Doug Henwood wrote:
> Wall Street Journal - March 6, 2001
>
> Corporate Donors Seek Return
> On Investment in Bush Campaign
>
> By TOM HAMBURGER, LAURIE MCGINLEY and DAVID S. CLOUD
> Staff Reporters of THE WALL STREET JOURNAL
>
> WASHINGTON -- For the businesses that invested more money than ever
> before in George W. Bush's costly campaign for the presidency, the
> returns have already begun.
>
> MBNA America Bank was one of the single largest corporate donors to
> the Bush campaign and other GOP electoral efforts last year. The bank
> and its employees gave a total of about $1.3 million, according to
> the Center for Responsive Politics, a non-partisan clearinghouse
> here. Charles Cawley, MBNA's president, was a member of the Bush
> "pioneers," wealthy fund-raisers who each personally gathered at
> least $100,000 for the presidential campaign.
>
> Mr. Cawley hosted Bush fund-raising events at his home in Wilmington,
> Del., last year and, in 1999, at his summer home in Maine, north of
> the Bush family retreat in Kennebunkport. At the Maine affair, 200
> guests gathered in the early evening on the large porch of the Cawley
> home, situated on a hill with a sweeping view of the Atlantic Ocean.
> Guests sipped cocktails and heard a brief talk by the candidate.
>
> The money didn't stop on election day. Mr. Cawley and his wife each
> gave the maximum of $5,000 to help fund Mr. Bush's fight in the
> Florida vote recount. Mr. Cawley gave an additional $100,000 to the
> Bush-Cheney inaugural committee, the most the committee would take
> from a single donor.
>
> Last week, MBNA's investment began paying off. The company, one of
> the nation's three largest credit-card issuers, has been pushing for
> years to tighten bankruptcy laws that allow certain consumers filing
> for court protection, in effect, to disregard obligations to
> credit-card companies and other unsecured lenders. On Wednesday, the
> White House announced that President Bush would sign a bill now
> moving through Congress that would make it tougher for consumers to
> escape such debts. If enacted, the measure could translate into an
> estimated tens of millions of dollars in additional annual earnings
> for each of the big credit companies.
>
> MBNA's vice chair, David Spartin, says his firm has no way to
> estimate how the legislation would affect the company's bottom line.
> MBNA has backed the bill for years "because we think it is good for
> consumers," as it will "reduce the cost of credit for everyone," Mr.
> Spartin says. The donations to President Bush and other candidates
> were made because "we think they would make excellent public
> officials," he adds. No MBNA official "has ever spoken to President
> Bush about the bill," Mr. Spartin says.
>
> 'Out of the Cave, Blinking'
>
> Many corporations feel like a new day is dawning in Washington. "We
> have come out of the cave, blinking in the sunlight, saying to one
> another, 'My God, now we can actually get something done,' " says
> Richard Hohlt, Washington lobbyist for several other major banks
> which, like MBNA, are backing an industry coalition whose members
> provided some $26 million to Republicans during the 1999-2000
> campaign cycle.
>
> President Clinton last year vetoed a similar bill that would have
> toughened bankruptcy law. Consumer groups argue that such legislation
> would weaken protection for working families, many of whom have been
> the targets of aggressive credit-card marketing.
>
> Also in action last week were members of a large coalition of Mr.
> Bush's business backers who want to roll back new federal rules
> designed to protect workers from repetitive-motion injuries.
>
> In a private meeting with congressional leaders last Tuesday,
> President Bush signed off on a plan to kill the ergonomic
> regulations, using the powers of the Congressional Review Act. That
> act, passed in 1996, gives Congress 60 days to reject regulations
> issued by federal agencies. But it was never used during Mr.
> Clinton's term because to take effect, a resolution rejecting new
> rules has to be approved by the president.
>
> Repealing the ergonomic rules ranks high on the priority lists of the
> U.S. Chamber of Commerce, the National Association of Manufacturers
> and the National Association of Wholesaler-Distributors. The trade
> groups technically don't endorse candidates, but each of them mounted
> major grass-roots and advertising campaigns that benefited Mr. Bush
> and other Republicans in the 2000 elections.
>
> A repeal would be a particularly hard loss for organized labor, which
> has fought for enactment of the ergonomic rules for 10 years, saying
> they are needed to protect workers from wrist, back and other
> injuries.
>
> On employee safety, consumer bankruptcy and a host of other issues,
> Bush administration officials maintain they are acting strictly on
> the merits, not the money. Proponents of the bankruptcy bill, for
> example, point out that personal bankruptcy filings reached a record
> 1.4 million in 1998. The bill that would toughen the bankruptcy law
> won strong bipartisan support in the House last week, passing 309-106.
>
> Business advocates maintain that the ergonomics rules include an
> overly broad definition of "musculoskeletal disorders" and that the
> new standards give employees claiming to have such disorders overly
> generous treatment: 90% of their salary and benefits for up to three
> months.
>
> But as strongly as they believe in their arguments, business
> lobbyists acknowledge it's no accident that, following their massive
> support for the GOP, Republicans are moving quickly to address some
> of their top issues.
>
> Mr. Bush ran the most costly presidential campaign in American
> history. Donors to his campaign and the Republican National Committee
> contributed a total of $314 million. Of that, more than 80% came from
> corporations or individuals employed by them. Al Gore and the
> Democratic National Committee raised $213 million, receiving strong
> support from labor organizations and their members. But more than 70%
> of the Democratic total also came from businesses and their employees.
>
> These totals can be seen as somewhat inflated because most donors to
> either party work for a business. But the amounts don't included
> separate contributions from trade associations or independent
> business advertising. "The role of business last year was huge, and
> it overwhelmingly benefited Republicans," says Larry Makinson of the
> Center for Responsive Politics.
>
> As the bankruptcy and ergonomics bills move through the Senate over
> the next few days, business groups also will be looking for early
> action on other key issues. Here's a preview.
>
> Drugs and Privacy
>
> With then-Vice President Al Gore and many Democratic congressional
> candidates railing against alleged profiteering by drug companies,
> the industry made its biggest-ever contributions to the GOP cause.
>
> Drug companies contributed $14 million to Republican campaigns over
> the past two years and spent an additional $60 million to fund their
> own independent political-advertising campaign. Industry executives
> will be lobbying the new administration on a wide range of issues,
> such as the proposal to overhaul the Medicare program and include a
> prescription-drug benefit for senior citizens. The industry wants to
> make sure such a benefit doesn't lead to drug-price controls.
>
> But that fight isn't likely to command center stage for many months.
> In the meantime, drug companies will press for a rewrite of federal
> rules protecting the privacy of patients' medical records. The rules
> were announced with much fanfare in the final weeks of the Clinton
> administration. The drug companies recently got a sign that they,
> too, were making progress with the new administration.
>
> Health and Human Services Secretary Tommy Thompson, in a move that
> infuriated consumer groups, invited additional public comments on the
> rules until the end of this month. The industry is hoping the move
> will lead to more delays and, ultimately, significant revisions.
>
> Last December, Mr. Clinton heralded the rules as "the most sweeping
> privacy protections ever written." For the first time, patients would
> have access to their medical files and could correct mistakes.
> Providers, such as hospitals and health plans, would be required to
> get written permission from patients to use or disclose patients'
> health information. Providers also would have to create sophisticated
> record-keeping systems and privacy policies to document compliance
> with the rules.
>
> Hailed by privacy advocates, the rules include provisions anathema to
> nearly every segment of the health-care industry. Drug makers, HMOs,
> drugstore chains and hospitals say that while they back the goal of
> increased privacy, the rules have a potential cumulative price tag in
> the tens of billions of dollars, much of it to overhaul
> data-collection and information-technology systems.
>
> The companies warn that the new requirements mean that pharmacies
> would need signed customer consents on file before they could do
> something as simple as sending a prescription home with a neighbor.
> The drug industry also says that research critical to boosting
> corporate innovation and tracking the safety of drugs would be
> inhibited. Academic researchers seeking personal health information
> from hospitals would have to get authorization from the patient or
> undergo a special privacy review by a hospital panel.
>
> Privacy advocates such as Janlori Goldman of the Health Privacy
> Project at Georgetown University counter that such dire predictions
> are inaccurate and "hysterical."
>
> Technically, the regulations apply to the use of information by
> hospitals, doctors, pharmacists and HMOs. But they have big
> implications for drug companies, which depend on access to that data
> for research and marketing. Among the drug companies most concerned
> is Merck & Co., because of its Merck-Medco unit. Like other
> pharmacy-benefits managers, which obtain contracts from HMOs and
> employers to keep drug costs down, Merck-Medco fears it would it be
> hindered in its ability to track physician-prescribing patterns and
> other information.
>
> Taking the lead on combating the rules is the Confidentiality
> Coalition, an industry group that meets at the offices of the
> Healthcare Leadership Council, overlooking Farragut Square, a few
> blocks from the White House. Dubbed the "Anti-confidentiality
> Coalition" by privacy advocates, the alliance has 120 members,
> including Merck, Eli Lilly & Co., Cigna Corp. and Medtronic Inc., the
> big medical-device maker. A core group of 20 to 30 lobbyists shows up
> regularly for strategy sessions.
>
> During the second week in February, an industry contingent met with
> Sally Canfield, a senior counselor to Mr. Thompson of HHS. The
> industry team included Laurie Michel, a lobbyist for Merck, and Laura
> Gogal, vice president and chief counsel of the Federation of American
> Hospitals, the trade association of for-profit hospitals. Ms.
> Canfield was well known to the industry group because of her own past
> posts as a lobbyist for insurer Mutual of Omaha Inc. and a staffer to
> GOP Rep. Jim McCrery of Louisiana, who often works on health issues.
>
> Meanwhile, Craig Fuller, who served as chief of staff to former
> President George Bush and now heads the National Association of Chain
> Drug Stores, met recently with Mr. Thompson to make the case on
> privacy and other issues. Mr. Fuller's current constituents include
> such behemoths as CVS Corp. and Walgreen Co.
>
> The drug industry provides a case study of how the ties between the
> new Bush administration and its business backers run much deeper than
> money. There is often a shared worldview among people who have been
> colleagues and friends in both the private sector and government.
>
> Raymond Gilmartin, chairman and chief executive of Merck, and Anne
> Marie Lynch and Bill Walters, top officials at the Pharmaceutical
> Research and Manufacturers of America, the industry's main trade
> group, all served as advisers to the Bush transition team on health
> issues.
>
> Deborah Steelman, a prominent lobbyist whose clients include
> Bristol-Myers Squibb and the drug-industry trade group, was sounded
> out for a top job at the Department of Health and Human Services, but
> declined. Mitch Daniels, a Lilly executive, accepted the offer he got
> to be director of the White House Office of Management and Budget,
> which oversees both budget and regulatory issues.
>
> Tobacco Ties
>
> When it comes to being well-connected with the new administration,
> few industries rival tobacco. Cigarette makers are hoping those ties
> help accomplish such goals as snuffing out a multibillion-dollar
> federal lawsuit against it.
>
> Cigarette companies adopted a much lower profile in the last election
> than drug companies, in part because Republican strategists worried
> that featuring close ties to tobacco would anger many voters. But the
> money flowed liberally. Tobacco interests contributed roughly $90,000
> to Mr. Bush's campaign, part of the $6.7 million they provided to the
> Republican Party and its candidates in the last election cycle.
> Democrats received $1.4 million from tobacco interests.
>
> Beyond the campaign, industry titan Philip Morris Cos. was one of the
> most generous contributors to Mr. Bush's inaugural, giving $100,000
> itself and another $100,000 through its subsidiary, Kraft Foods.
> Along with a number of inauguration tickets, these donations entitled
> company executives to two tables at a candlelight supper attended by
> President Bush and Vice President Cheney the night before their
> swearing-in.
>
> Philip Morris has numerous long-standing ties to the Bush
> administration. Karl Rove, a senior White House adviser, worked as a
> political consultant for the company from 1991 to 1996. Kirk Blalock,
> a Philip Morris public-relations official, took a job in the White
> House in January as a liaison to the business community. Handling the
> inaugural donations for Philip Morris was Thomas Collamore, a vice
> president for public affairs who worked for President Bush's father,
> both in the White House and the Commerce Department. Charles Black,
> an informal adviser to Mr. Bush during his campaign, is also a Philip
> Morris lobbyist in Washington.
>
> Mr. Thompson of HHS, received more than $70,000 in Philip Morris
> campaign-related contributions during his years as Wisconsin
> governor. He disclosed before his Senate confirmation earlier this
> year that he owned between $15,000 and $50,000 in Philip Morris
> stock. An administration spokesman says that Mr. Thompson didn't
> realize he owned the company's stock because it was in a blind trust
> and that he planned to sell it.
>
> British American Tobacco PLC's Brown & Williamson unit and R.J.
> Reynolds Tobacco Holdings Inc. are also well-positioned. Both
> companies are represented by Barbour, Griffith & Rogers, a lobbying
> firm stocked with Republican operatives, including former GOP
> Chairman Haley Barbour and Lanny Griffith, a former White House aide
> to Mr. Bush's father.
>
> The industry's first objective is to get rid of a massive federal
> lawsuit, launched by the Clinton administration, that accuses
> cigarette makers of "racketeering" and lying about the health risks
> of smoking for 50 years. The case is pending in federal court in
> Washington.
>
> Tobacco companies are so confident the Bush team will drop the suit
> that they claim to have no plans even to ask for it to be withdrawn.
> "We are not lobbying on this at all," says Philip Morris spokeswoman
> Peggy Roberts. Many in the industry say they think an aggressive push
> to kill the suit would be counterproductive, causing the Bush
> administration to worry about the perception that it is eager to do a
> huge favor for one of its most-generous donors.
>
> One way to squelch the suit would be for Congress to cut or eliminate
> funding for it, which for the current fiscal year is budgeted at $23
> million. Although skittish about approaching the Bush administration
> directly, Philip Morris officials say they have no qualms about
> lobbying this year for such a funding cut. Another possible scenario
> for terminating the suit is for the Justice Department to reach a
> settlement with the companies.
>
> Mr. Bush has avoided making a definitive statement about the tobacco
> suit. But referring to the case in August, he said, "I think we've
> had enough suits," adding, "The lawyers I talk to don't feel they
> [the Justice Department] have a case."
>
> Complicating the situation is the presence of one key person on the
> Bush team who historically hasn't had an easy relationship with the
> big tobacco companies: Attorney General John Ashcroft, who now
> oversees the federal suit. Mr. Ashcroft's dim view of the industry
> arises from having seen several friends die from cancer, aides say.
>
> At a get-acquainted meeting with tobacco lobbyists soon after being
> elected to the Senate in 1995, Mr. Ashcroft damped the atmosphere
> with a diatribe. "Let me tell you up front that I believe you guys
> are the merchants of death, and I don't support your product or your
> industry," Mr. Ashcroft was quoted as saying by two people at the
> meeting.
>
> Yet three years later, as Mr. Ashcroft was considering entering the
> race for the presidency, he took a different position. When the
> Senate Commerce Committee considered legislation to restrict tobacco
> marketing and raise cigarette taxes, Mr. Ashcroft was the only vote
> against the bill on the 20-member committee, even though he still
> denounced the industry. His vote was a surprise to industry
> lobbyists, who were even more pleased when his persistent attacks on
> the proposed $1.10-a-pack rise in cigarette taxes helped kill the
> measure on the Senate floor.
>
> An aide to Mr. Ashcroft says that, while critical of the tobacco
> industry, Mr. Ashcroft concluded that the bill contained excessive
> tax increases and required too much bureaucracy to implement the
> marketing restrictions.
>
> During his confirmation hearings in January, Mr. Ashcroft said that
> he had "no predisposition" to dismiss the federal lawsuit. He
> promised to consult with career attorneys at the Justice Department
> and make a decision based on a "careful examination of the facts and
> the law."
>
> Airline Antitrust
>
> When George W. Bush became president-elect, American Airlines was
> ready. On the Sunday after Al Gore conceded the bitterly contested
> election, the Dallas-based unit of AMR Corp. rolled a brand-new
> 737-800 onto the tarmac at the airport near Austin, the Texas
> capital. It had been specially painted in the airline's distinctive
> 1960s colors -- a silver fuselage with a bold red lightning bolt.
>
> The triumphant charter flight, paid for by the campaign, ferried Mr.
> Bush and his inner circle, including aides Andrew Card, Condoleezza
> Rice and Karen Hughes, from Austin to Dulles for their first round of
> meetings here. The president-elect and his staff were treated to a
> dinner of Chateaubriand, shrimp Caesar salads and hot chocolate-chip
> cookies, baked on board.
>
> "As a Texas-based airline, it was an honor and a privilege to carry
> Mr. Bush," Don Carty, the chief executive officer, said at the time.
> "American Airlines is proud to have the president-elect's vote of
> confidence."
>
> Mr. Carty was an early booster, and, like Mr. Cawley of MBNA, one of
> Mr. Bush's pioneer fund-raisers. He personally gave the maximum
> donation of $5,000 to support Mr. Bush's legal fight following the
> contested Florida vote. The company also gave the maximum $100,000
> gift to the Bush inaugural committee.
>
> What American and other big companies hope for is a change in
> antitrust policy. In the airline's case that would mean the
> government's backing off the antitrust suit President Clinton's
> Justice Department brought against it. The suit, filed in 1998 and
> scheduled to go to trial in May in federal court in Wichita, Kan.,
> alleges that American used illegal tactics to squelch competition at
> its Dallas hub. The case is being watched closely as a sign of the
> new administration's approach to antitrust enforcement.
>
> The Bush team must decide whether to proceed with the trial as
> planned, or settle. Charles James, the nominee for Justice Department
> antitrust chief, hasn't been confirmed, and career officials at the
> Justice Department say they expect the case to be pursued on its
> merits.
>
> But there are already signs that the administration may view the case
> skeptically. Timothy Muris, who has been close to Mr. James since the
> two worked together at the Federal Trade Commission during the Reagan
> years, has openly questioned the wisdom of the Clinton suit because
> it relies on an expansive interpretation of antitrust law. A law
> professor at George Mason University in Arlington, Va., Mr. Muris
> helped shape antitrust policy for the Bush transition team and is
> expected to be named chairman of the FTC, which also enforces
> antitrust laws.
>
> Mr. James won't comment on American's case but has said he generally
> doesn't favor antitrust cases that "make new law."
>
> Alaska Drilling
>
> Of all the business interests that backed Mr. Bush, oil companies
> have the clearest ties and strongest personal meaning to the new
> president. He is a former oil man who revels in his attachments to
> Texas, and his best friends are oil men, too. Promoting the industry
> is an instinctive impulse for the president that goes beyond campaign
> contributions.
>
> When Mr. Bush announced Mr. Cheney, former chairman of Halliburton
> Inc. as his running mate, Hollywood director Rob Reiner joked that
> the GOP's idea of diversity is having "two guys heading the ticket
> from two different oil companies."
>
> The personal connections were strengthened with money. The oil
> industry donated more than it ever has before: $32 million during the
> past two years, with 80% of it going to Republican causes. As a
> result, "all the stars are aligned this year," says Roger Herrera,
> who heads a lobbying effort to allow oil drilling in Alaska's costal
> plain, known as the Arctic National Wildlife Refuge.
>
> Mr. Herrera is a courtly, Oxford-educated oil company geologist, who
> has made more than 50 appearances before congressional committees,
> taken hundreds of politicians on guided tours of Alaska and built one
> of Washington's most innovative and influential lobbying operations,
> known as Arctic Power. Until now, his decade-long efforts to open up
> Alaska's coastal plain for oil and gas development have been
> consistently frustrated. In 1989, there was the Exxon Valdez oil
> spill; in 1991, a Senate filibuster threat; and in 1995, a veto by
> President Clinton.
>
> Now, Mr. Herrera promises, things will be different. He's counting on
> the combined power of the new president, who favors drilling in the
> coastal plain, and Alaska's powerful congressional delegation,
> Senators Ted Stevens, Frank H. Murkowski and Rep. Don Young. All
> three of these veteran Republicans chair influential committees. In
> the White House, Mr. Cheney's energy-policy task force is directed by
> Andrew D. Lundquist, former staff director for Sen. Murkowski's
> Senate Energy Committee.
>
> To build support last week, Alaska's Governor Tony Knowles, in town
> for a governors conference, took two days to discuss oil exploration
> with skeptical Democrats on Capitol Hill. "I am going to be in
> contact with people who have expressed opposition but seem to be
> amenable to reason," he told reporters last Tuesday. He went to the
> Hill that day carrying support and strategic advice from all corners
> of the new administration. He had met with Interior Secretary Gale
> Norton, Energy Secretary Spencer Abraham and Environmental Protection
> Agency Administrator Christine Todd Whitman.
>
> This powerful network of industry allies will face a daunting
> alliance of more than 400 environmental organizations determined to
> stop Alaska drilling in the interest of preserving the area's
> pristine condition. But this year, Mr. Herrera says, the industry
> group feels up to the task.
>
> -- John Wilke and John Fialka contributed to this article.
--
Michael Perelman Economics Department California State University Chico, CA 95929
Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu