, his loyalties have shifted.

"When the public trust intersects with private interests, basically, he has favored land development . . . in every case," said Rob Smith, director of the Sierra Club's Arizona affiliate.

McCain also has been critical of government's "revolving door," which allows former government officials to position themselves as influential lobbyists. Rogers said that McCain does not recall being lobbied by his former staff members on the land swap and that "no lobbyist influenced Senator McCain on this issue."

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.

A Developer, His Deals and His Ties to McCain
By DAVID D. KIRKPATRICK and JIM RUTENBERG

Donald R. Diamond, a wealthy Arizona real estate developer, was racing to snap up a stretch of virgin California coast freed by the closing of an Army base a decade ago when he turned to an old friend, Senator John McCain.

When Mr. Diamond wanted to buy land at the base, Fort Ord, Mr. McCain assigned an aide who set up a meeting at the Pentagon and later stepped in again to help speed up the sale, according to people involved and a deposition Mr. Diamond gave for a related lawsuit. When he appealed to a nearby city for the right to develop other property at the former base, Mr. Diamond submitted Mr. McCain’s endorsement as “a close personal friend.”

Writing to officials in the city, Seaside, Calif., the senator said, “You will find him as honorable and committed as I have.”

Courting local officials and potential partners, Mr. Diamond’s team promised that he could “help get through some of the red tape in dealing with the Department of the Army” because Mr. Diamond “has been very active with Senator McCain,” a partner said in a deposition.

For Mr. McCain, the Arizona Republican who has staked two presidential campaigns on pledges to avoid even the appearance of dispensing an official favor for a donor, Mr. Diamond is the kind of friend who can pose a test.

A longtime political patron, Mr. Diamond is one of the elite fund-raisers Mr. McCain’s current presidential campaign calls Innovators, having raised more than $250,000 so far. At home, Mr. Diamond is sometimes referred to as “The Donald,” Arizona’s answer to Donald Trump — an outsized personality who invites public officials aboard his flotilla of yachts (the Ace, King, Jack and Queen of Diamonds), specializes in deals with the government, and unabashedly solicits support for his business interests from the recipients of his campaign contributions.

Mr. McCain has occasionally rebuffed Mr. Diamond’s entreaties as inappropriate, but he has also taken steps that benefited his friend’s real estate empire. Their 26-year relationship illuminates how Mr. McCain weighs requests from a benefactor against his vows, adopted after a brush with scandal two decades ago, not to intercede with government authorities on behalf of a donor or take other official action that serves no clear public interest.

In California, the McCain aide’s assistance with the Army helped Mr. Diamond complete a purchase in 1999 that he soon turned over for a $20 million profit. And Mr. McCain’s letter of recommendation reinforced Mr. Diamond’s selling point about his McCain connections as he pursued — and won in 2005 — a potentially much more lucrative deal to develop a resort hotel and luxury housing.

In Arizona, Mr. McCain has helped Mr. Diamond with matters as small as forwarding a complaint in a regulatory skirmish over the endangered pygmy owl, and as large as introducing legislation remapping public lands. In 1991 and 1994, Mr. McCain sponsored two laws sought by Mr. Diamond that resulted in providing him millions of dollars and thousands of acres in exchange for adding some of his properties to national parks. The Arizona senator co-sponsored a third similar bill now before the Senate.

A spokeswoman for Mr. McCain, Jill Hazelbaker, said the senator, now the presumptive Republican presidential nominee, “had done nothing for Mr. Diamond that he would not do for any other Arizona citizen.”

The campaign said in a statement that the Arizona land exchanges had broad support from local governments and environmentalists seeking to expand a federal park.

For the California projects, the campaign said the McCain aide arranged the introduction to an Army official for Mr. Diamond’s team as “a constituent matter.” The campaign said it had no knowledge of the aide helping to expedite the sale.

In Mr. Diamond’s other project at Fort Ord, the campaign initially said that the senator “would not have issued” the letter vouching for Mr. Diamond “if he knew at the time it would be used to favor any particular party in the course of a pending competition.” Later, the campaign described the letter as “a character reference” and said it was included only at a “pre-competition” stage in the selection process. The campaign also noted that two other members of the Arizona Congressional delegation provided similar letters.

Mr. Diamond, for his part, said Mr. McCain had only done his job. “I think that is what Congress people are supposed to do for constituents,” he said. “When you have a big, significant businessman like myself, why wouldn’t you want to help move things along? What else would they do? They waste so much time with legislation.”

He said he often complained to Mr. McCain that he was “too straight” about refusing to provide federal help for Arizona businessmen. “I tell him, ‘You are an Arizona senator besides being the world senator. Loosen up, kid!’ ”

‘A Love Fest’

Mr. Diamond, 80, met Mr. McCain when he was a former prisoner of war running for Congress in 1982. “I liked him right away because I respected what he went through in Vietnam,” Mr. Diamond recalled. When he got to know Mr. McCain and his wife, Cindy, Mr. Diamond said, “it became a love fest.”

Mr. Diamond was already a major player in Arizona real estate and Republican politics. A tenacious dealmaker who once visited a Mexican jail to close a sale with an inmate, Mr. Diamond had made a first fortune on Wall Street before turning his trader’s eye to the Arizona desert in 1965. He eventually became one of the state’s biggest landowners, picking up trophies that included the 12,000-acre Howard Hughes estate, stakes in two of Arizona’s professional sports teams, the Diamondbacks and the Suns, and, for a time, a Tucson television station.

Over the years, Mr. Diamond and his wife, Joan, visited the McCains at their ranch in Sedona, Ariz., and entertained them in their Tucson home and in the Bahamas, where Mr. Diamond sometimes keeps his 134-foot yacht, the Queen of Diamonds. In 2001, the two men attended a Yankees-Diamondback World Series game together. “He is just very, very good company,” Mr. Diamond said of Mr. McCain. “I knew all his people and the staff.”

Mr. Diamond and his family have given more than $55,000 to Mr. McCain’s campaigns (and more than $600,000 to other federal candidates). More significantly, the developer has collected (or “bundled”) hundreds of thousands of dollars in contributions from others, and is now serving as a national co-chairman of the finance committee for Mr. McCain’s current presidential run. In the spring of 2000, when Mr. Diamond was in the thick of the negotiations for his California deals, he traveled with Mr. McCain through the early Republican primaries. Mr. Diamond was on the campaign trail again this year.

In building his empire, Mr. Diamond said he had struggled with local elected officials over land use and zoning issues just like any other developer. “They are a pain in the ‘you-know-what,’ ” he said.

But associates say he revels in his ability to “work the system,” as his friend and sometimes partner, Stanley Abrams, put it: “Nobody is as connected as Donald.”

Mr. Diamond is close to most of Arizona’s Congressional delegation and is candid about his expectations as a fund-raiser. “I want my money back, for Christ’s sake. Do you know how many cocktail parties I have to go to?”

To raise money for Mr. McCain, Mr. Diamond invites local Republicans to make fund-raising calls from his Tucson office. Ray Carroll, a member of the council that controls zoning in Pima County, Ariz., said Mr. Diamond followed up on one fund-raising session with a thank-you note “on behalf of Mr. McCain,” sending a copy to the senator.

“To reciprocate, if you need any zoning in the county, let me know,” Mr. Diamond wrote. (Mr. Diamond said it was the kind of joke he often made.)

Mr. McCain has campaigned as a critic of the corrupting influence of money and politics, saying he had learned a lesson from a late 1980s scandal over his part in an intervention with banking regulators examining a savings and loan controlled by a patron, Charles Keating. Since then, Mr. McCain vowed to embrace ethics standards that set him apart from many colleagues.

“I have carefully avoided situations that might even tangentially be construed as a less than proper use of my office,” he wrote in his memoir, “Worth the Fighting For” (Random House, 2002).

Mr. McCain once publicly criticized Mr. Diamond as lobbying too hard for his own financial interests. In 1995, Mr. McCain called it “unheard of” that Mr. Diamond had hired a Washington lobbyist to try to block construction of a federal building in Tucson that threatened to take away some of his rental income. “I didn’t talk to him for one year,” Mr. Diamond said of Mr. McCain. “I was annoyed.”

Legislating Land Deals

Mr. McCain has been willing, though, to help sponsor bills authorizing federal land exchanges that Mr. Diamond sought. Former Representative Jim Kolbe, another Arizona Republican close to Mr. Diamond, said Mr. Diamond often proposed such deals and impressed lawmakers with his frankness about the potential sensitivities, Mr. Kolbe said.

“He would tell you, ‘I don’t think you should get on this one, this one is too close to where you live, let another member of the delegation work on this one,’ ” Mr. Kolbe said. “He never tried to flim-flam you.”

Such exchanges can serve a public interest by expanding parks or wilderness areas. But many environmentalists and other analysts have also concluded that such trades almost invariably give private developers a profitable bargain at public expense. Although federal rules stipulate that public land can be traded for private land only of “equal value,” appraisals of unusual property or in fast-growing areas are highly variable and developers often apply political pressure to get favorable terms.

A study in 2000 by the nonpartisan Government Accountability Office cited “inherent difficulties” and “fundamental inefficiencies” in such exchanges and urged Congress to discontinue them.

The first two swaps involving Mr. Diamond that Mr. McCain helped sponsor were initially supported by local governments and conservationists, and Mr. Diamond argues the land would be worth far more today. But many Arizona conservationists later protested that the federal deals gave away too much.

“Don Diamond has done very well through these land exchanges,” said Sandy Bahr, director of the Arizona chapter of the Sierra Club. “It is the public that got shortchanged.”

The McCain campaign noted that the bills left the terms of any acquisitions to the Interior Department, but environmentalists argued that the legislation set the parameters.

“It’s not like there is some market mechanism at work,” Ms. Bahr said.

The laws expanded what is now the Saguaro National Park just outside Tucson to insulate it from proposed Diamond projects, including one to build 10,000 houses and four resorts on the 4,400-acre Rocking K Ranch nearby. Mr. Diamond had bought the ranch for less than $10 million in 1979.

In the first deal, Mr. McCain was the sole Senate sponsor of a 1991 law authorizing the Department of the Interior to acquire about 2,000 acres of the ranch, which local environmentalists valued at about $5 million but Mr. Diamond and parks appraisers put at around $30 million.

Over the next five years, the government paid him more than $23 million for the land and traded him two parcels of about 50 acres in upscale Scottsdale, Ariz. And the expanded Saguaro also added to the value of the remaining Rocking K land, where Mr. Diamond is still planning to build 3,000 houses along with resorts and golf courses.

When The Arizona Republic linked Mr. McCain’s support for the bill to Mr. Diamond’s fund-raising, Mr. McCain called the implication “outrageous and disgusting.”

In 1994, Mr. McCain sponsored, along with a Senate colleague at the time, Dennis DeConcini, Democrat of Arizona, another law expanding the park by again acquiring land from Mr. Diamond. To carry out the expansion, the Interior Department has so far taken over about 630 acres from Mr. Diamond in exchange for about 4,300 acres near Phoenix.

Last year, Mr. McCain co-sponsored another bill with Senator Jon Kyl, Republican of Arizona, that would grant Mr. Diamond about 1,250 acres south of Tucson in exchange for requiring him to contribute about 2,500 acres to other conservation areas — a scaled-back version of a 2003 proposal that collapsed under protests that it was too generous to Mr. Diamond. A Senate committee passed it to the floor this month.

A Deal and a Lawsuit

In the mid-1990s, Mr. Diamond set his sights on Monterey County, Calif., where the Army was closing Fort Ord. It was a dream property — hundreds of undeveloped acres and two golf courses in the ocean-misted hills overlooking Monterey Bay, one of California’s great tourist destinations.

Tipped off by a fellow Tucson developer, Mr. Diamond had snapped up a housing complex there that had been built on land leased from the Army, giving him the inside track to buying the land when the base shut down.

After the Army did so in 1994, Mr. Diamond asked Mr. McCain, a member of the Senate Armed Services Committee, for an introduction with an Army official who could work out a sale. Mr. McCain’s legislative aide, Ann Sauer, arranged a meeting with Paul W. Johnson, a deputy assistant secretary, a Diamond executive involved in the deal said.

When the talks stalled over price and water supply, Ms. Sauer interceded with the Army, according to Mr. Diamond’s deposition and others involved. “She showed up and got the thing resolved,” Mr. Diamond said.

Mr. McCain’s campaign aides said in a statement they did not believe Ms. Sauer’s involvement went beyond setting up the Pentagon meeting. Ms. Sauer, who no longer works for Mr. McCain, said she could not recall details of her role. A spokesman for the Army declined to comment.

Mr. Diamond finally bought the land for $250,000 in 1999. He obtained an unusual guarantee from the Army that provided a generous water allowance outside the standard allocation process — a bonus that continues to rankle municipal officials on the dry Monterey Peninsula.

“Those guys got a sweetheart deal,” said Michael Keenan, whose family bought the housing complex from Mr. Diamond for nearly $30 million two years later. Mr. Diamond acknowledged turning a profit of $20 million.

Even before he completed his negotiations with the Army, Mr. Diamond had begun turning his attention to an even bigger prize: the two Fort Ord golf courses, which had been sold to the city of Seaside.

Mr. Diamond and his partners imagined building high-end condominiums and a luxury hotel by the links, a project they described in an internal memorandum as a “World Series, final game, out of the park, grand slam home run.”

When Seaside solicited submissions in 1998 from bidders competing to develop a world-class resort, Mr. Diamond sought to exploit his Washington connections. His package included the laudatory letters from Mr. McCain, Mr. Kyl and Mr. Kolbe.

“The folks that were there at the time were sort of, like, star struck: ‘God, these people really know some high-up people,’ ” said a former senior Seaside official, who requested anonymity to speak candidly.

Mr. Diamond acknowledged that, as court papers show, he tried more than once to enlist Mr. McCain in assisting the city on other matters as the selection process continued. “I don’t mind trying,” he said. For instance, in 2002, Mr. Diamond forwarded to Mr. McCain an article from The Monterey Herald about Seaside’s problems in a water dispute. “As per our conversation today,” he wrote, “I would appreciate it if you would follow up and drop a line to the city manager of Seaside.”

He added in a postscript, “Sorry you can’t make it to the Yankees series,”

Daniel E. Keen, the former Seaside city manager, recalled: “Diamond had a relationship with McCain. He was offering to help.”

Mr. McCain rejected that request as “inappropriate at that time” because he was poised to regain the chairmanship of the Senate Commerce Committee, Mr. Diamond said in the deposition. “John said that he would rather not get involved. He didn’t think that it was right.”

Mr. Diamond’s courtship of Seaside almost unraveled the next year when a rival developer, Danny Bakewell Sr., a civil rights activist, filed a lawsuit charging that Mr. Diamond had conspired to rig the selection process. The company running the former Army golf courses, BSL Golf, was acting as the city’s agent to pick a developer, and Mr. Bakewell’s lawyers presented documents showing that Mr. Diamond offered to give BSL a stake in the resort in exchange for helping him win the project. Mr. Diamond and BSL denied any wrongdoing and settled the suit for an undisclosed sum in 2004.

Though Mr. McCain helped with the Fort Ord deals, Mr. Diamond said, he still thinks that Mr. McCain is too worried about avoiding any appearance of a favor. “He doesn’t bring home enough for the state,” Mr. Diamond said. “It is a sore subject between us.”

Kitty Bennett and Barclay Walsh contributed research.