Today’s Must Read

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June 26, 2008 10:01 a.m.

Sen. John McCain’s campaign manager, Rick Davis, took leave from his lobbying firm in 2006. He often reminds us that he derives no income from the firm these days.

Yet Davis derived financial gain from his relationship with McCain for years after running the senator’s first bid for the GOP nod in 2000 — and would likely garner similar benefits even if McCain loses this time around.

A story in today’s Washington Post offers some details about that relationship throughout the past eight years.

In all, Davis, his firm and a company he helped start have earned at least $2.2 million in part through their close association with McCain, his campaign and his causes, according to a review of federal campaign, tax and lobbyist disclosure records.

Davis’s lobbying firm, Davis Manafort, has a client list that has included Verizon and SBC Communications, a Ukranian holding company Systems Capital Management and Russian magnate Oleg Deripaska, a close ally of Russian President Vladimir Putin. He has also worked as an uregistered lobbyist representing the interests abroad of foreign politicians and businessmen.

After McCain dropped out of the Republican primary in 2000, Davis continued to work for — and fundraise — for the senator.

When McCain started the Reform Institute in 2001 to promote campaign finance reform, he turned to Davis. Though still actively lobbying, Davis pulled in $120,000 as an institute consultant in 2002.

Davis brought with him other McCain insiders, and fundraising took off. In 2003, tax filings show, Davis earned $110,000 in fees, and in 2004 and 2005, while he served as president of the institute, his salary totaled $165,000. Tax forms said he worked five hours a week or “as needed.”

The Post profiles a few examples where Davis was raking in lobbying fees from companies that McCain was helping out on Capitol Hill.

In 2003, for instance, DHL Holdings (USA) and Airborne hired Davis to lobby the Senate to facilitate a merger. Hotly opposed by shipping giants FedEx and United Parcel Service, the merger encountered opposition from Sen. Ted Stevens (R-Alaska) on the commerce committee. McCain took steps that helped Davis’s clients. He thwarted Stevens’s effort to insert language into legislation that would prohibit foreign-controlled companies such as DHL from holding certain military contracts.

Davis’s firm earned $125,000 from Airborne in 2003 and $465,000 from DHL parent company Deutsche Post World Net (USA) from 2003 to 2005, records show.

The Post also reminds us how Davis’s outside business dealings have apparently caused tension inside the campaign, particularly last year when McCain was struggling with money and far behind in the polls. There was a lot of grumbling — and still is — about the firm 3eDC that Davis helped hire and also partly owned.

Davis has confirmed that he owns a stake in 3eDC. Over several months, McCain’s campaign doled out payments to the firm approaching $1 million.

The 3eDC contract initially brought objections from top advisers, who argued that it smacked of self-dealing. After the summer campaign shake-up, it appeared that payments to the firm ceased.

Davis is not alone among those in the campaign who have recently shed their lobbying ties but may have banked some money in previous years.

Longtime fundraiser Carla Eudy earned $138,434 working for McCain’s 2000 presidential bid. But she made far more — $813,000 — working for McCain’s leadership committee, the Reform Institute, and another nonprofit McCain chaired, the International Republican Institute, tax records show. Some of the money has gone to her company. Trevor Potter, McCain’s top lawyer, has brought in nearly $750,000 in fees for his law firms by working for such endeavors, as well as $949,000 in compensation over five years for the nonprofit he helped create, the Campaign Legal Center, which has defended in court the McCain-Feingold campaign finance law, tax records show.
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Firms run by Rebecca Donatelli, McCain’s Internet strategist in 2000, have since then done more than $700,000 in work for McCain-related endeavors, though the campaign notes that some of that money has gone to cover credit card transaction fees for money raised online.

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