Contributions from corporations spark criticism


January 09, 1993|By Nelson Schwartz | Nelson Schwartz,Contributing Writer

WASHINGTON -- The election was over long ago, but President-elect Bill Clinton's fund-raisers are still hitting up the same fat cats who gave during the campaign to pay for this month's $20 million-plus inauguration extravaganza.

The list of contributors reads like a who's who of corporate America. American Telephone & Telegraph Co., IBM, General Electric, USX, and others have lent millions of dollars to a fund that will pay for much of the festivities.

Special interest groups like the Tobacco Institute, the American Federation of Teachers and others with much at stake before the new administration have also made tax-deductible contributions to the Presidential Inaugural Foundation, which helps underwrite the free events that are open to the public.

Although it's the way inaugurations have been funded for decades, the practice of soliciting for donations has been criticized by those who worry what supporters will expect from the White House in return.

The system's defenders maintain that it prevents average Americans from having to bear the cost. Moreover, they say, there are few direct links between inaugural planning and White House operations.

"We're not here to make decisions about policy or about who gets jobs," said Richard Mintz, communications director for the Presidential Inaugural Committee. "We're here to put together a celebration of democracy. There are no conflicts of interest."

Mr. Mintz described the huge tents to be set up on the Mall, with tens of thousands of seats, for events on Jan. 17 and 18 that are open to the public. "Entertainers are performing for free, vendors are making free contributions," Mr. Mintz said. Gifts from large corporations, he added, are in the same spirit of public service.

Even under the current arrangement, taxpayers aren't completely off the hook. The Armed Forces Inaugural Committee, which coordinates and plans the military's participation in the festivities, is spending $2 million from the Pentagon's budget, not to mention the cost of paying its 650-member staff. And the Washington, D.C., city government, with help from Congress, is spending more than $5 million on police and other services.

"This is going to be the most accessible inauguration in history," Mr. Mintz promised. "But doing that is expensive."

The inaugural was originally expected to cost $20 million, but the final total is now expected to exceed that by several million -- still probably less than the nearly $30 million spent on George Bush's inaugural in 1989.

Ever since Harry Truman's inauguration in 1949, planners have

relied on an arrangement that mostly pays for itself. Corporations and wealthy individuals loan money to a Guaranty Fund that covers the cost of the celebration. Contributors, who don't receive interest on the loans, are then paid back using proceeds gathered from selling tickets to balls, commemorative items and television rights.

Despite the name of the fund, creditors aren't guaranteed 100 cents on the dollar. But they've always gotten the full amount back with one exception -- President Eisenhower's second inaugural. With lukewarm interest and weak ticket sales, supporters received 87.5 cents on the dollar.

Backers of the Guaranty Fund with Maryland connections include Bell Atlantic, owner of Chesapeake & Potomac Telephone Co.; Primerica Corp, which owns Baltimore-based Commercial Credit Corp.; and Henry A. Rosenberg Jr., chairman of Crown Central Petroleum Corp., a gasoline refiner and retailer in Baltimore.

The Presidential Inaugural Foundation is more controversial than the Guaranty Fund, because donations are tax-deductible and aren't repaid. CSX Transportation Inc, based in Richmond, Va., but with extensive Maryland operations, donated to the foundation.

Critics concede there isn't much new here, but say they expected more from Mr. Clinton who, as a candidate, pledged to loosen the ties that wed the White House and Capitol Hill to private interests. They worry, too, that it is a sign that Mr. Clinton is backing away from the promises he made to reform the way Washington works.

During the campaign, Mr. Clinton decried a system where politics is "held hostage by big money interests. . . . Political action committees, industry lobbies, and cliques of $100,000 donors buy access to Congress and the White House."

Ellen Miller is among those who say they are disappointed in Mr. Clinton, even if the issue at stake is the nation's biggest party, not a high-profile concern like defense or health care.

Ms. Miller, executive director of the Center for Responsive Politics, a Washington research group that tracks money and politics, said: "It's certainly business as usual. While you have to get money from some place, it's surprising to see the Democrats raising money exactly the same way the Republicans did."

A better solution might be to use public money, regardless of the hue and cry it might generate among voters, she added.

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