Bundles of Influence

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http://www.motherjones.com/news/outfront/2004/05/04_405.html

 

Bundles of Influence

The Bush campaign's Pioneers and Rangers are raising millions to re-elect the

president. What do they expect in return?

Tim Shorrock and Michael Scherer

May/June 2004 Issue

The Bush campaign's Pioneers and Rangers are raising millions to re-elect the

president. What do they expect in return?

 

On January 8, 2004, Mark Guzzetta, a prominent Florida developer, helped host a

fundraiser for the Bush campaign. In the four hours that Air Force One was on

the tarmac in Palm Beach, the cocktail party added more than $1.5 million to the

president's re-election coffers; several hundred supporters paid $2,000 each to

attend. If any weren't clear why they were there, Guzzetta offered a stark

reminder. " Protect your investment, " he said.

 

Not all of President Bush's financial supporters are as blunt as Guzzetta. But

his words underscore why many of the nation's most powerful executives and

influential lobbyists are raising money for the president: The Bush

administration has looked out for its friends. And right now, some of its most

important friends are " bundlers " like Guzzetta -- fundraisers who can pull

together unprecedented numbers of large individual donations for Bush's

campaign, which is setting out to raise more money than any in U.S. history.

 

 

 

 

Bundling has long been part of the political fundraiser's arsenal; in 2000, the

Bush campaign encouraged supporters to bundle checks, and designated those who

could raise $100,000 or more as " Pioneers. " But in the wake of the 2002

McCain-Feingold -- which outlawed unlimited " soft money " contributions -- the

campaign now is going far beyond that, turning bundlers into a sophisticated,

corporate-style sales force that serves as the backbone of the Bush money

machine. By early March, a total of 268 fundraisers had earned Pioneer status,

and an additional 187 had become " Rangers " by raising $200,000 each; together,

they had collected more than $60 million, more than one-third of the campaign's

record-breaking $170 million war chest. The Kerry campaign is also relying on

bundlers; as of March 19 it had 60 " vice chairs " who had raised $100,000 each,

and 122 " co-chairs " at $50,000 each.) In return for their efforts, Bush bundlers

get perks such as exclusive meetings with the president, Vice

President Cheney, and Bush strategist Karl Rove. Some of them may also have

their eyes on an appointment in a second Bush administration; according to a

report by the group Texans for Public Justice, of Bush's 241 Pioneers in 2000,

90 were appointed to federal posts including 21 ambassadorships and four Cabinet

positions.

 

But most of all, the Rangers and Pioneers are working to re-elect an

administration that has proved sympathetic to their agenda. Among them are

executives from major energy companies that have successfully pushed for looser

pollution standards, from pharmaceutical manufacturers that have counted on the

administration to block efforts to lower drug prices, and from Wall Street firms

that expect Bush to continue cutting taxes on the wealthy and to move toward

privatizing Social Security. And remarkably, despite the McCain-Feingold law's

goal of reducing the influence of wealthy " superdonors, " many of Bush's top

fundraisers are the same people who have historically dominated the campaign

finance system: A Mother Jones analysis of campaign data has found that of the

top 10 Republican donors from the pre-McCain-Feingold era, six are now Bush

Rangers or Pioneers.

 

" You're dealing with a small circle of people who can give this kind of money or

raise this kind of money, " notes Larry Noble, executive director of the Center

for Responsive Politics and a former general counsel to the Federal Election

Commission. " They see this basically as a business investment. "

 

Consider Ranger Henry " Hank " McKinnell, the CEO of pharmaceutical company Pfizer

Inc. McKinnell has lobbied aggressively against efforts to force U.S.

pharmaceutical manufacturers to lower prices; in recent years, he has been an

outspoken opponent of a Japanese policy that required companies to reduce the

price of any drug two years after introducing it. In 2003, the Bush

administration named a top Pfizer official, Karen Katen, to a U.S.-Japan trade

commission, which soon issued a report chastising Japan for policies " that

penalize successful medical innovations, " such as the pricing policy. Within

less than a year, the Japanese Ministry of Health and Welfare agreed to revise

the regulation. Pfizer and other pharmaceutical manufacturers also benefited

when the administration moved to stop Americans from importing drugs from

Canada, and when the White House defeated congressional efforts to include

drug-price controls in last fall's Medicare bill. At least a dozen other

health-industry executives have made it onto Bush's elite fundraiser list,

including Munr Kazmir, CEO of direct-mail pharmacy Direct-Meds Inc., and William

McGuire, CEO of UnitedHealth Group, whose company expects its revenue to grow by

as much as $445 million as a result of the Medicare legislation.

 

Energy-industry executives have long been among Bush's key supporters -- and

after having much of their political wish list fulfilled in the past four years,

more than 20 of them have signed up to raise money for the president. Thomas R.

Kuhn, president of the trade group Edison Electric Institute, first became a

Pioneer in 1999, urging donors to include his campaign-issued tracking number on

their checks so that " our industry is credited. " Last year Kuhn signed up as a

Pioneer again, earning an invitation to an August barbecue at Bush's Crawford

ranch. But Kuhn and other energy executives had already received far more

crucial access. In 2001, representatives from Kuhn's Edison Institute had at

least 14 discussions with members of Cheney's energy task force, pushing for

looser air-pollution rules. The task force also met with representatives of two

power companies that the Environmental Protection Agency was investigating for

clean-air violations: FirstEnergy -- based in Akron, Ohio

-- whose CEO, Anthony J. Alexander, is a Pioneer, and the Atlanta-based

Southern Company, which has four Pioneers and Rangers among its top officials

and lobbyists.

 

Over the past two years, the administration has rewritten the clean-air rules in

almost exactly the ways industry representatives suggested, often using language

from corporate memos verbatim. FirstEnergy and Southern alone are likely to save

hundreds of millions of dollars in penalties because of the changes. While the

new rules were being crafted, individuals associated with Southern gave so much

money to the Bush campaign -- a total of $180,000, up from $24,000 in 2000 --

that the company now ranks among the campaign's top 15 benefactors.

 

Also on Bush's list of Rangers and Pioneers are dozens of K Street's most

powerful lobbyists -- people like Bill Paxon, a former Republican congressman

whose firm represents several major energy and health care companies as well as

Bechtel, which has garnered nearly $3 billion in contracts for the

reconstruction of Iraq. In addition to raising funds, lobbyists backing Bush

often coach their clients on how to become bundlers themselves; there are now so

many executives trying to be recognized as Rangers and Pioneers, lobbyist Lanny

Griffith told National Journal, that " competition is pretty fierce for getting

credit. "

 

No industry, however, has produced as many top Bush fundraisers as the finance

sector, which in the past had split its contributions between Republicans and

Democrats. Finance-industry leaders accounted for 20 percent of the campaign's

Rangers and Pioneers as of late last year; already, Wall Street has delivered

more in contributions to Bush than it did in the entire 2000 campaign. Many of

these executives rely on their employees and business associates to pull in

contributions. For example, Merrill Lynch CEO Stan O'Neal, a Ranger, sent

letters to 300 of his top executives, urging them to give to the Bush campaign.

By March of this year, Merrill Lynch employees and their families had

contributed more than $458,000, making the company Bush's No. 1 source of

campaign money. Among the 10 companies whose employees have given the most to

Bush, six are New York-based financial houses whose top executives are either

Rangers or Pioneers.

 

What put the financial industry so squarely in Bush's camp? The president's tax

cuts -- which reduced or eliminated taxes on dividends, capital gains, and

estates -- are a major reason; the financial industry's trade group, the

Securities Industry Association, lobbied hard for those cuts. The president's

2005 budget offers another initiative popular with Wall Street -- a new kind of

tax-free retirement account that, according to the Securities Industry

Association's annual report, was hatched during the group's " discussions with

the White House. " If Bush is re-elected, many in the industry expect him to

block moves to tighten securities regulation and to work toward privatizing

Social Security by letting workers invest part of their contributions directly

in the stock market.

 

Not all of Bush's top fundraisers are attracted simply by the president's

pro-business, anti-regulatory approach; some have very specific agendas of their

own that the administration has favored, sometimes in direct contradiction of

its broader policies. Rangers and Pioneers from Florida-based sugar companies,

for example, have been pushing federal officials to exempt their industry from

free-trade agreements with Australia and Central American countries. In January,

according to the journal Inside U.S. Trade, sugar lobbyists met with Rove, who

then contacted U.S. Trade Representative Robert Zoellick. Despite its stated

commitment to free trade, the administration quickly changed course. The

Australian trade pact was rewritten to keep barriers against foreign sugar in

place; meanwhile, negotiations on the Central American pact are continuing.

 

Michael Scherer is Mother Jones' Washington correspondent. He profiled anti-tax

crusader Grover Norquist in " The Soul of the New Machine " (January/February)

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This article has been made possible by the Foundation for National Progress, the

Investigative Fund of Mother Jones, and gifts from generous readers like you.

© 2004 The Foundation for National Progress

 

 

 

 

 

 

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