COLUMN ONE : Campaign Gifts Flow From Rich : Donations to candidates are again unrestrained and the law virtually unenforced. Some of the heaviest spenders are over their legal limit.


Over the past three years, as Congress debated legislation to limit hostile business takeovers, Texas corporate takeover specialist Harold C. Simmons and his family pumped more than $250,000 into the campaign coffers of key federal office-seekers. In the process, Simmons’ contributions more than doubled the legal limit on political giving by the very rich.

Simmons made more than $120,000 in personal contributions to President Bush and members of Congress who were in a position to influence legislation governing corporate takeovers.

For the record:

12:00 a.m. May 5, 1990 For the Record
Los Angeles Times Saturday May 5, 1990 Home Edition Part A Page 2 Column 2 National Desk 2 inches; 51 words Type of Material: Correction
Hunt contribution--The Times reported on April 18 that Texas oilman Ray Hunt made $17,000 in federally regulated contributions to candidates in 1988 and $10,000 in soft money contributions, which are not regulated by the Federal Election Commission. The $10,000 was not a soft money contribution, but has since been credited to his wife, Nancy, in FEC records.

He gave $59,958 just to candidates seeking election in 1988, more than double the $25,000 limit. His relatives, after consulting with Simmons, gave to a similar list of candidates for public office after consulting with Simmons.


At the same time, Simmons proved an effective force in Congress. Campaign contributions and tireless lobbying by Simmons and others of the nation’s biggest corporate raiders, according to congressional sources, have played a big role in blocking legislation that would have severely restricted leveraged buyouts and other hostile takeovers.

While Simmons is a leader among wealthy patrons of the American political system, he is certainly not the only millionaire who exceeded civil limits established by a Watergate-era law designed to prevent the rich from exerting undue influence on the political system.

A Times study, which used computer searches of federal election reports to focus on the political giving habits of more than 100 of the nation’s wealthiest and most influential citizens, found that at least nine others also exceeded the legal limit during the 1988 election campaign.

The nine others were corporate buyout specialists Ronald O. Perelman, Meshulam Riklis and Henry Kravis; Kravis’ brother, Raymond; Riklis’ son, Ira; Manhattan developer Donald Trump; grain trader Dwayne O. Andreas, and his wife, Dorothy Inez, and Caroline Rose Hunt, daughter of the late Texas oilman H.L. Hunt.

Kravis, like Simmons, exceeded the limit by more than 100%, according to federal records.

When contacted by The Times, spokesmen for each of these rich contributors acknowledged the accuracy of the records.


“I can’t make the problem go away,” said John Garrett, Simmons’ lawyer, after reviewing his client’s canceled checks and contribution records.

Spokesmen for most of the other nine donors asserted that the violations were inadvertent. A few pointed out that they had exceeded the limit only by a few hundred or a few thousand dollars.

These heavy contributors are the sorts of people who have important business and financial interests affected by decisions made in Washington by officials they help to elect. So enormous have such contributions become that many of the congressional recipients of the largess are beginning to worry about the consequences and to agitate for reform.

“There is too much money in politics; there is too much special-interest influence,” declared Sen. David L. Boren (D-Okla.), who himself has received thousands of dollars from these contributors and is leading the drive for reform. “It’s an open invitation to corruption.”

Ironically, the records suggest, wealthy individuals are giving even more money to presidential and congressional candidates than they did two decades ago when Congress enacted a law intended to restrain political contributions by the very rich.

Example of Donations

The Bass family of Ft. Worth, for example, distributed close to $700,000 to a variety of candidates for federal office over the past three years--most of them defenders of Texas oil interests. Many others doled out contributions of as much as $100,000 to a single presidential candidate.

The Times review of federal and state campaign records shows that political giving by the rich is now largely unrestrained.

Even many of those who technically abide by the $25,000 limit seem to have found other ways to channel additional money to candidates. Some have relatives who contribute to a similar collection of candidates. Some make so-called “soft money”--contributions to presidential and congressional candidates that are not limited by law because they are forwarded to state political parties for party-building activities.

Among the givers who used one or both of those entirely legal techniques for giving more than $25,000 were the Bass family; Hollywood executive Lew R. Wasserman; Disney executives Michael D. Eisner, Frank G. Wells and Jeffrey Katzenberg; Chicago industrialist Lester Crown, and several descendants of the late Texas oilman, H.L. Hunt.

Although Wasserman and the Bass family have been fined in the past by the Federal Election Commission for their unrestrained giving to political candidates, FEC officials acknowledge that they do not adequately monitor compliance with the limits on individual donations. A search through federal records shows no penalties exceeding $250.

Fred Wertheimer, president of Common Cause, the self-styled citizens’ lobby, said the information uncovered by The Times’ study of campaign giving “means that the laws on the books intended to prevent wealthy contributors from using large amounts of money to potentially influence government are being ignored.”

The FEC’s failure to enforce the laws governing donations by individual contributors demonstrates the need for a massive overhaul of federal election laws, which is currently being considered in Congress, according to Wertheimer. He said the FEC does not monitor compliance with the $25,000 limit, and also has failed to write regulations that would restrict soft-money contributions.

“If we had effective enforcement of the law today, the soft-money contributions would not be taking place and contributions over the aggregate limit would not be occurring,” he said. “Since the FEC is not doing its job, Congress must again act to make sure the law means what it says.”

The current law, enacted in 1974, was intended to prevent the kinds of activities that occurred during the 1972 presidential campaign of Richard M. Nixon. According to public records, Nixon’s aides collected contributions of $1 million or more from such rich industrialists as W. Clement Stone of Chicago, Max N. Fisher of Detroit and Richard M. Scaife of Pittsburgh, Pa. At the time, those contributions were legal.

Under the law, contributors are permitted to give up to $2,000 to a congressional campaign, $5,000 a year to a political action committee and $20,000 a year to a party committee. Total contributions for a single year (donations in 1989 to a candidate running in 1990 count toward the 1990 limit) may not exceed $25,000.

Although the FEC has “no legal authority to fine anyone,” according to FEC spokesman Scott Moxley, it can try to negotiate civil fines of up to $5,000 for unwitting violations and $10,000 for willful violations, but federal records showed no penalties approaching more than a fraction of those limits.

In violations deemed to be “substantial and willful,” Moxley said, the FEC could refer cases to the Justice Department for criminal prosecution, and the penalties could range up to $25,000 and one year in jail.

In the 16 years since the law was passed, however, party leaders, candidates and their rich contributors have found numerous ways to circumvent those restrictions. The result is a system in which, as Wertheimer put it, “Watergate-size and Watergate-style campaign money are once again a major force in federal elections.”

Anita Dunn, communications director for the Democratic Senatorial Campaign Committee, said some contributors may actually be unaware of the $25,000 limit because the candidates, PACs and parties are not bound by law to remind them about it. “There’s no rule that you have to inform people what the federal aggregate limit is,” she said.

The giving habits of Simmons, Kravis and Perelman vividly illustrate how some very rich people are eager to fill the campaign coffers of influential candidates--especially when their business interests appear to be threatened by government action.

These three men had a great deal at stake in 1988 and 1989, when Congress considered legislation that would have made it easier for corporate managers to fend off hostile takeovers. George Bush, first as a candidate and then as President, hinted that he might support legislation to toughen the tax treatment of corporate debt, which is a vital component of most hostile takeovers.

But both Bush and Congress eventually backed down.

Some members of Congress insist that individual contributions are so small when measured against their total fund-raising needs that they have little influence. “I really do not believe that senators are going to be bought for a $1,000 contribution or for a $5,000 contribution,” said Sen. John C. Danforth (R-Mo.).

But economist Robert Reich of Harvard, among others who closely observed the process, says campaign contributions from corporate raiders were directly responsible for dissuading Congress and the President from taking any action against corporate takeovers.

“Wall Street has been pouring money onto Capitol Hill and both Democrats and Republicans have developed a strong thirst for it,” he said. “All of this is manifest in Wall Street’s extraordinary power and the resolute timidity of Congress in the face of that power.”

Over the past three years, the Simmons, Kravis and Perelman families each made more than $250,000 in political contributions, most of them to Bush and members of Congress who were in a position to play a key role in killing any corporate takeover legislation.

In the House, Simmons gave contributions of between $500 and $1,000 to the men with the most control over such legislation: John D. Dingell (D-Mich.), chairman of the Energy and Commerce Committee; Edward J. Markey (D-Mass.), chairman of the subcommittee with direct responsibility for financial markets, and three other members of the committee--Mike Synar (D-Okla.), John Bryant (D-Tex.) and Joe L. Barton (R-Tex.).

While Markey’s subcommittee held extensive hearings on the corporate buyout issue during 1989, it did not draft legislation.

In the Senate, Simmons and Kravis gave contributions of $1,000 to $2,000 to many members of the Banking and Finance Committees, which have jurisdiction over corporate finance. Finance Chairman Lloyd Bentsen (D-Tex.) received $5,000 from the Simmons family and $2,000 from Kravis for his 1988 reelection campaign. After publicly criticizing the takeovers, Bentsen announced in March, 1989, that his panel could propose no legislation.

The year before, the Banking Committee sent to the Senate floor a bill designed to curb corporate takeovers. But Sen. William Proxmire (D-Wis.), then the committee’s chairman, abruptly pulled the bill from the floor after the Senate voted 57 to 40 in favor of an amendment that would have curbed the use of so-called “poison pills” by managers to avert outside takeovers.

That pro-takeover amendment effectively killed the bill, and 21 of the 26 senators who had received campaign contributions from Simmons, Kravis or Perelman over the past three years voted in favor of it. Only five--John Heinz (R-Pa.), Albert Gore Jr. (D-Tenn.), Donald W. Riegel Jr. (D-Mich.), Daniel Patrick Moynihan (D-N.Y.) and Paul Simon (D-Ill.)--voted to protect poison pills.

While contributing these large sums of money, Kravis, by his own account, also privately lobbied about 50 members of the House Ways and Means and Senate Finance Committees, arguing that corporate takeovers generally are good for the nation’s competitiveness. One House member who met with him twice recalled that Kravis was “very persuasive.”

Unlike Kravis, Simmons seldom if ever does any personal lobbying in Washington. Despite his wealth and phenomenal success, he remains a shy, unassuming personality.

A poor boy from rural Texas, Simmons, now 58, began his business career with an investment of $5,000 and built a successful drug store chain that he sold to the Eckard drug store chain. Then, through a series of corporate takeovers, he amassed a financial empire currently valued at nearly $2 billion. He recently lost a battle for control of Lockheed Corp.

Lawyers Name Wife

Although FEC records show that Simmons contributed more than twice the $25,000 limit to candidates in 1988, his lawyers assert that $7,000 of those contributions were actually intended to be donated by his wife, Annette, but she did not sign the check.

The lawyers acknowledged that the FEC records are otherwise accurate. And even by their own accounting, Simmons was $27,958 over the annual limit for political giving set by federal law.

A lawyer representing Simmons said the couple wrongly believed they would not run afoul of the law if they kept their combined donations under $50,000. “That may not be the law, but that’s the way he does it,” Simmons’ lawyer said. He did not explain how Simmons and his wife failed to abide by their self-imposed $50,000 ceiling.

In addition to Simmons’ $59,958 in contributions, federal records show that his wife contributed $10,750, his two brothers and sister-in-law gave $15,175 and his four daughters--three of them still college students--kicked in another $51,500. That brought the family’s total contribution to more than $137,000.

Like most rich families that make substantial political contributions, all members of the Simmons clan gave money to a similar list of candidates. Critics of the current system view this pattern as evidence that individuals such as Simmons are actually responsible for all the donations. Indeed, according to party officials, the candidates who receive the money assume it is all coming from one source.

The parallel contributions of Simmons and his family members are particularly clear in the case of his three college-student daughters. In 1987, for example, Scheryle Simmons gave $5,000 to the PAC of one of her father’s corporations, Contran, and another $5,000 to the PAC of the Chicago-based law firm that does business for her father, Kirkland Ellis. Simmons’ lawyer acknowledged that Simmons and his wife and daughters discussed their contributions before making them.

While Simmons shuns lobbying, Kravis and Perelman are well known in political circles, and both clearly enjoy rubbing elbows with Washington’s power elite. Perelman’s national reputation soared in 1986 when he acquired Revlon for $3 billion, and Kravis is best known for the biggest takeover in history, the $25-billion leveraged buyout of RJR Nabisco Inc. in 1988.

Records show that Kravis, 45, contributed $56,711 directly to federal candidates and political action committees in 1988, or more than twice the legal limit. His brother, Raymond, an internationally recognized oil and gas consultant, exceeded it by giving $34,500. His wife, fashion designer Carolyne Roehm, contributed another $3,711. Like the Simmons family, the different members of the Kravis clan gave mostly to the same candidates.

A spokesman for Kravis declined to comment on the FEC records of his contributions.

Kravis also made a so-called “soft money” contribution of $100,000 to Team 100, a program run out of Republican National Committee headquarters in 1988 by Bush’s chief fund-raiser, Robert A. Mosbacher, now secretary of commerce.

Although the money was raised by Bush’s presidential campaign, it was not subject to federal limitations because it technically was spent on the state level by the Republican Party for such things as voter registration and get-out-the-vote drives.

It is estimated that Bush and his Democratic opponent, Michael S. Dukakis, used this loophole in federal election laws to raise about $50 million between them in soft money in 1988. The money is used to supplement the $92.2 million in public funds received by presidential candidates.

Even Donations

While Simmons and Kravis favored Republican candidates, Perelman, 46, whose personal wealth is estimated at $2.75 billion, showed little or no party favoritism in his giving during the last election campaign. His soft-money contributions were evenhanded--$100,000 to the Republicans’ Team 100 and $100,000 to a similar fund created by Democratic fund-raiser Robert Farmer for Dukakis.

According to FEC records, Perelman also gave a total of $30,500 in contributions that were subject to federal law, or more than $5,000 over the legal limit. These included $1,000 each to Democratic presidential hopefuls Dukakis, Joseph R. Biden Jr., Gary Hart, Richard A. Gephardt and Gore, and $500 each to GOP presidential hopefuls Bush and Bob Dole.

A spokesman for Perelman, James Conroy, acknowledged that his boss in 1988 may have slightly exceeded the limit on contributions subject to federal law. But he argued that $5,000 of Perelman’s $30,500 in donations reported to the FEC should not be subject to federal law because it was given to the Presidential Trust, a Republican Party fund, which Perelman mistakenly thought was a soft-money account.

Another corporate raider, Riklis, 77, the Beverly Hills billionaire who owns the retail conglomerate Rapid-American and has been in the business of buying out corporations much longer than Simmons, Kravis and Perelman, also exceeded the limit on political giving by $1,000 in 1988, according to FEC records. Riklis’ wife, singer Pia Zadora, gave $23,000, and his son, Ira, contributed $29,500, more than the law allows, to a list of candidates that was similar but not identical.

Attorney Arnold Brozer said the elder Riklis was under the mistaken impression the law would allow him to credit a $1,000 contribution to Biden’s 1988 presidential campaign to 1987, since that was the year Biden dropped out of the race. He said Ira assumed that one of his federal contributions--he could not remember to whom--was a soft-money gift outside the purview of federal law.

“It was believed by both Ira and Meshulam (at the time they contributed the money) that they were not violating the law,” Brozer said.

The political giving of the Riklis family does not fit the pattern established by other corporate raiders. None of the candidates funded by Riklis are members of committees with direct jurisdiction over legislation affecting corporate takeovers or the varied business interests of his vast financial empire.

The favorite candidate of the Riklis family was Biden, the Delaware Democrat who is chairman of the Senate Judiciary Committee. He received $12,000 in campaign contributions from the Riklis family during the past three years for his Senate and presidential campaigns.

Friends say Riklis’ son, Ira, is primarily responsible for these contributions. While a student at Wharton Business School, Ira met with Biden, decided he liked the Delaware senator’s policies and persuaded his whole family to contribute.

It is not just the corporate raiders who have exceeded the limit on campaign contributions. The list includes men and women with other interests in Washington as well.

In supermarket tabloids, Donald Trump is known primarily for his stormy divorce battle with his wife, Ivana. In New York City, he is known as the owner of Trump Tower and the Trump Shuttle. But among many candidates for high office, it seems, he is known as a soft touch.

Federal records show that Trump made $42,300 in contributions subject to federal law during 1988 and exceeded the federal limit by $17,300. He also gave $100,000 in soft-money to Team 100, and his family members kicked in another $13,500 in contributions to various candidates.

Trump’s beneficiaries range across the ideological spectrum from liberal Rep. Ted Weiss (D-N.Y.) to conservative Rep. Jim Courter (R-N.J.). Sources within the Republican and Democratic Parties say Trump appears to contribute money to politicians primarily because it gives him an opportunity to socialize with the nation’s leaders.

Anthony Gliedman, an executive vice president of the Trump Organization, said that when his boss learned a year ago that he had exceeded the $25,000 limit in 1988, he quickly asked for refunds. But Gliedman knew of no refunds received by Trump, and none of the recipients have reported any refunds to the FEC, as required under federal law.

Andreas, chairman of Archer Daniels Midland Co., one of the largest grain trading firms in the world, has long been an acknowledged leader in the art of influencing government officials. He has been friends with every President since Harry S. Truman and currently makes frequent trips to Moscow in his corporate jet for private meetings with Soviet President Mikhail S. Gorbachev.

The grain industry enjoys government subsidies at every level of production and distribution--all of them regulated by Congress and the Administration in close consultation with the big agricultural leaders such as Andreas. Archer Daniels Midland owes much of its overseas sales to U.S. grain export subsidies.

Find Check

Two decades ago, Andreas played an unwitting role in the development of the legislation that he now appears to be violating. The law was written after Watergate investigators discovered that a $25,000 check written by Andreas to the 1972 campaign of President Nixon had found its way into a Miami bank account of Bernard L. Barker, one of those arrested in the Watergate break-in.

That embarrassing disclosure did nothing to dampen Andreas’ eagerness to contribute money to the American electoral system. To this day, he remains a stalwart financial backer of the Republican Party and a contributor to many Democratic candidates as well. In fact, Andreas, a regular churchgoer, has said he views political giving as an obligation similar to his commitment to contribute to his church.

In 1988, according to FEC records, Andreas made $28,680 in political contributions that are subject to federal law--or $3,680 more than the limit. Claudia Madding, a spokeswoman, said Andreas inadvertently violated the limit because he did not understand that contributions to candidates in a non-election year are attributed to the year in which the candidate stands for election.

In addition, Andreas’ wife, Dorothy Inez, gave at least $27,680--or $2,680 over the limit--to a nearly identical list of candidates. Eight other Andreas relatives contributed a total of $99,500 to a similar list of candidates.

The Andreas family list of favored candidates is replete with members of Congress who have big roles in making tax and agriculture policy governing export and sales of U.S. grain, such as House Agriculture Committee Chairman E. (Kika) de la Garza (D-Tex.). Andreas also gave a $100,000 contribution to Team 100, the Bush campaign’s soft-money fund.

The Hunt family of Texas gave $148,000 in 1987 through 1989 to a list of candidates dominated by Texas advocates of the oil industry. The leading contributors in the Hunt family were Caroline Rose, 77, who gave $25,700 in 1988--$700 over the limit--and her half-brother Ray, 47, who contributed $17,000 plus $10,000 in soft money.

Jim Oberwetter, a spokesman for Caroline Rose Hunt, who runs a chain of posh hotels, said her $10,000 contribution to the GOP Presidential Trust was a soft-money donation not subject to federal law. But Republican spokeswoman Leslie Goodman said all contributions to the Presidential Trust are subject to federal law. She added that party records show that a letter was sent to Hunt advising her that the donation was not soft money.

Some wealthy donors, such as Disney President and Chief Executive Officer Frank G. Wells, say they are meticulous about keeping their political giving within the letter of the law. In fact, Wells and other top Disney executives use a computer program designed for them by their lawyers to keep them from violating the law.

Federal and state records show that Wells, 58, and his wife, Luanne, gave at least $118,250 to candidates and political organizations over the last three years, including $50,000 in soft-money contributions to the Democratic Party and a $5,000 donation last year to the California Democratic Central Committee.

Like other Disney executives, Wells favors candidates supported by the Motion Picture Assn. of America. These include Rep. Jack Brooks (D-Tex.), whose subcommittee on economic and commercial law has jurisdiction over many film industry issues, and California Democrats such as Reps. Howard L. Berman of Panorama City, Henry A. Waxman of Los Angeles and Anthony C. Beilenson of Los Angeles.

Give to Sen. Bradley

The Disney group also gave generously to the campaign of Sen. Bill Bradley (D-N.J.), but that was a different matter. Although Bradley serves on the tax-writing Senate Finance Committee, he is also a close friend of Disney chairman Michael Eisner and a man whom Disney executives would like to see run for President in 1992.

Another big Hollywood giver, MCA chairman Wasserman, 76, has also carefully monitored his contributions ever since December, 1980, when the FEC fined him $250 for exceeding the $25,000 maximum. His wife, Edith, also gives to political causes.

Over the past three years, Wasserman has made $72,000 in contributions that were subject to federal law and his wife has given $37,500, according to FEC records. In addition, he was among those who gave $100,000 to Dukakis’ soft-money fund in 1988.

Like Wasserman, Texas oilman Perry Richardson Bass, 75, was fined $250 by the FEC in 1981 for violating the $25,000 limit. Although he said he had intended that half of the contributions be listed in the name of his wife, Nancy Lee, there was no record of this. The FEC ruled that in order for a contribution to be recorded in the name of both spouses, the check or an accompanying letter must be signed by both. Otherwise, the full donation would be counted as coming from the individual who signed the check.

The fine did not discourage the Bass family from giving huge sums of money to political candidates. Bass, his four multimillionaire sons, Sid, 46, Edward, 44, Robert, 41 and Lee, 33, as well as other relatives gave more than $680,000 over the past three years, making them the most generous family in The Times survey. These gifts included soft-money contributions of nearly $400,000 to Bush, Dukakis and the Texas Republican Party.

Oil Industry PACs

The Bass family, whose wealth was derived originally from Texas oil, have contributed primarily to Texas politicians such as Democrats Bentsen, Reps. Martin Frost and Jim Chapman and former House Speaker Jim Wright, and Republicans including Sen. Phil Gramm and Reps. Joe L. Barton, Dick Armey and Lamar Smith. They have also contributed to PACs that advocate the views of the oil industry.

Although most rich contributors insist that their relatives’ giving is independent of their own, Lester Crown, 64, whose $2-billion financial empire includes a 22% interest in General Dynamics, readily admits some cooperation with family members.

The Crown family contributed more than $154,000 over the past three years to a long list of House and Senate members whose committee assignments give them jurisdiction over arms sales, such as House Armed Services Committee Chairman Les Aspin (D-Wis.). Among other things, General Dynamics manufactures the F-16 fighter plane used by the U.S. Navy and many foreign governments.

A Crown spokesman explained that many contributions attributed to Lester in federal records were actually made by his 96-year-old father, Henry. “His dad gave the money,” explained an aide, “but his father was not available that day, so Lester signed his dad’s check.”


Contributions of the family of Texas corporate takeover specialist Harold C. Simmons to federal candidates:

1987 1988 1989 Harold C. $24,660 $59,958 $22,250 Annette (wife) 10,750 5,000 Andrea (daughter) 5,000 16,000 Lisa (daughter) 10,000 14,000 5,000 Scheryle (daughter) 10,000 17,000 Serena (daughter) 4,000 5,000 Douglas (brother) 4,800 G. Reuben (brother) 8,375 Mrs. G. Reuben 2,000 Total $49,600 $136,883 $37,250

Source: Federal Election Commission