Pro-business populism

Carl Remick carlremick at
Wed Aug 30 13:25:38 PDT 2000

[The following is an interesting review of Joe Lieberman's record that ran in the NY Times Aug. 27.]

As a Senator, Lieberman Is Proudly Pro-Business

By Leslie Wayne and Don Van Natta Jr.

Joseph I. Lieberman has introduced himself to the American people this month on a decidedly populist note, lashing out against oil companies, assailing industrial polluters and calling for greater government spending on health care.

But behind the traditional Democratic oratory of his convention speech is a senator who has described himself as "pro-business, pro-trade and pro-economic growth." During his two terms in the Senate, Mr. Lieberman closely aligned himself with three industries -- insurance, high technology and health care -- that are the main sources of his campaign contributions, and whose lobbyists say they are pleased with how he has promoted their agendas in Washington.

Mr. Lieberman's pro-business record contrasts sharply not only with his own speech at the Democratic National Convention, but also with the larger message that Vice President Al Gore has been sending recently. In his acceptance speech at the convention -- and since then on the campaign trail -- Mr. Gore has repeatedly attacked "big tobacco, big oil, the big polluters, the pharmaceutical companies, the H.M.O.'s."

Whether defending stock options for the newly minted rich of Silicon Valley, promoting legislation that allowed insurance companies to enter new markets or promoting a moderate alternative to the administration's ill-fated health care program, Mr. Lieberman is seen as a leader among a small band of business-friendly Democrats on Capitol Hill.

He has embraced industries viewed as the pillars of a new high-tech, free-trade economy. And Mr. Lieberman and other centrist Democrats have received a windfall of campaign contributions from industries that are not traditional supporters of the Democratic Party.

"Joe Lieberman understands the needs of business and doesn't view industry with hostility," said Herbert Perone, a spokesman for the American Council of Life Insurers, an industry group. "You can count on Joe Lieberman to understand why something is important to us and vote the right way and not scoff at our reasons. He's been a friend to us."

Mr. Lieberman declined to be interviewed for this article, but instead issued a statement saying that he would "call it like I see it on the issues, including when I disagree with those individuals, industries and interests who support me."

And an aide said Mr. Lieberman did not see a conflict between the support he received from business, and the Democratic ticket's populist message. The aide added, "He has done some things the health care industry has liked, and other things they have not liked."

Mr. Lieberman's support for these industries, and theirs for him, are part practical and part philosophical. As the junior senator from Connecticut, where more than 50,000 people work for 36 insurance companies -- including such giants as Aetna, Cigna and Hartford Life -- Mr. Lieberman has worked hard to protect insurance interests.

Geography also accounts for his staunch support of military programs with a Connecticut connection. As a member of the Senate Armed Services Committee, he has been a strong advocate for increased military spending, fighting for the controversial Sea Wolf submarine project, which is made in Groton, Conn., and costs $2.5 billion per sub, and defending such programs as the Blackhawk and Comanche helicopters, which are also manufactured in his state.

But Mr. Lieberman's interests seem to go beyond local politics and reflect a belief that the Democratic Party will flourish -- and the economy, too -- when government promotes international trade, business entrepreneurship and technological innovation. This philosophy has pulled Mr. Lieberman away from such traditional sponsors of the Democratic Party as trade unions and trial lawyers. Instead, he has drawn his greatest support from a Wall Street flush with cash, a Silicon Valley just stepping into the political arena and a health care industry reeling in record profits.

Among Mr. Lieberman's top supporters is the health care industry -- and, more specifically, pharmaceutical companies. A health care lobbyist said the senator was "a loyal friend" who, more often than not, supported industry initiatives on Capitol Hill.

Last year, for example, Mr. Lieberman was part of a bipartisan group in Congress that tried to break a deadlock between the Clinton administration and Republican leaders over how to regulate health plans. At the time, the administration argued that the legislation favored by Mr. Lieberman, which did not pass, would have been too generous to insurance companies.

However, Mr. Lieberman's aides say, he has also taken some anti-industry stances. They point out that he wrote legislation that would have required health care report cards for H.M.O.'s and insurance companies. The legislation was not passed.

'There Is No Hesitation There'

Mr. Lieberman is not afraid to take on pharmaceutical companies "when they are wrong," said Dan Gerstein, a spokesman for the senator. "He has opposed the industry on prescription drug prices -- especially at a time of a rising surplus. That is something that Lieberman is proud to stand with Gore and fight for. There is no hesitation there."

Health insurers have come under particularly sharp attack by Mr. Gore, but Mr. Lieberman has always "kept an open door and an open mind" to the industry's arguments, said Karen Ignagni, president of the American Association of Health Plans, the H.M.O. trade group in Washington.

"He is very interested in policy, and has mastered the specifics of a number of legislative proposals," Ms. Ignagni said. "He really wants to know the details. His door is always open, and you have the opportunity to make your case." Last year, Mr. Lieberman co-sponsored a bill that limited the amount of money plaintiffs could receive from lawsuits against H.M.O.'s.

Ms. Ignagni predicted that Mr. Lieberman would "find it difficult" to reconcile his generally pro-business record with the populist language of the Gore-Lieberman ticket. "I think it's impossible," she said. "I see it as a political ploy."

But a financial services lobbyist disagreed, noting that President Clinton was often more pro-business than Mr. Gore: "This worked effectively for the last eight years. Why, all of a sudden, do they think it will be an impossible situation? Joe Lieberman's qualities won't dry up and blow away if he is elected vice president."

Before joining the Gore ticket, Mr. Lieberman had already collected nearly $3.3 million for a re-election campaign in which he faced minimal opposition. Executives and political action committees in the insurance, finance and real estate industries were the biggest givers, coming up with $773,386, according to data from the Center for Responsive Politics, a nonprofit group in Washington. Among insurers alone, Mr. Lieberman received more contributions than any other senator.

He also received $276,000 from the health care industry and $173,563 from high-tech companies -- money that Silicon Valley fund-raisers say was given to the senator without his even having to solicit it.

Pro-Israel groups have given him $213,000, and the Free Cuba political action committee, which liked his anti-Castro, pro-embargo stand, gave him $10,500, the largest donation by that organization in the current election cycle. He received $102,700 from military contractors and a much more modest $84,997 from trade unions. He received no contributions from the handgun industry, although some handgun manufacturers are based in Connecticut.

Part of Mr. Lieberman's support among the financial services industry is a result of Connecticut's proximity to Wall Street. The industry was particularly pleased by his support last year of the financial services industry modernization bill, which permitted banks, brokerage firms and insurance companies to merge into even larger conglomerates.

In addition, Mr. Lieberman has used the gospel of the new economy to raise money for similar-thinking Democrats through the New Democrat Network, an ideological political action committee he founded in 1996 with Senator John B. Breaux, the moderate Democrat from Louisiana.

The group has raised a total of $7.2 million since its founding, $4 million of it coming in the past 18 months. Not surprisingly, the three largest industry donors to the New Democrat Network are the same ones that support Mr. Lieberman's Senate campaign committees. The PAC's donors include more than 22 of the nation's largest insurance companies; technology companies like Microsoft, America Online and MCI Worldcom; and a roster of pharmaceutical companies that includes Merck, Glaxo Wellcome and Johnson&Johnson.

"Our mission is to build a generation of Democrats who are more modern and global in their outlook," said Simon Rosenberg, executive director of the PAC. "We view ourselves as a venture capital fund for the Democratic Party."

A High-Tech Champion

Silicon Valley corporations are among Mr. Lieberman's biggest fans.

"Right down the line," said Jeff Modisett, vice president and general counsel of TechNet, a Silicon Valley lobbying group, "we are hard pressed to find a bill of importance to us that he hasn't been a champion of or at least supported. It's hard to imagine any other member of Congress who is as well received by the high-tech community as Joe Lieberman."

Mr. Lieberman first went to battle for Silicon Valley in 1994, when he led the charge against proposed accounting changes that would have forced corporations to treat stock options given to employees as a form of compensation, an action that could have halted their use. Fast-growing companies complained that if the bill had passed it would have reduced their profitability, made it impossible to attract and keep top talent and hampered their prospects of going public. Mr. Lieberman led the Senate fight against the rule change, and today is often praised as the senator who saved stock options.

More recently, Mr. Lieberman has supported a laundry list of pet high-tech issues. In the last Congress, he introduced a bill to double government financing of basic high-tech research at universities. He backs efforts to expand tax credits for corporate research and development expenses. He also supports efforts to liberalize visa restrictions to allow more high-tech workers in foreign countries to immigrate here.

Mr. Lieberman also broke with his party to support tort law changes, an issue important to high-tech companies, whose volatile stocks make them worry about class-action lawsuits brought by angry shareholders. And his backing of liberalized trade with China is welcome among high-tech companies wanting to sell their wares there.

The senator's support of liberalized trade with China and tort changes is also popular among his financial services backers. With financial markets expanding, domestic insurance companies want to begin to sell products overseas, especially in India and China. In addition, Mr. Lieberman's attempts to reduce lawsuits against corporations are "a biggie for us," said Mr. Perone of the insurance industry, which is vulnerable to product liability litigation.

As an example of Mr. Lieberman's closeness to the insurance industry, Mr. Perone cited a letter the senator wrote in January to the administration objecting to a proposed $7 billion package of taxes on insurance products as "unwarranted and counterproductive." While the measure had little chance of being enacted -- and ultimately died -- the industry was pleased with the swiftness with which Mr. Lieberman put their thoughts through his pen.

The State and the Sea Wolf

As a member of the Senate Armed Services Committee, Mr. Lieberman has pressed to protect the dwindling number of military installations in Connecticut. In the mid-1990's, when efforts were made to scuttle the proposed Sea Wolf submarine program, he managed to make sure that at least three of the $2.5 billion subs were built -- preventing the closing of General Dynamics' Electric Boat facility in Groton.

A military contracting lobbyist remembers that Mr. Lieberman won the debate not by arguing that the boat was important for his state, but by saying the nation needed to retain an industrial base of submarine-making skills until the next generation of subs was designed. Those submarines -- the so-called Virginia class -- are now manufactured in Connecticut as well.

"He brings a certain moral authority to the debate," said one lobbyist for the military industry, "even if it is in his constituents' interest."

For all his pro-business views, Mr. Lieberman is termed an "interesting mix" by Gene Kimmelman, co-director of Consumers Union's Washington office. While Mr. Kimmelman said he had "done battle" with Mr. Lieberman on such issues as tort changes, he also said the senator could be "a strong pro-consumer populist."

Mr. Kimmelman characterized Mr. Lieberman as a strong supporter of consumer protections and antimonopolistic efforts among telecommunications companies and rated him "fairly pro-consumer" on increased government financing for prescription drugs.

Specifically, Mr. Kimmelman cited Mr. Lieberman's successful drive to reregulate the cable television industry after consumers complained of high prices and anticompetitive practices in the early 1990's. Then, when the cable companies sought to lighten these regulations in the landmark 1996 Telecommunications Act, Mr. Lieberman worked against them and succeeded in having the regulations extended somewhat.

"Lieberman was a breath of fresh air for us," Mr. Kimmelman said. "He has his home-state interests he is going to side with. But once he does that, he doesn't have to worry about any other industries. So he goes out of his way to look for important consumer protection issues to get involved in."



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