Business groups woo Democrats

“Some people have discovered virtues in me that they had previously overlooked,” Rep. Barney Frank of Massachusetts, who stands to become chairman of the Financial Services Committee if Democrats control the House, mused recently. “The prospect of the chairmanship seems to have been a very good introduction.”

Frank was referring to a surge in campaign contributions from pro-business groups -- groups whose members would have to deal with the liberal Democrat instead of a probably-more-congenial Republican. (Rep. Michael G. Oxley, the Ohio Republican who now heads the committee, is retiring after this term.)

Issues involving the financial services industry fall under the committee’s jurisdiction. And the New York Life Insurance Co.’s political action committee has contributed $10,000 to Frank this election season, up from $1,000 in the 2003-’04 cycle, according to PoliticalMoneyLine, which tracks political donations. The National Assn. of Insurance and Financial Advisors PAC contributed $10,000 to Frank this election season, up from $3,000 in the last cycle.

Frank is not alone. As prospects appear to grow that Republicans will lose control of the House and perhaps even the Senate, business groups, trade associations, and their lobbyists and political advisors have developed a sudden enthusiasm for contributing to Democrats -- especially to those likely to be in the House leadership or to head important committees if Republicans lose their majorities.

Rep. Charles B. Rangel (D-N.Y.), for example, would chair the tax-writing Ways and Means Committee in a Democratic-run House, and he has begun hearing from groups he says had not called since the Republicans won control of the House in 1994.

“I don’t think meeting with the chairman of General Electric has anything to do with my taking over Ways and Means; I just never realized how much they loved me,” Rangel joked.

In this election cycle, the congressman has raised $17,000 from General Electric’s political action committee for his campaign and his leadership PAC, which provides campaign funds for other Democrats. That’s more than twice what he collected the previous cycle, according to PoliticalMoneyLine.

None of this is to say business has changed sides. It continues to give far more to Republicans than to Democrats. And the major groups representing the business community, including the U.S. Chamber of Commerce, are working hard to protect the GOP majorities in Congress.

Moreover, many business groups seek to play down their campaign contributions to the other side. New York Life spokesman William Werfel said that his company’s PAC was giving more in general this cycle and that the GOP still got the most.

But as storm clouds gathered over the GOP this election season, business leaders, lobbyists and PACs quietly began to take out a form of political insurance -- contributing more to Democrats who, if they become the majority party, will wield power over issues affecting business’ bottom line.

“All of the Democratic ranking members have seen an increase in attentiveness to their fundraising.... There has definitely been an increase in people paying attention to the ranking members in particular,” a House Democratic aide said, speaking on condition of anonymity because he was not authorized to speak for members.

Frank, for one, sent out a solicitation asking contributors to “help me raise campaign funds which, as you know, I am using in substantial part to make sure that the next time we talk after that, I will be the Chairman in Waiting of the House Financial Services Committee.”

As Democrats try to encourage the shift in campaign contributions and Republicans try to counter it, the result can be a behind-the-scenes tug of war.

“The Democrats are telling business lobbyists: ‘Hedge your bets, we probably are going to be in control,’ ” said James Benton of the campaign watchdog group Common Cause. “The Republicans, on the other hand, are saying: ‘We’re watching. Don’t give your money to Democrats. We’re the people you can trust.’ ”

One lobbyist, who spoke on condition that he not be named because of the sensitivity of his relationship with the business groups he represented, acknowledged that business groups were ramping up their political donations to Democrats. “It’s typical of the business community,” he said. “They panic.”

Political spending is projected to reach $2.6 billion in 2005-’06, making this the most expensive congressional campaign in history, according to the Center for Responsive Politics. PAC spending is expected to exceed $1 billion for the first time, “reflecting the ever-growing influence of business, labor and ideological interests,” the center’s acting director, Sheila Krumholz, said.

Washington lobbyist Aaron Houston said he had seen business’ new interest in Democrats at a number of recent fundraisers. “There are a whole lot of $3,000 suits showing up,” he said.

Republicans say they’re not surprised.

“Business PACs go with wherever they see the wind blowing,” said Rep. Jack Kingston (R-Ga.), vice chairman of the House Republican Conference.

Typical of the emerging pattern is the National Beer Wholesalers Assn. PAC. Although Republicans still receive a larger share of its donations, the wholesalers have made $10,000 contributions to more than twice as many House Democrats as they did in the last election.

Craig Purser, president of the beer wholesalers, said in a written statement: “It looks like there are going to be more close races this year than in recent memory, so we are getting more requests from everyone. However, our strategy remains what it has always been. The NBWA-PAC simply continues to support those who stand with beer distributors on the issues that matter the most.”

House Minority Whip Steny H. Hoyer (D-Md.) had received no support from the beer wholesalers for at least a decade, but the trade group contributed $15,000 to the would-be majority leader’s campaign committee and his leadership PAC in this election cycle.

Thanks in part to larger contributions from some kinds of businesses -- including banking and insurance interests and defense and technology companies -- Hoyer has raised nearly $4 million through his campaign committee and leadership PAC, more than in any election cycle during his 24-year congressional career.

Rep. John P. Murtha (D-Pa.), who stands to chair the defense appropriations subcommittee in a Democratic-controlled House, has raised more than $2.5 million this year, including $179,400 from the defense industry -- more than in previous election cycles.

And Rangel is poised to surpass the $879,554 he raised from PACs for the last election cycle. If Democrats should take over one or both chambers of Congress, Krumholz and other experts said, business contributions are likely to increase even more.

richard.simon@latimes.com