Lobbyist Funded Mass Mailing That Hurt McCain Campaign
By DAVID ROGERS
 THE  WHORE  STREET  JOURNAL
 

WASHINGTON -- The letter went out in the last days of the South Carolina
presidential primary: a mass mailing to tens of thousands of conservative
households that accused John McCain of denigrating the Confederate battle
flag atop the state's Capitol.

It was a critical moment for the Arizona Republican. "If we win here, I
don't see how we can really be stopped," he was telling supporters. Days
later, after losing to Texas Gov. George W. Bush, Mr. McCain would hold up
the letter as a symbol of the right-wing assault that denied him his win --
and began the end of his presidential campaign.

Amid the thunder of South Carolina, no single blow was decisive, but the
flag letter stands out for its timing and the power of its appeal. It is also a
symbol of how the breakdown of campaign-finance rules allows individuals
with money and their own agendas to become important players in today's
politics, while disclosing little or nothing of their role to the outside world.

The Keep It Flying PAC, which took credit for the attack, didn't even
formally exist at the time the letter went out. Its front man was a
Charleston musician and political neophyte who only later registered the
political action committee with the state. Even today, South Carolina and
federal election officials have no idea what the mailing cost or who paid for it.

    [Illustration of letter from "Keep It Flying" PAC omitted]
    [caption of illustration:] Excerpts from a pro-Confederate flag letter
critical of Sen. John
    McCain was mailed to voters just before the South Carolina GOP primary.

But Richard Towell Hines, a Bush ally and lobbyist for the government of
Cambodia, now acknowledges he helped foot the bill. His Indochina link adds
to the intrigue for a Vietnam veteran like Mr. McCain.

Mr. Hines's company, RTH Consulting, has received at least $540,000 in the
last 18 months from the ruling Cambodia Peoples Party to promote Phnom Penh
strongman Prime Minister Samdech Hun Sen. The 51-year-old Mr. Hines won the
lucrative contract after pitching himself to his once-communist client as
someone whose ties to the political right would help win back U.S. aid, cut
off after a 1997 coup that solidified Mr. Hun Sen's power.

Those ties to the right include a history of involvement in the
Confederate-flag movement, and there is a strong overlap between the same
Hines company and the Keep It Flying PAC. Until recently disconnected, an
"800" number used by the flag group was registered to RTH Consulting. It
rang not in South Carolina but at a northern Virginia answering service,
which said it forwarded messages to RTH's row-house offices in Alexandria,
Va., outside Washington.

Mr. Hines denies any link between the flag letter and his lobbying on behalf
of the Cambodian government. "I've been an active Republican for 30 years,
and I supported Bush," he said. But helping Gov. Bush and wounding Mr.
McCain also dovetailed with the lobbyist's strategy of appealing to the
right and isolating those in the GOP critical of his client, Mr. Hun Sen.

The International Republican Institute, a quasipublic, democracy-building
organization headed by Mr. McCain, has long been a thorn in Mr. Hines's
side. In a 1998 report to his future client, the lobbyist urged that
Cambodia support a campaign to cut off public funding for the IRI, which he
accused of helping Mr. Hun Sen's political opponents and generating "bad
press" for the regime.

Roland Eng, Cambodia's ambassador, declined comment on Mr. Hines's
activities. Mr. McCain reacted with surprise. "Fascinating!" he said. "It is
the ultimate irony that a regime that has destroyed the democratic process
in that poor country is now funding a foreign agent who contributed in a
major way to the seminal defeat of my presidential campaign."

When approached by a reporter about the flag letter, Mr. Hines, a tall,
patrician man, said: "I am a private individual and resent any invasion of
my privacy." He later conceded to paying $5,000 to cover postage costs but
has refused since to provide a postal receipt, or to clarify if the money
came from company funds.

His new Washington attorney, election-law expert Stanley Brand, invited
written questions, then declined answers when they were submitted. But as a
registered foreign agent, Mr. Hines may be forced to tell more in regular
biannual reports required by the Justice Department covering his political
activities.

The Bush campaign has always denied any part in the letter, but the mailing
helped the governor by casting him as the one true flag supporter. "Of the
major candidates, only George Bush has refused to call the Confederate Flag
a racist symbol .," the letter reads.

The ability of individuals like Mr. Hines to enter the political fray has
grown in the current election cycle. Weeks after South Carolina, Mr. McCain
was the target of a more expensive attack financed by Texas billionaire, Sam
Wyly, a shy, Massachusetts Institute of Technology-educated entrepreneur who
spent more than $2 million in three battleground states on a television ad
attacking Mr. McCain for not doing more to support solar power. Mr. Wyly
made no secret of wanting to help Gov. Bush, but the national attention
generated by the ad campaign also helped the green-power enthusiast by
raising his profile in an energy-deregulation movement in which he has a
financial interest.

Mr. Hines, a onetime South Carolina state legislator, served in the Reagan
administration with his wife, Patricia Hines, the daughter of a prominent
South Carolina agriculture family. From 1992 to 1996, he was a consultant to
Philip Morris Cos., and sometimes used his contacts there to help place
tobacco money with conservative causes.

For the past 20 years, Mr. Hines has had an on-and-off relationship with
Warren Tompkins, a top Republican lobbyist and political operative in South
Carolina who now is the Southeast regional chairman for the Bush campaign.
Mr. Hines declined to answer questions about any of his dealings with Mr.
Tompkins.

Mr. Tompkins angrily denied ever discussing the letter with Mr. Hines or
sharing any polling data to help target the mailing. "Richard and I never
had a conversation about that," he said. Under the campaign-finance laws,
expenditures coordinated with the campaign would be considered donations,
subject to the laws' limits and disclosure requirements.Mr. Tompkins angrily
denied ever discussing the letter with Mr. Hines. "Richard and I never had a
conversation about that," he said. Under the campaign-finance laws,
expenditures coordinated with the campaign would be considered donations,
subject to the laws' limits and disclosure rules.

Justice Department records show Mr. Hines's financial involvement with
Cambodia began in late 1998, when he signed a one-year $550,000 contract,
later renewed at a $450,000 annual rate through this year. Interviews with
Cambodian officials indicate the government was impressed by what it saw as
strong ties between Mr. Hines and Senate Foreign Relations Committee
Chairman Jesse Helms, a fellow Carolinian.

Before winning his contract, Mr. Hines took credit for helping to block
action on a Senate resolution critical of Mr. Hun Sen, and claimed that he
brought pressure on the staff of the Foreign Relations Committee, where the
resolution died. Justice Department records show he received an upfront
payment of over $183,000 upon signing the contract months later.

RTH Consulting is listed as a $5,000 donor at a fund-raiser last year for a
Helms foundation at Wingate University; the Cambodia Embassy's charge
d'affaires, a Cambodia Peoples Party member, attended with Mr. Hines,
according to his filings with the Justice Department. Mr. Helms's office
said Mr. Hines has little access; through a spokesman, Mr. Helms said he
would have trouble recognizing him.

Mr. McCain is a recognized voice in this debate, and his Vietnam war record
allows him to strike a moderate tone on Indochina issues. But in Mr. Hun
Sen's case, relations have been more strained because of the senator's ties
to IRI, one of whose workers was hurt in a grenade attack in Phnom Penh
several years ago.

Just last month, Sen. McCain pulled back from supporting an amendment by his
friend, Massachusetts Democratic Sen. John Kerry, who sought to open the
door again to U.S. aid to Cambodia.

In his 1998 sales pitch to the Hun Sen regime, Mr. Hines took a tough stance
against the IRI. But earlier this month, knowing his role in the Confederate
flag letter would soon be disclosed, he wrote an op-ed piece in the
Washington Times praising Sen. McCain as Cambodia's friend. Back in South
Carolina, the flag has come down from atop the Capitol, and John Brannen,
the Charleston rock and country singer who signed the letter, was recently
preparing to go on a European tour. "I think it's good to have a little bit
of mystery about this stuff," he says of the financing. He preferred to talk
about his new album. Its tentative title is "Scarecrow."
 
 

Write to David Rogers at david.rogers@wsj.com1