Something Special In The Air: Hitchhiking Vi Ps

It was a request that any company trying to make friends in Washington would gladly oblige. On June 12, Beneficial Corp. chartered a six-passenger Gulfstream jet to whisk White House Chief of Staff John H. Sununu home from a New Jersey GOP fund-raiser. The state Republican Party agreed to reimburse Beneficial $142 for ferrying its guest.

"Sure, we said `yes' " when the GOP called, says Beneficial spokesman Robert Wade. Transporting such a VIP "was rare for us." The request came just a week before the House Banking Committee began drafting a financial-services reform bill. Beneficial, which backs the Bush Administration's version of the measure, brought its Washington lobbyist, Gary Perkinson, to New Jersey for the fund-raiser and put him on the plane to fly back to Washington with Sununu.

The Chief of Staff and the lobbyist chatted about hockey and problems in U. S. education--anything, both Sununu and Beneficial insist, except the financial-services business. "We were just trying to be accommodating," says Wade. Perkinson wouldn't comment.

So far, all Beneficial has gotten for its efforts is bad publicity. Although there's no evidence the company did anything improper, it has been singed by the controversy over Sununu's "fly now, pay rarely" approach to travel. But the episode revealed a fact of Washington life: One of the best ways to earn the gratitude and goodwill of busy officials is to let them travel on the corporate plane. Indeed, the game is sufficiently attractive that companies are willing to risk unpleasant legal, tax, and public relations problems just to play.

Although there's much clucking about Air Sununu on Capitol Hill, lawmakers such as Senator Bob Dole (R-Kan.) and Representative Richard A. Gephardt (D-Mo.) are among the most frequent corporate fliers (table). For short-notice jaunts, members of Congress often request corporate flights. Candidates and accompanying aides must pay in advance, generally at the commercial first-class rate. But that's only a fraction of the cost of a private charter.

Regulations in effect since March allow executive branch officials, including cabinet members such as Commerce Secretary Robert Mosbacher, to fly corporate planes on official business. The trips must be publicly disclosed twice a year--the first disclosure is due in October--and acceptance of the flight can't create the "appearance of improper influence." Again, compensation is paid at a comparable commercial rate.

Critics aren't impressed. Says Georgetown University law professor Robert Pitofsky, a Federal Trade commissioner in the Carter Administration: "Once you develop a policy where corporations can be generous to people in the executive branch, you run a serious risk that regulators will feel grateful and act accordingly." Pitofsky never took such flights.

EXPRESS MALE. Congress is making noises about tightening the rules on corporate flights. But Federal Express Corp. probably isn't worried. The Memphis-based delivery company, which declined to be interviewed for this story, is among the most active providers of corporate aircraft to official Washington. In 1988, FedEx delivered House Ways & Means Committee Chairman Dan Rostenkowski to the capital from a Miami Democratic fund-raiser. Rosty arrived just in time to finish work on a taxbill--one that included a $3 million tax break for Federal Express that Rostenkowski made sure was in the final measure. "They're the best at this," says one top Democratic congressional aide. "They serve cocktails and talk about baseball, knowing that later, when they need to be heard, they'll have the access."

Another company that frequently provides jets to government officials is Houston-based Coastal Corp., an oil and gas giant. "We have airplanes moving across the country most of the time," says John C. White, Coastal's Washington lobbyist and former chairman of the Democratic National Committee. "There's sort of a code. You don't talk about business. It would be improper. But no senator or congressman ever gets mad at you for providing flights."

Most corporations that provide such on-call services have made a complicated legal decision. "This isn't something you just do," warns Nel Sanders of the National Business Aircraft Assn. The group counsels its members against providing flights to government officials and candidates. One reason: conflicting interpretations of the law by the Federal Election Commission and the IRS. The FEC says a candidate must reimburse jet operators, or both the company and the campaign could be cited for violating FEC regulations. But the IRS may then slap the companies with federal taxes that apply only to carriers that transport paying passengers.

In the long run, persistence, doing favors for powerful friends, and coming through with some well-timed PAC contributions are still the preferred--or at least the safest--way for companies to snuggle up to Washington bigwigs. But the town's veteran lobbyists know there's nothing like the surge of power one feels taking off in a private jet to bring a smile to the face of a harried politician.


BOB DOLE (R-Kan.) The Senate Minority Leader has been a passenger on jets belonging to agribusiness giants ConAgra and Archer Daniels Midland and energy conglomerate Coastal Corp.

DAN ROSTENKOWSKI (D-Ill.) The House Ways & Means Committee chairman flew to Washington in 1988 on a Federal Express jet in time to make sure that a tax break for Federal Express remained in legislation

ROBERT MOSBACHER During the past two years, the Commerce Secretary has taken more than 20 domestic and foreign trips that were paid for by companies and foreign governments

RICHARD GEPHARDT (D-Mo.) The House Majority Leader used campaign funds to reimburse Archer Daniels Midland, Tyson Foods, Federal Express, U.S. Tobacco, and others for use of their jets


Before it's here, it's on the Bloomberg Terminal.