Easy Money

Corporate Elite Hobnob With Republican AGs in Austin

Easy Money
By Doug Potter

A group of GOP attorneys general could become poster children for campaign finance reform. The year-old Republican Attorneys General Association (RAGA) kicks off its two-day conference today (Thursday, March 30) at Barton Creek Resort, where a slew of big-money donors are expected to attend. Corporate contributors to the group reportedly include Microsoft, SBC, Sprint, GTE, and Aetna. Some companies may have given up to $25,000 in "soft money" to join the association. But it's impossible to know exactly how much money the companies gave or how their money will be spent. That's because all of the donations to RAGA are controlled by the Republican National State Elections Committee (RNSEC), an arm of the Republican National Committee, which does not provide separate figures for monies donated by RAGA members. Overall, according to the Federal Election Commission (FEC), the RNSEC took in $15.2 million and spent $8.8million in the first six months of last year. As part of the conference program, RAGA members were supposed to have been treated to a reception at the Governor's Mansion tonight. But after criticism last week from the Center for Public Integrity (CPI), the reception was moved to the Austin Club. Contrary to the CPI's claim, Bush spokesman Scott McClellan says the governor was never planning to attend the reception for the RAGA members. But there are still many connections between RAGA and the Bush campaign. Bush's chief strategist, Karl Rove, will speak to the group Friday morning. Hosting the event will be Texas Attorney General John Cornyn, a longtime Bush ally, and a founding member of RAGA. Another RAGA founder likely to appear is South Carolina Attorney General Charles Condon, also a Bush backer, who appeared on the stump on several occasions with Bush in South Carolina.

According to FEC records, three companies -- Microsoft, GTE, and Sprint -- have given a total of $180,000 to the RNSEC since January of last year. FEC records show that Microsoft has given the RNSEC $145,000. Sprint has given $15,000, and GTE has given $25,000. According to one source, phone giant SBC gave another $25,000, and insurance corporation Aetna gave a large donation. How much of that money was given to RAGA? Jennifer Lustina, director of Cornyn's political office, Texans for John Cornyn, refused comment. Numerous calls to the RAGA office in Washington, D.C., were not returned.

In addition to questions about how the group is raising money, there are also questions about the propriety of the meetings. Many of the companies that have given money to the RNSEC (and perhaps to RAGA) may have antitrust or legal issues that must be handled by the attorneys general with whom they are meeting. Most prominent among these is Microsoft. Condon, the South Carolina AG, dropped his state's antitrust claim against Microsoft in late 1998, shortly after Microsoft donated $20,000 to the South Carolina Republican Party.

RAGA is also reportedly accepting money from Aetna even though the state of Texas has pending lawsuits against two Aetna entities: Aetna U.S. Healthcare Inc., and Aetna Health Plans of North Texas Inc. The two Aetna companies and four other health maintenance organizations allegedly made contracts with doctors that encourage the doctors to limit medically necessary care. The suits are among the largest legal challenges ever made against the managed care industry in Texas history, and they include charges under the state's Deceptive Trade Practices Act, one of the state's most powerful legal tools for protecting consumers. Could Aetna officials try to lobby Cornyn at the RAGA event? Cornyn's press officials refused to talk about RAGA and referred all calls to Cornyn's political office which, as already mentioned, refused to answer any questions. And what's the latest on the Aetna case? Heather Browne, a spokesperson for Cornyn's office, said "discussions are ongoing."

Tom Smith, the Texas state director of Public Citizen, a nonprofit consumer group, criticized the RAGA conference, saying, "Those who donate get special access and opportunities to pitch their policies that others who can't afford the price of admission don't get. It's improper. It's as reprehensible as Clinton renting out the Lincoln Bedroom. It's the essence of the problem we have with political donations. And it demonstrates why we need to have reform and limits on donations."

The meeting also raises questions about how vigilant the AGs will be on issues like tobacco and other mass tort claims. Of the 43 attorneys general in the U.S. who are elected, 12 are Republicans. And those 12 have made it clear that they oppose using state prosecutors to sue large industries like big tobacco to recover billions of dollars spent caring for sick smokers. In fact, according to one source close to RAGA, the group was started because the AG's were concerned about "making laws through the courthouse that weren't made through the state house."

Last week, Cornyn told the Houston Chronicle that raising money is a "necessary but unpleasant part of seeking and holding public office. For better or worse, candidates for public office have to raise money to get elected." But he added that the money he has raised "has not influenced my official actions."


Tort and Retort

While that may be the case, the reason for creating RAGA appears to be an effort to counter the soft money being given to Democrats by the nation's trial lawyers. Lawyers who were involved in the tobacco litigation and other big tort claims are funneling tens of millions of dollars into the Democratic National Committee and other Democratic organizations in an effort to stem the tort reform agenda being pushed by the GOP. RAGA appears to be a counter-effort to get soft money out of the major corporations that could face large-scale tort actions from the trial attorneys. And although Bush won't be appearing at the RAGA event, he has made it clear that his political ideology is closely aligned with that of the Republican AGs. Last month he told the Financial Times, "I am not sympathetic to lawsuits. Write that down. I worry about the effect of lawsuits on job creation," Bush said. "If you are looking for the kind of president I will be, I will be slow to litigate."

Bush's tort reform agenda will undoubtedly be a topic of discussion at the RAGA events today and Friday. But there's an interesting irony to this: If Bush is elected, the RAGA event would likely be prohibited. The first plank of Bush's campaign finance reform proposal: "Ban corporate soft money." end story


RAGA (http://www.republicanags.org)

Federal Election Commission (http://www.fec.gov)

Center for Public Integrity (http://www.public-i.org)

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downtown, Second Street, Federal Realty Trust Inc., Toby Futrell, Alcoa, Bastrop, Gotham Condominium, Andy Martin, Gary Bradley, SOS Alliance

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