Monday, Sep. 23, 1996
THE CORPORATE DOLE
By JEFFREY H. BIRNBAUM AND VIVECA NOVAK
Bob Dole promises to eliminate "corporate welfare," but like many of his former Senate colleagues, he often advanced the causes of private interests. These patrons have contributed to what might be called Dole Inc.: his network of campaigns, foundations and a pac. In return he has rewarded donors with favors. Among the best-known recipients: Dwayne Andreas of Archer Daniels Midland; and Koch Industries, a Kansas-based oil-and-gas firm. A look at some of these interests that have benefited from his attention:
THE WINEMAKERS ERNEST AND JULIO GALLO
In any given year only a few hundred Americans have to pay a levy called the "generation-skipping tax," which is 55% on transfers of more than $1 million from a grandparent to a grandchild. But Dole once helped shrink even that paltry number at the urging of two of his biggest cash donors, Ernest and Julio Gallo. According to the Center for Public Integrity, the Gallos, who own the biggest wine-making company in the country, are Dole's largest financial backers, having given more than $1 million over the years. But that is a modest investment compared with the $80 million that the Gallos were able to shelter thanks to Dole. In a House-Senate conference during the summer of 1986, he was instrumental in securing victory for the "Gallo amendment," which allowed grandparents with the wherewithal to give each grandchild $2 million free from the generation-skipping tax. At the time the aged Gallos had 20 grandchildren between them. And Dole did not stop there. He fought against increases in excise taxes on wine, championed federal programs that promote American wine abroad and, in 1992, supported the Gallos' efforts to market as a version of champagne a bubbly wine that was vat produced, even though the real champagne method calls for fermentation in the bottle. With Dole's help, the Gallos celebrated their labeling victory the very next year.
THE GOLDEN RULER J. PATRICK ROONEY
Dole has almost always worked with Senator Nancy Kassebaum, especially to assist Kansas industries like wheat growers and small-airplane manufacturers. But Dole broke with his fellow Republican--and endangered the health-care legislation she left last month as her legacy--by looking after the interest of a Dole Inc. supporter, Golden Rule Insurance of Indianapolis. Golden Rule was pushing medical savings accounts, which allow people with high-deductible insurance plans to set up tax-favored savings accounts to use for their health-care expenses. Dole's amendment, which would have cost the Treasury $1.8 billion over seven years, was defeated in April. But Dole refused to take no for an answer. Other than Kassebaum, Dole appointed as final negotiators on the bill only Senators who supported the accounts. Democrats objected, and action stalled for weeks until a compromise was struck in late July that allows a limited test of medical savings accounts.
Golden Rule is the one company best positioned to take advantage of this windfall--a fact that Dole was well aware of. In 1993 Dole touted the accounts on television the day after Golden Rule flew the Senator to meet with company chairman J. Patrick Rooney. Later Golden Rule executives gave $30,000 to Dole's pac. Golden Rule also gave the Republican National Committee more than $500,000 for the 1994 election cycle, in which the G.O.P. captured both the House and the Senate.
THE TRUCKING MAGNATE JOHN RUAN
John Ruan is a big man in a small state. And since that state is Iowa, the location of the nation's first presidential caucuses, perennial candidate Dole went to extraordinary lengths to help Ruan, who owns a multimillion-dollar trucking company. In return Ruan has held fund raisers in Des Moines, and is considered an important reason Dole has won the Iowa caucuses twice. But those wins came at a price: $8.5 million. That's how much Dole saved Ruan in taxes by retaining for Ruan the 10% investment tax credit that was taken away from virtually everybody else in 1986. Dole and Iowa Senator Charles Grassley tried to protect Ruan four separate times before forcing through an amendment specifically worded to benefit "a privately held truck-leasing company headquartered in Des Moines, Iowa," a persistence that led Iowa newspapers to call it "the tax break that would not die."
THE SUGAR DADDY JOSE ("PEPE") FANJUL
There aren't many sugarcane growers in Kansas. Yet Dole went out of his way to help Palm Beach, Florida, resident Jose ("Pepe") Fanjul, one of the world's major sugar producers, who, with his companies and clan, has given Dole and his pac more than $62,000 over the years as well as $419,000 to the Republican Party since 1991. Dole opposed a plan last winter to tax Florida cane growers 2' for each pound of their product to help restore the Everglades, which is dying from the phosphorus runoff of sugar plantations like Fanjul's. But to do nothing for the Everglades would have crippled his presidential ambitions in the crucial state of Florida. So instead of assessing cane growers like Fanjul, Dole struck a compromise to take $200 million from the general treasury for Everglades restoration and thus scored a threefer. Dole could still lay claim to caring about the Everglades, but his contributors could dodge the costs of the cleanup even as they continued to profit from the federal sugar program.
THE CORN CAPO DWAYNE ANDREAS
Dole has for years been famously tight with contributor Dwayne Andreas, the chairman of agribusiness giant Archer Daniels Midland. Andreas, along with his company and members of his clan, has provided more than $475,000 for Dole's operations since 1979. Dole has proudly called himself "Senator Ethanol" in honor of the corn-based fuel that ADM produces and that Dole has long protected with tax subsidies. But Dole has also played a crucial role in making the sweetener market profitable for ADM by championing the sugar price-support program. ADM is the world's largest producer of high-fructose corn syrup, a sugar substitute; the higher sugar prices have soared, the more ADM has been able to charge for its product while still capturing a sizable chunk of the sweetener market. The syrup accounted for about 10% of ADM's total revenue last year and 30% of its profits, analysts estimate. A government study calculates that by keeping the price of sugar higher in the U.S. than in the world market, the sugar program Dole has fought for adds $1.4 billion to America's grocery bill each year.
THE MONEYMAN ROBERT LIGHTHIZER
There is probably no one more loyal to Dole than Washington lawyer and lobbyist Robert Lighthizer, but not everybody fully knows why--and that tale is a classic of Washington back scratching. In the early 1980s, Lighthizer was chief counsel of the Senate Finance Committee and Dole was its chairman. But by 1983, Lighthizer wanted to move on. The Kansas Senator pushed to include a tiny change in an obscure piece of legislation that increased by one the number of deputies in the the U.S. Trade Representative's office. Although he asserts the job wasn't created for him, Lighthizer quickly became its shoo-in candidate. During his 2 1/2 years in that role, Lighthizer negotiated trade agreements that benefited the U.S. steel industry. Afterward, he joined the prestigious law firm of Skadden Arps as a nearly $1 million-a-year trade attorney and lobbyist representing, yes, steel companies among others. In that role he has returned his mentor's generosity: as treasurer of Dole for President, he has helped raise $37 million, the maximum allowed under the law. Lawyers at Skadden Arps have provided more than $35,000 for Dole's presidential bid; steel companies are close behind.