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Aug 15

Fashion And Party Politics Make Well Dressed Bedfellows

Fashion industry officials are opening their wallets wide to back their favorite candidates and parties leading up to November congressional and state elections, after which stricter rules for campaign contributions could likely be in place.

Among retailers heavily into the business of 2002 campaign giving is retail giant Wal-Mart Stores, which is demonstrating how it also dominates general merchandise, department and apparel specialty stores in amassing a political war chest.

Halfway through the two-year congressional-election cycle, the Bentonville-Ark.-based chain’s political action committee collected $630,272 in donations from Wal-Mart store managers, executives and workers, as well as others outside the company. Of that amount, Wal-Mart gave $589,480 to mostly Republican candidates and activities, according to year-end 2001 Federal Election Commission reports.

fnppmwAt this pace, Wal-Mart by the fall will likely outpace its $694,032 in contributions made during the 1999-2000 election cycle, which in turn surpassed the $159,575 given by the company from 1997-1998. The increase in political spending reflects “a growing realization in the last few years that Wal-Mart needed to be more politically active” and help like-minded candidates get elected, a company spokesman said.

“There are a rising number of issues at the local, state and federal level that affect retailing,” he added.

On Capitol Hill — where most retail, as well as apparel and textile PAC dollars are spent — there’s a beehive of issues that could affect business, good and bad, ranging from taxing the Internet and making apparel imports from Andean countries duty-free to exposing employers to medical malpractice lawsuits and tightening cargo security procedures.

Also at stake is the control of the House and Senate. Democrats need to claim only six seats in the House to gain a majority, whereas in the Senate, Republicans need to wrest a single spot to take charge.

For the most part, retailers tend to favor GOP candidates, but they still contribute to Democrats who favor industry issues. The same goes for apparel and textile manufacturers and importers, although Seventh Avenue has had a more liberal, Democratic bent over the years.

“When the houses of Congress are controlled by Republicans there is more of a pro-business support,” said Steve Pfister, senior vice president of government relations at the National Retail Federation.

One regular recipient of retail, as well as apparel and textile importer campaign dollars, is House Ways & Means chairman Bill Thomas (R., Calif.), the gatekeeper of all trade and tax legislation, who is a proponent of lowering import tariffs. His counterpart on the Senate side, Finance Committee Chairman Max Baucus (D., Montana), although a bit more tempered in his advocacy of free trade, is also popular with those in the fashion industry who import.

The domestic textile industry, concerned about increased competition from low-cost imports and lowered trade barriers, tend to favor lawmakers who question legislation that expands trade breaks for apparel and textiles.

Burlington Industries, though in Chapter 11, is among a handful of mills that has stayed active in political fund raising and backing textile-state lawmakers. The company, based in Greensboro, N.C., so far this election cycle has given $1,000 to Sen. Fritz Hollings (D., S.C.), as well as House Textile Caucus chairman Rep. Howard Coble (R., N.C.), both diehard defenders of the textile industry. Burlington also has one of the meatiest textile industry PACs, reporting $72,469 in contributions, of which $16,000 has been handed out.

One potentially huge political donor, billionaire textile magnate Roger Milliken, doesn’t maintain a PAC through his Milliken & Co. Unlike other corporate chiefs, Milliken isn’t an active fund-raiser. Rather, he keeps his giving to the $25,000 limit the FEC places on annual personal campaign contributions and backs only GOP candidates and party causes.

The only exception was in 1998, when he gave Hollings $900 in his Senate reelection bid. Milliken and the South Carolina Democrat are like-minded in arguing how U.S. free-trade policy has caused the demise of the country’s manufacturing base, including textile production.

Milliken’s Washington lobbyist, Jock Nash, said his boss “thinks having a PAC is like trying to get someone who works for you to adopt your views.”

“Clearly, a company our size could have a huge PAC,” Nash said. “It certainly would make my job a lot easier if I had money hanging out of my pockets like some in the retail, textile and apparel industries.”

The second-largest retail player this election cycle is May Department Stores, having amassed $192,183, of which $86,922 has been disbursed, according to the FEC’s year-end 2001 records. Sears is in third place with a $188,604 war chest, of which $102,965 has already been sent to candidates and political party PACs.

In the apparel industry, there’s been little activity thus far among corporations in the political-giving game. However, one industry standout is the activewear and sportswear maker Russell Corp., which reported $73,826 in its war chest by mid-2001, of which $4,000 was given to candidates.

Among apparel industry executives donating individually to campaigns are Paul Charron, Liz Claiborne’s chairman and ceo, who has backed Sen. Charles Schumer’s (D., N.Y.) reelection bid with a $2,000 donation. Likewise Elie Tahari, owner of Tahari Ltd., and his wife, Rory, have each given $1,000 to Schumer, as has Leonard A. Lauder, the Estee Lauder chief.

Brothers Paul, Maurice and Armand Marciano of Guess Inc. are demonstrating their political largess, giving a combined $31,000 to Democrats. Of that money, a $20,000 check written by Maurice went to the Democratic Senatorial Campaign Committee, which in turn will dole the money out to party candidates.

Calvin Klein, another loyal contributor to the Democratic party, has given Sen. Charles Schumer (D., N.Y.) $2,000 for his reelection campaign. Klein also wrote a $50,000 check to the party to be used this election, a donation that falls into the category of soft money.

Soft money is directed to political parties for non-campaign purposes, like building party membership and get-out-the-vote drives. The funding isn’t regulated by the FEC, has no limits on the size of contributions and would be outlawed under campaign reform legislation that has passed the House. Backers in the Senate of campaign reform legislation are hoping this is the week they’ll push the bill through, although filibusters from the opposition are still being threatened.

Both parties have become adept at raising millions of dollars in soft money from corporations, unions and wealthy individuals. The enormity of soft money raised and its popular use in funding advertisements that portray candidates in negative lights without naming them has made such contributions a likely target for reform.

Other soft money contributors in the fashion world are Gap’s Inc. chairman Donald Fisher and The Limited’s chairman Leslie Wexner, who’ve directed their donations to the GOP. Wexner has given state GOP efforts $25,000 in this election cycle, which follows a $100,000 contribution he gave in the last go around.

Fisher also has written a $25,000 soft-money check to help GOP campaign efforts at the state level for this year’s elections. This contribution is minimal compared to the 2000 presidential election, when Fisher wrote soft-money checks of $305,000 to the GOP and $30,000 to Democratic activities.

Even though soft money would become illegal after the November elections under the proposed legislation, wealthy contributors won’t necessarily be stymied in their big-time political spending. Under the proposed reforms, individuals would be able to increase their net contributions to politicians and PACs to $95,000 in a two-year election cycle, up from $25,000 a year.

In addition, current individual limits of $1,000 donations per primary and general election would increase to $2,000, and that amount would keep pace with inflation. In addition, state and local parties could still receive individual donations of up to $10,000 a year for things like get-out-the-vote drives.

Steven Weiss, communications director with the Center for Responsive Politics, said under reform legislation outlawing soft money, candidates and parties would have to work harder to amass “hard-money” contributions from individuals or PACs. However, Weiss expects no downturn in total political giving under reform.

“The pressure will be on to raise even more hard money,” Weiss said.

He also noted that negative political advertising funded by soft money could still be paid for by hard money. However, the reform legislation would ban radio or television broadcast of these so-called issue ads within 60 days of an election.

As far as PAC contributions, which comprise the bulk of political giving in the retail, apparel and textile sectors, the rules wouldn’t be changed under reform legislation. Current law caps PAC contributions per primary and general election to $5,000 for a candidate and $15,000 for national party or other PACs. The PACs can also give to as many candidates or other committees as they want and they are already banned from soft-money donations.

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