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How Business Is Wooing Democrats


Democrats on Capitol Hill are reporting some unusual sightings in recent weeks: emissaries from the business world. Aides to Representative Charles B. Rangel (D-N.Y.), the top Democrat on the House Ways & Means Committee, got a call from executives of General Electric Co. (GE) seeking to get together to catch up. House Energy & Commerce Committee Democrats have been fielding requests for meetings with business lobbyists. And Republican-leaning companies including Boeing, KPMG, BP, HSBC, AND MERCK have signed on as top donors to the centrist new Democrat Coalition. "There's been a palpable shift of outreach to Democrats by businesses, business lobbyists, and trade groups," says Representative Adam Smith (D-Wash.), New Democrats' co-chair. laughs Rangel: "I have a lot of new friends."

With the 2006 midterm elections nearing and the Republicans receiving record-low approval ratings from the American public, companies and business groups are reaching out to opposition leaders in anticipation of a possible Democratic takeover of the House of Representatives, or even a Democratic sweep of Congress for the first time in 14 years.

FATTER DONATIONS

Business lobbyists have scrambled to sponsor fund-raisers for Democratic Senators Christopher J. Dodd of Connecticut and Patrick J. Leahy of Vermont, who are not up for election this year but are in line to become key committee chairs if Democrats seize control of the Senate. House Minority Leader Nancy Pelosi (D-Calif.), who has a 24% lifetime approval rating from the U.S. Chamber of Commerce, has watched her contributions from business political action committees jump 31% over the same period in the last election cycle, according to the nonpartisan Center for Responsive Politics. Even Representative Barney Frank, the sharp-tongued Massachusetts liberal in line to take over the House Financial Services Committee, has seen a 35% increase in his donations from corporate interests.

The corporate Establishment hasn't suddenly shifted left. But just as business groups played ball with House Democrats during that party's 40-year run, through 1994, companies are once again showing they are prepared to deal the best they can with the people in power. "It's a very safe assumption to say that Democrats are more popular than they have been recently," says Bernadette A. Budde of the Business Industry Political Action Committee. "I don't think you can be a mainline industry and just work one side of the aisle." Indeed, many companies touching base with Dems say they always have lines out to both parties. "We fail to maintain contact with them at our own peril," says a GE lobbyist.

The newfound popularity of Democrats can be seen in the giving patterns of dozens of corporate PACs. Most business groups remain firmly Republican in their outlays, but a dozen have shown significant shifts toward the out party. The PAC of retail chain Target Corp. (TGT) has increased its donations to Democrats from 23.5% in the 2004 election to 41.6% this year, through July 31 according to the nonpartisan PoliticalMoneyLine.com. The Democratic share of Intel Corp.'s (INTC) PAC contributions jumped from 22.5% to 35.1%, and Wal-Mart Stores Inc.'s (WMT) Democratic contributions rose from 22.1% to 32.1%. "The business community is first and foremost practical," says one former Republican Cabinet member who is now a lobbyist, "and they will cover their butts."

Driving the outreach is polling that shows congressional Democrats are in fighting shape for the first time in years. Influenced by frustrations in Iraq, wages that haven't kept pace with inflation, and the response to Hurricane Katrina, voters say they prefer Democrats to Republicans this year. A survey by the Pew Research Center for the People & the Press conducted Sept. 6-10 found that voters favor the Democratic congressional candidates in their districts by 50% to 39%. The Democrats' chances are best in the House, where Republicans hold a 231-201 edge, with two vacant seats, and an independent who votes with Democrats. They need to gain 15 seats to control the chamber. They need a 6-seat shift to gain the majority in the Senate -- less likely, but not impossible.

TALKING SOFTER

Already, House Minority Whip Steny Hoyer (D-Md.), a pro-business moderate, has been trying to reassure corporate lobbyists that a Democratic majority would not result in an orgy of business-bashing. Rangel, the would-be chair of the House tax-writing committee, says he also hopes to unite business lobbyists and committee members of both parties on such issues as trade, tax reform, and education. "If we fight for two years, Democrats won't be able to get a damn thing done," he says.

Republican-leaning businesses say the stream of contributions to Democrats would become a torrent if Democrats prevail. Conservative activists are not amused by the new bipartisanship. "It comes across as unprofessional," says Grover G. Norquist, president of Americans for Tax Reform. "The AFL-CIO doesn't shift its giving when Republicans come to power. They give to people who agree with them."

Meanwhile, the street value of Democratic lobbyists is surging. According to one recruiter, a well-connected Democratic lobbyist can boost his or her pay by more than $100,000 by jumping to a firm looking to beef up its Democratic bona fides. "A lot of people are saying, 'Oh, my God, the House may be Democratic-controlled, and who do we have who would have a relationship with the committee chairs?"' says former Senator John Breaux (D-La.), a pro-business Democrat now with the Patton Boggs law firm.

This spring the all-Republican lobbying shop Federalist Group, whose clients include the American Trucking Assn. and Viacom Inc. (VIA), hired Democratic lobbyists for the first time, including former Representative Chris John (D-La.). Says managing director Wayne L. Berman, a veteran GOP operative: "We are positioned to represent our clients' interests to key House leaders in either party."

Democratic lobbyist Tony Podesta of the bipartisan firm PodestaMattoon says he was surprised to land three new clients in August of an election year, a time when companies are more likely to cancel contracts than to sign them. Podesta says one client recently bragged that his company leads its industry in contributions to Democrats. "That was a conversation," he says, "that would have been unimaginable a year ago."

By Richard S. Dunham and Eamon Javers, with Dawn Kopecki in Washington


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