Clinton Cozies Up To Business

He campaigned as a Southern populist who railed against corporate greed and business as usual in Washington. But guess who's been coming to dinner--and lunch and breakfast--since Bill Clinton moved into 1600 Pennsylvania Avenue? After years of hobnobbing with Republican Presidents, blue-chip CEOs are discovering that they can do brisk business with a Democratic Chief Executive, too.

With an outreach campaign that transcends anything the Democrats attempted before, the Administration has gone to enormous lengths to cultivate a wary business community. Despite the fact that the President devoted his first year to deficit reduction and expanded trade, he still isn't making many business converts. But he's definitely winning some corporate wallets. Since Clinton took office, unprecedented levels of cash from Corporate America have poured into the Democratic National Committee. The Democrats have raised a record $60 million--the bulk of it from big donors. The party's Business Leadership Forum, which has an admission price of $10,000, has ballooned from 135 members

last year to 850 now. "People are screaming to give us checks," crows DNC Finance Director Terence R. McAuliffe.

Why the corporate largesse? Some execs covet an ambassadorship or a ticket to a glitzy event. Others seek insurance to protect themselves from regulatory assault. "I tell my clients that if they want to get in the door they need to pay up," explains a plugged-in Democratic lobbyist.

To traditional Democrats and ethics crusaders, wooing of business amounts to mutual back-scratching that's ripe for abuse. That's really true, they say, with an Administration pursuing an industrial policy to promote some industries. Says Fred Wertheimer, president of Common Cause: "All this literally puts the Presidency on the auction block."

HAPPY CAMPERS. Case in point: Boeing Co. From 1991 through 1993, the company had donated $16,000 to the DNC. But since Feb. 28, 1994, Federal Election Commission reports say, Boeing has given $65,000 to the party. The gifts began days after Clinton announced that Saudi Arabia had agreed to buy $3.6 billion worth of commercial aircraft from Boeing. Boeing says the gifts were not tied to the Saudi deal.

Veteran Clinton-watchers are not surprised at his probusiness bent. Since he was governor of dirt-poor Arkansas, he has courted business with tax breaks and regulatory relief. As President, he has even more goodies to bestow.

Clinton lunches at least once a month with CEOs. And he often phones executives, such as Xerox Corp.'s Paul A. Allaire, a donor and longtime Democrat, about his economic message. White House aide Alexis M. Herman says she feels she can "pick up the phone anytime and call" Procter & Gamble Co.'s Edwin L. Artzt to talk trade. Clinton, says Artzt, "maintains an excellent dialogue with business leaders."

One highly coveted corporate prize is a seat on Commerce Secretary Ronald H. Brown's trade missions. On Aug. 26, two dozen execs--including DNC donors Lodwrick M. Cook of Arco, Raymond W. Smith of Bell Atlantic, Edwin Lupberger of Entergy, and Bernard L. Schwartz of Loral--flew with Brown to China and Hong Kong. The trip already has paid off. Entergy, Westinghouse Electric, Pitney Bowes, and IBM announced contracts with the Chinese.

Business seems particularly pleased with Brown's supersalesmanship--so much so that the Commerce Dept. keeps a "Happy CEO" file with letters of thanks for the government's help. "I could not ask for a better advocate for the U.S. business community," Occidental Petroleum Corp. CEO Ray R. Irani wrote last April after returning from a trade mission to Russia. Occidental has donated $152,549 to the DNC since July, 1992.

The Democrats are happy, too. Largely because of corporate gifts, the party has virtually closed the fund-raising gap with the GOP. The Republican National Committee has raised $66 million since January, 1993, but three-quarters came from small donors.

The Dems' fat-cat dependency has riled critics, who cry hypocrisy. During the Bush Administration, Clinton charged that "cliques of $100,000 donors buy access." Now, some of these same GOP benefactors have become switch-hitters, among them Arco's Cook, Dwayne Andreas of Archer Daniels Midland, Carl Lindner of American Financial, and Marvin Davis, president of Davis Cos.

No wonder Clinton has stopped complaining that U.S. political leaders "are being held hostage by big-money interests." He's now spending his summer vacation golfing with super-investor Warren E. Buffett and dining with William H. Gates III, CEO of Microsoft. And Clinton rakes in millions at black-tie fundraisers. Co-chairs of a June 22 Washington Presidential gala--where execs paid up to $100,000--included ADM's Andreas and Ronald O. Perelman of Revlon Inc., who gave the RNC and the DNC each $100,000 during the 1988 campaign. Two weeks later, ADM got a boost when the Environmental Protection Agency issued a rule requiring use of corn-based ethanol in gasoline.

A sure sign that the Clintonites appreciate the link between business dialogue and dollars is the fact that so many top Administration officials, such as Brown, were campaign fund-raisers. Robert E. Rubin, former co-chairman of Goldman, Sachs & Co., collected millions from Wall Street before being named director of the White House National Economic Council. Kenneth D. Brody, another Goldman Sachs fund-raiser, now heads the Export-Import Bank.

GOOD INTENTIONS. White House aide Herman, Brown's deputy at the DNC, now drums up corporate support for Clinton. Melissa Moss, a former DNC finance director, helps pick CEOs for Commerce trade missions. Mark Middleton raised campaign money before becoming an aide to former White House Chief of Staff Thomas F. McLarty III. Middleton is always taking calls, helping executives find the right Administration person to solve a problem. McLarty, now a Presidential counselor, devotes up to half his time to troubleshooting for business.

Clintonites, of course, deny any quid pro quos, insisting that they're only helping business create jobs for Americans. Likewise, contributors profess only good intentions. Loral's Schwartz, who wrote the DNC a $100,000 check in June, says he's a lifelong Democrat. Schwartz adds that he doesn't need to buy access: "I can open any door I want as chairman of a $6 billion company."

But not all executives are so confident that the White House is an equal-opportunity listener. Remarks one senior Clinton adviser: "Someone who doesn't give doesn't get the same chance to make his case." Adds a Democratic lobbyist: "If an official sees you at a fund-raiser, you'll be perceived as having clout. When it comes time to make your case, you will be respected or feared."

From business' standpoint, political giving is a small expense that can reap big gains. That seems to be the case for AT&T. When Clinton's Inaugural Committee turned to business to help finance its January, 1993, extravaganza, the company came through with a $100,000 loan, fax machines, and telephone gear. Within two weeks, Commerce chief Brown began lobbying Saudi Arabia to hire AT&T for a phone modernization project. Last spring, the Saudis awarded the $4 billion contract to AT&T over foreign competitors. Soon after, DNC records show, the company sent the party $20,000. AT&T says it's a regular contributor to both parties and there is no tie-in between the contract and its donations.

But companies with big stakes in government decisions aren't merely being civic-minded. Consider Walt Disney Co., which gave the DNC $250,000 since mid-1992 and lobbies on many issues. Now it must overcome federal environmental hurdles for a theme park in Virginia. When Disney's The Lion King premiered at a Washington theater in June, who sat next to Disney Chairman Michael D. Eisner? Environmental czar Al Gore.

HOLLYWOOD HUSTLE. Arco is another corporate donor angling for favorable treatment. At a White House lunch for execs in June last year, Clinton surprised Arco Chairman Cook with a birthday cake. As he blew out the candles, Cook may have wished that the White House would lift a 21-year ban on exporting oil from Alaska, where his company has major interests. Clinton is considering that idea.

To be fair, the White House also talks to executives who haven't given the Democrats a dime. And donations don't guarantee special treatment. Take the entertainment industry, which has given Democrats $1.7 million since 1992. During last year's negotiations on a new General Agreement on Tariffs & Trade, Hollywood lobbied ardently for the U.S. to insist that the French ease import limits on U.S.-made films and videos. At a $50,000-a-plate fund-raiser at the Los Angeles home of billionaire Marvin Davis last December, studio heads pressed Clinton on the issue. The White House did push the moguls' cause, but when the dispute threatened to scuttle GATT, Clinton caved.

All this fraternizing between Clinton and the fat cats proves that even a reformist Democrat can't resist the lure of bright lights and big money. That, more than anything else, may explain why the vacationing President is relaxing with the rich and famous on the Vineyard--rather than sinking into the mineral baths of Hot Springs.

      Corporate America is filling the coffers of the Democratic National Committee, and many of these companies have big stakes in White House decisions. Here's what some of the biggest companies and their top executives gave from July, 1992, to June, 1994.
      Lobbying hard for approval to break into long distance
      Won White House backing for proposal requiring corn-based ethanol in gasoline
      Wants federal agencies to agree that Disney's theme park in Virginia won't violate environment laws
      Would like Administration to push for lifting export ban on Alaskan oil
      TIME WARNER     $518,333
      BENEFICIAL      $406,000
      MCA             $250,000
      SEAGRAM & SONS  $232,704
      ANHEUSER-BUSCH  $186,000
      SONY            $181,650
      REVLON          $171,000
      WASTE MGMT.     $161,000
      ERNST & YOUNG   $160,300
      OCCIDENTAL      $152,514
      MCI             $115,000
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