WASHINGTON — The fashion industry is hedging its bets when it comes to the November Congressional elections.
Retail and apparel executives, as well as corporate political action committees, while maintaining their longtime preference for Republican candidates, are giving more than ever to Democrats as the possibility looms that the GOP could lose control of Congress for the first time since 1994. Executives are carefully targeting candidates who support their issues, ranging from international trade, port security and health care reform to a minimum wage increase, tax credit extensions and immigration reform.
Democrats need to gain 15 seats in the House to seize control and six in the Senate. Political pundits have said Democrats are more likely to take control of the House, where all 435 seats are up for grabs, than in the Senate, where one-third of the 100-member body is on the ballot. Those senators up for reelection include Hillary Rodham Clinton of New York, who is among the candidates getting the highest level of contributions from all sides of the political spectrum (see related story, page TKTK).
In the 2005-06 election cycle, retailers collectively have given 60 percent of all campaign donations to Republicans and 40 percent to Democrats, according to The Center for Responsive Politics.
Wal-Mart has dominated the retail sector in terms of campaign contributions this election season. The world’s largest retailer has made a concerted effort to shift a little more of its $1.68 million in political contributions in the two-year election cycle through June to Democratic candidates, according to a Wal-Mart spokeswoman. The company has $823,793 left in its war chest, according to Federal Election Commission records.
“Part of our goal is to build more bipartisan support for businesses and Wal-Mart,” said the spokeswoman. “We’re just trying to work with members on both sides of the aisle and educate not only Republicans, but also Democrats, about our company and the issues important to our customers and associates.”
Wal-Mart has come under fire in the past couple of years from organized labor, which has made unionizing the retail giant a top priority, as well as from members of Congress for its treatment of employees, health care benefits and its impact on local communities.
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The company shifted 10 percent of its contributions to Democrats from 2004 to 2005. Last year, 68 percent of the company’s contributions went to Republicans, while 32 percent went to Democrats. In 2004, the split was 78 percent Republican and 22 percent Democrat, the spokeswoman said.
Among the Democrats Wal-Mart recently has supported are Sen. Clinton, who later returned the company’s $5,000 contribution; Sen. Jeff Bingaman of New Mexico; Sen. Kent Conrad of North Dakota, and Rep. Charles Rangel of New York.
For corporate PACs, industry trade groups and executives, campaign contributions are key to opening the doors of politicians on Capitol Hill.
“While there are no quid pro quos on having given money to meet with a congressman or senator to make your case on an issue,” many members of Congress involved in costly campaigns rely heavily on familiar sources for funding, said Steve Pfister, senior vice president of government relations at the National Retail Federation.
The fashion industry’s contributions heading into this uncertain election won’t be forgotten.
“While nobody can say how it will turn out, I think there is a significant amount of concern with the Republican Party, more in the House than in the Senate,” said Pfister. “The House will clearly be in play.”
Many retail industry heavyweights feel it is their responsibility to be actively engaged with members of Congress on the issues that affect their businesses.
Paul Charron, chairman and chief executive officer of Liz Claiborne, said that, as an industry leader and association board member, he must articulate issues that affect not only his business but the entire industry to lawmakers on Capitol Hill.
Beyond supporting the NRF with a $5,000 annual contribution and the American Apparel & Footwear Association with a $3,000 annual contribution, Charron said he backs individual candidates who are more moderate and centrist in tenor and support the industry’s issues.
“I really like highly intelligent people who do not hold an extremist view,” said Charron. “You will never see me support either a conservative on the far right or a liberal on the far left, and you will never see me supporting or rejecting a candidate or legislator because of their position on only one issue.”
Charron, who is a registered independent, said he is a “centrist, bipartisan voter.” He singled out two politicians, a Democrat and a Republican, who also happen to be potential 2008 presidential candidates: Clinton and Arizona Sen. John McCain.
“They are both intelligent, and both constantly process information” and do not take a one-dimensional approach, Charron said.
Some retail veterans choose not to make direct political contributions and rely instead on association PACs.
Allen Questrom, former chairman and ceo of J.C. Penney Co. Inc., consistently has given money to the NRF’s PAC over the past five years. He has given $5,000 to the trade group in this election cycle.
“I found the best way to go was through the NRF, because they represent different opinions put forth on the table,” said Questrom. “If you have a group of people focused only on the issues of the retail world, I believe it is better equipped to give direction to Congress than I could be sitting at Penney’s or Federated or wherever.”
Questrom said he expects to see a shift in retail contributions if the Democrats regain a majority in the House or Senate.
“I’m not sure you will see a significant shift, because Democrats have to be a lot more pro-business than they have demonstrated in the past for a major shift to occur, but there will be some shift for sure,” said Questrom.
He said Republicans have not been “effective” in getting legislation through despite their control of both the White House and Congress, which he argued will have a negative impact on the GOP in the midterm elections.
“The Republican Party today has a right-wing element that is not necessarily driven in business issues, and that is why they couldn’t get anything done on Social Security, which is a major issue, or entitlements, which is a big issue,” said Questrom.
John Pomerantz, former chairman of the now-defunct Leslie Fay Co., said globalization has forced many more companies to get involved in the political fray and throw their support behind candidates supportive of their position on trade.
“Free trade is very important to the retail industry,” said Pomerantz.
He has contributed $2,000 to Sen. Joseph Lieberman (D., Conn.) who just lost a primary and is now running as an independent to retain his seat. Pomerantz, a longtime Democratic supporter, believes there should be a change in the House or Senate in November.
“We should have a balance, because they are not passing anything,” he said.
On the trade front, Charron gave $1,000 to Rep. Edolphus Towns (D., N.Y.) for a difficult vote the congressman made in favor of the Central American Free Trade Agreement, which barely squeezed through the House by two votes in July 2005.
A close look at the industry’s association PACs reveals some patterns in contributions to lawmakers who made “difficult” trade votes on CAFTA. The NRF, AAFA and Retail Industry Leaders Association have all given to Rep. Henry Cuellar (D., Tex.), who voted for CAFTA, breaking ranks with Democratic leaders.
“He is a pro-business Democrat and also a free trade Democrat, and he was very helpful to us on [CAFTA],” said Kevin Burke, president and ceo of the AAFA. “As a result of that, he got a lot of grief from Democratic colleagues from supporting it…and that’s why he has received support from groups like ours. The way our system works is we support those who support us. We don’t give to anybody because they are an R or a D. We look carefully at what the members represent to us and the good of the industry.”
The AAFA and other associations also have channeled contributions to Southern textile-state lawmakers, such as Reps. Sue Myrick (R., N.C.) and Robin Hayes (R., N.C.), for their support of CAFTA amid some intense textile industry opposition. Congressional incumbents in positions of leadership and sitting on key committees crafting policies impacting the fashion industry in both parties also factor into where retailers and apparel and textile PACs place their contributions.
Examples of influential Republican incumbents getting retail support are House Speaker Dennis Hastert (R., Ill.), who has received $60,000 in retail contributions this election cycle, and House Majority Whip Roy Blunt (R., Mo.), who has received $52,000 from the retail sector, according to the Center for Responsive Politics. Apparel manufacturing PACs have given $12,000 to House Majority Leader John Boehner (R., Ohio).
Allen Gant Jr., president and ceo of textile mill Glen Raven Inc., gives the bulk of his political contributions to textile-state lawmakers who support the sector on trade and tax issues. Gant gave $2,500 to the National Council of Textile Organization’s PAC and $2,000 to Myrick, who cast a “yes” vote on CAFTA. NCTO supported the trade pact.
“I think trade votes are extremely important for international trade, and how someone votes on those issues has a lot to do with how we support them, but it is a bipartisan issue,” Gant said. “I get very upset with politicians that vote the party line as opposed to doing what is right for the country or the textile industry.”
Gant said he gave to Myrick because she has been a “stalwart” for the textile industry. “She has the capacity to bring people together, and on many occasions has [turned up the pressure] on the administration or the speaker of the House,” he said.
Paul Kelly, senior vice president for federal and state government affairs at RILA, said, “In order to establish a relationship, a tried-and-true method, whether you like it or not, is to support politicians financially. If you don’t do that, you are essentially unilaterally disarmed and you are ceding your position with key policy makers to other groups.”
Kelly said he has helped increase the size of RILA’s PAC by 30 percent in the past two years. The trade group, which counts Wal-Mart among its members, gave $66,958 in the two-year cycle through June.
Kelly, RILA’s chief lobbyist, said the association would withhold supporting a member of Congress who has a consistent track record opposing trade issues, although he said: “In politics, sometimes you have to give people a pass” when they vote against your issue. “It’s a compromise business. You can’t expect 100 percent purity all of the time.”