Clinton Bashes Business But Does He Mean It?

It's a snowy night in Bedford, N.H., and the entire town seems to be packed into a classic New England town hall to hear Arkansas Governor Bill Clinton. Allegations of womanizing have not yet stalled his Presidential campaign, and Clinton is flying high. He revs up his standard speech, tossing out examples of what's wrong with Corporate America and the changes a Clinton Administration would make.

He blames self-serving CEOs for ruining the economy with "paper and perks" instead of people and products. He promises to boost the sagging incomes of American workers. He pledges not to dole out special-interest tax breaks that "reward the old arrangements and serve the rich and powerful instead of average workers who generate the nation's real wealth." A Clinton Presidency, he says, wouldn't let companies deduct executive bonuses, excessive salaries, and golden parachutes from taxes.

The applause meter goes wild as he yells: "When a chemical engineer in New Hampshire can't work like a dog year in and year out without being fired 30 days before his pension vests, only to have the person who fired him sell the company and bail out with a golden parachute, we've lost our sense of community."

Thrashing corporate greed plays well in depressed New Hampshire, where Clinton holds a tenuous lead in the polls. But does this populist rhetoric match his record as governor? In 12 years in office, Clinton has passed out about $100 million in special tax breaks to entice companies to expand, and he's been willing to hold off fixing environmental problems to keep plants open. Brochures once published by Arkansas boasted of low wages--it ranks near the bottom in per capita income. Now brochures simply point out that it is a right-to-work state.

CUTTING EDGE. Arkansas has a history of segregation, and civil rights groups fault Clinton for failing to push for legislation barring job discrimination against workers not covered by federal law. Clinton has formed a task force to write such a law. And private groups that rank state working conditions place Arkansas at the bottom in health and safety, enforcement of regulations, and wages.

In short, Governor Clinton has been a lot friendlier to business than would-be President Clinton. Clinton aides confirm that the governor has received numerous campaign contributions from corporate executives. And when he was head of the probusiness Democratic Leadership Council, Clinton was a master at bringing in corporate money. Says Curt F. Bradbury, chairman of Worthen Banking Corp., one of the state's largest banks: "He's got a way with CEO types, and that has stood him in good stead politically and the state economically."

No doubt about it, Clinton has put Arkansas on the cutting edge of economic development. Other states are emulating his Arkansas Development Finance Authority (ADFA). The self-funding state agency sells tax-exempt bonds and offers loan guarantees to provide long-term, low-interest financing to public and private projects.

The state also offers a variety of tax breaks to induce employers to expand their business or move operations there. Companies that have been in the state for two years can take a 7% tax credit on capital investment. And companies that locate in rural, high-unemployment areas are entitled to a $2,000 tax credit for each new employee they hire. Clinton increased the amount of state pension funds invested in Arkansas businesses and began theArkansas Science & Technology Authority to provide seed capital to high-tech companies.

The results have been mixed. Between 1985 and 1989, manufacturing jobs increased 10%, though national manufacturing employment grew less than 1%. But even with the increase in jobs in relatively high-paying industries, Arkansas has risen to only 47th among states in per capita income--up from 49th in 1983. The average wage is only $8.89 per hour, compared with the national average of $11.20. "I think that's the consequence of weak unions, and that's a consequence of Bill Clinton's support for right-to-work laws," says J. Bill Becker, president of the Arkansas AFL-CIO, who circulated a scathing review of Clinton's 12 years in office to unions nationwide.

TWO FACES. Clinton can hardly take the full blame for the poverty. "You can't turn around 100 years of neglect in 10 years," says ADFA President Bob J. Nash. "Arkansas is still a poor state, and we have a lot of catching up to do."

Arkansas is really two states: Its northwest quadrant is home to fast-growing companies such as Wal-Mart, food processor Tyson Foods, J.B. Hunt Transport Services, and Dillard Department Stores. Unemployment is down around 3%, and business is booming. But to the east in the impoverished--and predominantly black--Mississippi country, unemployment runs up to 25%. "There is no Arkansas miracle," Clinton admits. "But we're proud of the tremendous progress we've made."

To catch up, Clinton has focused on raising the state's education standards in the hope of attracting business with a well-trained work force. But that investment is not likely to show any payoff until the middle of the decade, say Clinton supporters.

Clinton's record with state labor organizations is mixed. Despite Becker's criticism, some unions are backing his Presidential bid. But to critics, Clinton showed his true colors when he sided with management in a bitter strike at Morrilton Plastics Inc. When the company faced tough negotiations with the United Auto Workers in 1990, the state issued a $300,000 loan guarantee, helping the company secure a $1 million bank credit line. That allowed Morrilton to build up inventory and protect contracts with auto makers. The UAW, which eventually struck, is suing the state and Morrilton--now in Chapter 11--for interfering with collective bargaining. "When it comes to business vs. labor, you won't get a much clearer case than Morrilton to show you he's probusiness," says John R. Brummett, editor of Arkansas Times magazine.

Environmentalists also aren't happy with the Clinton record. The League of Conservation Voters, in a recent report, faulted Clinton for appointing industry-friendly people to a state pollution control board. Says Ali Webb, LCV associate director: "Clearly Bill Clinton did not put environmental protection as a top priority when he was governor." A senior Clinton aide acknowledges that environmental issues at first did not receive the attention they deserved and that Clinton in recent years has tried to improve his record. On health and safety issues, the Chicago-based National Safe Workplace Institute ranks Arkansas 50th in enforcement of worker-safety regulations and workers' compensation.

So far, Clinton's record in Little Rock has received little attention from rivals in the Presidential race. But if he manages to put his problems behind him, his front-runner status will draw attention to his role as governor. And Democrats, especially the activists who dominate the primaries, may be less than happy with what they see.

      INCOME Clinton attacks Bush for allowing U.S. wages to fall behind other
      industrial nations. But his state is among the lowest in per capita income
      TAX POLICY Clinton clobbers Republicans for raising taxes on the middle class. 
      But Arkansas relies heavily on a 4% regressive sales tax
      CIVIL RIGHTS Clinton has blasted Bush for endorsing the 1991 Civil Rights Act 
      only at the last minute. But Arkansas has no employment-discrimination statute
      ENVIRONMENT Clinton criticizes Bush's lack of focus. But the Southern States 
      Institute ranks Arkansas 49th among the states, partly because its pollution 
      control board is stacked with industry representatives
      JOB SAFETY Arkansas is rated last by the National Safe Workplace Institute on 
      enforcement of regulations, workers' compensation, and accident prevention
      DATA: BW

Paula Dwyer in Little Rock