Features » March 26, 2004
Bought and Paid For
Who’s behind the president’s fundraising machine—and what they expect in return
It’s official: President Bush’s re-election campaign is underway.
For those who haven’t been paying attention—and Bush, Cheney and their corporate cronies certainly hope you haven’t—the president officially launched his campaign at a March 20 “kickoff” rally in Orlando. “I’m looking forward to this campaign ahead,” Bush told the assembled party faithful between chants of “Four more years!” and “USA! USA!” “With you at my side, there is no doubt in my mind we’re headed to a victory.”
Bush may claim the “political season” is just beginning, but he has spent the past nine months crisscrossing the country on a dash for cash, personally headlining 45 million-dollar fundraising events on the way to amassing an unprecedented $170 million campaign war chest. Awestruck by the sheer amount of cash on hand, the media sometimes mistake Bush’s piles of money for popularity. Venality is more like it. Bush has turned the election into an auction, an invitation-only opportunity for Corporate America to prove its loyalty to the president.
The engine in Bush’s money machine has been an elite regiment of 455 “Rangers” and “Pioneers,” the honorary titles bestowed on fundraisers who can collect at least $200,000 or $100,000, respectively. Legally, each of these individuals is limited to a maximum donation of $2,000. But the Bush campaign has perfected a sophisticated system of bundling—by which corporate executives, lobbyists or other insiders pool a large number of contributions to maximize their political influence. The Rangers and Pioneers have collected at least $64.2 million so far.
In return, these worthies have received access to the administration, relaxed regulations, legislative favors, targeted tax breaks, lucrative federal contracts, and plum appointments at home and abroad. But some hold more of a stake in Bush’s re-election than others: The 10 industries profiled on the following pages have been among the most generous supporters of the president—and they stand to reap the greatest rewards if Dubya prevails in November.
Bullish on Bush
Nearly one in five Rangers and Pioneers comes from the financial sector. This group of 85 bankers, stockbrokers and wealthy private investors—which has bundled at least $12.5 million for the 2004 Bush campaign—includes 20 top Wall Street executives. Wall Street firms account for six of the top 10 companies whose employees have donated the most to Bush this cycle.
Bush’s economic policies—particularly the sweeping dividend, capital gains and income tax cuts—have lined Wall Street’s pockets. Now the industry is leading the drive to make the Bush tax cuts permanent, endorsing administration plans to overhaul the retirement system and salivating over the prospect of Social Security privatization.
These same firms have been at the center of almost every major corporate scandal from Enron to Worldcom to Martha Stewart. Yet Wall Street is banking on Bush to muzzle watchdogs like New York Attorney General Eliot Spitzer and fend off further regulation of mutual funds, derivatives trading and arcane, highly profitable tax-avoidance schemes. The Wall Street Journal reported that hedge fund consultant Lee Hennessee sent out invitations to a March 11 Bush fundraiser with this message: “The current administration is favorable to the hedge fund industry, and we need to do all we can to keep them in office.”
Under the Influence
Fundraising for Bush is a win-win situation for Washington lobbyists. Achieving Ranger or Pioneer status ensures insider access to the administration, which these influence-peddlers can then turn around and market to their clients. The client lists of major Bush backers read like a corporate scandal sheet—from Boeing and Wal-Mart to Tyco and the tobacco companies.
The 55 Rangers and Pioneers registered as federal lobbyists have bundled at least $6.7 million in contributions for Bush this cycle. These same lobbyists met repeatedly with Dick Cheney’s secret energy task force to do the bidding of energy interests, took millions from drug companies to help push through the Medicare bill and led the fight for Bush’s tax cuts on behalf of the business community.
While the Bush campaign has produced ads attacking Senator John Kerry for being beholden to “special interests,” the president has accepted more in direct contributions from lobbyists in 2003 than Kerry did in the past 15 years. “The issue is hypocrisy in saying you’re going to take on the special interests, not who took the most special interest money,” Bush media strategist Mark McKinnon told the Washington Post. “You don’t hear the president in the Oval Office railing against the special interests.”
Real estate developers, who have donated at least $32.2 million to Bush campaign efforts since 1999, have helped shape the White House’s anti-environment agenda. Working closely with its developer friends and donors, the Bush administration repeatedly has attempted to weaken the protection of wetlands. And under Bush, the Endangered Species Act—long seen as a major obstacle by developers—is threatened with extinction.
Nowhere is the Bush administration’s favortism for developers more apparent than in Florida, home to a third of the more than three dozen Rangers and Pioneers from the real estate industry. To oversee the fragile western Everglades, President Bush appointed an EPA regional administrator who has made it nearly impossible to deny permits for developers wishing to build there. EPA biologist Bruce Boler quit after the agency endorsed a developer-financed study that concluded wetlands discharge more pollution than they absorb.
One of the developers who helped finance the study—which implied water quality could be improved by replacing wetlands with golf courses and mansions—is Al Hoffman, a Ranger and finance chairman of the Republican National Committee. Hoffman has described regulators as radicals “who think the world will end if they can’t protect that little tree.”
In May 1999, Thomas Kuhn, president of the Edison Electric Institute, sent a letter to his colleagues in the electric utility industry soliciting support for Bush’s nascent presidential campaign. Kuhn exhorted them to include his campaign tracking number on their checks to “ensure that our industry is credited.”
The industry must have earned extra credit for the $5.2 million it contributed to Bush in the 2000 election. Electric utility officials and their high-priced lobbyists served on the Bush transition team and met behind closed doors numerous times with Cheney’s secret energy task force. “Just because somebody makes a campaign contribution,” Cheney told the Associated Press, “doesn’t mean they should be denied the opportunity to express their view to government officials.”
Recommendations by the Cheney task force led to the undoing of a key clean air rule that required electric utilities to install modern anti-pollution equipment at old, coal-fired plants when they made major upgrades that significantly increased emissions. The rule change will save the utility companies billions. Bringing the plants into compliance would have reduced emissions by nearly 7 million tons annually, cutting air pollution from U.S. power plants in half.
Next on Bush’s agenda was the Clear Skies initiative, which would allow the release of far more sulfur dioxide, nitrogen oxide and airborne mercury than existing regulations—delaying by as much as a decade cuts currently required under the Clean Air Act. Kuhn has called Clear Skies “an exciting opportunity for our industry.”
The biggest prize of all for the electric utility industry may be the proposed repeal of the Public Utility Holding Company Act, which would lead to widespread deregulation and consolidation of electric utilities. Repealing PUCHA would put an estimated $1 trillion in regulated electric power generation, transmission and distribution facilities up for sale to the highest bidder. This would allow big power companies and Bush backers like Southern Co. and Cinergy to merge and expand, encouraging further Enron-style debacles.
The Bush administration’s handouts to the oil and gas industries have gone beyond a wildcatter’s wildest dreams. Oil and gas companies, which gave $13.4 million to Bush campaign efforts in 2000, were welcomed in Washington with open arms. At least a dozen industry officials were named to the Bush transition team. Not surprisingly, the administration’s energy policy has focused on expanding the supply of fossil fuels—largely by opening up public lands to exploration—rather than reducing demand through efficiency and alternative energy sources.
The centerpiece of the administration’s strategy is drilling in the Arctic National Wildlife Refuge, even though this precious ecosystem likely contains only enough oil to satisfy six months of U.S. demand. The Senate rejected this scheme again last year, but the administration continues to press forward. Bush’s 2005 budget includes $2.4 billion in projected revenues from oil lease sales in ANWR in 2006.
In 2000, the oil and gas industry produced 41 Pioneers. But in the current cycle just a dozen industry rainmakers are on the list. They include several longtime Bush supporters from Texas such as billionaire Lee Bass and Nancy Kinder (Ken Lay’s former secretary, whose husband Richard, was an ex-president of Enron). The oil goliaths such as ConocoPhillips and Exxon may be holding back until passage of the energy bill, which contains billions in industry benefits. Or perhaps these companies are keeping a lower political profile, hoping to avoid a Halliburton-like backlash.
“You did everything you could to elect a Republican president,” William Raney, director of the West Virginia Coal Association told a group of industry executives in May 2001, after the Bush administration reneged on its pledge to regulate carbon dioxide emissions and abandoned the Kyoto global warming treaty. “You are already seeing in his actions the payback, if you will, his gratitude for what we did.”
The paybacks just kept coming. In 2002, the EPA adopted an environmentally devastating rule promoting mountaintop removal coal mining, which would allow companies to bury hundreds of miles of streams under piles of rubble. A federal judge found that the rule change was “designed simply of the benefit of the mining industry.” Bush Pioneer James H. “Buck” Harless sits on the board of Massey Energy, one of the biggest practitioners of mountaintop removal mining.
An even bigger gift to the mining industry would be passage of the energy bill. Even the “slimmed down” version of the bill crafted to speed its passage still contains $7.4 billion in subsidies and tax breaks for the mining industry. Jack Gerard, head of the National Mining Association and another Bush Pioneer, told the West Virginia Coal Symposium in January that “the Energy Policy Act may well be the best opportunity the mining industry will have in our lifetimes.”
Prescription for Profits
Pharmaceutical companies and their executives have spent half a billion dollars since 1999 on lobbying, campaign contributions and industry front groups in an all-out effort to prevent a Medicare prescription drug benefit that would give government the power to negotiate lower prices. Decrying “price controls” and clamoring for a “market-based” solution, the nation’s drug-makers—already the most profitable industry in the country—have made it clear they won’t tolerate any threat to their bottom line.
The Medicare bill passed by Congress and signed by Bush last fall is tailor-made to their interests. Projected to cost taxpayers at least $530 billion over 10 years, the bill greatly expands the customer base for the pharmaceutical giants but ensures that the prescription drug benefit will be administered by private companies. In fact, the bill expressly prohibits the government from negotiating lower prices.
The drug industry also has aggressively opposed the “re-importation” of less expensively priced drugs from Canada. Pfizer, whose CEO Hank McKinnell is a Ranger, has threatened to blacklist any Canadian pharmacy that sells drugs to Americans. The Bush administration has marched in lockstep with the drug-makers, insisting drugs from Canada pose a risk to public safety. Yet when pressed by Congress to substantiate these claims, one top FDA official admitted, “We have very little evidence.”
The real danger, it seems, is to drug company profit margins.
Bad for Your Healthcare
Executives in managed care, hospitals and nursing homes also stand to profit from the massive Medicare package, which promises them additional billions. For example, managed-care companies like UnitedHealth—which is headed by Pioneer William McGuire—will take in at least an extra $14.2 billion over 10 years in payments designed to entice them to offer drug coverage, according to the Congressional Budget Office. And Medicare revenues for managed-care companies are expected to increase six-fold from $37 billion in 2003 to $226 billion by 2010.
Meanwhile, the president is pushing federal medical malpractice legislation, which would insulate healthcare providers from the costs of their own negligence by limiting court awards to patients, especially those who have been catastrophically injured. Charles “Chip” Kahn III, president of the Federation of American Hospitals, told the National Journal: “Medical-malpractice reform is a mountaintop issue for our members. That’s why people were motivated and why we were successful” at soliciting enough campaign contributions to become a Pioneer.
Bush’s push for medical malpractice legislation also earns him points with doctors’ groups and nursing homes. Consider the potential benefits to Ranger W. Andrew Adams, president of the nursing home chain National Healthcare Corp. When it comes to negligence and liability, Adams has obvious concerns: As of June 2003, his company faced at least 87 personal injury or wrongful death lawsuits—including 46 suits in Florida alone, where the company was forced to close up shop after its insurer canceled its liability policy. More lawsuits may be on the way: A fire in September killed 14 residents in a company facility in Nashville that had not been equipped with sprinklers.
Tort reform also is a top priority of the insurance industry, which has given more than $12 million to Bush’s federal campaigns. The Class Action Fairness Act—a Bush-backed bill now held up in the Senate—would help insurance companies and their corporate clients by pushing more cases from state to federal courts, where judges are far more likely to avoid certifying class action lawsuits.
Of the nine insurance companies with Bush Pioneers, at least seven have faced potential class-action suits for illegally denying claims for necessary medical treatments, using misleading sales practices, deceiving shareholders, retaliating against internal whistleblowers, and even failing to pay benefits on policies held by Holocaust victims.
None of this fazes Bush, who has praised the industry for working “long and hard” on the tort reform issue. As one official boasted to an industry trade magazine, “Any time the president of the United States uses his bully pulpit to remind the American people that an out-of-control legal system hurts consumers—that is a good day.”
On February 2, the Federal Communications Commission (FCC) swung into action, promising a “thorough and swift” investigation of a burgeoning national media calamity: Janet Jackson’s Super Bowl striptease.
For his part, President Bush claimed he dozed off during the second quarter and missed all the excitement. Jackson’s “wardrobe malfunction” may have garnered all the headlines, but the real outrage at the FCC under Bush has been the nonstop deregulation and unfettered consolidation of the companies controlling the airwaves. On these issues, the president hoped to catch the public napping.
Yet the FCC decision to allow one company to own television stations reaching up to 45 percent of the U.S. viewing public was second only to the Iraq war in the number of complaints received on Capitol Hill last year. Eventually, the White House signed off on a “compromise” ownership cap of 39 percent—just enough to ensure that neither News Corp. nor Viacom would have to sell any stations.
But returning Bush to office—and thus preserving the 3-to-2 Republican majority at the FCC—is crucial for the next round of media mega-mergers to win approval. After all, that narrow 3-to-2 margin made possible the controversial $3 billion merger of Univision and Hispanic Broadcasting. Univision Chairman and CEO Jerry Perenchio, a Pioneer, profited handsomely from the deal, which combined his television network with the country’s largest Spanish-language radio network.
But the Univision merger was small potatoes compared to Comcast’s plans for media domination. On February 11, the country’s largest provider of cable TV and broadband Internet services made an unsolicited offer to buy Walt Disney for $47.8 billion. If the deal goes through, it would create the largest media company in the world. Comcast Cable President Stephen Burke already has raised $200,000 for Bush’s re-election.
Portions of this article originally appeared in the Public Citizen report Bush’s Campaign Ads … Brought to You by Special Interests, which is available in full at www.WhiteHouseForSale.org.
ABOUT THIS AUTHOR
Craig Aaron is senior program director of the national media reform group Free Press and a former managing editor of In These Times.