Bush and Kerry fundraisers: What have they gotten, and what do they want?

Carl Lindner

Former Board Chairman, Chiquita Brands International; Chairman and CEO, American Financial Group; Majority Owner and CEO, Cincinnati Reds, Cincinnati, Ohio

What he gave: Amount raised for Bush 2004: At least $200,000
Amount contributed to Bush-Cheney inauguration: $200,000 ($100,000 from Lindner; $100,000 from American Financial Group)
Soft money contributions, 1999-2002: $2,777,000 ($2,030,000 to Republicans; $747,000 to Democrats).
TOTAL: $3,277,000

What he got: The World Trade Organization forced European Union nations to open their markets to Chiquita bananas, while Lindner gave substantial financial support to the Democratic Party under former President Bill Clinton and to President George W. Bush. The move by the WTO accelerated a trade dispute between the EU and the United States that, in 2003, threatened to add more than $6 billion in tariffs on U.S. products, including $2.2 billion in tariffs on products manufactured in political battleground states.

The Story:

COST TO THE PUBLIC:
At least $191 million in higher prices on goods imported from Europe; heightened economic troubles for U.S. industries that consume domestic steel; potential future damage to the economies of African and Caribbean banana-producing nations.

 

BACKGROUND:
From his seat as chairman and CEO of American Financial Group (AFG), Carl Lindner oversees nearly $20 billion in assets. AFG, which serves as a holding company for the Lindner family’s financial interests – which once included Chiquita Brands International, the world’s largest banana distributor – controls vast insurance operations and real estate across the country. Its holdings include the Great American Insurance Company, Great American Financial Resources, Inc., and Provident Financial Group Inc., which National City Corp. recently bought in a $2.1 billion stock deal. (That deal is expected to give Lindner and AFG nearly $1 billion in bank stock.) Its real estate holdings include luxury hotels and New York’s Grand Central Station. Lindner is known for contributing to politicians of both parties; in the past 10 years, Chiquita and Lindner have contributed $6.4 million to Democratic and Republican political campaigns alike. In 2000, Lindner and Chiquita Brands gave Bush and former Vice President Al Gore $200,000 each. Since then, his giving has leaned more Republican: He gave $200,000 to the Bush-Cheney inauguration in 2001, double the $100,000 contribution limit (the inaugural committee refunded the excess money, only to have Lindner funnel the money through AFG). During the 2002 Senate elections, Lindner and his family contributed $450,000 to Republicans. In the 2004 presidential campaign, Lindner was one of the first 23 “Rangers” who raised at least $200,000 in bundled contributions for Bush. He hosted a September 2003 fundraiser at his home in the Cincinnati suburb of Indian Hill, which raised an estimated $1.7 million for Bush.

 

WHAT HAPPENED:
As the former chairman of Chiquita Brands International, Lindner exerted significant influence in a U.S. trade policy decision over the past decade. In July 1993, the European Union began reserving 8 percent of its banana imports for its former African and Caribbean colonies. Lindner claimed the quota system gave an unfair advantage to those producers over Chiquita. Meanwhile, Chiquita claimed the quota would halve its share of the European market – estimated at 22 percent before the quota took effect. But the quota system was even more critical for farmers in the former colonies, who produced few crops and depended on access to European markets. In a 1996 meeting with Rep. Maxine Waters (D-CA), Terry Telemaque, a banana farmer from Dominica, predicted dire consequences if Chiquita succeeded. “If they squeeze us out, we will be the ones that suffer,” he said. “Some big men are trying to do us cruelty because when you take away a man’s daily bread, you take away my livelihood. You send me on common crime. You send me to steal. You force me to (grow and sell) drugs.”

 

Nevertheless, Lindner lobbied the Clinton administration to join Latin American nations in asking the World Trade Organization (WTO) to examine the EU trade quota. On April 11, 1996, the Clinton administration filed its complaint with the WTO. The next day, Lindner gave more than $500,000 in soft money to Democratic parties in nearly two dozen states. In 1997, the WTO ruled the EU banana quota was illegal and ordered the nations to develop new trade rules for bananas. When the EU refused, the U.S. slapped tariffs on European luxury items. The banana struggle finally seemed to reach an end in 2001, when the U.S. and the EU agreed to phase out the quota system by 2006. In exchange, the U.S. would eliminate its retaliatory sanctions on European luxury items, which by 2001 had totaled $191 million.

 

The resolution of that trade dispute was fresh when, in March 2002, Bush placed 30 percent tariffs on imported steel from Europe, Asia and South America. The EU planned to retaliate with more than $6 billion in tariffs, including $2.2 billion on goods produced in states that were crucial to Bush’s re-election campaign (such as fruit and nuts from California and Florida and textiles from Southern states) and another $4 billion in sanctions on products from U.S. corporations. In the face of the EU threat, and with the WTO set to rule the steel tariffs illegal, the U.S. dropped the tariffs in December 2003. Some trade analysts said the U.S.-EU fight may not have started if the United States had not gone to bat for Chiquita nearly a decade earlier. “The U.S. started all this with fights in the EU over bananas and beef hormones,” one analyst said. Added the Christian Science Monitor: “Auto and metal-stamping companies say the higher prices on imported steel have caused them more harm and cost more jobs than the steel industry has saved.”

 

Lindner’s generous contributions and political influence in Washington has been criticized as a key example of what was wrong with the nation’s campaign finance system. Some trade experts pointed out that the U.S. does not actually produce bananas, and that the jobs at stake in the dispute were negligible. Critics said the move seemed to be a political favor to Lindner, a point one of Clinton’s trade representatives, Mickey Kantor, adamantly denied. Further, calling the move a “mockery of the government’s trade policy,” and a “caricature of bad trade policy,” The Washington Post and the Los Angeles Times both condemned a 2000 attempt by Sen. Trent Lott (R-MS), one of the legislators Lindner counted as a key ally, to include language in an appropriations bill that would have granted Chiquita veto power over any settlement of the banana dispute. While Lott’s bid failed, it was a classic demonstration of the reaches of Lindner’s power. 

 

In 1954, the United Fruit Company (Chiquita’s predecessor) participated in a coup in Guatemala that removed a democratically elected president, a move giving new meaning to the term “banana republic.” Now, thanks to the bidding of its former chairman, Carl Lindner, Chiquita appears to have found a new “banana republic” in the halls of Congress and the Clinton and Bush II White Houses. While Lindner opened European markets for Chiquita bananas, it came at a high cost: more expensive goods for American citizens; the threat of fewer jobs in industries that buy American-manufactured steel; and certain economic instability for Caribbean and African nations and its citizens.