McCain helped Diamond purchase Fort Ord land for $250,000 in 1999. The land was improved for roughly $10 million, and then sold for $20 million profit two years later.
A Developer, His Deals and His Ties to McCain
By DAVID D. KIRKPATRICK and JIM RUTENBERG
Published: April 22, 2008
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 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.
Think Rezko on Crack & Steroids
A Developer, His Deals and His Ties to McCain
By DAVID D. KIRKPATRICK and JIM RUTENBERG
Published: April 22, 2008
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 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.
Think Rezko on Crack & Steroids
