Corporate Abuses Giving Democrats a Campaign Issue
By ADAM NAGOURNEY
The New York Times
Sun Jul 14, 9:18 AM ET
BOISE, Idaho — From scouring the voting records and business backgrounds of Republican opponents to preparing television advertisements promising to "hold corporate executives accountable," Democrats are moving to turn the battle over corporate governance to their advantage this fall. The focus on Wall Street has given a jolt of energy to a party that just a month ago was casting around for issues to emphasize in the midterm elections.
At the same time, the White House is confronting what is apparently the end of the lock-step support it has enjoyed from Congressional Republicans for the last two years. Republicans are moving sharply to distance themselves from Wall Street and President Bush ( news - web sites), embracing Democratic proposals concerning corporate abuse and offering tough words against corporate malfeasance.
"To corporate C.E.O.'s, and the accounting firms that audit their companies, let me be very clear," Representative Mike Ferguson, Republican of New Jersey, said this week, "if you violate the public trust, if you flush down the drain the retirement security of millions of Americans, you will — and you deserve to — go to jail."
Mr. Ferguson, a freshman whose seat is being challenged by Democrats, and who voted against legislation proposing criminal penalties for corporate malfeasance, made the remarks at a Congressional hearing, then shared them in a newsletter he mailed to constituents.
Democrats, particularly, are rushing to seize the issue by staging forums, news conferences and town hall meetings intended to spotlight corporate abuses, and they are raising the topic as governors of both parties are gathered here this weekend for their annual meeting.
In Jackson, Miss., Representative Ronnie Shows, a Democrat, held an "accountability town hall" today at the Mississippi Agriculture and Forestry Museum — not far from the Clinton headquarters of WorldCom, which has been under investigation since it disclosed that it improperly accounted for $3.8 billion in expenses.
In Minneapolis on Thursday, at the very moment that Mr. Bush was speaking on behalf of the Republican challenger to Senator Paul Wellstone, Mr. Wellstone was distributing a statement noting the "turmoil caused by the ongoing accounting scandals and concern over the president's ability to respond to them" and asking, "Who will Minnesotans trust to be a watchdog for investors and consumers?"
Democrats are inspecting the backgrounds of Republican candidates for links to discredited corporations and examining the records of incumbents for votes that can be portrayed as lax on corporate abuse. They are preparing scripts for television advertisements featuring Senate candidates promising to "protect jobs and pensions" and stand up for "people who work hard and play by the rules," an official who has reviewed the scripts said.
"I think it's going to be a very big deal," said Stanley Greenberg, a Democratic pollster tracking the issue. " People are angry."
The issue of corporate abuse and its potential effect on the coming elections was a refrain among officials gathered here today at the National Governors Association.
Democratic governors said they were confident that it would help the party make significant gains in the Congressional elections this fall.
At least one Republican governor, Frank Keating of Oklahoma, acknowledged that this was possible. "If Republicans appear to be resisting legitimate reforms because big business doesn't wish them, or Republicans appear to be avoiding reforms because they were a part of that business excess, I think Republicans could be hurt very badly," Mr. Keating said in an interview.
"I think Republicans are dealing with it fairly, but I don't think they are dealing with it with the sense of urgency that I would," he added.
A Democrat, Howard Dean of Vermont, today assailed Mr. Bush for naming Harvey L. Pitt the chairman of the Securities and Exchange Commission ( news - web sites), saying, "That was his single worst appointment that was made, because it signaled permissiveness."
The maneuvering by Republican candidates and their advisers underscores lingering concerns that the party is particularly vulnerable on this issue. As both parties noted, Republicans have long been associated with big business. The links have included positions the party has taken in Congress, the source of their biggest soft-money contributions and the number of former chief executives in the Bush White House.
Still, for all the signs of Democratic confidence, and corresponding anxiety on the Republican side, it remains far from certain that the Democratic Party can gain the advantage its leaders are hoping for again. Party officials acknowledged that there were serious risks and complications in trying to turn this issue to their advantage.
For one thing, this is a topic for which blame is difficult to assess, and party differences on related issues like fund-raising and the images each party has sought to project are not as sharp as they once were.
A report issued on Thursday by Democracy 21, a group advocating changes in campaign financing, found that corporations contributed $636 million in soft money to Republicans over the last decade while giving $449 million to Democrats.
The election is about four months off, and if recent history is any guide, this issue could disappear with the end of summer, particularly if the economy improves and the stock market rises. Democrats, in particular, given their history, need to be careful about making political moves that might be portrayed as undermining Wall Street.
"Half the American people are in the stock market," said Bill Carrick, a Democratic consultant.
The nation has come a long way from the days when a Republican president, Calvin Coolidge, declared that "the business of America is business," while Democrats held themselves out as the protectors of the working class.
Bill Clinton moved the Democrats to the center in 1992 in large part by challenging the notion that his party was antibusiness, and a number of Democrats are now expressing concern that overheated populist rhetoric by candidates could strike voters as opportunistic and unravel what Mr. Clinton accomplished.
"This could play into the worst stereotypes of the Democratic Party: that we engage in class warfare, that we favor big government, that we engage in the politics of resentment," said Senator Evan Bayh of Indiana. "Most Americans would prefer a more positive approach."
Senator Joseph I. Lieberman of Connecticut said, "Having re-established ourselves in the 1990's as a party of economic growth, it's very important that, as we respond to this, we don't overreact so that we become an antibusiness party again."
While Democrats are moving to spotlight ties of Republican candidates to business, many have found themselves standing on the same corporate stage. In North Carolina, Erskine B. Bowles, who was Mr. Clinton's White House chief of staff and is now running for Senate, was attacked last week as a Wall Street insider — by a fellow Democrat challenging him for the nomination — because he is an investment banker.
Similarly, Republicans, in pushing back, were quick to note that Terry McAuliffe, the chairman of the Democratic National Committee ( news - web sites), turned a $100,000 investment in Global Crossing, one of the companies that has emerged as a symbol of corporate wrongdoing, into an $18 million profit after the company went public.
"I suspect that even though people blame the Republicans more than the Democrats for this, there is the sense that everybody sort of swims in the same murky waters in Washington," said David Axelrod, a Democratic consultant based in Chicago. "I suppose there's a point where people will reject kind of excessive moralizing on this. But to me, that is a small danger for us. I think the real danger is on the other side."
Several Republicans argued that the issue would have little punch in the fall if the economy and the stock market are in good shape.
"If consumer confidence stays high," said William McInturff, a Republican pollster, "and the economy rebounds and the stock market stays stable, the Democrats are going to lose anyway. That's where we were in late May and early June. They started this because they are losing the cycle. Everything else they tried didn't work."
But even Republicans acknowledged that the issue of corporate malfeasance could prove effective if, come October — when most voters are first beginning to focus on Congressional and Senate races in their states — the economy and the stock market are down, and Americans believe the nation is heading in the wrong direction.
Democrats said they believed that if that were to happen, voter distress about corporate behavior would give new force to their plans to revive attacks on Republicans proposals to link Social Security ( news - web sites) and retirement plans to the stock market.
Should they indeed be a central topic this fall, corporate abuses could be an unusually effective issue for Democrats, because this is likely to be an election with a relatively low voter turnout. The voters who are most vulnerable to disruptions in the stock market are older Americans approaching retirement whose pension and retirement accounts are tied to stock performance. Not incidentally, older voters are the ones who tend to go to the polls in off-year races, even when there is no compelling issue driving the election.
"Too many people have lost too much money to ignore all that has happened," said Frank Luntz, a Republican pollster. "When you have a third of people in their early 50's and their early 60's saying their retirement has now been delayed because of the market, you've got an angry segment of the election. And they are voting." |
