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The McConnell Machine
Full Coverage from Kentucky.com
A lucrative connection
Lobbyist's close ties to senator pay off for them both...and clients
By John Cheves, Lexington Herald-Leader, October 22, 2006
WASHINGTON - -
Kentucky farmers needed help from Sen. Mitch McConnell, R-Ky., three years ago as Congress debated a buyout of their government tobacco quotas.
The farmers ended up with the perfect lobbyist to present their case: Gordon Hunter Bates, McConnell's recently departed chief of staff and campaign manager, just getting his start in the private sector.
They signed up as clients of the brand-new Bates Capitol Group, a small firm Bates opened after he was disqualified from the 2003 race for Kentucky lieutenant governor because he had been living in Virginia.
Bates charged about $350,000 in fees, and with McConnell's help, the farmers got what they wanted, a $10 billion buyout over a decade.
As the deal was approved, McConnell gave a Senate floor speech and described Bates' role as "extremely important."
"Hunter is like a son to the senator, and having that kind of access is a big help," said Danny McKinney, chief executive of the Burley Tobacco Growers Cooperative Association in Lexington. "Most of the work he
did for us was just the two of them in a room, in private, without the rest of us."
Bates soon hired other lobbyists tied to McConnell and is now perceived as a gatekeeper to one of the most powerful figures in the Senate. His business likely will boom if McConnell, now the majority whip, replaces
the retiring Senate Majority Leader Bill Frist, R-Tenn., in January, as planned.
From his seat on the Senate Appropriations Committee, McConnell has recommended about $45 million in federal funds for four of Bates' clients, interviews and public records show. The senator has filed or rewritten
bills for three other clients, loosening pension contribution rules and making it harder to sue businesses.
Overall, Bates, who is 38, reports that he has charged about $2.4 million in fees to clients helped by McConnell -- more than half of the fees he reports for his first three years as a Washington lobbyist. Those
clients have given McConnell about $120,000 in campaign contributions. Most did not give to McConnell until
they hired Bates. They declined to say whether Bates, who asks people to give to McConnell, solicited their own donations.
In a city still touchy about the criminal investigations that surround disgraced Republican lobbyist Jack Abramoff, watchdogs are critical of cozy ties between members of Congress and the connected lobbyists
whose special-interest work seems to pump money into their campaigns.
Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a watchdog group, says a new breed of lobbyists is especially troubling: congressional aides who go private not to market their
knowledge of Congress, but to sell precious access to their onetime bosses, becoming highly paid doorkeepers.
For example, Sloan said, the high-powered Alexander Strategy Group was founded by former aides to House Majority Leader Tom DeLay, R-Texas, who resigned this year after being indicted.
"Alexander Strategy's whole raison d'tre was that they got you into the room with Tom DeLay ... until they both collapsed in scandal," said Sloan, previously a federal prosecutor and congressional aide.
In a recent interview, McConnell said he helps worthy Kentucky companies whenever he can. If much of his assistance has gone to Bates' clients, that is coincidental and unrelated to their friendship or the money
Bates raises for his campaigns, he said.
"I'm not sure who Hunter's client list is," McConnell said. "I have 280 former employees. I know some of them work in this town (as lobbyists). I couldn't tell you who represents who."
Some farmers say McConnell himself sent them to Bates -- "He told us, 'You need to hire Hunter Bates, I can work with Hunter Bates,'" said Versailles farmer Rusty Thompson, a Burley Tobacco Cooperative board
member -- which McConnell denied.
Bates declined to be interviewed.
In a prepared statement, Bates wrote: "Working with members of Congress to achieve outcomes that are consistent with shared vision and values is not corrupt, but rather, is a critical part of the democratic process."
"I also have been blessed to work with talented, principled friends that I previously worked with on Capitol Hill and have known for more than five years," he wrote. "Again, such actions would be viewed by most
reasonable observers as natural and sensible, not alarming and inappropriate."
Going underground
One beneficiary of Bates' pull with McConnell is eCavern, a Louisville company that leases out space within a 3-million-square-foot, man-made cave near the airport.
Founded in 1999, eCavern hopes to create an underground computer data storage center in a quarry once mined for limestone to pave highways. It promoted itself at trade shows and for three years retained a
Louisville lobbyist, Timothy Mulloy, to get federal money.
Mulloy said he introduced eCavern president Mark Roy to Kentucky's congressional delegation but had no luck winning funds for the untested company.
Luck improved once eCavern replaced Mulloy with Bates in 2003. Since 2004, McConnell has set aside $2.5 million for eCavern from the Treasury Department, with $1 million more announced for the coming year.
Under a deal proposed by eCavern, the University of Kentucky will use its cave to study the effectiveness of underground storage of computer data from the financial sector in the event of disasters or terrorist attacks.
"In a post-9/11 world, it is critical that our financial institutions be secure," McConnell said in a 2004 press release. "ECavern is ideally suited to protect critical data and communications facilities."
ECavern came up with the idea and asked UK to join as research partner, said Wendy Baldwin, UK's former executive vice president for research. "They had this unique resource and were thinking, 'Hmm, how do you
take advantage of this?'" Baldwin said.
The project is supposed to start this year and continue indefinitely.
UK, which would not allow a tour, pays by far the highest rent in the cave.
Louisville Underground rents out storage elsewhere in the cave for cars, boats and other items, charging from $3 to $5 per square foot annually. UK is paying eCavern $173.60 per square foot for the first 19 months, according to its lease.
eCavern charges so much because of infrastructure improvements needed for computer equipment, such as a raised floor, high-speed Internet access and backup electrical systems, said Larry Williams, a Louisville leasing agent for eCavern and Louisville Underground.
In fact, taxpayers are enhancing eCavern's prospects.
"That's the exciting thing about the Treasury Department project, that it's facilitating improvements to the space that will allow eCavern to leapfrog forward with additional customers in the future," Williams said.
Bates has reported about $400,000 in fees charged to eCavern so far. (In a written statement, Roy -- eCavern's president, who declined to be interviewed -- said that sum is what Bates has charged, but his company has been able to pay Bates only about $7,700 so far. "Hunter Bates is a hero to Kentucky and
should be applauded," Roy wrote.)
ECavern officials gave $3,000 in donations to McConnell in 2005. They gave $2,000 to an out-of-state Republican Senate candidate for whom McConnell held a fund-raiser. ECavern also gave $1,000 to the legal
defense fund of Tom DeLay, who was indicted on multiple criminal charges.
Independent watchdogs who monitor federal spending say it's not unusual for the government to protect things by burying them, such as the North American Aerospace Defense Command, beneath Cheyenne
Mountain in Colorado.
But a commercially owned cave 50 feet under Louisville, with its plans and location revealed by McConnell in press releases, isn't the same thing as NORAD, they said. And if the project is essential, they asked, why
is eCavern the only site participating?
"It's the politics of contracting," said Jennifer Porter Gore, spokeswoman for the non-profit Project on Government Oversight. "There was no open competition from other companies that might offer their own
ideas on data-storage protection. It's a contract steered to one company by a friendly senator. We find that troubling at best."
McConnell earmarks
ECavern is only one of at least four Bates clients to win federal money from budget "earmarks" added by McConnell. An earmark puts language into spending bills that orders federal agencies to give money to
specific companies for projects the agencies did not request. There is no public notice or debate. McConnell has claimed credit for the eCavern earmarks in press releases.
"There's really very little oversight that takes place after an earmark is given out. It's not like when you have a planned project that an agency requests, with competitive bidding and progress reports," said David Williams
, vice president for policy at Citizens Against Government Waste, a congressional watchdog.
- In 2005, McConnell earmarked $2.1 million from the Defense Department for Accella Learning, a division
of Boardpoint LLC of Lexington, a Bates client.
Accella is developing an "intelligent tutoring system" at the Army's Fort Detrick, in Maryland. In one example in Accella sales material, medical personnel are shown skin sores on a computer and taught to
identify the one caused by anthrax.
Bates has charged Boardpoint about $240,000 in fees so far. Director Joe Coons, a Lexington businessman, made a $2,100 donation to McConnell in October 2005. Coons declined through a
secretary to comment.
- Bates also lobbies for Appriss Inc. of Louisville, which sells communications technology to law
enforcement and owns VINE, the National Victim Notification Network.
Bates has charged Appriss about $260,000 to promote government purchase of its victim-notification products. Scores of local and state police agencies use Appriss products, from the Texas Rangers to the
Kentucky Justice Cabinet.
Since 2004, the small Senate budget negotiation teams on which McConnell sat have earmarked $17 million from the Justice Department for the purchase of victim-notification systems. At a Washington
news conference about the products in 2004, McConnell praised Appriss for "innovative techniques that are going to help us make children of this country a lot safer."
Appriss values McConnell's assistance, said Mike Davis, Appriss's president. But the money that he helped set aside must be matched by money from state and local governments before police agencies
make purchases, Davis said. Even then, Appriss shares the pot with competitors.
"We certainly won't get all of that," Davis said.
Appriss created a political-action committee in 2003 that has given $11,200 to McConnell and $3,000 to out-of-state GOP Senate candidates for whom he bundled donations. Appriss executives and their wives gave $28,400 to McConnell in recent years and $3,000 to out-of-state GOP Senate candidates for whom
he held a fund-raiser.
- Bates' work for Voice for Humanity Inc., a Lexington company, won attention last year in a Herald-Leader
story. The company sells small audio devices -- similar to iPods -- with recorded messages.
Bates has billed Voice about $200,000 to get federal funding.
Since 2003, McConnell has earmarked $8.3 million for Voice from the State Department to send its devices to Afghanistan and Nigeria, with messages intended to promote democracy or AIDS prevention. McConnell recommended Voice get $15 million more to move into Iran and North Korea.
The State Department paid nearly $8.5 million of the $23.3 million to Voice by this summer, spokesman David Snider said. More than 60,000 of its devices went to Afghanistan alone. State Department officials
said the devices are unusual but effective. They cited a study, released in January, of 364 Afghans who listened to the devices before parliamentary elections in 2005.
Voice founder Michael Kane gave $4,200 to McConnell in 2005. He gave $1,000 to an out-of-state Republican Senate candidate for whom McConnell held a fund-raiser.
Changing laws
Some of McConnell's favors for Bates' clients involve changing laws, not appropriating money. The senator has introduced or amended bills for at least three, including UPS, the shipping giant that has its main U.S. air hub in
Louisville.
Bates has charged UPS about $400,000 since 2003 to lobby Congress on several topics, such as the
company's effort to ease its burden under federal pension-contribution rules.
In 2004, President Bush signed a law to let many large employers delay pension fund contributions for two years
because of stock market losses. At the last minute, McConnell persuaded the Bush administration to include the pension fund that covers UPS.
UPS is grateful to McConnell for "making sure" it was added to the plan, said UPS spokesman David Bolger.
The UPS PAC has given McConnell more than $45,000 since 1999.
Another Bates client is the American Beverage Association, a trade group for soft-drink makers. Since 2005,
Bates has charged it about $100,000 to lobby for a law to shield soda and food companies from obesity-related lawsuits.
Shortly after Bates was hired, McConnell filed that bill, the Common Sense Consumption Act, which states that
"fostering a culture of acceptance of personal responsibility is one of the most important ways to promote a healthier society."
McConnell's bill -- similar to one he pushed in 2003 -- won praise from soda, candy and fast-food companies.
They face challenges from consumer groups, such as the Center for Science in the Public Interest, which this
year sued Louisville-based KFC over "startlingly" high levels of artery-clogging trans fats in its fried chicken.
"It's not Ben & Jerry's fault if you eat too much ice cream. It's not Sara Lee's fault if you eat too much cake,"
McConnell argued when introducing his 2003 bill. The latest version of his obesity bill awaits committee action. A House version has moved through that chamber.
The association's PAC has given McConnell $2,000 since 2002. The PACs of association members Coca-Cola
and Pepsi-Cola have given him at least $25,000.
Finally, Bates has billed the U.S. Chamber of Commerce's Institute for Legal Reform about $260,000 to lobby for
McConnell's Common Sense Consumption Act, and for a law to protect corporations from class-action lawsuits,
which allow large pools of people who claim related injuries to combine their resources and seek compensation.
Last year, three months after Bates took that client, McConnell co-sponsored the Class Action Fairness Act to
make it harder for people to win damages through those kinds of suits. It passed Congress. President Bush signed it into law.
A grinning Chamber official shook McConnell's hand after the Senate vote, shown on the Chamber Web site. The
Chamber PAC gave McConnell $2,500 two months later. Corporations represented on its board of directors --
such as Massey Energy, Accenture and BellSouth -- have given tens of thousands of dollars to McConnell.
'The right people'
As Bates prospered, he hired other lobbyists from McConnell's circle. They included Holly Piper, wife of McConnell chief of staff Billy Piper, who left Bates' firm earlier this year. Former McConnell aides Patrick
Jennings and Lesley Elliott currently work for the firm.
For all those connections, though, clients say it's the Bates-McConnell relationship that is invaluable.
"He has Mitch McConnell's cell phone number. I know I don't," said Roger Quarles, president of the Tobacco
Growers Cooperative.
In his spare time, Bates raises money for McConnell. Louisville lawyer Robert Cusick said Bates approached
him and several colleagues last year and urged them to give money to McConnell's re-election fund. Cusick gave $2,500.
Months later, Cusick said, McConnell wrote him a recommendation letter, and President Bush named him to
direct the U.S. Office of Government Ethics, a post he desired. Cusick said he does not think his donation
prompted the offer. The Senate confirmed Cusick this year. McConnell introduced him as "a man of wisdom, character and judgment."
Bates gets client referrals from other McConnell donors, such as Louisville attorney C. Edward Glasscock,
whose law firm provides Bates with Kentucky office space; from other Republicans in the Kentucky congressional delegation, and from McConnell's Senate staff.
Dan Parker, owner of a Louisville environmental management firm, said he spoke by telephone to Billy Piper and
McConnell aide Michael Zehr in 2004, seeking federal funds. One of them -- he's not sure which -- suggested he hire Bates, he said.
"They knew I didn't have anyone who could help me in Washington, and within a few weeks, I got a call from
Hunter," said Parker, who used Bates for a year. "He got us in front of the right people. He even got us a bill written, but we couldn't quite get it to the floor."
Parker said he never questioned why his senator's office would refer him to a lobbyist. He assumed that's how
Washington works.
He declined to say whether Bates recommended the $1,400 he has given the National Republican Congressional
Committee, starting six months after he hired the lobbyist. Giving to political parties once you ask for help -- he assumed that's also part of the game.
"They've got a business to run as well," Parker said.
$10 billion -- Value of buyout of tobacco quotas McConnell arranged for farmers, for whom Hunter
Bates lobbied
$45 million -- Federal funds McConnell has recommended for four of Bates' lobbying clients
$2.4 million -- Lobbying fees Bates has reported from clients helped by McConnell
$133,000 -- Donations to McConnell from Bates, his wife and lobbying clients
Two for the money
When McConnell's pull fails, his Labor secretary wife fills in
By John Cheves, Lexington Herald-Leader, October 20, 2006
WASHINGTON -
Millionaire coal magnate Bob Murray knew the name to drop in September 2002, when Mine Safety Health Administration inspectors confronted him about safety problems at his mines: Sen. Mitch McConnell.
Murray, a large man with a fierce temper, is a huge donor to Republican senators. McConnell, R-Ky., rose through the ranks by raising money for those senators. And McConnell is married to Labor Secretary Elaine Chao, whose agency oversees MSHA.
Shouting at a table full of MSHA officials at their district office in Morgantown, W.Va., Murray said: "Mitch McConnell calls me one of the five finest men in America, and the last I checked, he was sleeping with your
boss," according to notes of the meeting. "They," Murray added, pointing at two MSHA men, "are gone."
Murray, in a recent interview, denied that he referred to McConnell "sleeping with" Chao.
But nobody disputes that district manager Tim Thompson, at one end of Murray's jabbing finger and the man
whose notes recorded the meeting, was transferred to another region, away from Murray's mines. He appealed
the transfer for three years until he grudgingly took retirement in January. Labor Department officials refuse to discuss his transfer.
"The ironic part is, I'm a Republican," said Thompson, now a private mine-safety consultant. "But I don't think
you should bring up politics at a meeting like that, involving safety."
When it comes to workplace-related issues such as mine safety, the McConnell-Chao marriage presents an
intriguing target for industry donors. At the Labor Department, Chao has taken what some reports say is a
relaxed attitude toward the regulation of coal mines and an approach that labor unions perceive as hostile.
Sometimes Chao achieves what her husband cannot in the Senate, such as a wage freeze her department instituted on certain farmworkers.
Chao attends her husband's fund-raisers, chats with his donors and seeds her agency with his former aides.
Chief among them is Deputy Labor Secretary Steven Law, whose last job was helping McConnell tap donors --
Bob Murray included -- at the National Republican Senatorial Committee. They collected an impressive $187 million in four years there.
Chao declined to comment for this story. (Law, who did comment, said politics do not influence the Labor Department.)
McConnell recently said he neither asks Chao to favor his donors nor advises her on Labor Department activities.
"She doesn't need any direction from me," he said. "In fact, I think that's a little bit insulting." It's hardly
surprising they both push the Republican Party agenda in their jobs, he said.
"I'm a Republican, and I generally support what the Bush administration is trying to do," McConnell said. "She takes her orders from the White House."
Ergonomics rule
Some longtime McConnell donors found their lobbying efforts more effective once Chao took over the Labor Department.
For example, the Food Marketing Institute lobbied the Senate and the Labor Department after President Bush
took office in 2001 to kill the mandatory ergonomics rules that President Clinton had intended to protect workers
from repetitive-stress injuries. The institute says it represents 26,000 grocery stores.
At the urging of the institute and other business groups, in 2001 McConnell and the GOP Senate narrowly
approved a resolution declaring that Clinton's safety rules "shall have no force or effect."
But it was Chao, after the food institute's officials approached her, who sealed the deal by replacing Clinton's
safety rules with "voluntary guidelines," the institute told its members in a newsletter.
"The proposed voluntary guidelines will give our member companies helpful suggestions," the group's chief
executive, Tim Hammonds, said in a statement thanking Chao for "the new spirit of cooperation."
The institute, which had contributed at least $13,000 to McConnell in the 1990s, upped its donations, giving him
nearly $13,000 more during Chao's first two years as labor secretary. Officials of the institute declined to comment.
"There's definitely an overlap in what they're doing, and McConnell makes no bones about it," said Bruce
Goldstein, director of Farmworker Justice, a Washington non-profit that advocates for laborers.
Asked about the 2002 incident in which Murray angrily threw his name at mine inspectors, McConnell said he
knew nothing about it and hasn't spoken to Murray since before then. He denied calling Murray one of America's
five finest men. "After what he apparently said about me, he wouldn't make my list," McConnell said.
Murray, chief executive of Murray Energy, acknowledged in a recent interview that he loudly complained about
MSHA manager Thompson at the meeting. Thompson harassed his mines for no reason and even shut down operations in one for hours, he said.
He said it's possible he mentioned his friend McConnell. His company's political-action committee has given
about $360,000 in campaign donations since 2000, nearly all to Republicans, including McConnell. Murray personally has given about $100,000.
"I have no idea why I would have brought up Sen. McConnell, but I can tell you I have a tremendous respect for
what he does," Murray said. Regarding Thompson's transfer, Murray added: "I said he should be removed. But they didn't do it because I said so."
After the Murray incident was reported in various publications, Thompson said he was angry that his name had
been released, and scared that McConnell would be mad at him. So, he said, he sent a polite letter this year to
McConnell to make it clear that he didn't blame the senator or his wife for his problems. He has never been given a reason for his transfer, he said.
Corporate origins
Bush picked Chao as labor secretary in 2001 after his original choice, Linda Chavez, withdrew because of
questions about an illegal immigrant who had lived in her home. Chao had proved her Republican loyalty as a "Bush Pioneer," having raised more than $100,000 for the president's campaign.
Born in Taiwan and raised in New York, her father the wealthy founder of a shipping company, the 53-year-old
Chao was educated at Mount Holyoke College and Harvard Business School. She worked in international
banking and as a midlevel Republican federal appointee before taking over the United Way of America, which had been rocked by financial scandal. Chao is credited with restoring its reputation.
When Bush chose her, Chao was making more than $200,000 a year as a "fellow" at the Heritage Foundation, a
conservative, corporate-funded think tank in Washington. While she was there, Heritage scholar D. Mark Wilson issued a report titled How to Close Down the Department of Labor, in which he blasted Labor's "excessive
burdens on businesses." Chao hired Wilson as deputy assistant secretary in charge of workplace standards.
She also made hundreds of thousand of dollars in speaking fees and by serving on the boards of directors for 13
corporations, several of which donated to McConnell and lobbied the Senate for favorable laws and federal contracts. Nearly all her board memberships began after they married in 1993.
Chao is staunchly conservative. Speaking at a Washington event in May, she said, "Often, people come into
public service with a zeal to take immediate action. But, sometimes it's not what you do but what you refrain from doing that is important."
Few industries were happier to see Chao bring that philosophy to the Labor Department than mining, which has
given more than $400,000 to McConnell's Senate campaigns, according to the Center for Responsive Politics.
In early 2001, industry magazine Coal Age listed the various mining executives invited to shape the agency's
agenda and wrote that they were "benefitting from high-level access to policymakers in the new administration."
At the Mine Safety and Health Administration, Chao named Utah coal operator David Lauriski as director,
assisted by former McConnell aide Andrew Rajec. (Lauriski resigned in 2004, citing family concerns, after the
Labor Department's inspector general questioned no-bid MSHA contracts that went to firms connected to him.)
His deputies for policy and operations, John Caylor and John Correll, had been executives at Cyprus Amax
Minerals Co. of Englewood, Colo. The company's PAC gave $17,000 to McConnell and $15,000 to the National Republican Senatorial Committee while McConnell and Law, now Chao's deputy, ran it.
"They stacked MSHA with executives who came straight from the coal and mining companies," said Tom Kiley,
a Democratic aide to the House Education and Workforce Committee. "Sure, it's good to have some expertise,
but there was no effort to balance that with people from the workers' side. It's totally the fox guarding the henhouse over there."
Close to coal
The first battle over the Labor Department's new practices concerned its investigation of the largest-ever environmental disaster east of the Mississippi River.
At a subsidiary of Massey Energy Co., a McConnell donor, a massive coal slurry spill was unleashed on Eastern
Kentucky in October 2000. Nobody died, but the waterways ran black with several hundred million gallons of coal
waste. MSHA investigated for evidence of negligence. Jack Spadaro, the MSHA engineer in charge, said Massey had been warned that its slurry retention pond was unstable.
After Chao became secretary, Spadaro said, she put on the brakes. She told reporters "it's time to call off the MSHA food fight" over the spill.
"They came to us and said, 'Boys, it's time to wrap things up,'" Spadaro said recently. "And we were nowhere near finished."
Spadaro said he argued with Lauriski over the contents of the final report, which he alleged "whitewashed"
Massey's misdeeds. Spadaro and his MSHA bosses continued to butt heads for months, and he left the agency under protest.
In April 2002, MSHA levied $110,000 in fines on Massey, a sum Spadaro said was much smaller than
appropriate. A Labor Department administrative law judge later reduced that to $5,600 and ruled that the MSHA failed to show enough negligence by the company.
In September 2002, Massey's PAC gave $100,000 to the National Republican Senatorial Committee.
The Labor Department and its critics disagree on the agency's recent impact on mine safety.
A January 2006 report by the Democratic staff of the House Education and Workforce Committee said that, under Chao, MSHA cut its coal-enforcement staff and weakened its oversight.
Labor Department officials dispute those findings and say that, between 2001 and 2005, citations to mine operators rose.
One undisputed fact is that by Oct. 12, the number of U.S. mining deaths for 2006 had climbed to 62 -- up 41 percent from this time in 2005, the worst fatality rate in the last five years.
Some MSHA officials talk of being pressured to go soft even when they uncover serious problems.
In April, MSHA inspector Danny Woods told the Pittsburgh Post-Gazette that colleagues wanted to shut down
part of a Massey coal mine in West Virginia in January because spilled coal and dust had accumulated along a
belt line, raising the risk of a fire. The request was denied. Woods said inspectors were told "to back off and let them run coal, that there was too much demand for coal."
Days later, on Jan. 19, a fire in that part of the mine killed two miners. MSHA spokeswoman Amy Louviere recently said MSHA is investigating Woods' allegation, so she cannot discuss it.
McConnell, a longtime advocate of tax breaks for mine owners, has had relatively little to say about miners,
although he represents thousands. The United Mine Workers of America said they count a number of Republican
and Democratic senators as champions of miners, willing to tour mines and promote safety legislation. But not McConnell, the union said.
"He's not done anything to help us with mine safety," said Bill Banig, the union's legislative director. "It does seem odd, given the state that he represents."
Law, the deputy labor secretary, said Chao's Labor Department has markedly improved enforcement on mine safety since 2001.
Mirroring McConnell
Sometimes Chao picks up the ball and runs with it at the Labor Department when McConnell fails to reach a similar goal in the Senate.
For example, McConnell filed legislation for three years, starting in 1998, to curb the mandatory annual raise in
wages of legal immigrant farmworkers under the government's H2A program. By 2001, the wage in Kentucky was
$6.60 an hour, which struck some agricultural businesses as too high. (Agribusinesses have given McConnell
more than $1 million for his campaigns -- out of $21 million from all donors over 22 years, according to the Center for Responsive Politics.) But the bills kept failing.
In 2001, Chao ordered an indefinite delay in the release of an annual Labor Department wage report that triggered
the farmworker raise. It was an insider move, not noticed by most Americans, but praised by McConnell's
Republican congressional colleagues and business groups in letters obtained from Chao's office.
Farmworker Justice sued Chao on behalf of immigrant workers, and in 2002, U.S. District Judge Gladys Kessler ordered her to resume publishing the wage report in a timely fashion.
In 2002, McConnell filed an amendment to a corporate ethics bill that would force unions -- whom McConnell
criticizes for supporting Democrats over Republicans -- to file far more detailed public reports on their spending.
His amendment drew protest from unions, and four Republicans joined with Democrats to defeat it.
The next year, Chao announced stricter rules on unions' expense disclosures through the Labor Department's
mandatory reporting system. Unions now must itemize every expense of $5,000 or more. The unions protested, but her order was upheld.
Richard Berman, a corporate lobbyist whose clients include McConnell donors, seized on the newly released
financial data to launch a Web site, UnionFacts.com. The Web site -- like McConnell -- criticizes unions for
giving more money to Democrats than Republicans. It also alleges criminal activities and urges union members to quit.
Berman's organization, The Center for Union Facts, found an ideological ally in Chao's Labor Department.
Berman and Chao both send aides to attend First Friday Labor Reform Working Group meetings on Capitol Hill,
where Republican congressional staff and lobbyists brief each other on union policy. Labor Department e-mails
obtained in June show Berman's staff and Chao's aides sharing union criticism, organizing lunches and promoting Berman's Web site within the department.
Berman declined to talk about his relationship to Chao, a spokeswoman said.
The watchdog group that obtained the e-mails, Citizens for Responsibility and Ethics in Washington, said
McConnell, a conservative Republican senator, can choose to side with corporations. But the labor secretary should not be so "cozy" with businesses, said Melanie Sloan, CREW president.
"The Labor Department is supposed to be there for the American worker," Sloan said.
$375,000 -- Mining industry donations to McConnell's Senate campaigns
$200,000 -- Chinese-American donations to McConnell from out of state
$8,000 -- First donation to McConnell from the Chao family
Wedded to free trade in China
By John Cheves, Lexington Herald-Leader, October 20, 2006
WASHINGTON -
When Sen. Mitch McConnell married Elaine Chao in 1993, he got more than a wife -- he got a river of campaign donations from her family and friends in the Chinese-American business community.
Some people think that might affect his views on China, the world's other superpower.
Eight days after the Tiananmen Square massacre in 1989, where China's communist regime crushed a nascent
democracy movement, McConnell collected his first $8,000 from the Taiwanese-born Chao, then just a friend, and her family.
The Chao family is headed by James Chao, founder of Foremost Maritime Corp., a shipping company in New York that benefits from Chinese trade. It buys cargo vessels from China.
As others in Washington reacted with outrage to the bloodshed in Tiananmen Square, it fell to McConnell to
defend normal trade relations with China and help kill a bill that would have granted amnesty to 40,000 Chinese students in the United States, which Beijing opposed.
Since then, McConnell, R-Ky., has received more than $200,000 from Chinese-Americans outside Kentucky, not
all of it legal, most of it originating with Chao's connections. After their wedding, McConnell joked about his campaign donors: "Get used to difficult names."
"Obviously, Elaine -- with the possible exception of (broadcaster) Connie Chung -- is the most prominent Chinese
-American in the country, and a lot of her friends and acquaintances want to help her husband," McConnell said recently. "I don't find that in any way unusual."
Some conservatives find China an awkward dance, a target of scorn for its brutal communist regime, but also a target of capitalist opportunity for its booming economy and cheap labor.
But few shuffle quite like McConnell, who as a Senate leader calls for freedom in Asia and warns about the
menace of "Red China" in fund-raising letters, while consistently defending Chinese business ties treasured by the Chao family and other China-interested donors.
Ideological contradiction
Nowhere is this contradiction more glaring than McConnell's vocal opposition to the military dictatorship in
Burma, in Southeast Asia, which persecutes its citizens and has Nobel Peace Prize recipient Daw Aung San
Suu Kyi under house arrest. McConnell frequently calls for economic sanctions against Burma to isolate its regime.
"The Burmese people want these sanctions because they want democracy, justice and freedom, and we stand with them," McConnell said on the Senate floor in July.
McConnell's rhetoric rings hollow to Chinese human-rights activists. Like Burma, they said, China is run by a
dictatorship that has butchered its own people; that denies citizens the freedom to speak, read, publish, pray or travel; and that jails political dissidents without trial.
Yet McConnell pushes for more lucrative trade relations with China. He and Chao meet privately with Chinese
officials, including Jiang Zemin in 1997, then general secretary of the Communist Party of China. (Chao's father and Jiang were schoolmates in China.)
Chao and her father declined to be interviewed for this story.
McConnell helped block attempts to link U.S. trade with China to human rights, religious freedom or a ban on
prison labor, even splitting with fellow Sen. Jim Bunning, R-Ky., who warned about "putting profits ahead of people."
McConnell is no idealist, said John Stempel, senior professor at the University of Kentucky's Patterson School of Diplomacy and International Commerce.
"He's not terribly sensitive to things like human rights. He looks at things like politics and business," Stempel said. "He's very pragmatic that way."
In 1999, McConnell invited Li Zhaoxing, the Chinese ambassador to the U.S., to speak at the McConnell Center
for Political Leadership at the University of Louisville. Li used his speech to blast Congress for what he called its
"malicious attacks" in demanding that China allow its people religious freedom.
A few years later, as China's foreign affairs minister, Li traveled to McConnell's loathed Burma to promote stronger ties between his regime and theirs.
Harry Wu, who spent about 20 years in Chinese prisons as a political dissident, said McConnell's friendship with Beijing is motivated by one thing.
"No mystery. It's the money," said Wu, a fellow at the Hoover Institution, a conservative think tank.
"Elaine Chao's family has a tight relationship with the Chinese government through their business," Wu said.
"And the big companies that give money to McConnell, like Boeing, they want an open door to China so they can do business there. McConnell accommodates them."
Added Minxin Pei, director of the China Program at the Carnegie Endowment for International Peace: "Burma is a tin-pot dictatorship. You can be tough on Burma and not pay any kind of price."
Donor questions
McConnell said Chinese-American money has no effect on his foreign policy.
"I was a free-trader long before I met Elaine, and I think I've been on the free-trade side of virtually every issue,
not just related to China," he said. Asked why he calls for sanctions only on Burma, he said, chuckling, "You
can't treat China -- a major trading partner -- you couldn't have trade sanctions against China."
Still, he said, he occasionally is willing to irritate Chinese leaders, such as in his sponsorship of a law that
recognized Hong Kong as its own territory, even after China took it back from the British in 1997.
Ho Tsu Kwok, chairman of Global China Group Holdings and the Hong Kong Tobacco Co. and member of the
Standing Committee of the Chinese People's Political Consultative Conference, is one of McConnell's larger
individual donors. Ho and his family have given more than $80,000 in the last decade to McConnell, the Kentucky
Republican Party and Senate Republican candidates for whom McConnell held a 2004 fund-raiser. Ho declined to be interviewed.
McConnell said he met Ho many years ago, when Ho called himself "Charles Ho" and worked in Louisville on
assignment with tobacco company Brown & Williamson. At the time, McConnell said, Ho claimed dual Chinese and U.S. citizenship, although he's apparently back in China now.
Toward the end of President Bill Clinton's administration, Congress investigated illegal donations to Clinton's
1996 campaign that apparently were funneled from China. Seizing on the scandal, McConnell launched a
blistering attack in a Republican fund-raising letter. He invoked the threat of "Red China."
"The Clinton-Gore team has ... put the presidency up for sale to the slimiest crooks and low-lifes of our society,"
McConnell wrote. "This is a direct slap in the face to those brave, young American soldiers who spilled their blood defending freedom and democracy in the world."
Then congressional investigators learned that McConnell took a few thousand dollars from two of those "crooks"
-- Maria Hsia, whom McConnell helped with an immigration bill friendly to China, and John Huang, who forwarded
illegal donations from The Lippo Group, an Indonesian financial conglomerate with ties to Chinese intelligence agencies.
Testifying to Congress and in a deposition, Huang said Elaine Chao approached him and other Chinese
-American businessmen. They sought influence in Congress. Chao urged them to give money to McConnell, Huang said.
"She was a very distinguished, you know, Chinese-American community leader then," Huang told a House committee in 1999.
Two years after Huang's testimony, McConnell returned the money and said he had been unaware of its source.
More recently, McConnell said his aides cannot determine whether his donors are U.S. citizens or have green cards. They expect that all donors are legally able to give, he said.
Price tag politics
Senator's pet issue: money and the power it buys
By John Cheves, Lexington Herald-Leader, October 15, 2006
WASHINGTON -
In the early 1970s, Addison Mitchell McConnell Jr., a young and intense Republican lawyer, strode into the political science class he taught at the University of Louisville.
He didn't introduce himself to his students. He went straight to the chalkboard and scribbled.
"I am going to teach you the three things you need to build a political party," he said, and backed away to reveal the words: "Money, money, money."
Three decades later, the teacher has mastered the lesson like few in history.
An extraordinary political fund-raiser, Senate Majority Whip Mitch McConnell, R-Ky., has used his skill to put
himself on the brink of a remarkable career achievement. If Republicans hold the Senate in the Nov. 7 elections, he is expected to succeed retiring Sen. Bill Frist of Tennessee as majority leader.
McConnell's rise to the top of Congress is testament to the power of money in modern politics. He has raised
nearly $220 million over his Senate career; he spent the majority not on his own campaigns but on those of his GOP colleagues, who have rewarded him with power.
"He's completely dogged in his pursuit of money. That's his great love, above everything else," said Marshall
Whitman, who watched McConnell as an aide to Sen. John McCain, R-Ariz., and as a Christian Coalition lobbyist.
A leader in the field of tapping the wealthy for campaign cash, McConnell also led the opposition against efforts
to rein in such donations through campaign-finance reform -- a fight that has taken him to the U.S. Supreme
Court and put him toe-to-toe against another emerging Republican leader, presidential hopeful McCain.
A six-month examination of McConnell's career, based on thousands of documents and scores of interviews,
shows the nexus between his actions and his donors' agendas. He pushes the government to help cigarette
makers, Las Vegas casinos, the pharmaceutical industry, credit card lenders, coal mine owners and others.
Critics, including anti-poverty groups and labor unions, complain that McConnell has come to represent his
affluent donors at the expense of Kentucky, the relatively poor state he is supposed to represent. They point, for
example, to his support last year for a tough bankruptcy law, backed by New York banks that support him.
McConnell waves away all criticism of his fund-raising.
In a recent interview, he said he never allows money to influence him. His donors support him because they like
his pro-business, conservative philosophy, he said, so it's hardly proof of corruption when he does what they want.
Supporters say, furthermore, that Kentucky benefits from having McConnell at the top, regardless of criticism
over how he got there. McConnell uses his clout to steer millions of dollars to projects back home, said Steven
Law, the senator's former fund-raising aide, now top deputy to McConnell's wife, Labor Secretary Elaine Chao.
Once he secured his own Senate seat, McConnell skillfully forwarded money to GOP senators who needed it, building a path to what he truly wanted -- the No. 1 job.
McConnell is hardly alone in his quest for cash. Money cascades into politics these days. Senate races burned
through $543 million in 2004, up nearly 50 percent from the previous election cycle. And although some argue
that the power of political money can be corrupting -- witness this year's imprisonment of former U.S. Rep.
Randy "Duke" Cunningham, R-Calif., for bribery -- McConnell has raised his millions without any evidence of improper personal benefit.
But someone who can raise more than $90 million for his allies -- as McConnell did twice, as chairman of the
National Republican Senatorial Committee -- is golden when it comes time for GOP senators to elect a majority
leader. That's not counting the millions McConnell sends to GOP colleagues from his own political-action committee and campaign fund.
Some senators shy away from fund-raising duties because of ethical concerns. Top donors tell senators what
they want from upcoming votes, and top donors get special treatment, said retired Sen. Alan Simpson, R-Wyo.
Their calls to Senate offices are returned first, Simpson said, and their wishes are a priority when action is taken.
"I didn't enjoy it at all," Simpson said. "I just felt uncomfortable."
Yet McConnell never blinks, Simpson said.
"When he asked for money, his eyes would shine like diamonds," Simpson said. "He obviously loved it."
McConnell denied that he's more devoted to money than anyone else "in my line of work."
"Building up your finances so you can amplify your voice is critical to any successful political activity," McConnell said. "It's a central part of the process."
Still, the symbiosis between McConnell and his donors raises questions about who's really in charge.
'A choking sensation'
Take his longtime friendship with cigarette-maker lobbyists, revealed in hundreds of corporate documents made public during litigation. Records suggest a close working relationship behind the scenes.
They instructed him on smoking-related legislation. He offered to amend bills on the Senate floor at their
direction. During the 1990s, when he attacked the Food and Drug Administration for its anti-smoking efforts, he
followed talking points they fed him. Their attorneys helped draft a bill he filed to protect their companies from
lawsuits, as well as his correspondence to the White House to oppose federal smoking-prevention programs.
In turn, they gave him gifts, including Washington Redskins football tickets and many thousands of dollars in
speaking fees to supplement his Senate salary. They paid for their own voter polls in his 1996 Senate race, to monitor his progress.
But their real support -- millions of dollars in donations -- came between important Senate votes. The lobbyists assured him: "We will provide maximum help very early."
In 1998, McConnell helped to kill a proposal to curb youth smoking. About four months later, he called lobbyists
at R.J. Reynolds Co. and asked for $200,000 in corporate "soft money" that he could pass to Republican
senators in elections. In an e-mail exchange, the lobbyists settled on "doing an additional 100,000 to him
immediately and then seeing what we have left at end of next week." The $200,000 was more than their company could swallow at once.
"Are you feeling a choking sensation?" Tommy Payne, vice president of external relations, asked John Fish, senior director of federal government affairs, in the final e-mail.
Three months later, rival Philip Morris Cos. sent McConnell $150,000 to distribute to GOP Senate campaigns
and $100,000 for his pet non-profit program, the McConnell Center for Political Leadership at the University of Louisville, according to industry and college documents.
McConnell helps people who help him, inside and outside Kentucky. Consider Guardsmark, a Memphis, Tenn., security firm with clients nationwide.
Guardsmark founder Ira Lipman and his employees have given more than $66,000 to McConnell's campaigns. McConnell has described Lipman as a friend whom he calls to arrange Tennessee fund-raisers.
After the Sept. 11, 2001, terrorist attacks, demand for private security boomed. Lipman thought it would be
useful for his employees to have access to the FBI fingerprint database, then available only to law-enforcement agencies. McConnell co-sponsored the necessary legislation.
"Today our nation is on its way to becoming safer and more secure," Lipman said in a press release after President Bush signed the bill into law in 2004. And Lipman credited McConnell.
The Inner Circle
Unlike other senators, McConnell, 64, typically avoids the mass fund-raising that brings small donations of less
than $200 from working-class Americans through direct mail, phone banks and the Internet.
His donors are likely to start at $1,000. He favors intimate receptions where he can offer them his full attention,
leaning in to listen, saying little, holding a glass of wine without paying much attention to it. His Rolodex is one
of the best. He is president of the century-old Alfalfa Club, which gathers the nation's richest and most powerful
on the birthday of Confederate Gen. Robert E. Lee, for cocktails and filet mignon.
McConnell seldom opens his own wallet. In the past decade, he has given only $10,000 of his personal funds for campaign donations. Asked to explain that, he pleaded poverty. In his view, it's wealthier people who support
campaigns.
"I don't have a whole lot of money to contribute," said McConnell, whose Senate salary is $165,200, and who
has homes in Louisville and Washington -- the latter a handsome Capitol Hill townhouse assessed at $1.3 million.
McConnell's invitations to the wealthy to become lifetime members of the "Senate Republican Inner Circle" ($15
,000 for life or $2,000 a year) guarantee private dinners and valuable briefings with "the men who are shaping the Senate agenda," including himself, caucus leaders and committee chairmen.
"Americans are big on rewards these days. Financial rewards in the stock market -- cash rewards on your credit
cards -- luxurious rewards in the travel industry," McConnell wrote in one invitation. "But a special group of
Americans is experiencing one of the greatest reward programs ever, because they took the initiative to become a Life Member of the Inner Circle."
Those rewards are greatly anticipated by corporate leaders who want a say in Senate decisions. After the Inner
Circle welcomed Geoffrey Bible, chief executive at Philip Morris, he sent a copy of the announcement to his aides.
"So now I'm in," Bible wrote in the margin. "See if we can make the most of it."
In an interview, McConnell said his invitations exaggerate the intimacy at some events in order to get people to
write him a check. A major GOP Senate fund-raiser can draw 1,000 people, he said. No donor ever uses social time with senators to influence Senate business, he said.
"They want their picture taken with you; that's all it amounts to," he said.
As McConnell's influence grows, so does the value of his company.
Lobbyist Kent Hance organized a reception for McConnell in March at the Dallas home of oilman R.H. Pickens.
Hance said it raised about $50,000 for McConnell's 2008 re-election from a few dozen investors and executives.
(McConnell spent $5.7 million on his 2002 campaign and already has banked half that sum for 2008.)
Millionaires and billionaires wanted to hear how McConnell plans to further cut their taxes, Hance said.
"He's gonna be the next Senate majority leader, so we didn't have to hold a gun on people to get 'em to attend," Hance said. "Everybody wants to be his friend now."
Speaking in 1994 at the Heritage Foundation, a conservative think tank, McConnell explained his fund-raising: "I
prefer to get (money) from individuals who voluntarily choose to give to me because they like what I stand for."
However, because he now raises the majority of his money nationally, not in Kentucky, it's not uncommon for his donors to know scarcely anything about him, except that he is a powerful man.
Corporations and professional groups that want a friend in Washington instruct their employees and members to give generously to the rising senator.
At a New York luncheon last fall, McConnell received about $60,000 from scores of workers at two financial
giants, UBS and Citigroup, which had just successfully lobbied Senate Republicans for a tough bankruptcy law
that makes life harder for credit card debtors. President Bush praised McConnell by name as he signed the law.
Christopher Hagstrom, a UBS Financial Services securities lender, said managers spread the word to write a
check to McConnell. His suggested sum was $1,000, which he gave. Hagstrom said he is barely aware of McConnell, other than "he has the backing of the guys here."
McConnell has said he encourages donors to send the maximum allowed by law, then arrange for their families
to give, too. Before he takes checks from minors, he said, "they, of course, have to be signed by the children."
(It is legal for children to give, if they do so willingly and use their own money, which the Federal Election
Commission says is hard to determine.) He gets tens of thousands from donors identified as "students," usually in sums of $1,000 each.
Pressed for time, McConnell regularly skips daily Senate business. In 2005, for example, he missed 83 percent
of his assigned committee hearings about government spending and agriculture. He said it's "absurd" to question
the hearings he misses, given his busy leadership schedule. "Every day is a series of choices about how to spend your time," he said.
However, he attends myriad receptions in Washington and around the country. These events are scheduled by
McConnell's fund-raising office, run by former banking lobbyist Alison Crombie Kinnahan out of a corporate lobbying firm a quick walk down the street from McConnell's Capitol office.
McConnell says his coast-to-coast collections are appropriate because he is no longer a mere Kentucky politician. He is "a United States senator."
Even in Congress, which devotes evenings and weekends to taking money, McConnell is considered extraordinary.
Not physically: Relatively small in stature and with a pale complexion, he is formal and reserved. Other senators
cultivate a folksy demeanor to connect with folks back home. Senate aides compare approaching McConnell to meeting a girlfriend's father.
But he brings in the money. In 2002, GOP senators elected him to their No. 2 post -- majority whip -- after his
record-breaking four years as chairman of their fund-raising machine, the National Republican Senatorial
Committee. He's one of only two senators in decades to serve consecutive terms in the grueling job. In fact, this
year, the GOP struggled for months to find anyone to volunteer as chairman for 2008.
Under McConnell, the NRSC paid off a $6 million debt, said former NRSC aide Stuart Roy, who later joined
Chao's Labor Department. McConnell raised $91 million in one term and $96 million in the next.
He disgusted a few colleagues by focusing on televised attack ads. What McConnell calls "amplifying your voice," others saw as dragging public debate into the gutter.
Many politicians sling mud at their opponents. But McConnell is thought especially brilliant at finding a potential
weakness in his opponents, crafting an attack around it and hammering it home, again and again, with blistering commercials -- which is where so much of that money goes.
McConnell learned under Republican media consultant Roger Ailes, who handled paid media for his 1984 campaign and is now the head of Fox News Channel.
Not everyone has blessed the approach.
"This nonsense of savaging your opponent and making their noses grow long and their ears grow hairy and big,
that's something my 6-year-old and 8-year-old find quite amusing. It's great theater, but I don't know what it does
to improve the culture of politics or governance or leadership in this country," said Sen. Chuck Hagel, R-Neb., in a 1998 challenge to McConnell's command at the NRSC.
But Republicans stuck with McConnell. He built Senate loyalties by redirecting millions of dollars he raised
through his own PAC, dispensing $5,000 and $10,000 at a time. He pledged this year to send $1 million of his funds to pay for other senators' races.
"His fund-raising is like a corporation, a booming, full-time business," said Whitman, the former Republican Senate aide.
"He has people in charge of reaching out to new donors, people in charge of massaging the old donors and
staying in contact with them, and people in charge of collecting," Whitman said. "This goes on throughout the year, every year."
McCain vs. McConnell
In the Senate, McConnell cast himself as the anti-McCain.
John McCain, the once and future GOP presidential candidate, is a fiery reformer drawn to television cameras.
McConnell, a defender of the status quo, mocks "reform" efforts with a smirk. He prefers to cut deals in private.
Other senators are wary of butting heads with the media-savvy McCain. Not McConnell. When McCain's reform proposals displease Republican Party donors, McConnell outmaneuvers the maverick.
"McConnell is not scared of McCain," said Mark Buse, a former McCain aide for two decades and now a lobbyist
. "Because he knows the (Senate) rules better than most people, he does very well by them."
They have had epic clashes:
- In 1998, McCain pushed a bill to curb youth smoking through new tobacco advertising restrictions.
Senators voted it down after a closed-door lunch for Republican senators in which McConnell --
according to news reports -- told colleagues that cigarette companies would help them with campaign advertising if they voted against the bill.
Health groups protested that McConnell sold out the nation's youth.
McConnell refused to publicly discuss his luncheon remarks. But the bill did fail, and federal election
records show that cigarette companies poured hundreds of thousands of dollars through McConnell to Senate GOP campaigns.
- In 2000, McCain pushed a bill to outlaw gambling on college sports, which is legal only in Nevada.
Among those arguing for the bill was University of Kentucky basketball coach Tubby Smith, who said
Las Vegas bookies legally set the point spreads that form the basis of illegal betting everywhere else.
McConnell was befriending Las Vegas casinos, which opposed the bill. In 1997, he and then-Senate
Majority Leader Trent Lott, R-Miss., flew to Las Vegas on the corporate jet of Steve Wynn, owner of
Mirage Resorts, to kick off a series of GOP fund-raisers. "We wanted to have support from that industry," McConnell said later.
They got it. Casinos in the American Gaming Association -- whose chief lobbyist, D. Brett Hale, is a
former McConnell aide -- gave more than $2 million to the NRSC during McConnell's chairmanship in 1998 and 2000, up from $375,000 for the 1996 races.
McCain's gambling bill easily passed in committee but languished for four months while he pleaded
with Senate GOP leaders to allow a floor vote. They said they could not find time. When they finally
agreed to a vote, Nevada's two senators -- both Democrats -- were ready to block it with objections. It died.
News reports identified McConnell as one of the senators working against the bill. McConnell recently denied that.
Doris Dixon, who lobbied the Senate for the bill, said McConnell was part of the effort to keep it from
getting a floor vote. Dixon was then director of federal relations for the National Collegiate Athletic Association. She said McConnell and his aides refused even to meet with her side.
"Sen. McConnell was instrumental in blocking it from going forward," Dixon said. "He was talking to
other Republican senators about the problems it would pose for him as chairman of their fund-raising committee, which was taking money from Nevada."
McConnell had pleased his Las Vegas donors earlier by persuading Sen. Dan Coats, R-Ind., to withdraw an amendment that would have ended the federal tax deduction for gambling losses.
The deduction costs the government millions. Coats wanted it replaced with a deduction for Americans who support scholarship programs for poor children. But the gambling industry said the
deduction was crucial for its biggest bettors.
- Also in 2000, responding to fatal crashes involving Ford Explorers with Firestone tires, McCain
pushed a safety bill to require automakers to report serious defects to the government or risk prosecution.
McCain's bill passed in committee but stalled when several senators placed anonymous "holds" on it,
blocking a floor vote. McCain angrily cried, "The fix is in!" Business groups and Senate GOP leaders backed the shadowy stall tactic.
News reports and McCain's office identified McConnell among the senators placing a hold.
"I was there, I was intimately involved with lobbying on Sen. McCain's bill, and Sen. McConnell
definitely was actively opposing it," Joan Claybrook, president of watchdog group Public Citizen, recently said.
McConnell, an advocate of anonymous holds, recently denied placing a hold in that case. He said he and the Senate voted for McCain's safety bill, and it became law.
However, what really happened -- according to congressional records and interviews -- is that the
Senate killed McCain's bill by blocking the vote. In its place, the Senate adopted a weaker House bill
sponsored by Rep. Fred Upton, R-Mich., and supported by the auto industry. McCain reluctantly accepted it as a compromise.
Critics said Upton's bill did not require automakers to analyze their data for evidence of defects, and it allowed government secrecy to keep the public from learning of safety problems.
McConnell took more than $75,000 from automakers in the five previous years, according to the Washington-based Center for Responsive Politics. Ford Motor Co.'s Washington advocacy team,
which spent more than $8 million lobbying in 2000, was led by Janet Mullins Grissom, who was McConnell's first Senate campaign manager and chief of staff.
People who know McCain and McConnell say they dislike each other. In separate interviews, the
senators were respectful. McConnell said he feels no animosity over their "terrific battles."
Asked about McConnell, McCain smiled tightly and shrugged. "One thing I've learned in politics, I try never to look backwards in anger," McCain said. Then he turned away.
Enemy of reform
Campaign donations by "special interests" corrupt the Senate, Mitch McConnell warned -- in 1984.
As Jefferson County judge-executive, McConnell challenged incumbent Sen. Walter "Dee" Huddleston, D-Ky
. He flew to a breakfast at Washington's Capitol Hill Club to ask the major PACs for money.
They refused. They backed Huddleston. So the underdog bit the hands that wouldn't feed him.
"Huddleston For Sale to the Highest Bidder," accused one of his campaign press releases attacking the
senator's PAC and special-interest money. McConnell depicted Huddleston as solely concerned about cash.
Within days of his surprise victory, McConnell launched fund-raising for his 1990 re-election, tapping the very
Huddleston donors he had criticized. PACs alone gave him more than $41,000 before he took office.
"There was a lot of atoning to do," lobbyist Benjamin Cooper told the Herald-Leader during a McConnell fund-raiser, a month after the 1984 election.
In a recent interview, Huddleston said he heard complaints.
"It got back to me pretty quickly," Huddleston said. "Mitch went to the people who had supported me and
told them that if they wanted any kind of representation in the Senate from this day forward, they had better pony up to him, starting now. Open your checkbooks."
Not true, McConnell countered. He didn't have to threaten anyone, just welcome them with open arms. It's
common for "special interests" who backed the loser to switch sides after an election, he said.
"I've always found it a bit amusing," McConnell said. "They all have a right to support whomever they choose.
And when they're not supporting you, you have every right to complain about it."
McConnell continued publicly warning about corruption while privately raising as much money as he could for
his first decade in the Senate. Democrats, then the party in power, held the fund-raising advantage. McConnell called for campaign-finance reform to neutralize their edge.
"The electoral process suffers from real and perceived special-interest influence," he wrote in a Herald-Leader opinion column in 1990.
Everything changed in 1994. Republicans seized Congress. Money shifted to the GOP. And in an about-face, McConnell became Washington's fiercest enemy of campaign-finance reform.
For years, he beat back McCain and Sen. Russ Feingold, D-Wis., as they tried to ban unlimited "soft
money" contributions from corporations, unions and the wealthy. That opposition became his signature issue
. Money equals speech, he said, so limiting donations is akin to gagging a political protester.
When McCain and Feingold's Bipartisan Campaign Reform Act passed in 2002, McConnell called it "stunningly stupid." He sued all the way to the U.S. Supreme Court to stop it -- and lost.
He resents Republican reform sympathizers.
In 1998, Rep. Linda Smith, R-Wash., challenged first-term Democratic Sen. Patty Murray. McConnell's job
as NRSC chairman was to assist GOP Senate campaigns. But Smith called for campaign-finance reform
and assailed "the old boys and the old establishment." McConnell limited her funding to a fraction of the more than $400,000 he was authorized to provide to her. Smith was defeated.
"We ended up with no money to put on any kind of TV or radio advertising," Dale Foreman, who was
chairman of the Washington state Republican Party, said recently. McConnell gave him a frosty reception when he flew east to plead Smith's case, Foreman said.
"He clearly had strong opinions on campaign-finance reform, and anyone who disagreed with him, Republican or not, was not going to get any help," Foreman said.
McConnell denied snubbing Smith because she called for reform. He said she simply could not win. "She
was never in the game," he said. But in McConnell's NRSC fund-raising material sent to donors before the 1998 election, Murray was described as "highly vulnerable to defeat."
GOP senators were happy to let McConnell lead the charge against reform, freeing them from taking a politically risky stand, said Brian Minnich, a McConnell aide in the 1980s.
McConnell insisted that voters do not care -- "This issue, for average Americans, ranks right up there with
static cling," he said in a public television interview -- and that was true, at least for Kentucky.
His 2002 election opponent, Lois Combs Weinberg, recently said her polls showed only five percent of the state's voters objected to McConnell's opposition to campaign-finance reform.
McConnell's ardent pursuit of money set him apart and made him a leader. He is baffled by politicians who complain about having to ask for money, said Minnich, now a lobbyist.
"He wasn't embarrassed by fund-raising," Minnich said. "And he never forgot the people who helped him. That's key."
'It was thuggish'
Not every donor wants to pay forever. In 1999, a group of prominent corporate leaders -- including some of
McConnell's donors -- led a rebellion against his fund-raising style. To his great anger, they endorsed reform.
One of them was Edward Kangas, who was worldwide chairman and chief executive of accounting giant Deloitte Touche Tohmatsu from 1989 to 2000.
Kangas was no purist. In 1995, he and other Deloitte executives put together about $20,000 for McConnell.
Kangas said Deloitte wanted "visibility" as it lobbied for the Private Securities Litigation Reform Act, making
it harder for investors to recover fraud losses. The GOP Congress passed the act over President Clinton's veto.
Consumer advocates howled, but McConnell backed the act. Arthur Anderson & Co. -- the accounting firm
later disgraced by its role in the Enron Corp. fraud -- encased a copy of the bill in plastic to keep as a trophy. It also gave McConnell $3,000 about the time of the Senate vote.
Sending money to politicians on occasion is standard business, Kangas said. But it began to feel as if
whenever Congress met, lawmakers called to mention upcoming votes that could help or harm Deloitte, he said. And a donation request would follow.
"It was a shakedown," Kangas recalled, declining to say whether he specifically referred to McConnell.
"It's often a regulated industry, like the banks, the financial services companies, the pharmaceuticals," he
said. "An executive gets a call from a politician -- or someone close to the politician, who everyone knows
speaks for him -- who says, 'Hey, it would be really appreciated if you could show us some support right now.'"
So Kangas joined other corporate leaders at the Committee for Economic Development -- a Washington-based business group -- in endorsing the McCain-Feingold campaign-finance reform bill.
McConnell was outraged. He mailed angry protest letters to CED members and their companies to warn that their reform advocacy would crimp the income of the Republican Party.
"I would think that public withdrawal from this organization would be a reasonable response," he wrote. At
the bottom, he scrawled personal messages naming individuals and concluding: "I hope (name) will resign from CED. Mitch."
"Mitch was not completely happy," Kangas said, chuckling.
"It was thuggish," said Charles E.M. Kolb, the CED's president.
Kolb, a White House adviser to the first President Bush and an appointee under President Reagan, previously had donated to McConnell, but he resented McConnell's tone. His group stood firm.
"His letters sounded like a heavy-handed threat -- 'Continue to do business with these guys, and you won't
do business with us' -- but it backfired," Kolb said. "It became a strong piece of evidence as to what's wrong with the system. It was Exhibit A."
Good medicine for drug firms
By John Cheves, Lexington Herald-Leader, October 15, 2006
WASHINGTON- The pharmaceutical industry needed a friendly senator in 1999, and it was willing to talk money.
Senate Democrats were pushing universal prescription drug coverage for senior citizens -- including a provision to let Medicare negotiate for cheaper prices. Drug companies wanted to stop them.
Barry Caldwell, lobbyist at the Pharmaceutical Research and Manufacturing Association (PhRMA), sent his
boss a memo explaining that they would sit down with Sen. Mitch McConnell, R-Ky. McConnell had the ear
of other GOP senators as chairman of the National Republican Senatorial Committee (NRSC), their fund-raising machine, Caldwell said.
Caldwell listed four objectives for their Feb. 9, 1999, meeting with McConnell.
"Personal introduction of you to him," Caldwell wrote to Alan Holmer, the head of PhRMA in Washington.
"Apprising him of industry's concern with attention on pharmaceutical costs and efforts by Democrats to
demagogue the issue at Republican expense," he wrote. "Sen. Ted Kennedy (D-Mass.) prepared to force Republicans to choose between a tax cut for the rich and a drug benefit for seniors."
"Soliciting the senator's views on issue."
"And," he concluded, "expressing PhRMA's willingness to be a resource, substantially and politically, to
assist in maintaining a Republican majority in 2000."
Caldwell referred to campaign money. To refresh his boss's memory, he attached a list of the
pharmaceutical industry's Republican Party donations during the 1998 elections.
"Industry has been a solid supporter," he noted.
PhRMA found a sympathetic reception.
When the Democratic drug plan came up for a vote in 2000, |
