Hyde & Seek


With his impeachment hearings fast becoming a laughingstock, white-maned House judiciary chair Henry Hyde and his wacky sidekick, Chicago Democratic investigator David Schippers, cast wildly about for ways to widen their probe— maybe even going after Janet Reno’s Justice Department itself.

Hyde, however, must tread carefully. Opening the hearings into other areas could expose the man Mary McGrory called “the nearest thing to a patriarch that Congress can provide” to some nasty questions about his role as a director of Clyde Federal— an Illinois S&L that collapsed in 1991, costing taxpayers $67 million.

The Resolution Trust Corp. sued Hyde and the other directors of Clyde for $17.2 million, charging them with mismanagement and negligence. Before the case could be tried, the defendants settled for $850,000, according to a summary of the situation in the current Washington Monthly. Hyde refused to pay anything, and the other directors covered his share.

The story doesn’t end there. While Hyde was a director, Clyde joined with another S&L— Madison Guaranty, run by Jim McDougal, Bill Clinton’s late friend, business partner, and campaign contributor— in making a bad loan to a Texas beachfront condo. Madison, of course, was at the center of Whitewater. So if Hyde’s probe draws anywhere near that scandal, he could be running an investigation that would touch on his own past dealings. In that case, would Hyde, renowned for his fairness, step down?

Trust Congress

John D. Lives in Proposed Oil Deal

The much discussed merger of Mobil with Exxon couldn’t come at a better time for the oil companies, since the key posts in the Republican-
controlled Congress are held by members from Alaska and Louisiana— bastions of Big Oil— who will bend over backward to accommodate them.

Both Bob Livingston, the new Speaker, and John Breaux, a Democrat who is Louisiana’s senior senator, are not unfriendly to the industry. Breaux especially is anxious to help the oil companies, and has joked that while his vote can’t be bought, “it can be rented.”

Livingston and Breaux can join with three Alaskan legislators— Ted Stevens, who runs the Senate Appropriations Committee; Frank Murkowski, chair of the Senate Energy Committee; and Don Young, head of the House Resources Committee.

Alaska and Louisiana have worked together to back the industry, encouraging drilling in the Gulf of Mexico and off northern Alaska.

Since 1911, oil companies have dodged the breakup of Rockefeller’s Standard Oil Trust by forming the international petroleum cartel to divvy up spoils, first in what is now Iraq, then worldwide. From the beginning, the problem was glut— not shortage.

In today’s shamelessly pro-business atmosphere, straightforward monopoly may be more acceptable than it has been in years. And the pieces of the old Standard Oil Trust are close to being reassembled. British Petroleum already owns both Standard Oil of Ohio, which it bought in the 1970s, and Amoco, acquired last summer. An important part of any merger between Mobil and Exxon would entail working out Mobil’s joint refining and marketing ventures in Europe with BP.

If that happens, John D.’s old firm will be back in action.

Da$ Capitol

Finance Funds Swamp Senate, House

Of the extraordinary $1.26 billion spent to lobby Congress last year, the finance industry— banks, health insurance companies, securities firms, and real estate combines— led the way with $177.1 million, according to the Center for Responsive Politics. That’s more than $300,000 per member.

Financiers also were the biggest campaign contributors, giving $98 million— two-thirds of it to Republicans. But New York’s Chuck Schumer was the top industry recipient in the House, with $1.1 million. Other big recipients from New York, according to the Center, were congressmen Rick Lazio, Republican of Long Island ($225,000), and Harlem Democrat Charles Rangel ($177,000).

Biggest individual contributors, according to a current Mother Jones tabulation, included Julian and Josephine Robertson Jr. of New York, probably best known for his gift of $25 million in her name to Lincoln Center. They were the eighth-ranking political donors in the nation, giving $313,000 to the Republicans. Julian Robertson heads Tiger Management, the big hedge fund.

Other top contributors from the New York area included Orin Kramer and Jon Corzine, who gave $288,250 and $257,800 respectively to Democrats. Kramer, who owns the investment firm of Kramer Spellman, formerly served as an aide to both Jimmy Carter and Bill Clinton. Corzine, co-CEO of Goldman Sachs (former firm of Treasury Secretary Robert Rubin), is a major player in Asia and other overseas markets.

Banks, insurance outfits, and securities firms all fought pitched battles in the last session for special legislation. Banks pushed for measures that would allow them to merge with other businesses (so far unsuccessfully); insurance companies beat back HMO and medicare reform; and securities firms won protection from “frivolous” lawsuits (some from investors who got taken for a ride by the Asian financial debacle).

Wall Street is eying gigantic profits if
Congress privatizes Social Security, allowing workers to put some of their Social Security savings into IRA-type accounts.

Nike Sweats

Third World Plant Horrors Detailed

When Third World sweatshops became a media scandal more than a year ago, the administration stepped in to broker a voluntary industry agreement with companies such as Liz Claiborne, Nike, and Reebok. Known as the White House Apparel Industry Partnership, it set up a task force to establish a code of conduct covering child labor, minimum wages, and working conditions.

But despite renewed efforts to get things moving, the agreement lacks teeth. And Charles Kernaghan, director of the National Labor
Committee— a union-sponsored group that tracks sweatshops around the world— reports that little improvement has taken place. According to a recent committee report workers in Myanmar make apparel at four cents an hour for Bradlees, J.C. Penney, Sears, Marshalls, and other U.S. companies. In Honduras, women making clothes for U.S.-owned companies are injected with Depro Provera to block pregnancy for up to three months, according to the labor committee.

One focus of the labor committee’s report was the Formosa Textiles plant in El Salvador, where apparel is made for Nike. A 22-year-old single mother described conditions there. “The supervisors scream at you to go faster,” she said. “You need permission to drink water and to go to the bathroom. . . . ”

According to the labor committee, the plant operators don’t allow sick days or even let workers visit a health clinic, although fees to pay for the clinic come from their wages. They are routinely subjected to searches. Workers get 60 cents an hour, but new workers must labor for three months at half that.

One day, the young mother said, she stayed home because her child was sick. Whe she returned the next day, the chief of production “grabbed me by the shoulders, shook me violently, pushed me and hit me hard in the thigh with his knee. . . . He shoved me again and tried to trip me. As I ran away, he cursed at me. They fired me on Friday.”

Nike shirts sell for about $70 in the U.S.

Reefer Madness

Medical Marijuana Barred in Capital

Washington, D.C., is a city where a convicted crack user can be reelected mayor, but where the medical use of marijuana will not be allowed for cancer and AIDS patients.

That’s because Georgia Republican Bob Barr successfully led a drive in the last session to deny the District funds to place a medical marijuana initiative on the ballot. However, by that time it had been put on the ballot, and on the basis of
exit polls is believed to have passed by at least two-thirds. Nevertheless, because D.C. officials fear offending Congress, they’ve refused to allocate money to tabulate the vote. Similar initiatives were passed in California, Oregon, Washington, Hawaii, and Arizona in the last election.

Meanwhile, according to a recent FBI report, marijuana arrests nationwide were higher in 1997 than in any previous year. In 1997, there were 695,201 pot busts— 87 percent for possession. In fact, the number of marijuana arrests was almost as high as the arrests for murder, rape, robbery, and aggravated assault combined— 717,720.

The Kiwi Brigade

Most important holiday jaunt this Christmas will not be to Renaissance Weekend in South Carolina for a meet and greet with the Clintons, but to New Zealand, where 28 people— members of the tax-writing House Ways and Means Committee, along with spouses and staff— are being flown aboard Pentagon aircraft accompanied by military escorts. Such GOP stalwarts as Phil Crane (Illinois), Nancy Johnson (Connecticut), Jennifer Dunn (Washington), and Wally Herger (California) have signed up.

New Zealand has replaced Chile as the world’s free-market paradise. In New Zealand there are no controls on prices and wages. Tariffs will be practically nonexistent by 2000. There are no farm or industrial subsidies, and labor unions are no big deal. Most important, New Zealand has been cutting its income tax and is moving toward a flat tax— all steps that can only be to the liking of Ways and Means chair Bill Archer (Texas), who has long plotted to get rid of the graduated income tax here.

Research: Bob Frederick