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Corporate Traffic Heavy on U.S. Political Money Trail

Survey: In race for Washington access, many blue-chip companies also stay on sidelines, Times study finds.

September 21, 1997|RALPH VARTABEDIAN | TIMES STAFF WRITER

WASHINGTON — You won't find America's most competitive and best-managed corporations anywhere near the top of this chart.

Blue-chip firms such as Intel, Merck, Caterpillar, Procter & Gamble and General Electric rank far down among corporate contributors to candidates for federal office.

Instead, according to a Times analysis of political giving by every major corporation in America, the big players include a number of firms that have become the focus of federal investigations, or whose reputations have declined within their industries. The big givers are highly regulated by the government or highly dependent on it for subsidies--typically in the financial, defense, tobacco, oil and telecommunications sectors.

If money buys access to Washington's power brokers--and this is what the corporate contributors say they are seeking--then, for the most part, the government is not focused on the ideas of the nation's fastest-growing and most forward-looking companies.

As controversy swirls around the billions of dollars lubricating the federal election machinery, The Times examined the political contributions of every major corporation in the nation, the 544 biggest public and private companies.

The Times survey shows that contributions by the 544 companies jumped 75% to $102.4 million over the last four years. Company executives and other employees kicked in an additional $26.9 million, a 41% increase.

More companies are getting into the political-giving derby, the survey shows. Among the biggest 544 companies, the number making federal political contributions rose from 366 in 1992 to 403 in 1996.

Under federal election laws, businesses may give to individual candidates only through political action committees that raise funds from voluntary employee contributions.

However, corporate donations given directly to political party organizations--so-called soft money--are the one form of corporate largess not limited by federal law. Soft money is the fastest-growing component of corporate political giving, having more than tripled to $50.8 million between the presidential elections in 1992 and 1996.

The Times study also found sharp imbalances in the geographic distribution of corporate contributions. California provides just 9% of the money, even though it has 12% of the seats in the House of Representatives. But the corridor of big business in New Jersey, New York and Connecticut is a titanic force, providing one-third of the combined corporate and employee contributions in the last two-year election cycle. The financial-services sector in the Northeast, which accounts for much of the region's giving, exercises plenty of clout in Washington.

'Special Interests Play a Huge Role'

The big corporate contributors say their intent is not to exercise improper influence but to elect politicians who support policies good for their companies and the nation as a whole. They believe that corporate money plays a necessary and responsible role in a democracy.

Critics say the intent of the corporate contributors is far from benign.

"Special interests play a huge role in legislation; otherwise these appropriations bills would not be larded with pork, and tax-code bills would not be loaded with loopholes," complained Sen. John McCain (R-Ariz.), who is pressing for tight campaign-finance limits. "And who ends up making up the difference if the money is spent in a wasteful and inefficient fashion? The average American, who doesn't have the influence or the access in Washington."

The Times examined the role of business in financing federal elections at a time when unprecedented scrutiny is being focused on unorthodox and potentially illegal fund-raising efforts by politicians for their 1996 campaigns.

The analysis shows that companies most frequently cited as the best-managed major corporations in America are all below-average contributors. While pharmaceutical maker Merck & Co. is the 50th-largest corporation on The Times' list of 544 firms, for example, it ranks as the 129th-largest contributor. Intel Corp., the computer chip giant, is the 45th-largest firm but the 307th-largest political player.

Meanwhile, Philip Morris Cos., the nation's biggest corporate political contributor in 1995-96 at $3.9 million, is under political and legal attack for its cigarette marketing and manufacturing practices. While the company is regarded as well-run and highly profitable, it has also eliminated 12,000 jobs during the last five years.

AT&T Corp., the third-largest contributor, pumped $2.2 million into federal election campaigns in 1995-96. In a survey this year by Fortune magazine, AT&T dropped more sharply than any other corporation in America in its reputation among its peers for good management.

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