L.A. Times (August 8, 2008)

DHL Deal Gone Sour Haunts McCain in Ohio

Friday 08 August 2008


by: Bob Drogin, The Los Angeles Times


The Cleveland Plain Dealer reported that McCain campaign manager Rick Davis worked as a lobbyist to help DHL's parent German company buy out Airborne Express, costing thousands of Ohio jobs. McCain worked to support the deal in his role as chairman of the Senate Commerce Committee. (Photo: dragonforged.com)
The firm may close its hub, imperiling nine county economies. A campaign aide lobbied for its parent company.

Wilmington, Ohio - Finally given a chance to address Sen. John McCain, Mary Houghtaling choked up Thursday and began to cry.

Wiping away her tears, she told the presumptive Republican presidential nominee how a controversial corporate deal he backed in 2003 as chairman of the Senate Commerce Committee - the sale of Airborne Express cargo service to a German conglomerate that owns DHL and the subsequent expansion of the air freight hub here - had gone horribly wrong.

Now, its business in a tailspin, DHL wants to combine operations with rival United Parcel Service and close its huge hub here. If the merger goes through, community officials and union leaders warn, staggering job losses will eviscerate the economy and the social fabric of nine struggling counties in southeast Ohio.

"Never before have so many people been abandoned at once," said Houghtaling, who runs a local hospice. "It is inconceivable to think about losing 10,000 jobs in the first wave, and the estimates run in the 30,000 range as the wave continues."

Houghtaling first warned McCain of the pending catastrophe July 9 when he campaigned nearby. The candidate vowed to return and bring help.

But on Wednesday, the Cleveland Plain Dealer reported that McCain's campaign manager, Rick Davis, previously worked as a lobbyist for the German group, Deutsche Post World Net, and was paid $185,000 to help engineer the 2003 deal, plus another $405,000 for other work.

Davis helped Deutsche Post overcome objections in the Senate when the German company was negotiating the purchase, the paper reported. As head of the commerce committee, McCain fought back proposed amendments in a defense spending bill that would have barred a foreign-owned company from flying U.S. military equipment or troops.

McCain said he objected to restricting the Pentagon's options, and to using a spending bill to set military policy. But his position angered some lawmakers and DHL competitors that sought to keep the U.S. air freight business in American hands.

McCain's campaign said Thursday that Davis has not lobbied for DHL since 2005 and had no role in the current controversy. He took a leave of absence from his lobbying practice to run McCain's campaign.

But the politically sensitive case has embarrassed McCain, who has railed against the role of special interest groups in Washington, and it threatens to undermine his efforts to capture this crucial state in November.

In news releases, conference calls and local street protests, Democrats and union groups have blamed McCain and Davis for backing the original deal, and accused McCain of ignoring the workers' plight. During a campaign visit last month, Barack Obama, the presumptive Democratic presidential nominee, met with Wilmington's mayor, David Raizk, and pledged his help if elected.

McCain moved quickly to demonstrate his own concern Thursday, his second straight day of campaigning in a state he has called vital to his White House bid. McCain pledged to call for a congressional hearing "as quickly as possible" and said he would urge the Justice Department to launch a "thorough and complete" antitrust investigation of the proposed merger.

He also vowed to help provide federal emergency grants and other aid to the displaced workers and devastated communities if DHL ends local operations.

"I can't assure you that this train wreck isn't going to happen, but I will do everything in my power to avert it," McCain told two dozen elected officials and community leaders during a 45-minute meeting on the campus of Wilmington College.

McCain listened as Houghtaling declared that many people believed he was there only because he faced political pressure to attend.

"Empty rhetoric is not what we need," she said emotionally. "Sir, promises and trusts are things that have been sadly suspect" since plans to close the air hub were announced on Memorial Day.

"My straight talk would be, please don't let this foreign company ruin our part of the world," she pleaded, her voice choked up. "Please give us a reason to once again believe in promises and trust."

After learning that the chairman of DHL, Frank Appel, had not agreed to meet local residents, McCain promised to write to the head of parent company Deutsche Post and invite him.

He then added what he called some "straight talk," his trademark phrase. "I don't know if any of this will work," he admitted. He then turned to Houghtaling. "I can't look you in the eye and say we're going to avert this."

Earlier Thursday, McCain used a town hall in Lima, Ohio, to step up his attacks on Obama.

"Sen. Obama says he's going to change Washington," McCain said, reading from prepared remarks. "But his plan is to raise your taxes and spend more of your money. It's not my idea of a solution to what troubles Washington. In fact, it sounds a lot like the problem."

Obama's words, he said, "for all their eloquence and passion, don't mean all that much."

"And that's the problem in our nation's capital. It's not just the Bush administration, and it's not just the Democratic Congress. It's that everyone in Washington says whatever it takes to get elected or to score the political point of the day," said McCain, who has served 26 years in Congress.

For his part, Obama predicted Thursday that the Democratic convention this month would come off smoothly, though he seemed to take issue with the assertion of his erstwhile opponent Hillary Clinton that her supporters were looking for a "catharsis" at the event.

In a YouTube video that surfaced recently, Clinton was seen telling a gathering of her supporters in Palo Alto that those who backed her in the primary fight should have their voices heard. "It's as old as Greek drama," Clinton said at the event last month. "There's a catharsis. Everybody comes and they want to yell and scream and have their opportunity, and I think that's all to the good."

Talking to reporters on his campaign plane, Obama said the convention's purpose is not catharsis.

"I am letting our respective teams work out the details," he said, according to a transcript provided by his campaign. "I don't think that we are looking for catharsis. I think what we are looking for is energy and excitement about the prospects of changing this country."

Obama had a light day on the campaign trail, one day before he leaves for a weeklong vacation in his native Hawaii. He spent about half an hour greeting diners at the Copper Dome Restaurant in St. Paul, Minn. He ordered buttermilk pancakes to go, dropping $3 at the cash register.

When a couple asked him about the Twins and White Sox baseball teams, Obama said: "If you think I'm going to throw my White Sox under the bus because I'm here in Minnesota, that's not going to happen."