The Observer (UK): Payback time for USA Inc: The big donors by Oliver Morgan: “Corporate America - and corporate Britain, as the donations of BP, Shell, BAE Systems, Catterpillar and GSK show - bet right. The markets rose, pharmaceutical, oil and defence stocks all gained. So now it's payback time.” (ShellNews.net) 7 Nov 04
Sunday November 7, 2004
They paid up big time. With an estimated $4 billion price tag, the 2004 US elections were the most expensive ever. For those doing the bank rolling, the results were satisfactory. President Bush, on whom $360.6 million was lavished in private and corporate donations, was re-elected. In the Senate, where the Republican membership rose from 51 to 55, 91 per cent of contests went to the candidate who spent most, according to the Washington-based Centre for Responsive Politics. In the House of Representatives, where the Republican majority also increased, it was 96 per cent.
Sector by sector across corporate America, either through 'political action committees', which channel donations to individual congressmen, or through donations by individuals, companies bet on a Republican victory. For example, of the $39m spent by energy companies - utilities such as Texas-based TXU and crude oil supermajors like Exxon, which have always been close to the former oilmen George Bush and Dick Cheney - 75 per cent went to Republicans. Agribusiness spent $38.7m, of which 71 per cent went to Republicans. In the financial sector, investment banks such as Goldman Sachs and Morgan Stanley have led a massive recent increase in political donations. Republicans got 59 per cent of the dollars. In defence 62 per cent was Republican red, in pharmaceuticals, 66 per cent, in construction, 71 per cent.
Corporate America - and corporate Britain, as the donations of BP, Shell, BAE Systems, Catterpillar and GSK show - bet right. The markets rose, pharmaceutical, oil and defence stocks all gained. So now it's payback time.
Larry Noble, of the CRP, says: 'Companies make political contributions and support because they want to have someone in office who is sensitive to their needs. Most look at it as investment, and they expect a return.'
Bush can now push measures and legislation that either failed last time round - his energy bill, for example - or was deemed too radical, such as privatisation of social security, or too difficult, such as reform of the law of tort. Most will benefit Republican donors.
The pharmaceutical industry will heave a huge sigh of relief that Democrat plans to limit refundable drug costs on state health programmes will not be enacted for at least another four years. Pfizer employees will feel that their $1.2m - 67 per cent of it for the Republican cause - was well spent. Ditto GSK, at $835,135, the second biggest donor. Car makers (who donated 64 per cent of their $1.9m to Republicans) will also be relieved that Kerry's emissions proposals will not see the light of day.
Even without the bill, energy companies got a lot out of Bush. He did not sign up to the Kyoto agreement to cut greenhouse gas emissions. Oil and gas companies such as Occidental and Marathon (which gave $306,000 and $250,000, respectively, this time, more than 80 per cent going to Republicans) have not done badly out of the lifting of sanctions on Libya, where they have had skeleton operations for two decades. And Halliburton (which Cheney used to lead and which saw 86 per cent of its donations go to Republican candidates) has won contracts in Iraq.
What these companies are looking for this time is passage of the bill - the nuclear industry wants its proposed new plants; the utilities further deregulation. And Exxon, ChevronTexaco, and BP, will be hoping that when Bush says he wants to 'reduce America's dependence on foreign oil', he means they can drill on the protected Arctic wildlife refuge in Alaska.
But Noble says: 'If you look at energy contributions, although they are clearly aimed at Republicans, they are not the largest. This may be because these companies know they have got former oil men as president and vice president, so they do not have to dig too deep to get what they want.' He adds that the most significant development of this election is the role played by Wall Street and the financial community. While, 10 years ago, commercial banks, insurers and accountants spent $99m, this year it is $250m. Lewis adds: 'The financial sector is swirling around Bush.'
Why? Several reasons, including the obvious: lower tax. 'The real radical policy of this next term will be social security reform,' says Noble. 'We could see it privatised, and there would be enormous interest in that from banks.' Meanwhile, reforms to civil law could, for example, limit damages in medical negligence cases to $250,000, which will delight insurers - 68 per cent of the $27m they gave to candidates went Republican.
There are Republican standpoints that go against the grain of corporate sponsorship. For example, Bush's stand against stem cell research could undermine a big source of revenue for the healthcare sector. Biotech stocks fell after the result came through.