Sunday, October 3, 2004

Despite recent reforms aimed at curbing the influence of deep-pocketed contributors on national politics, San Antonio's top corporations have found new ways to get cash to their favorite candidates. And deliver it in record amounts.

Cashing in on candidates

BY Sanford Nowlin, Express-News Business Writer
October 3, 2004

Despite recent reforms aimed at curbing the influence of deep-pocketed contributors on national politics, San Antonio's top corporations have found new ways to get cash to their favorite candidates.

And deliver it in record amounts.

Alamo City contributors have funneled more money to national political candidates in the ongoing 2004 election cycle than in the entire 2000 campaign, according to the nonpartisan Center for Responsive Politics.

This cycle marks the first presidential election since Congress passed a law aimed at limiting the influence of big contributors.

Contributions have topped $7.2 million in the current cycle, up from $6.6 million in 2000. It's a considerable jump, experts said, considering the campaign isn't over yet.

Leading the gain are increased donations from San Antonio corporations' political action committees, executives, employees and shareholders.

The 2002 McCain-Feingold Act tried to stop the flow of unlimited money into national politics by ending "soft money" contributions, but experts said businesses have since found other ways to get cash to their favorite candidates.

"Companies don't have to give money directly," said Tucker Gibson, a Trinity University political science professor. "If you're an executive, you go around to the people you play golf with, the people you serve in civic groups with. You put the bite out there and say, 'If we really want to make an impression, we should contribute together.'

"It's called 'bundling,' and it sends essentially the same message as your company giving the money directly."

Five San Antonio-based companies ranked on the Center for Responsive Politics' list of the 25 largest Texas-based corporate donors for the current election cycle.

Telecommunications giant SBC Communications Inc. topped the list, as it did in 2000. The other four from San Antonio were refiner Valero Energy Corp., insurance giant USAA, media group Clear Channel Communications Inc. and Loeffler, Jonas & Tuggey, a law firm led by former U.S. Rep. Thomas Loeffler.

The list isn't based on direct corporate donations but on contributions by companies' executives, employees, shareholders and political action committees.

Even so, during the 2000 campaign, when soft money contributions were legal, only two Alamo City companies, SBC and USAA, made the center's list.
Growth at several of the city's largest companies contributed to the spending increase, experts said. During the 2000 campaign, Valero and Clear Channel were smaller companies with less complicated regulatory agendas, but strings of acquisitions have since catapulted both onto the national stage.

"I think you're seeing some firms that have changed dynamics since 2000," said Mike Novak, chairman of the Greater San Antonio Chamber of Commerce. "They've moved during that time from being players on the Texas scene to being players on the national scene. If you're a company of that size, you have to be a player in national politics. There's no other option."

Both President Bush and rival Sen. John Kerry have encouraged leading fund-raisers — many of them business executives — to bundle donations. Bush calls those who raise $200,000 or more for his campaign "Rangers" and those who raise more than $100,000 "Pioneers." Kerry has dubbed his top money-raisers "Vice Chairs."

SBC Chairman Edward E. Whitacre Jr. and Loeffler both are listed as Rangers on the Bush campaign's Internet site. USAA Chief Executive Officer Bob Davis is listed as a Pioneer.

Texas' other large corporate donors are spending their dollars overwhelmingly with Republicans this election cycle, according to the Center for Responsive Politics. All five San Antonio companies among the state's top 25 corporate contributors have given the majority of their contributions to the GOP.

Though corporate giving strategies in the past usually involved significant donations to both parties, analysts said Republicans have benefited in the current election by controlling the White House and both houses of Congress.

Not only are Republicans viewed as the party friendliest to big business, they're also the party in power.

"Clearly, a good deal of these (executives) are giving because they expect to get something in return," said Craig McDonald of watchdog group Texans for Public Justice. "They may not expect a direct favor in return — it may be something as subtle as access. But if you're a CEO or a lobbyist, that access is a valuable commodity."

Here's a look at the largest San Antonio corporate contributors during the 2004 election cycle, based on Center for Responsive Politics data:


SBC is the top-contributing phone company in the 2004 cycle, spending $1.8 million to No. 2 Verizon Communications' $1.1 million.

Its contributions are so large that it ranked eighth nationally among corporate donors for the cycle, besting Wal-Mart Stores and Merrill Lynch.

"Our future as a regulated company — as one of the most heavily regulated companies in the country — depends on the decision of policy-makers," spokesman Dave Pacholczyk said. "We need to make sure policy-makers are educated and informed on the issues."

One of the regional Bell companies created with the breakup of the AT&T systems, SBC wants to convince lawmakers and regulators that it has sufficiently opened its local markets to competition and that it should therefore face fewer rules governing how it sells access to its network to rivals.

Congress also is likely to consider revising the 1996 Telecommunications Act, which lays out ground rules for competition in the industry. Much will be at stake for SBC if lawmakers make significant changes to the act.


USAA ranks 11th among insurance companies in contributions during the 2004 campaign. Its PAC contributed the majority of the money.

Bill McCartney, senior vice president for government relations at USAA, said more than 500 employees of the company — mostly officers — contribute to the PAC to have a voice in policies affecting the company.

"All our businesses are highly regulated at the state level and at the federal level," McCartney said.

One issue the insurance giant would like to see come before Congress is uniformity in the rules governing property and casualty coverage. The military member insurer now has to deal with 51 regulatory schemes in all the states and Puerto Rico.

McCartney said the PAC also wants to give USAA a voice on Securities and Exchange Commission regulations in the mutual fund industry and in preserving access to customer credit reports.

USAA, like most corporations exposed to lawsuits, wants national tort reform limiting liability in class action civil lawsuits.


The nation's largest independent refiner, with 15 refineries, Valero Energy Corp. pays close attention to the federal electoral process — to the tune of half a million dollars in the 2004 election cycle.

Of the top 20 oil and gas contributors listed on the Center for Responsive Politics' Web site, Valero's political action committee is the largest in the industry. Eighty-four percent of its donations are to Republicans.

"We don't think that there's any doubt that President Bush would be a better advocate for our industry than Sen. Kerry would be," said Jim Greenwood, Valero vice president for governmental affairs.

The key issue for the refiner is a provision in a stalled energy bill that would provide protection from MTBE cleanup lawsuits.

The fuel oxygenate called methyl tertiary butyl ether was required by the federal government to help gas burn cleaner. Now that it has fouled numerous public drinking water supplies, many communities are suing gasoline storage companies and manufacturers such as Valero to pay for the cleanup.

Nationwide cleanup costs could approach $30 billion. Refiners such as Valero want Congress to shield them from the lawsuits, despite evidence that they've known of MTBE's problems for decades.


Clear Channel Communications is the country's largest radio station owner, concert promoter and billboard advertising company.

This campaign, Clear Channel employees and its PAC have given some $572,000 in federal contributions to candidates, with about three-quarters going to Republicans. That's more than any other TV or radio station company.

"It's important to note many companies almost always give more money to the majority party. It's just a fact of political life," said Travis Larson, a spokesman for the company led by longtime Bush family friend Lowry Mays.

Clear Channel has faced increasing scrutiny from the Federal Communications Commission and fines over indecent radio broadcasts on some of its stations. It also must deal with the renewal of its federal licenses through the FCC for its nearly 1,200 radio stations nationwide.

"Education and communications in Washington are critical in ensuring the health of our industry," Larson said. "Political contributions are one of the many tools available that help us achieve that goal."


Tuggey, Jonas & Loeffler Chairman Thomas Loeffler, a former U.S. representative, has been a longtime Republican fund-raising stalwart, explaining at least in part the law firm's presence among the state's largest corporate campaign contributors.

The company didn't show up as a top contributor in the last presidential election cycle because it wasn't formed until 2001.

Partner Tim Tuggey said the firm, which represents clients including the city of San Antonio and KellyUSA in federal lobbying efforts, encourages political involvement for its employees.

Because Tuggey, Jonas & Loeffler's emphasis is on governmental affairs law, it is important that the firm be familiar to federal lawmakers, Tuggey added. Though contributing to political campaigns can boost familiarity, "if you approach it with kind of a quid-pro-quo ideal, you'll ultimately be disappointed," he said.