The Los Angeles Times Tuesday, September 23, 1997
BIG BUSINESS, BIG BUCKS: The rising tide of corporate political
donations. Not even a public outcry over workplace deaths can drown out
the sound of money, critics say
WHERE BIG DONORS TREAD,
BIG FAVORS SEEM TO FOLLOW
By Ralph Vartabedian
WASHINGTON -- The gruesome 1992 murders of four teenage girls, shot
and then burned late one night in a Texas yogurt shop, focused national
attention on a shocking problem: Murder had become the leading cause of
workplace death among women.
With night clerks in convenience stores and fast-food restaurants
particularly vulnerable, the Occupational Safety and Health Administration
finally decided to act in 1995 by proposing voluntary safety guidelines for
retail outlets.
Who could possibly object? OSHA soon found out. The convenience
store industry, deriding OSHA's voluntary guidelines as a misguided
intrusion into its business, enlisted 108 members of Congress--many of
them recipients of its campaign contributions--to sign a letter that
lambasted the guidelines. The letter torpedoed OSHA's efforts.
To critics of today's campaign-finance system, the fate of the OSHA
proposal perfectly illustrates how members of Congress can be unduly
influenced by political donors, even when the public welfare is at stake.
"It is a subtle form of corruption," an angry Robert B. Reich, secretary
of Labor when the issue played out, said in an interview. "There were all
sorts of warnings that we must not move forward with this. It came from
lobbyists, congressional staffers, members of Congress."
Politicians, by contrast, insist that they are able to set aside petty
considerations and base their decisions strictly on the public interest. If they
share their contributors' agendas, they say, it is because their own credos
attract like-minded supporters, not because they bend their positions to suit
their benefactors.
No matter who is right, the potential for influence-peddling is mounting
in step with the rapidly escalating cost of winning federal office.
Disclosures about both Democratic and Republican fund-raising practices
before the 1996 elections reveal a sharp departure into unorthodox and
aggressive methods of getting money.
"People are buying their way to power," said Jamin B. Raskin, a
political finance expert at American University. "It wasn't always this way.
In the past, you had to earn political power."
One casualty appears to be public trust, such as it was, in elected
leaders.
"I have no doubt that the public's confidence in government has been
destroyed by the current form of election financing, and, from that
standpoint alone, it should be changed," said Whitney Seymour, a New
York attorney active in campaign-finance litigation.
Corporate influence in Congress also causes real economic damage that
measures in the billions of dollars, most often the result of blocking needed
reforms of economic and business policy, according to reform advocates,
political experts and former bureaucrats.
On other occasions, as with the voluntary safety guidelines for retail
outlets, the government favors corporate interests over the public health
and safety, critics say. And there is a constant stream of special tax breaks
and subsidies to sick industries. 'A Little Twist Can Make a Zillion Dollars'
The most egregious government giveaways almost never involve highly
visible issues but, rather, obscure ones that can be enormously beneficial to
special interests, said Kenneth Gross, an election-law expert at the law firm
of Skadden, Arps, Slate, Meagher & Flom.
"A little twist can make a zillion dollars," said Gross, a former general
counsel of the Federal Election Commission. "Nobody could figure these
things out in a million years."
To be sure, critics are hard pressed to show that these favors would not
have been granted even in the absence of campaign contributions.
American history is full of giveaways that enriched special interests in the
process of building the world's most powerful economy: the railroad land
grants, federal water projects, and technology giveaways by the Pentagon,
to name three.
"There is no question but that people who contribute have access and
may get some benefits," said Herbert Alexander, a political-finance expert
at USC. "But it is not quite as seedy a situation as many would have us
believe."
The difference today is that the power of big business, as business itself
boasts, has never in recent history been greater.
"The influence of corporations on public policy is growing," said
Bernadette Budde, senior vice president of the Business-Industry Political
Action Committee. "Of course, it is a positive. In some way, we are all
beneficiaries of a thriving economy."
When corporations repeat their standard reasons for contributing to
political candidates--not to manipulate government decisions but merely to
have access to the decision makers--some political veterans can barely keep
a straight face.
Corporations need tangible results for their contributions because,
under the laws of most states, they cannot legally spend shareholders'
money without a return, said New York Law School professor Faith Kahn.
Corporations have enormous freedom to make political contributions
without answering to shareholders, precisely because the contributions are
a management tool rather than an ideological expression.
"If you are not doing this to achieve influence for the corporation, then
it would be a waste," Kahn said.
Corporate executives are anything but bashful about making explicit
demands, sometimes for petty personal needs. Just ask Marion Blakey,
who ran the National Highway Transportation Safety Administration when
George Bush was president.
Blakey said an executive of a major U.S. corporation enlisted a member
of Congress to seek a special exemption from federal automobile-safety
standards so that he could import a sports car.
"The car--a very exotic sports car that I think was from Italy--was
unlikely to ever meet vehicular-safety standards," Blakey said. "I told them,
'Nope, nope, nope.' Those are the things that cause you to sit back in your
chair and say, 'Why would I do something illegal like that?' " Requests for
Favors Can Slow Legislators
Even when bureaucrats successfully resist such requests--and they
clearly do most of the time--the very process has a costly side effect.
"It causes bureaucratic paralysis," said Albert Sykes, former chairman
of the Federal Communications Commission. "The world of Washington
lobbyists is populated by a lot of bright, articulate and well-funded people.
And when they want some action or want to block some action, they can
put on a lot of heat."
Telecommunications companies gave $11.3 million in the 1996
elections and made up one-fourth of the top contributors. The money
flowed into political coffers just as Congress and the FCC were
considering major reforms of the industry.
Caught in the cross-fire of such heavy hitters, bureaucrats typically
delay action as long as possible--in large part to prevent angering powerful
interests that can block them when they seek future government
appointments or high-paying corporate jobs, Sykes said.
"This effect is really pernicious," he said.
Telecommunications reforms were years late in coming and badly
muddled by compromises made to accommodate the competing
constituencies, Sykes said. "It wasn't very good public policy," he said,
because the prospect of lower consumer prices, more choice in the
marketplace and faster technological innovations appear not to have
materialized.
The easiest outcome for a contributor to achieve is the status quo.
Former Federal Reserve Board Chairman Paul A. Volcker points to the
savings and loan industry, always a heavy donor to congressional
candidates, for an example.
For many years, Volcker said in an interview, the savings and loan
industry received important advantages from Congress, including greater
tax breaks and lower capital-reserve requirements, in its competition with
banks.
S&Ls thrived, Volcker said, as long as they could earn more on their
long-term loans, principally for home mortgages, than they paid their
depositors. But they were squeezed when short-term interest rates
skyrocketed in the early 1980s.
The industry stepped up its political contributions, Volcker said, and
the crisis spiraled out of control as Congress and government regulators
allowed S&Ls to launch an undisciplined binge of diversification into high-
risk ventures, many of which went bust.
"Certainly there were operators out there who wanted that
liberalization, and some of them I am sure were big political campaign
contributors and unsavory," Volcker added. "Federal regulators were slow
to respond, and in many cases Congress interfered, ultimately leading to a
$200-billion bailout that taxpayers are still paying for." Powerless Groups
Face Tough Road in Capital
When powerful economic interests clash in Washington, their influence
often cancels out. Groups without power can get politically slaughtered in
the mar-ble palaces of government.
The retail industry's women, teenagers and minorities are among the
political lightweights of America. Few are represented by unions. The
clerks have no lobbyists or political action committees.
Their most potent representation appears to come after they are killed,
when grieving family members plead with bureaucrats to do something
about the safety of others. One is Nancy Carothers, who has led the fight
for safety standards at convenience stores since her father was gunned
down in a 7-Eleven 15 years ago.
"There are people dead on the floor because of this," Carothers said.
"This is the worst example of citizens' welfare being compromised because
of political contributions. It is abominable."
Convenience stores, oil companies, liquor stores, motels and fast-
food chains have erected a formidable lobbying machine to combat
federal efforts to intercede on the safety issue, particularly with a
suggestion that stores employ at least two clerks at night. There are
nearly 100,000 convenience stores alone, and many more retail outlets
operate at night.
"Who would oppose putting out guidelines on saving women's
lives in the workplace?" asked former OSHA Administrator Joe Deer.
He answered his own question: "The companies that employ those
women."
Five weeks before the 1996 elections, the companies persuaded 108
members of Congress of both parties to sign a letter objecting to OSHA's
proposed guidelines. Many of those who signed had received support from
the National Assn. of Convenience Stores, the National Restaurant Assn.
and the American Hotel Motel Assn., among other retail groups.
"The effect was to completely slow down the agency's issuance of
guidelines," Deer said.
The lead author of the letter was Rep. Cass Ballenger (R-N.C.),
chairman of the House subcommittee that oversees OSHA. Ballenger
received more than $18,000 in contributions from the groups in 1995-96.
Among other signers, Rep. John E. Ensign (R-Nev.) had received
$5,000 from the convenience store group alone. Rep. James M. Talent (R-
Mo.) had been given nearly $8,000 by the same group. Rep. Jennifer Dunn
(R-Wash.) signed the letter two days after receiving a $2,000 contribution
from the association.
Kerley LeBoeuf, president of the National Convenience Store Assn.,
declined to be interviewed on the issue of slain clerks, saying: "I don't
know about that." LeBoeuf referred questions to a member of his staff who
did not return several calls.
The National Restaurant Assn. was also a heavy political contributor
and was instrumental in getting the letter circulated in Congress. Lee
Culpepper, vice president for federal relations for the association, said
contributions played no role in getting the signatures.
"I have never looked at who we contributed to and who signed the
letter," Culpepper said.
"We don't sit here and say this PAC gave us $1,000 and so we are
going to sign this letter," said Patrick Murphy, a spokesman for Ballenger.
The politicians and the industry raised several arguments against
OSHA's proposed guidelines.
Restaurateurs maintained that they were not given adequate
opportunity to express their views before OSHA drafted the
recommendations and that their businesses should not be lumped together
with convenience stores.
The convenience store industry said OSHA had no research to show
that the guidelines would reduce workplace deaths.
Talent disliked the guidelines because they would have imposed more
government paperwork on business, a spokeswoman said. Ballenger said
she suspected that OSHA's voluntary guidelines were really mandatory
rules in disguise. A Rising Cost in Clerks' Lives
Victims' groups were left wondering whether anybody in Congress
cared about the dead clerks. Each year, about 1,000 Americans are
killed at work, about half at low-paying retail jobs.
After the deaths of her two teenage girls at the Austin, Texas, yogurt
shop five years ago, Barbara Suraci never stopped blaming herself for
allowing them to fall into harm's way. But she reserves her most bitter
feelings for Congress.
"They do not care," said Suraci, who shared in a $12-million settlement
from the yogurt shop. "They only care about their own jobs, and they think
it will never happen to them. You cannot make these people feel the pain I
have until their own child is gone."
Prompted by former Labor Secretary Reich, OHSA began in 1995
to prepare Guidelines for Workplace Violence Prevention Programs
for Night Retail Establishments. A few years earlier, the agency had
issued similar voluntary safety guidelines without much controversy for the
health care industry.
The retail guidelines suggested such measures as bright lighting,
unobstructed windows and security cameras. They mentioned the use
of time-release cash drawers that dispense $20 bills at slow intervals.
Some convenience store chains, such as 7-Eleven, argued they had
already made great strides in improving store safety, said Margaret
Chabris of the Southland Corp., which operates the 7-Eleven chain.
Asked why retailers shouldn't bear more liability, Chabris said,
"We don't shoot the employees."
The two-clerk issue proved particularly controversial, although
Labor Department officials say retailers are trying to block any
guidelines at all.
Industry lobbyists cited the research of Rosemary Erickson, a
consultant to the convenience store industry, who argued that two
clerks on duty would not deter robbers. In an interview, Erickson said
she believes OSHA had no basis for thinking that two clerks would
help reduce homicides.
Law enforcement officials dismiss such arguments as absurd,
saying they contradict such basic law enforcement principles as
having police officers work in pairs.
"If you were walking down a dark street in a dangerous part of
town, would you rather be alone or with somebody?" asked retired
Gainesville, Fla., Police Chief Wayland Clifton.
Gainesville passed the toughest safety law in the nation in 1987,
requiring, among other things, that convenience stores employ at least
two clerks during night shifts.
Within two years retail robberies dropped 80%, and in the last 10
years there has been only one assault of a clerk, which occurred after
the clerk tackled a robber in a parking lot, Clifton said. The city's
arrest rate for robberies went up, from 28% to 80%, as witness
identification improved and cameras gained more widespread use,
Clifton said.
Convenience store officials say the drop in crime and the increase in
arrests were caused by other factors. They complain that they would be
vulnerable to lawsuits by victims and their families if they failed to follow
voluntary federal guidelines.
"This is an industry with no shame," said Joseph Kinney, a
workplace safety expert in North Carolina. "It allows kids to be
raped, stabbed, shot and traumatized. And they want a legal shield."
After 15 years of fighting the industry, Carothers, whose father died in
a 7-Eleven robbery, broke down crying: "If OSHA doesn't issue these
guidelines, it will be for nothing. You only hear the tip of the iceberg of
women being assaulted in these stores. They are just sitting there, like
bait."
