Dem hopefuls won tax breaks for contributors

Both Democratic presidential candidates, who promise to curb the influence of corporate lobbyists in Washington, helped enact narrowly tailored tax breaks sought by major campaign contributors.

Sen. Barack Obama's presidential campaign has accepted $54,350 from members of a law firm that in 2006 lobbied him to introduce a tax provision for a Japanese drug company with operations in Illinois, according to public records and interviews. The government estimates the provision, which became law in December 2006, will cost the treasury $800,000.

In 2002, Sen. Hillary Rodham Clinton introduced legislation at the request of Rienzi & Sons, a Queens, N.Y., food importer, according to company president Michael Rienzi. The provision, which became law in December 2004, required the government to refund tens of thousands of dollars in duty charged on imported tomato products, Rienzi told USA TODAY.

Rienzi gave $110,000 to committees set up to support Clinton's 2000 Senate race, records show. Rienzi family members contributed an additional $52,800 to her campaigns since 2000. Michael Rienzi also said he donated to Bill Clinton's presidential foundation, but he declined to say how much.

At issue is a little-known congressional practice of suspending import taxes on specific products at the request of companies. Typically, Congress passes a tariff bill every two years that includes a variety of such measures.

Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense, says the provisions are part of a corporate favor factory that rewards lobbyists and fuels fundraising. "It's a make-work money-making cycle for all involved," Ellis said.

It's legal and common for members of Congress to accept campaign money from people who have benefited from their actions. Nonetheless, both Democrats have promised to reduce the influence of corporate interests in Washington, even as they have each raised more than $130 million.

Clinton accepts money from lobbyists, but she recently has stepped up her criticism of what she called, in a Feb. 14 speech, "a government of, by, and for the special interests."

Obama touts his refusal to take donations from Washington lobbyists though he accepts money from their co-workers who are not registered to lobby. Speaking after the Feb. 12 primary, he decried a "Washington game" where "lobbyists write check after check and Exxon makes record profits."

Obama declined to be interviewed for this story. His campaign said in a statement that Obama "introduced these bills to help Illinois companies get products they need that aren't available in the U.S. so they can lower costs for customers and create jobs."

Clinton's campaign also declined to make her available. "This type of routine legislation was introduced jointly by New York's senators to help companies throughout their state," Clinton spokesman Philipe Reines said by e-mail. Of the contributions, he said, "One thing had nothing to do with the other."

John McCain, the likely Republican nominee, does not introduce tariff suspension bills under "a longstanding policy — no private relief bills or any bills for one person," spokeswoman Jill Hazelbaker said in an e-mail.

In May 2006, after the finance committee invited senators to put forward tariff suspension proposals, Obama introduced a bill requested by Astellas Pharma, which was seeking a break on an ingredient it imports from Switzerland.

Astellas employed two lobbyists with the Chicago firm of Katten Muchin Rosenman, Senate records show. Another Katten lawyer had helped the senator set up a blind trust in 2005, campaign spokesman Tommy Vietor said.

The two lobbyists have not contributed to Obama. But their law partners and associates at Katten gave $77,000 to his campaigns since 1999, according to the non-partisan CQ Moneyline.

Mark Zolno, a Katten partner who represents Astellas, said in a statement that the tariff suspension was a routine matter that arose long before Obama decided to run for president. "Katten's individual attorneys are free to contribute to political campaigns of their choosing," the statement says.

Clinton's 2002 tomato legislation stemmed from a court decision that sided with food importers who successfully sued the government, arguing their products had been improperly taxed, Michael Rienzi said. He said that he became a Clinton contributor because he admired how she handled herself during the Monica Lewinsky scandal and that his contributions were unrelated to the tariff bill.

He said he never discussed the proposed tax relief with Clinton, leaving that task to his lobbyists, from the firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt. Members of that firm have contributed $58,200 to Sen. Clinton since 2001, records show.

"We won this in court. The judge decided that the government was wrong," Rienzi said. "Customs didn't want to listen. That's why the bill."