September 19, 2002 |
Corporate Villains Seem To Like
Cornyn’s A.G. Slush Fund
Dozens of alleged villains implicated in the current corporate-crime wave have given more than $5 million to a PAC that launders money for an attorney general slush fund that Texas Attorney General John Cornyn helped found in 1999.
As a U.S. Senate candidate, Cornyn rarely mentions the Republican Attorney General Association (RAGA). But during the bubble economy, he often reminded corporate interests that he helped create RAGA to prevent industry-wide lawsuits like the one that states filed against big tobacco.
This mission—and the fact that RAGA hides the identities of its donors by laundering its money through the Republican National State Election Commission (RNSEC)—has prompted protests that RAGA is a lawsuit-protection racket. “This is absolutely an effort by people with special interests to stop attorneys general from pursuing their traditional role as protectors of the public interest,” said Scott Harshbarger, the former Massachusetts attorney general who heads Common Cause.
Because RAGA refuses to disclose which RNSEC funds were earmarked for RAGA, every RNSEC donation is suspect of being a stealth RAGA contribution. Since RAGA’s 1999 founding, RNSEC has received $5.4 million from the PACs, executives and treasuries of corporations that recently have been accused, convicted or have confessed to serious wrongdoing (see below). These charges—some of which are being investigated by attorneys general—include accounting fraud, excessive executive perks, insider trades, improper stock promotions, document shredding, breaking consumer laws and exploiting electric-deregulation loopholes.
RNSEC's Tax-Dodger Money
| Unamerican RNSEC Donor |
Tax-Dodge Incorporation |
RNSEC Amount |
| Global Crossing | Bermuda | $366,729 |
| Tyco Internat'l | Bermuda | $146,715 |
| Accenture | Bermuda | $127,200 |
| Carnival Corp | Panama | $40,000 |
| Triton Energy | Cayman Isles | $25,000 |
| Xoma Corp | Bermuda | $1,500 |
TOTAL: |
$707,144 |
Big RNSEC donors include alleged corporate thugs Enron, Worldcom, Adelphia, Tyco, Global Crossing, Qwest and Arthur Andersen. Enron was the No. 1 source of this money, pumping $721,272 into RNSEC (including $282,910 from Ken Lay and $50,000 from Jeff Skilling). While Cornyn returned $200,000 that he received from Enron, his RAGA will not return—or disclose—what it took from alleged corporate crooks. RNSEC, the top donor to the Republican Party of Texas this election cycle ($1.1 million), is popular with companies that incorporated off shore to dodge taxes that they otherwise would pay to Uncle Sam.
Major RNSEC donors clearly could benefit from RAGA’s promises to oppose active attorneys general like Mississippi’s Mike Moore (who is going after alleged WorldCom frauds) and Connecticut’s Richard Blumenthal (who sued Stanley Works to stop its move to Bermuda). Such stains may explain why RAGA launders its money.
Donations From Actual &
Alleged Corporate Villains
To the Republican National State
Election Committee
Jan. 1999 Through July 2002
| RNSEC Donor | RNSEC Amount |
Admitted or Alleged Skulduggery |
| Enron Corp | $721,272 |
Huge accounting frauds; TX/CA electricity gaming charges |
| El Paso Energy | $536,432 |
Round-trip trader; grave accounting concerns |
| Kmart Corp | $572,937 |
SEC accounting probe; changed dubious accounting practices |
| TXU Corp | $420,486 |
TX PUC charges of 'gaming' TX electric system |
| Citigroup | $395,909 |
Did deals hiding Enron debt; NY AG probing stock-pumping charges |
| *Global Crossing | $366,729 |
Insider trading and sham transactions to inflate sales alleged. |
| Reliant Energy | $328,940 |
Round-trip trade admissions prompted federal probes |
| MCI Worldcom | $311,077 |
Executives indicted for $7.2 billion accounting fraud |
| Interpublic Group | $200,000 |
Improperly accounted for $69 million in expenses |
| Merrill Lynch | $188,525 |
Settled stock-pumping charges for $100 million.; Enron deals probed |
| Dynegy | $168,982 |
Round-trip trader. Alleged: accounting/tax fraud, CA gaming charges |
| Williams Co's | $161,800 |
Resold capped CA energy elsewhere; SEC accounting probe |
| *Tyco International | $146,715 |
Improper accounting and executive perks alleged. CEO indicted |
| AOL Time Warner | $105,850 |
Federal accounting probe; ordered to preserve documents |
| Halliburton | $88,000 |
Accounting concerns involving construction-project cost overruns |
| PG&E Corp | $82,550 |
Improper accounting and asset transfers alleged |
| Qwest Comm. | $72,059 |
Restated $1.1 billion; sham transactions to inflate sales alleged |
| Duke Energy Corp | $65,000 |
Feds probing its admitted round-trip trades |
| Rite Aid Corp | $65,000 |
Executives indicted on fraud charges; restated $1.6 billion earnings |
| Arthur Andersen | $60,966 |
Obstructing justice conviction; approved many cooked books |
| Calpine Corp | $55,800 |
SEC urged it to revise financial disclosures |
| Xcel Energy | $50,000 |
FERC records show it discussed gaming CA system w/ Mirant |
| Adelphia | $43,000 |
Executives indicted for fraud after receiving $3.1 billion in loans |
| Xerox Corp | $42,300 |
Paid $10 million fine after overstating almost $2 billion in revenue |
| KPMG | $36,500 |
SEC probing role of KPMG partners in Xerox accounting scandal |
| Charter Comm. | $35,000 |
DOJ probe of accounting for capital expenses |
| Echostar Comm. | $25,000 |
10 state AGs probing alleged consumer-protection law violations |
| PNC Bank | $25,000 |
Restated $155 million after loan-transfer-accounting questions |
| Lucent Tech. | $11,250 |
SEC probing $679 million revenue restatement |
| JP Morgan Chase | $7,500 |
Crafted deals hiding Enron debt |
| Avista Corp | $5,000 |
FERC probing alleged manipulation of CA energy markets |
| CMS Energy Corp | $3,850 |
Disclosed overstated revenues from round-trip trades |
TOTAL: |
$5,424,429 |
* Reincorporated in Bermuda to dodge U.S. taxes.
