Did They Get?
Payola Policies for Top Money Industries
In addition to showering individual elite donors with presidential sleepovers, appointments and contracts, the Bush administration has promoted laws and regulations that benefit entire industries. This section summarizes administration policies to benefit three industries that are major spawning grounds for Pioneers and Rangers:Finance
The self-destruction of George W. Bush's No. 1 career donor in late 2001 served as a crash course for investors and regulators into the corrupt practices that many U.S. corporations were using to cook their books. As regulators belatedly dug through the wreckage of Enron and dozens of other energy and communications companies, they discovered that crooked executives could not have cooked their books so thoroughly without the aid of their investment banks and legal and accounting firms. By the time Worldcom's $74 billion scandal began hitting the news in June 2002, even President Bush pledged to "usher in a new era of integrity in Corporate America." In this climate, fierce lobbying by Wall Street and the accounting industry could not stop the 2002 Sarbanes-Oxley Act. This law:
"Every investor knows that the market involves risk," Spitzer said in announcing the 2002 settlement. "But what every investor expects and deserves is honest investment advice . . . untainted by conflicts of interest."
The ink on the Sarbanes-Oxley Act scarcely had dried before the industry began demanding a rollback. Bush Ranger and Merrill Lynch CEO Stan O'Neal warned in an April 2003 Wall Street Journal op-ed that, "If we attempt to eliminate risk--to legislate, regulate, or litigate it out of existence--the ultimate result will be economic stagnation, perhaps even economic failure." Around this time, Morgan Stanley--which produced three Bush Rangers--circulated a proposal to block Spitzer and other state regulators from imposing reforms on the securities industry. When Rep. Richard Baker (R-La.) introduced such legislation, SEC Chair William Donaldson tacitly endorsed it--before it fell victim to unfavorable media coverage. Meanwhile, each month the Bush campaign announced a new crop of Wall Street Pioneers and Rangers who were not part of Bush's fundraising elite in 2000.
While pledging to crack down on corporate corruption, President Bush has promoted Wall Street's agenda. Bush delivered the securities industry's top 2003 legislative priority through his tax plan, which eliminated what the industry denounced as a "double taxation" of dividends. Bush tax cuts on dividends and capital gains benefited the finance industry as a whole and personally enriched industry executives. Based on the $28.4 million compensation package that Bush Pioneer and Bear Stearns CEO James Cayne received the year before, Citizens for Tax Justice estimated that Bush tax cuts would slash Cayne's personal tax payments by $610,000 in 2003 alone. Big-ticket items that remain on Wall Street's do-it list include: Privatizing Social Security; Curtailing class-action lawsuits; and heading off efforts to better regulate derivatives, hedge funds and arcane tax dodges.
Meanwhile, credit-card companies are clamoring for strict consumer-bankruptcy limits that would save them $1 billion a year. Giant MBNA Corp., which spawned two Bush Rangers, would make at least $75 million a year off this measure. Similar bankruptcy legislation died in 2002 only after Democrats added an amendment to stop anti-abortion activists from declaring bankruptcy to dodge court-imposed fines.
and Natural Resources
Soon after taking office, President Bush began freezing or gutting a slew of environmental regulations that:
The still-secret deliberations of Cheney's industry-dominated energy task force produced the administration's supply-side National Energy Policy. Eschewing energy conservation, it advocated: Drilling more public lands for oil and gas; Further deregulating electric utilities; and Renewed investments in nuclear and coal plants. President Bush also abandoned the international Kyoto treaty on global warming, reneging on a campaign promise to back curbs on fossil-fuel emissions of carbon dioxide. A Senate filibuster stalled the administration-backed Energy Policy Act in 2003, but this massive giveaway to the extractive industries is expected to be revived. Key provisions of the 2003 bill would have: Deregulated electric utilities; Increased energy drilling on public lands; and Shielded producers of the toxic gasoline additive MTBE from liability for contaminating drinking water.
In 2003, Bush's EPA gutted rules that required old coal-fired power plants to install pollution controls when they renovate. This EPA ruling undercut lawsuits that sought to impose huge fines and costly upgrades on electrical utilities, including Southern Co. and FirstEnergy Corp. which have executives who are elite Bush donors. The Attorneys General of Connecticut, New Jersey and New York pledged to try to fill this enforcement void by filing litigation against these polluters. Bush's subsequent "Clear Skies" initiative would replace existing clean-air rules with a "market-based" system of tradable pollution credits. This proposal, which endorses voluntary restrictions on carbon dioxide pollution, would ease emission restrictions on sulfur dioxide, nitrogen oxide and mercury emissions. Bush Pioneer Tom Kuhn, who heads the electric industry's trade group, called Clear Skies "an exciting opportunity for our industry." Meanwhile, the EPA's inspection and enforcement staff has fallen to its lowest level in history, according to the Center for Progressive Regulation. The number of polluters being fined is dropping, as are the amounts of the fines that the EPA does impose.
Bush's 2004 Rangers include the CEOs of Pfizer and mail-order drug company Direct Meds. Another 2004 Pioneer is a former vice chair of Bristol Myers-Squibb, where executives reportedly were warned that their names would be reported to the CEO if they failed to follow a company prescription to contribute to the Bush campaign.
Insurers and HMOs also backed the Medicare law, which is expected to pay them billions of dollars to entice them to offer Medicare drug coverage. Bush's elite 2004 donors include HMO executives from WellCare, United Health Group, Foundation Health Systems, AmeriGroup and Blue Cross Blue Shield of Florida.
In his State of the Union addresses in 2003 and 2004, President Bush called for caps on jury awards in medical malpractice lawsuits, a key legislative goal of health insurers and HMOs, as well as hospitals and physicians. A bill imposing a $250,000 cap on non-economic damages such as pain and suffering passed the House but stalled in the Senate in 2003. Bush's elite 2004 donors include seven physicians and Charles "Chip" Kahn, president of the Federation of American Hospitals. Kahn made malpractice caps the centerpiece of his Pioneer money pitch to his industry, telling the National Journal, "That's why people were motivated."