Supporting the Cause: Retailers, Designers Pack Election Coffers

WASHINGTON — Even in lean times, the fashion industry is managing to funnel millions of dollars to candidates in the upcoming congressional elections.<br><br>Retailers are leading the charge, with mass market giant Wal-Mart Stores Inc. showing...

WASHINGTON — Even in lean times, the fashion industry is managing to funnel millions of dollars to candidates in the upcoming congressional elections.

This story first appeared in the October 23, 2002 issue of WWD.  Subscribe Today.

Retailers are leading the charge, with mass market giant Wal-Mart Stores Inc. showing it’s also adept at dominating the campaign contribution arena.

Wal-Mart’s political action committee, PAC for Responsible Government, has amassed $1.33 million in its war chest during this two-year election cycle, of which $1.17 million has been handed to candidate and party activities, mostly Republican, according to Federal Election Committee data collected through Oct. 15.

By contrast, in the 2000 election Wal-Mart’s PAC collected $703,487 from donors — chain executives and store managers are key contributors — and spent $667, 805 on political activities.

Beneficiaries of Wal-Mart’s political giving include $10,000 in contributions to PACs backing the re-election of Rep. Roy Blunt (R. Mo.), sponsor of legislation that killed Clinton administration OSHA rules designed to curb repetitive stress work injuries, viewed as costly and unnecessary by Wal-Mart and other retailers. Another top recipient of Wal-Mart money was the retailer’s hometown congressman, Rep. John Boozman (R., Ark), who received $25,000 in total PAC contributions from Wal-Mart. Boozman recently agitated on behalf of the retail giant for President Bush to intervene in the West Coast dock lockout.

With just under two weeks left before the key midterm elections on Nov. 5, Wal-Mart’s PAC still has $160,930 left to dole out, which could be useful in a heated election season such as this. It’s typical in the waning days of campaigns for a surge of PAC money to be funneled to favorite candidates in close elections for use in last-minute advertising.

While Wal-Mart’s largess is hard to beat among retail political donors, Sears, Roebuck & Co. is no slouch in the giving game, with the second-largest retail PAC among apparel merchants. This election season, Sears has operated from a kitty of $299,548, of which it has contributed $222,845. Third-place May Department Stores’ PAC has amassed $227,389 and spent $169,547 on the election.

Contributing to 2002 races is more than a political crap shoot. At stake is which party will control the House and Senate after voters go to the polls to decide the fate of all 435 House seats and one-third of the Senate. Who’s in the majority is reflected in what legislation gets passed and how President Bush’s agenda progresses on matters like expanding trade, the top political goal on retailers’ and other apparel and textile importers’ agenda.

Likewise, fighting Bush’s aggressive trade agenda is the goal of many domestic apparel and textile producers, and the industry union UNITE, which this election has deployed a $276,949 political war chest.

It’s a heated contest occurring against a backdrop of a fragile economy and the chance of a U.S.-led war against Iraq. The political landscape has also shifted with newly redrawn congressional districts that are threatening reelection of several House GOP incumbents. Concerned about these close races, on Tuesday Bush again flew to several battlegrounds to campaign, including North Carolina, where the declining textile industry is a central issue in House and Senate races.

Bush and his GOP team are maneuvering to maintain control of the House and dislodge Democrats in the Senate from their one-seat majority. Democrats see a chance to pick up the slim six seats needed in the House to knock Republicans from power and to bolster their fortunes in the Senate. Historically, in a non-presidential national election, Democrats pick up more congressional seats than Republicans, but there is also lighter voter turnout.

While Steve Pfister, senior vice president of governmental affairs at the National Retail Federation, said “no one can predict with certainty how things will end up” after voters go to the polls, “the conventional wisdom is the Republicans will protect their majority in the House, unless Democrats hit the election home run. What happens in the Senate is anybody’s guess.”

On voters’ minds, said Pfister, are “jobs, their retirement portfolios, the economy — all will weigh heavily on the outcome.”

It’s not just companies participating in the political financing gambit.

Calvin Klein is among the individuals in the industry who are active in political giving. This election, Klein has come through again for Democrats by writing the party a $50,000 check, a contribution in the form of so-called soft money, a category of giving that has no limits and can only be used for party-building activities like get-out-the-vote drives.

However, Klein will have to find another outlet for his contributions, since soft money has been outlawed by campaign reformists in subsequent elections.

The same is true for Donald Fisher, Gap Inc.’s chairman, who has given $25,000 in soft money to GOP activities this election cycle. Other soft money contributors are The Limited chairman and chief executive officer Leslie Wexner, and his wife, Abigail, who have competing contributions. He has given the Republican party $25,000, while she has countered with $10,000 for the Democrats.

Retail, domestic textile manufacturing and apparel and textile importers largely give to Republican incumbents and GOP activities, although moderate Democrats frequently are recipients of Seventh Avenue contributions.

Often, there are must-give donations for the sectors. For example, House Ways and Means Committee Chairman Bill Thomas (R., Calif.) and Senate Finance Committee Chairman Max Baucus (D., Montana), are on many fashion industry PAC lists, since they are gatekeepers for trade and tax legislation.

“People who get our PAC money support pro-trade, free trade,” said Kevin Burke, president and ceo of the American Apparel & Footwear Association, whose PAC has spent $29,221 this election.

To cover their bases, fashion industry PACs frequently give to Rep. Charles Rangel (D., N.Y.), the top Democrat on Ways and Means, and Sen. Chuck Grassley (R., Iowa), the top Republican on Finance, who would each likely become chairmen should their be a power shift in either chamber. Both Rangel and Grassley also have pushed apparel import-liberalizing legislation for Caribbean Basin and sub-Saharan African countries.

Sometimes fashion industry donations are made to Senate candidates in years when they’re not up for reelection. That’s the case with Sen. Charles Schumer (D. N.Y.), who doesn’t run again until until 2004 but this year received $1,000 donations from Tommy Hilfiger and Harvey Sanders, chairman, president and chief executive officer of Nautica Enterprises. Giving $2,000 to Schumer this election cycle are Liz Claiborne chairman and ceo Paul Charron, and Lewis Frankfort, chairman and ceo of Coach Inc.

Meanwhile, John Pomerantz, chairman, Leslie Fay Company, this year has given $1,000 to Democrat Hillary Clinton, the other New York senator, who’s building her campaign purse to run in 2006. Oscar de la Renta is also dabbling in this year’s election, giving $1,000 to Virginia GOP Sen. John Warner’s reelection campaign. Warner has no real opposition.

There are limits placed on contributing. For each primary and general election, individuals and PACs can give up to $1,000 to candidates, $20,000 to political parties and $5,000 to other PACs. Individuals have an annual limit of $25,000 for these non-soft-money contributions, while PACs have no overall limits.

In this non-soft-money realm, retail executives have been busy writing checks. Big personal contributors include The Gap’s Fisher, who has given $47,000 this election, while his wife, Doris, has displayed her generosity by giving $33,500, both to mostly Republican candidates and PACs.

The Limited’s Wexner’s non-soft-money political giving so far amounts to $34,500, also directed largely at GOP causes, as well as the retailer’s own PAC. Wexner’s wife’s non-soft-money giving has reached $53,000, including $20,000 to the Democratic Senatorial Campaign Committee. She also gave $5,000 to a PAC called Promoting Republicans You Can Elect, which supports moderate GOP candidates.

Among the Senate campaigns garnering interest with retail executives is the Texas face-off between former Dallas Mayor Ron Kirk, a pro-business Democrat, who’s running against Republican State Attorney General John Cornyn for a vacancy left by GOP Sen. Phil Gramm, who is retiring.

In a departure from their largely GOP loyalty, the Fishers each have given Kirk $1,000. J.C. Penney Co. chairman and ceo Allen Questrom, whose company is in the Dallas suburb of Plano, also has given Kirk $1,000, as has Dallas-based Neiman Marcus chairman Burt Tansky.

However, the NRF is backing Cornyn with a $1,000 donation from the $110,565 the association has spent this election. NRF’s Pfister acknowledged Kirk’s pro-business record, but he said the association wants Cornyn to win because his election might ensure a Republican majority in the Senate. He said, “A GOP majority is generally more favorable to this industry.”

Questrom, a registered Republican, said he gave Kirk money over Cornyn because Kirk sought out Questrom for a meeting. Although not in agreement with all of Kirk’s platform, Questrom said he was impressed with the candidate’s pro-business point of view and his record as mayor.

“Between the two candidates, he’s been the most aggressive campaigner,” Questrom said. “I didn’t make a contribution to the Republican candidate because he didn’t call me and I don’t know what his point of view is.”

While Questrom said he hasn’t made up his mind yet whether he’ll vote for Kirk, the fact that a Kirk victory may mean Democrats maintain control of the Senate won’t figure into his decision.

“The only reason I would vote for Cornyn would be to have a Republican majority, but that’s not enough to make a decision,” Questrom said. “I’m not a fundamentalist. I basically go with people who have strong viewpoints of their own, as long as they aren’t left of center.”

Among other fashion executives into political giving is Maurice Marciano, co-chairman and co-ceo of Guess Inc. Among his contributions is $20,000 given to a PAC that donates to Democratic senate candidates. Marciano also wrote checks amounting to $2,000 to Democrat Erskine Bowles’ Senate campaign in North Carolina. Bowles, President Clinton’s former chief of staff, is battling GOP candidate Elizabeth Dole, former secretary of labor in the first Bush administration, for retiring Republican Sen. Jesse Helms’ seat. It’s a close race, with each candidate claiming to be textile-industry friendly.

Bowles, whose family is tied to the North Carolina textile firm Springs Industries, said if elected he’d work to increase Customs Service funding for policing textile and apparel imports that are illegally shipped through third countries to avoid U.S. quota restrictions. To attain the same objective, Dole wants to require foreign producers to use textiles with dye she calls “tracers” to detect where imports originate.

Also on Bowles’ campaign-financing bandwagon is Mackey McDonald, ceo of North Carolina-based apparel maker VF Corp., who’s given $2,000 to the campaign. The Lauder family of the Estée Lauder Cos. cosmetics empire, has competing money in the Bowles-Dole race. Evelyn Lauder, senior corporate vice president, has given $1,000 to Dole, while her husband, Leonard, who is chairman, has placed $1,000 into the Bowles race.

The textile industry, through the American Textile Manufacturers Institute’s PAC, is hedging its bets by giving $1,000 each to Bowles and Dole from the $74,345 spent thus far in the election.