WorldCom Directed Money to Democrats, GOP

W A S H I N G T O N, June 26, 2002 -- The political world's perspective about WorldCom's precipitous slide may not fit too neatly into the conventional view among Democrats that Republican coddling of corporate interests is responsible for lax enforcement on Wall Street and in Congress.

That's because the telecommunications giant has contributed as much so-called soft money to Democrats as it has given to Republicans, according to an ABCNEWS analysis of Federal Election Commission records of such contributions.

And, according to analysis of "hard-money" contributions conducted by the Political Money Line Web site, WorldCom's political action committee has given a majority of hard-money donations to Democrats and their campaigns — 56 percent to 44 percent. That money includes $36,000 for Republicans on the House subcommittee that marks up telecommunications legislation and more than $40,000 for subcommittee Democrats.

Recipients of the PAC's money include many members of the Subcommittee on Telecommunications and the Internet, as well several senators who have jurisdiction over similar matters.

Corporations like WorldCom are prohibited from directly contributing to political campaigns, but they can pool donations to political action committees. And they can raise and spend as much "soft money" as they want. Campaign contributions are considered "soft" when they're raised and spent without being subject to federal election law. The money is held in separate, nonfederal bank accounts and can't be directed to electioneering activity.

Until the new campaign-finance law takes effect Nov. 6, corporations, unions and individuals can spend as much soft money as they want to get out their vote, promote the party, and sign up new voters.

Hard and Soft Coffers

WorldCom checks totaling $400,000, spread evenly between Republicans and Democrats, have been deposited in party soft-money accounts this election cycle, according to the finance records.

In 1999 and 2000, it gave more than $723,000 worth of soft money.

The single biggest donation came in June 2001, when WorldCom underwrote a major Republican fund-raising dinner by writing a $100,000 check to the Republican National Committee's "President's Dinner" account. A few days later, it donated $50,000 to the Democratic Senatorial Campaign Committee.

Scott Sullivan, the WorldCom chief financial officer who was fired Tuesday, has donated money to Reps. Chip Pickering, R-Miss., Jim DeMint, R-S.C., and Ed Markey, D-Mass. Markey and Pickering sit on the House Energy and Commerce Committee; Markey is the ranking member of the telecommunications subcommittee.

Former CEO Bernard Ebbers, who stepped down in April, has given money to Pickering, Markey, and Sen. Thad Cochran, R-Miss., the records show.

In 2000, Ebbers' wife gave more than $27,000 to the Republican National Committee. Ebbers himself wrote a $7,000 check that year to the same committee.

One donation that may influence the architecture of an investigation, should it ever come: WorldCom gave $10,000 to then-Republican Sen. John Ashcroft's Missouri Victory Committee in 2000. Ashcroft, now the attorney general, recused himself from the Department of Justice's investigation into the collapse of Enron partly because of similar donations.

Democrats to Press Corporate Responsibility

Democrats have said they want to use corporate irresponsibility and corruption to delineate the values they speak about from the values they attribute to Republicans.

In Connecticut's 5th District, where StanleyWorks tool company used to pay taxes before reincorporating in Bermuda, Democrat James Maloney has criticized Republicans for encouraging companies to avoid federal taxes. But his Republican opponent, Rep. Nancy Johnson, has been just as vocal in her condemnations of the tax arrangement.

But since WorldCom has given as much money to Democrats — many of them on the Energy and Commerce Committee — the party's leaders may face pressure to tread lightly on the subject. And more centrist Democrats have touted their pro-business credentials in recent elections.

Rep. Richard Gephardt, D-Mo., the minority leader, said he would not be deterred.

"No member will pull his or her punches," he said "Well, I think the fact we have, not only not changed our rhetoric, we have not changed our actions on these issues are proof that the Democrats aren't affected by these money-raising activities."

Republican leaders said they favored a hard look at the sweep of laws that govern corporate accountability. House Energy and Commerce Committee Chairman Billy Tauzin, R-La., today announced his plan for a congressional investigation.

"This latest accounting scandal only highlights the importance of Congress working together to pass tough, new laws, which will prevent future abuses and restore investor confidence in the stock markets and corporate America," he said in a statement.

But President Bush, speaking at a conference of Group of Eight ministers in Canada, cautioned against judging the entire corporate world by a few of its high-profile failures.

"Most corporate leaders in America and honest and open people and care deeply about shareholders and employees," he said. "We are going to pursue those who are irresponsible."

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