Business Groups Invested in Races, Now Wait for Returns

Times Staff Writer

Lobbyists for the nation’s leading business groups have been toasting the success of what they describe as an unprecedented effort this year to help elect President Bush and Republican congressional candidates. Now they plan to collect on that investment.

“With his victory and better numbers in the Senate and the House, we hope we would get to some things we believe are long overdue,” said Dirk Van Dongen, president of the National Assn. of Wholesaler-Distributors and a leader of this year’s effort to mobilize the business community behind the Bush candidacy.

Business was generally pleased with the first four years under Bush, but Tuesday’s victory now brings within grasp some of the things it was unable to secure in his first term.

The list, according to interviews with lobbyists and trade associations, includes making tax cuts for capital gains and dividends permanent, limiting liability lawsuits, changing bankruptcy laws and opening previously restricted land in Alaska and elsewhere for energy exploration.


Business groups also count on more narrow shifts, such as changing health insurance rules in a way that benefits some of the GOP’s most ardent allies, easing corporate government reform measures at the Securities and Exchange Commission, and making specific adjustments to the tax code.

Assembling interest group wish lists and agendas is a postelection rite in Washington, a modern-day spoils system in action. For businesses, spending time and money on a campaign is a practical and tactical decision, literally an investment.

Bush’s first term brought tax cuts, loosened rules on clean-air standards and workplace safety sought by business, and Medicare reforms emphasizing private sector solutions.

Campaign support from business this election did not come in the form of higher direct contributions to campaigns -- business giving roughly matched the $1.2 billion donated in 2000.

The big push came from a new direction as trade associations and Washington lobbyists, flexing their grass-roots skills as never before, produced elaborate get-out-the-vote drives in battleground states.

Thousands of businesses urged their employees to vote and educated them on pro-business positions. Business interests are claiming credit for making the difference in key states narrowly won by Bush and other Republican candidates.

There were other firsts: Some business trade associations, including the U.S. Chamber of Commerce, made clear they would like to see Bush win, the first time they have indicated a favorite in a presidential contest.

The greatest contribution of Washington-based business organizations, however, was the on-the-ground effort for candidates in hard-fought congressional races.


Nowhere was this more dramatically displayed than in South Dakota, where former Republican Rep. John Thune defeated Senate Minority Leader Tom Daschle. Washington business lobbyists made an extraordinary effort to usher Dashcle from power because they said they were frustrated with his role in blocking tax cuts, energy legislation and liability limits.

“It was Tom Daschle the obstructionist who motivated us to stand up publicly and form Team Thune,” a coalition of two dozen trade associations and lobbying firms, Van Dongen recalled.

The group was modeled after efforts used in Georgia and Minnesota Senate races in recent years. “We recognized we can take the mechanism of a Washington legislative coalition and reposition it for political purposes,” Van Dongen said.

In short order, the coalition raised half a million dollars for Thune from corporate contacts. By election day, it had funneled 200 volunteer lobbyists and lawyers from Washington to South Dakota, matching the labor organizers and Democratic lobbyists supporting Daschle. Similar business teams were organized to support the successful GOP Senate candidates in South Carolina and North Carolina.


Some Washington lobbying shops were nearly empty in the days before the election. At Piper Rudnick, senior partners estimate that up to 60% of the firm participated in campaigns.

A senior policy advisor at Piper, former House Majority Leader Dick Armey (R-Texas), was active with an organization he co-chairs called FreedomWorks/Citizens for a Sound Economy. The corporate and member-funded organization made more than 1 million telephone calls in battleground states. Armey is already logging the returns from such efforts.

“The president, within 48 hours of the election, said he is going to hit the ground running,” Armey said last week. “In his press conference he spoke of tort reform, social security and tax reform. Those are some of the biggest issues out there.”

They are also among the issues that Armey and his organization have backed -- and that interest some of Piper’s clients.


The Chamber of Commerce will not reveal its overall budget for the campaign, although informed sources estimate it will approach $40 million, the result of corporate contributions.

The drug industry was the biggest spender of any industry in the 2000 and 2002 elections. Its contributions, always difficult to trace, were even more obscure this cycle.

In 2000 and 2002, it sent money to nonprofit groups with names like Citizens for Better Medicare that ran millions of dollars worth of broadcast ads in key states. The industry spent $30 million to $50 million on those campaigns during each of those cycles.

This year, the Pharmaceutical Research and Manufacturers Assn., an industry trade association, has been less visible in part because campaign finance laws limited the use of corporate funds in broadcast political ads. Some organizations that PhRMA backs ran print ads and did mailers in key states and made calls urging support for candidates who supported the Bush Medicare proposal and opposed drug importation from Canada. Drug companies were significant donors to the Chamber of Commerce campaign efforts this year.


PhRMA spokesman Jeff Trewhitt declined to discuss campaign-related spending but said the organization had two major priorities: keeping the Bush Medicare drug plan on track in 2006 and blocking efforts to permit importing drugs from Canada. The association’s members were concerned about proposals by Democratic candidate Sen. John F. Kerry that would encourage Medicare to bargain for lower drug prices.

Banking and investment houses are excited about the president’s plan for social security reform and health savings accounts that include private investment accounts. In addition, banks and credit card companies list bankruptcy reform on the priority list. Bankers also want legislative and executive branch action allowing them to move into real estate, a move opposed by realtors, another major group of donors.

Coal and utility companies continued to be a significant source of support for Republicans. Their wish list includes an energy bill and a market-based plan to control mercury and other pollutants.

Oil and gas companies that have been loyal benefactors of the Bush-Cheney ticket are likely to see immediate results. The Interior Department is expected to announce decisions in the next few weeks that would permit some oil and gas drilling on once-protected land on Colorado’s Roan Plateau and New Mexico’s Otera Mesa.


The business trade associations that advocated most strongly for Bush have as a top item on their list a new kind of health insurance that the groups could offer their members. Association health plans would allow small businesses to pool together to offer greater health insurance options than they could on their own.

The associations say such plans would provide health coverage for uninsured small-business employees, a group that suffers because small firms often cannot afford to offer health insurance. The sale of such insurance could yield substantial revenue for trade associations themselves, which would in some cases become the marketers of these plans.

The president publicly backed association health plans in the final days of the campaign.

“We are fresh from having proved to ourselves that we can change the outcome of elections,” said Michael Baroody, executive vice president of the National Assn. of Manufacturers. “Using the same tools -- employee involvement and education -- we can change the outcome in policy terms across the wide spectrum of issues from legal reform to tax relief.”




A winning investment

Business organizations spent millions of dollars supporting Republican candidates in this year’s election. Now many hope their wish lists will be fulfilled.


Contributions to federal candidates and parties in 2004:

*--* % given to Total given to GOP GOP of total Industry (in millions) contributions Real estate $43.0 59% Securities/investment $34.7 51% Health professionals $34.0 63% Insurance $18.8 67% General contractors $15.5 75% Commercial banks $15.4 64% Oil and gas $14.4 81% Business trade groups $1.7 85%


Source: Federal Election Commission data analyzed by Center for Responsive Politics


PAUL DUGINSKI / Los Angeles Times