By Juliet Eilperin Washington Post Staff Writer Sunday, June 15, 2003; Page A04
Only a decade ago, politically active business groups and executives gave 60 percent of their U.S. House campaign contributions to Democrats, and 40 percent to Republicans. Now the numbers are reversed, and Democrats are scrambling to find ways to repair their relations with business groups that give millions of dollars to federal candidates.
The shift in dollars represents an enormous blow for Democrats. In 1992, House Democrats had a $30 million edge over Republicans in terms of contributions from corporate groups and individuals, according to the Center for Responsive Politics. In the last election, Republicans enjoyed a $42 million advantage. Several campaign finance experts said that barring a dramatic political development or switch in Democratic tactics, this gap will widen.
"With Republicans in charge of the White House and both houses of Congress, [corporate giving] is understandably skewed highly Republican," said Thomas E. Mann, a senior fellow at the Brookings Institution. "The Republicans have an enormous advantage. They have a wealthy constituency pleased with the policies their majority is delivering in Congress."
The Republican Party's increasing coziness with the business community comes at a bad time for Democratic fundraising efforts. The nation's new campaign finance law generally is perceived as more harmful to Democrats, because it prevents some of their wealthiest allies -- labor unions and Hollywood moguls, for example -- from making unlimited political donations. Meanwhile, President Bush appears poised to shatter all fundraising records in 2004, leaving him with enough cash to help dozens of Republican House, Senate and gubernatorial candidates in key races.
Even if Democrats manage to retake Congress or the presidency -- uphill fights, according to polls -- some party leaders and outside analysts say their relationship with the nation's business community has suffered long-standing damage. In recent years, the Democratic Party has taken stands that are anathema to many corporate executives and small-business owners: support for stiffer environmental regulations and workplace rules; backing for labor unions and caps on prescription drug prices; and opposition to curbs on legal liability, often called "tort reform."
It was not always this way. During the New Deal era, Democrats assembled a powerful financial base that included Wall Street firms, southern textile interests and the oil industry. Dubbed the "Boston-Austin" axis, this network sustained Democratic politicians for years. But over time the coalition frayed, especially when southern conservatives moved from the Democratic Party to the GOP, and took their contributions with them.
"Basically, Austin's gone, and with it went a bunch of votes and a lot of money," said Michael Bailey, a professor of government at Georgetown University.
In the 1980s, Democrats still managed a steady flow of money, partly by making bold appeals to an array of business interests. As chairman of the Democratic Congressional Campaign Committee, Californian Tony Coelho made it clear to U.S. businesses that party leaders monitored contributions when making policy.
"Just remember that we control every committee and subcommittee in the House, and we keep score," Coelho told potential contributors, according to the Almanac of American Politics.
But the 1994 GOP takeover of Congress transformed corporations' political calculus. No longer beholden to Democratic committee chairmen, business groups began giving more money to Republicans.
Now Democrats are working to regain ground in the corporate community. The DCCC has established a Democratic Business Council, through which lawmakers hold sessions nearly weekly with lobbyists representing different industries. House Minority Whip Steny H. Hoyer (D-Md.) invites business representatives into his office for briefings. And Democratic Senatorial Campaign Committee Chairman Jon S. Corzine (D-N.J.) has established a Business Roundtable in which he meets with corporate heads.
Democrats must counter two powerful forces to win business allies: Republicans' insistence on loyalty from lobbyists, and the fact that Democrats' own campaign rhetoric and policies have angered executives in recent years. Both Senate and House Democratic leaders have accused Bush of cozying up to corporations, a charge that implies corporations are suspect.
This rhetoric surfaced most frequently in political attacks against managed care and prescription drug companies. Democratic campaigns have accused the two industries of exploiting the elderly and sick by denying health benefits and overcharging for medicine.
After a DCCC solicitation earlier this year, one pharmaceutical executive said he sent a note to the committee's staff saying, "You guys have demonized us for the last three cycles, and we're just not going to give to the DCCC anymore."
DCCC Chairman Robert T. Matsui (D-Calif.) promptly called the drug lobbyist, who asked not to be identified, and invited him to one of the committee's outreach meetings. A month ago, the lobbyist said, he would have ruled out giving money to Matsui's committee, but now he was "open" to the idea. Still, he said he would have to see what kind of political line Democrats adopted in the upcoming campaign.
Rep. Mike Thompson (D-Calif.), who heads the new Democratic Business Council, said party leaders hope to build a "long-term relationship" by involving lobbyists in policymaking. "They bring a certain expertise to the table," Thompson said.
Thompson, considered a centrist Democrat, has close ties with the wine and liquor industry (he represents the Napa and Sonoma valleys), as well as other business interests. He has backed abolishing the inheritance tax, a levy that many small businesses oppose.
Laurie Knight, director of government affairs for the National Beer Wholesalers Association, said, "You can go to Mike with a problem, a request, asking with a hand out, and Mike will be more than willing to help you." Knight's group gives about 80 percent of its campaign contributions to Republicans.
Hoyer has begun holding the same kind of meetings with executives in his office that House Majority Leader Tom DeLay (R-Tex.) started when he served as GOP whip. Hoyer has invited some trade groups, such as the U.S. Chamber of Commerce, that are seen as Republican allies. "Clearly, this is an effort to make sure people in the business community know there are two parties, the parties are closely divided, and there's significant reason to maintain relations with both," Hoyer said.
But some business lobbyists still fear they might alienate House leaders by cultivating Democratic ties. One lobbyist close to the GOP helped orchestrate the Democrats' recent outreach effort but did not want to be quoted by name. "I don't want DeLay and those guys to be hammering me," he said.
Democratic lawmakers said they have just begun reaching out to business in a formalized way, so it is too early to predict what might develop. Corporate lobbyists, for their part, said they want to see whether Democrats' votes reflect this new openness to input from the business sector.
"Actions speak louder than words," said Lyle Beckwith, vice president of government relations for the National Association of Convenience Stores.
Georgetown's Bailey said that as long as Republicans control Congress and the White House, "the Democrats will have to work harder and harder" to win over business. "The more they'll have to do what business likes," he said.