Business Sees Gain In GOP Takeover
Political Allies Push Corporate Agenda By Jim VandeHei
Washington Post Staff Writer
Sunday, March 27, 2005; Page A01
Fortune 500 companies that invested millions of dollars in electing Republicans
are emerging as the earliest beneficiaries of a government controlled by President Bush and the largest GOP House and Senate majority in a half century.
MBNA Corp., the credit card behemoth and fifth-largest contributor to Bush's two presidential campaigns, is among those on the verge of prevailing in an eight-year fight to curtail personal bankruptcies. Exxon Mobil Corp. and others are close to winning the right to drill for oil in Alaska's wildlife refuge, which they have tried to pass for better than a decade. Wal-Mart Stores Inc., another big contributor to Bush and the GOP, and other big companies recently won long-sought protections from class-action lawsuits.
Republicans have pursued such issues for much of the past decade, asserting that free market policies are the smartest way to grow the economy. But now it appears they finally have the legislative muscle to push some of their agenda through Congress and onto the desk of a president eager to sign pro-business measures into law. The chief reason is Bush's victory in 2004 and GOP gains in Congress, especially in the Senate, where much of corporate America's agenda has bogged down in recent years, according to Republicans and Democrats.
"These are not real high-profile, sexy issues like the war or Social Security, but these are issues that have huge economic consequences," said Charles R. Black Jr., a GOP lobbyist and one of the president's top fundraisers. "And there is more to come on that score."
Bush and his congressional allies are looking to pass legal protections for drug companies, doctors, gun manufacturers and asbestos makers, as well as tax breaks for all companies and energy-related assistance sought by the oil and gas industry.
With 232 House seats, Republicans have their largest majority since 1949. This is the first time since the Calvin Coolidge administration in 1929 that the GOP has simultaneously held 55 or more Senate seats and the presidency. Senate Republicans are only five votes shy of the 60 needed to break the most powerful tool the minority holds in Congress -- the filibuster.
Over the next four years, the GOP hopes to use this enhanced power to approve the president's judicial nominees, some of whom Democrats lambaste as too conservative, and restructure Social Security and the tax code. But in the early days of the 109th Congress, it is corporations, which largely bankrolled the GOP's resurgence that began a decade ago with the Republican takeover of the House, that are profiting.
As recent Senate votes on bankruptcy and class-action lawsuits showed, corporations rely on a number of Democrats in the House and Senate and continue to contribute generously to both parties. But in the 2004 elections, Republicans received 66 percent of corporate political action committee (PAC) money, which reflects a trend of businesses tilting support toward the GOP over the last decade. In 1993-94, business PACs gave slightly more to Democrats.
R. Bruce Josten, top lobbyist for the U.S. Chamber of Commerce, said businesses feel a sense of urgency to enact as many pro-business laws as possible before a fight over judicial nominees or a Supreme Court opening brings legislative action to a "screeching halt."
Wal-Mart, the retailer many experts consider the most-sued company in America, stands to benefit from the new class-action law, which is designed to cut down on lawsuits and big verdicts by steering some cases into federal courts, away from state courts with track records of siding with plaintiffs and awarding multimillion-dollar verdicts, according to policy experts.
The company, which expressed disdain for Washington politics in the 1990s, changed its tune dramatically after then-Senate Majority Leader Trent Lott (R-Miss.) sat down with the company's managers in Bentonville, Ark., in the late 1990s and warned them of the perils of sitting on the sidelines.
Soon after, Wal-Mart became a major player in GOP politics, funneling money to groups such as the U.S. Chamber to lobby on its behalf and creating a political action committee. In the elections last year, the company's $2.4 million PAC was the third-largest corporate PAC in the country, with nearly 80 percent of its money going to Republicans. Wal-Mart officials contributed more than $30,000 to Bush last election, according to Federal Election Commission data compiled by the Center for Responsive Politics, a nonpartisan organization that prepared the fundraising data for this article.
In many cases, companies such as Wal-Mart spend significantly more money hiring Republican lobbyists and helping fund groups such as the U.S. Chamber and other GOP-dominated trade associations that are not required to disclose their donors than they devote to political candidates. Wal-Mart, for instance, has contributed at least $1 million to the Chamber of Commerce, according to chamber documents.
Marty Heires, a Wal-Mart spokesman, said the company did not want to comment for this report. "They want to play it low-key on this," he said. Wal-Mart is only one of scores of businesses that sought the class-action law. The companies, which included technology firms such as Intel Corp. and pharmaceutical giants such as GlaxoSmithKline Plc, did much of their lobbying quietly though a group called the Class Action Fairness Coalition, which is run by the U.S. Chamber of Commerce's Institute for Legal Reform. Both refused to disclose their donors.
In the end, the companies prevailed because the larger GOP majorities were joined by several pro-business Democrats, who were comfortable with the compromises they negotiated that limited the effects of the bill. Many of these Democrats also received substantial campaign contributions from companies concerned about class-action cases, the Center for Responsive Politics found. The story is the same for the bankruptcy bill, which recently passed the Senate and appears headed to easy passage in the House and to Bush's desk this spring.
United Republicans are counting on the support of enough Democrats to pass a bill that has been stalled since the mid-1990s. It would require many people filing for bankruptcy to repay more of their debt. Under current law, tens of thousands of people file for Chapter 7 bankruptcy, which erases all of their debt. The new law makes it harder to file for the more generous Chapter 7 protections.
Most Democrats and consumers groups say the new law is too hard on the sick, divorced and unemployed. Supporters argue that it is a necessary and long-overdue way of preventing people from shirking their debts when they could repay at least a portion of them.
Like the class-action law, hundreds of companies stand to benefit from changes in the bankruptcy law, even though it will include new mandates on business, including one requiring credit companies to tell consumers how long it will take to pay off their balance if they make only the minimum payments. Credit card and banking companies, who are leading the lobbying effort, were top financers of Bush's two campaigns. MBNA, Credit Suisse First Boston LLC, Bank of America Corp. and Wachovia Corp. were among the top 20 contributors to Bush, contributing more than $300,000 apiece.
The legislation includes several provisions benefiting specific industries. Retailers such as Target and Nordstrom, which help fund the National Retail Federation, a trade association lobbying for the bill, will benefit because they lose substantial money each year when people erase their debt through bankruptcy. "Retailers who offer credit card programs are left holding the bag on bad debt," said Craig Sherman, spokesman for the retail federation. "This legislation will get us out of this situation." Target contributed 80 percent of its $300,000-plus PAC money to Republicans last election.
Ford Credit Co. and others would benefit from a provision that stipulates that all automobile loans be repaid in full by people who file for Chapter 13 bankruptcy, or the auto will be repossessed. Under current law, only the present value of the car must be repaid. Ford Motor donated more than 80 percent of its PAC money to the GOP.
While bankruptcy is almost sure to become law, Bush's push to open Alaska's Arctic National Wildlife Refuge to oil drilling still must clear several hurdles. The Senate's 51 to 49 vote on a section of the budget resolution last week moved companies such as Exxon Mobil closer than ever to realizing their goal. If allowed, Exxon Mobil and other oil conglomerates would probably compete for the right to drill there, company officials say. Nearly 1 million barrels of crude oil a day could be pumped from the area by 2025, according to government forecasts.
"It only happened because Americans elected a larger [Republican] majority," said Jim DeMint (S.C.), one of seven new GOP senators who supported oil drilling, citing America's dependence on increasingly expensive foreign oil.
As further proof that the GOP and business alone still do not have enough power to work their will, many involved with the issue credited the Teamsters union with playing a key role in the recent Senate victory.
Exxon Mobil, which was the largest contributor among energy companies in 2004, has given $5.2 million to Republicans in the past decade and less than $650,000 to Democrats. Bush received $2.5 million from oil and gas companies for his reelection bid alone.
Lauren Kerr, spokesman for Exxon Mobil, said the company has been clear about its support for allowing drilling in ANWR and transparent about its political activities. Kerr said the company believes that "it's important to look at resources we have in our country."
Exxon Mobil is a leading contributor to Arctic Power, a lobbying group formed to promote drilling in Alaska. Kerr would only confirm that Exxon Mobil is a member of Arctic Power. As for its political contributions, she said, "We support a range of candidates that support issues that are important to the industry."