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Conservative nonprofit offered clout to FedEx -- for millions

The American Conservative Union asked for up to $3.4 million to support the carrier in a legislative battle. When the firm refused, the group's president backed rival UPS' position and blasted FedEx.

July 19, 2009|Andrew Zajac

WASHINGTON — In an unusual look inside Washington's lobbying culture, a sequence of letters published last week exposed how a conservative nonprofit advocacy group apparently tried to sell its clout in a legislative battle between FedEx and UPS.

For a fee of $2.1 million to $3.4 million, the American Conservative Union offered to "strongly support" FedEx's position and "rally [the] grass roots," according to a June 30 letter from Vice President Dennis Whitfield to a top lobbyist for the package carrier.

After FedEx rejected the offer, the group's chairman, David Keene, joined seven other conservative leaders in signing a July 15 letter supporting United Parcel Service Inc. and blasting its competitor for "false and disingenuous" statements made in trying to fend off legislation that would have increased organized labor's power at FedEx Corp.

The letters, which were published Friday by the Capitol Hill newspaper Politico, offered a window into the transactional side of nonprofit advocacy, in which money appeared to influence the position of a group ostensibly motivated exclusively by principle.

The Conservative Union responded in a statement that it still supported FedEx in the dispute and that Keene had signed the anti-FedEx letter as an individual -- even though the document bore his title and the group's logo.

The group has not received or been promised any money "to date" from UPS, the statement went on to say, and "ACU's positions on important policy issues have never been for sale."

The organization said that Keene was not available to be interviewed.

Others, however, said the letters provided a rare glimpse into how Washington works.

"Rarely do you see it spelled out like this. It's a blatant paper trail of how an organization will sell itself to the highest bidder," said Ellen Miller, director of the nonprofit Sunlight Foundation, which advocates for more disclosure by groups trying to influence government policy.

"There is probably far more of this than we're aware of," Miller said.

Billing itself as the nation's largest and oldest conservative lobbying organization, the American Conservative Union touts a commitment to defending traditional values, among them a market economy.

It is organized as a nonprofit under a provision of the tax code that allows it to engage in unfettered lobbying but does not permit donors to take tax deductions for their support.

UPS spokesman Norman Black said his company did not pay "any of those organizations whose leaders put their names" on the letter attacking FedEx.

At issue is a proposed change in the law, advocated by UPS, that would allow labor unions to organize FedEx workers on a location-by-location basis.

The company now operates under a provision that requires unions to organize workers nationwide or not at all.

FedEx pilots belong to the Air Line Pilots Assn. Its truck drivers are not unionized.

UPS moves most of its packages by truck, and has contracts with the International Brotherhood of Teamsters, the International Assn. of Machinists and the Independent Pilots Assn.

The legislation has passed the House and awaits action in the Senate.

FedEx opposes the change because under it, a local labor dispute could cripple the carrier's plane-based hub-and-spoke distribution system, spokesman Maury Lane said.

Lane said FedEx rejected the Conservative Union's overture because the company was "not comfortable with the lack of transparency" in paying the group for support that the public would perceive as based on the group's principles, rather than on a fee.

One of the signers of the anti-FedEx letter, Grover Norquist of the group Americans for Tax Reform, is a Conservative Union board member and has a financial tie to UPS.

For the last decade, the UPS Foundation has contributed as much as $50,000 annually to the Americans for Tax Reform Foundation in support of its efforts to combat overregulation and excessive litigation, Black said.

Norquist could not be reached for comment.

--

azajac@latimes.com

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