The Buying of the President 2000
Orrin Hatch
During the unprecedented, raucous — at times even surreal — Senate hearings investigating the sexual harassment allegations Anita Hill made against Supreme Court nominee Clarence Thomas, Orrin Hatch accused the University of Oklahoma law professor of having words put in her mouth. He claimed that Hill, in collusion with “slick lawyers” bent on derailing Thomas’s nomination, had concocted the whole tale. And on October 12, 1991, Hatch accused Hill of fabricating charges against Thomas by subconsciously drawing on works of fiction she had read. Waving a copy of William Peter Blatty’s novel, The Exorcist, Hatch suggested that she’d stolen the by-then-infamous “pubic hair” anecdote from the book by quoting the following line: “There appeared to be an alien pubic hair floating around in my gin.”
Hatch knew all about having words put in his mouth. The senator from Utah, once crowned the “Golden Throat” for the large number of paid speaking engagements he accepted, delivered a speech on the Senate floor on February 22, 1990, in which he defended the Bank of Credit and Commerce International. BCCI, known in some quarters as the “Bank of Crooks and Criminals International,” was then under investigation by the Justice Department, the New York City district attorney’s office, and dozens of law enforcement authorities in places ranging from Great Britain to Lebanon.
“The BCCI case in Tampa was a very serious matter,” Hatch said of one of the many trials involving the Middle Eastern financial institution and its executives, “but the charges ought to be viewed in their proper perspective. The case arose from the conduct of a small number of BCCI’s more than 14,000 employees.” Hatch further downplayed the dimensions of the scandal: “No member of the bank’s senior management or its board of directors was alleged in the indictment even to have been aware of any of the laundering transactions — much less to have approved them.”
Once known as one of the sharpest lawyers in Pittsburgh, Hatch said he based his defense of the bank on a briefing by officials of the Justice Department. He failed to mention that he’d also met with the defendants’ lawyers, one of whom, Robert Altman, was a close friend. A memo written by Altman disclosed that Hatch’s speech defending BCCI and its top management wasn’t his own work; BCCI’s lawyers had drafted it.
Shortly after he delivered his remarks, Hatch telephoned Swaleh Naqvi, the bank’s chief executive officer, and sought a loan for a business partner and campaign contributor of his, Houston developer Monzer Hourani. When the local news media got wind of the call, Hatch denied wrongdoing, and requested that the Senate Select Committee on Ethics investigate his relationship with BCCI.
That relationship was tangled. One of Hatch’s top aides, Michael Pillsbury, had a financial relationship with Mohammed Hammoud, a large stockholder in BCCI. Pillsbury advised Hatch on his dealings with BCCI; in 1989, the senator and his aide attempted to help the bank settle federal money laundering charges.
On November 20, 1993, the committee cleared Hatch of any wrongdoing.
As for BCCI’s top management, they didn’t get off as lightly as Hatch. Swaleh Naqvi, for example, was indicted on fraud charges in New York related to BCCI’s collapse. And Hourani, Hatch’s old business partner, was fined $10,000 in 1995 for conspiring to evade contribution limits by using his employees to funnel $7,000 to Hatch’s 1988 reelection campaign.
After he was cleared by the Senate Ethics Committee, Hatch released a statement saying that he was “confident my fellow Utahans understand that those who, like myself, will never be part of the Washington establishment and who stand up for what they believe is right, are sometimes wrongfully smeared.”
Hatch may not have started life as part of the Washington establishment, but by the time he announced his candidacy for president in the summer of 1999, he had certainly learned to play by its lax rules.
Hatch was born in Pittsburgh, Pennsylvania, in 1934, during the darkest days of the depression. His father, Jesse Hatch, was a metal lather while his mother, Helen, took care of Orrin and his siblings. Once, when the Hatches lost their home, Jesse Hatch borrowed $50 to buy second-hand building materials to put another roof over their heads. Hatch’s life was hardly privileged. He worked as a janitor, an all-night desk clerk, and, like his father, as a metal lather.
Hatch attended Brigham Young University, but interrupted his studies for two stints as a missionary — one for himself and the other for a brother who was killed in combat during World War II. Hatch returned to school and received his bachelor’s degree in history in 1959. After that, he put himself through law school at the University of Pittsburgh partly by mopping dormitory floors. He earned his law degree in 1962.
Hatch, whose great-grandfather helped to settle Utah, set up his own home there in 1969. He became a successful tax-fraud attorney, but left a prestigious law firm and substantial salary to pursue a career in politics, taking on an entrenched three-term Democrat, Frank Moss, in 1976. Hatch was virtually unknown at the time he declared for the race. He attracted some measure of national attention by delivering the nominating speech for Ronald Reagan at the 1976 Republican National Convention in Kansas City, Missouri. While Reagan would have to wait four years to be his party’s nominee, Hatch upset Moss. The son of two New Deal Democrats was sworn in as the Republican senator from Utah in 1977.
Hatch made his Washington debut as an especially audacious freshman senator. By his own admission, he was initially perceived as pushy, arrogant, and sometimes irritating in his zeal to impress Senate veterans. Dissatisfied with this perception, Hatch heeded the advice of Senator James Allen, a courtly Republican from Alabama, who urged him to learn the lay of the land before alienating himself from his more-experienced colleagues.
Hatch’s first target was the Labor Law Reform Bill of 1978, which would have made it much easier for labor unions to organize and recruit new members. Hatch’s history as a card-carrying member of the Wood, Wire and Metal Lathers Union didn’t thwart his resolve to make a big mark as a Senate conservative. Hatch took on the legendary Hubert Humphrey — the labor bill was the Minnesota senator’s last major legislative initiative — and won, chiefly by introducing nearly 1,200 amendments to the bill as part of his filibuster, earning him the nickname “Borin’ Orrin” for talking the bill to death.
Hatch certainly learned to use the rules of the Senate to partisan advantage quickly; he also learned how to make them benefit the fat cats who supported his campaigns. In 1982, Hatch introduced an amendment to the Tax Equity and Fiscal Responsibility Act that allowed companies to deduct “construction period interest and taxes for construction projects that were planned by July 1, 1982; for which governmental approval has been requested in writing; and on which construction will begin before January 1, 1984.”
A member of the House Ways and Means Committee told The Washington Post in 1982, “That description was drawn up to fit Marriott.” Marriott International is the second-largest lodging company in the world; the giant hotelier’s revenues neared the $8 billion mark in 1998, making it No. 206 on the Fortune 500. In 1982, the company hired then-Speaker Thomas “Tip” O’Neill’s son, Christopher “Kip” O’Neill, to lobby House Democrats for its special tax break. Among Republicans, the company had an even better lobbyist: Orrin Hatch.
The owners of the corporation, the Marriott family of Bethesda, Maryland, are Hatch’s No. 2 career patron, having given him $82,000 over the years. Members of the Marriott family (which now includes one of Hatch’s sons) were particularly generous to Hatch when his involvement with BCCI led to a Senate ethics investigation; they contributed some $50,000 to his legal defense fund, almost one-sixth of the total amount Hatch raised to pay his attorneys at Miller, Cassidy, Larroca & Lewin. That was small change compared to the service Hatch had already provided to Marriott: The amendment he sponsored saved the company upward of $55 million.
But then, Hatch has never been shy about using his power in the Senate to push for legislation that benefits his most durable and deep-pocketed supporters. In 1990, R. Earl Holding, a wealthy real estate developer, wanted to open a ski resort in the Wasatch Mountains in Utah. The land Holding sought was owned by the federal government and administered by the U.S. Forest Service. Holding offered to swap other land he owned in Utah for the Wasatch Mountain property. Reluctantly, the Forest Service agreed, and granted him 220 acres.
At a community meeting in Ogden, Utah, Hatch called the grant to Holding, considerably less than the developer sought, “a dumb-assed, boneheaded decision.” When Hatch asked if anyone at the meeting supported it, there was no response. “Well, if you do hear of someone, I want to know,” he said. “I’ll kill them.” Hatch then put his arm around Stan Tixier, the Forest Service’s regional forester whose job included managing federal lands in Utah and said: “I’ve never asked Stan to help us yet that he hasn’t done it. I hope that puts you on the spot, Stan.”
Indeed it did. Holding wound up with 1,320 acres of land in the Wasatch Mountains. The property, now known as the Snow-basin Ski Area, will host some of the events of the 2002 Winter Olympic Games. Holding, who sat on the committee that lured the games to Utah, also landed $13.8 million in contracts for the use of his resort in the games.
Holding and his family, who also own Sinclair Oil Corporation, Little America Hotel Company, and Sun Valley Corporation, are Hatch’s No. 8 career patron. The developer also helped Hatch’s personal bank balance. Thanks to the development of the Snow-basin Ski Area, a parcel of adjacent land that Hatch owned — he declared its value to be no more than $15,000 on his Senate financial disclosure forms — netted him $140,000 when he put it up for sale in 1999.
Pushing the land deal for Holding was just one of many favors Hatch has done for his wealthy contributors, many of which have benefited the senator personally. Consider Hatch’s relationship with the dietary supplements industry. When the Food and Drug Administration sought to tighten labeling laws for vitamins and other dietary supplements in 1991, the industry fought back hard, with Hatch leading the charge. (Hatch’s state is home to so many supplement companies that Wall Street analysts have dubbed it “Vitamin Valley.")
On September 18, 1992, as the Senate considered a major drug bill, Hatch introduced an amendment that prohibited the FDA from monitoring and evaluating health claims for dietary supplements until the end of the following year. Hatch’s amendment passed, and then-President Bush signed the drug bill into law.
At the time, Hatch owned nearly 72,000 shares of Pharmics, Inc., a Utah company that sold prenatal vitamins and vitamin C additives. Walter J. Plumb III, the company’s president, is Hatch’s former law partner. Hatch maintained that there was no conflict of interest because he was unaware of the company’s nutritional supplements business at the time he introduced the legislation.
But Hatch, apparently, was just warming up. In 1994, he introduced the Dietary Supplement Health and Education Act, which was aimed at even further restricting the FDA’s jurisdiction over vitamins and other dietary supplements. At a fundraising brunch in Las Vegas in 1993, 80 or so leaders of the industry gathered to pay tribute to Hatch — and his 1994 reelection fund. Hatch’s legislative beneficence gave the industry a big boost, contributing to a multibillion-dollar-a-year surge in sales.
“My bottom-line goal,” Hatch said in 1998, “is to allow the 100 million Americans who regularly consume dietary supplements to continue to reap the ever-growing body of science indicating that dietary supplements can promote health.” Hatch has pushed a wide array of legislation to benefit firms that manufacture and market dietary supplements — chief among them Herbalife International, the Los Angeles-based company that is Hatch’s No. 3 career patron. His son, Scott, used to lobby for Herbalife. Now, he works for Parry, Romani, DeConcini, Inc., a Washington lobbying firm that counts Herbalife among its clients.
Thomas Parry, Hatch’s former chief of staff and chief counsel, is one of the firm’s founders. One of three former aides to Hatch who now lobby for the dietary supplements industry, Parry also raises money for Hatch and runs his annual charity golf event.
Hatch has been equally generous to more traditional medications. Eli Lilly & Company, the pharmaceutical giant, is No. 10 on Hatch’s career patron list. The Indianapolis-based firm has reaped significant rewards from the Waxman-Hatch Act of 1984, which gave many of its products up to five years of additional patent protection. Among them is Prozac, the world’s best-selling antidepressant medication. Thanks to the Waxman-Hatch Act, Eli Lilly still holds exclusive rights to Prozac, which accounts for nearly 30 percent of the company’s total revenues.
Hatch did much the same favor for Glaxo Wellcome, another pharmaceutical manufacturer. In the fall of 1995, Hatch brokered a compromise bill that let Glaxo, which produces Zantac, an ulcer medication, keep its 19-month patent extension on the world’s top-selling drug. Glaxo Wellcome is Hatch’s No. 7 career patron.
Hatch’s leadership role on the Judiciary Committee has proved beneficial to the Seagram Company, one of the world’s largest distillers and the owner of Universal Studios, and Hatch’s No. 6 career patron. The committee has jurisdiction over the copyrights of musical recordings — an issue of dire importance to PolyGram, the largest music company in the world, which Universal Studios acquired in 1998.
In 1995, Hatch and Democrat Dianne Feinstein of California proposed a bill to protect the copyrights of recorded music — and the interests of large royalty owners like PolyGram — from digital distribution in black market mediums, including the Internet. Hatch had something of a personal interest in the legislation; over the years, he’s handsomely supplemented his Senate salary with royalties from his recorded Scripture readings, and from two compact discs for which he composed inspirational lyrics in 1998.
Hatch owes thanks for some of the royalties to Marilyn Bergman, the president of the American Society of Composers, Authors, and Publishers. In 1997, she encouraged the aspiring songwriter to try his hand at writing lyrics — just at the time when the legislation Hatch and Feinstein had proposed was pending before the Judiciary Committee. Bergman forwarded Hatch’s work to Sony Music Entertainment, Inc. in Nashville.
Hatch was also instrumental in protecting PolyGram’s interests in 1997, when he sponsored legislation to close a loophole in the copyright laws opened by two federal court rulings. At issue were songs recorded before the 1978 copyright law took effect; federal judges in Nashville and San Francisco held that unless royalty owners placed a copyright notice on them, the songs would enter the public domain. Most songs had no such notice. The bill sponsored by Hatch — and passed by the Senate unanimously — provided them with copyright protection, worth some $1 billion a year to the major record companies.
Wealthy industries form the branches of Hatch’s money tree. When Hatch shakes it, whether to launch another reelection campaign or to continue paying the lawyers who represented him in BCCI-related matters, green paper leaves come floating down. And Hatch seems eager to push legislation that will serve the interests of his biggest donors.
With perhaps one glaring exception.
In August 1988, Hatch stood hand in hand in Salt Lake City with one of the great American icons of the 20th century: Muhammad Ali. The heavyweight boxer was there to endorse Hatch, running for his third term in the Senate, over Brian Moss, his liberal Democratic challenger and the son of former Senator Frank Moss, whom Hatch had defeated some 12 years earlier. Although Hatch and Ali seemed every bit the political odd couple, there was at least one tie to bind: Both men had been boxers.
It was on the campaign trail that year that the mysterious relationship between Hatch, the former amateur welterweight, and Ali, the three-time heavyweight champion, came to light. Hatch seemed to delight in referring to Ali as “a dear friend,” though in truth he had known Ali for little more than a year. The two men had met in 1987, when Ali visited Hatch’s Senate office in Washington to thank him for helping one of his associates obtain an appointment from the Justice Department. As the highest-ranking Republican on the Senate Judiciary Committee, which reviews such appointments, Hatch’s endorsement carried a lot of weight. (Since 1995, when Republicans took control of the Senate, Hatch has been the committee’s chairman.) Ali expressed his thanks by giving Hatch an autographed punching bag.
In the summer of 1988, Hatch sent a memo to his favorite reporters in which he said that he planned to introduce legislation that would allow Ali to refile a $50 million lawsuit against the federal government over his draft-evasion conviction during the Vietnam War. Rather than go to Vietnam, Ali had made a principled stand, fought the validity of the draft in court, and lost both his case and his heavyweight title in the process. His act of conscience cost him three prime years of his boxing career; the Supreme Court ultimately overturned his conviction in 1971.
A few months after Hatch announced that he would help the fighter in his bid to seek compensation from the federal government for the lost years of his career, Ali gave Hatch one of only two championship rings he’d won in bouts for the heavyweight title. Hatch listed the ring as a gift on his 1988 personal financial disclosure report, which he filed with the Secretary of the Senate’s office on May 15, 1989, and assigned it a value of $6,500. Hatch’s report also included this brief notation about the ring: “Is considered priceless to the recipient.”
As well it may have been. The ring — engraved with the inscription, “With love from Muhammad Ali” — was almost certainly unique and undoubtedly could have fetched plenty more than $6,500 from a private collector. But the far more significant issue was the glaring appearance of a conflict of interest — and, in particular, the proximity of the gift to the legislation that Hatch was pushing to help Ali.
“Everyone on Capitol Hill knew this was Muhammad Ali’s bill,” a spokesman for Congress Watch told Rick Shenkman, a reporter for KUTV in Salt Lake City. “The fact that it’s Muhammad Ali, whom a lot of us admire and respect, can’t change the fact that Senator Hatch shouldn’t be taking huge gifts from people with direct interests in legislation.”
When Shenkman, with cameras rolling, asked Hatch if Ali had a direct interest in the legislation, the Senator replied only indirectly. “I can’t say that he did . . . his attorney did and others did, sure.” Soon, however, Hatch yielded under the torrent of negative publicity. He reneged on his promise to sponsor legislation to help Ali.
Many years later, however, Hatch paid homage to Ali in a way that did not require the consent of his colleagues on Capitol Hill. He wrote a musical tribute to Ali titled “The Difference Makes the Difference,” which Gladys Knight recorded and performed on a cable television network in February 1998.
Top Ten Career Patrons
$92,580
$82,000
$74,684
$57,500
$56,000
$55,994
$46,999
$44,250
$38,160
$37,000
This list is based on individual and PAC contributions to Hatch’s Senate campaigns from 1979 through June 30, 1999; all contributions to the Capitol Committee from 1995-1998; and all contributions to the Hatch Legal Expense Trust from 1993-1998. Contributions to Hatch’s presidential exploratory committee had not been disclosed as of this writing.
Sources: Federal Election Commission; Center for Responsive Politics; Secretary of the Senate.
5. Includes contributions from employees of Contran Corporation; its 90 percent controlled subsidiary Valhi, Inc.; Valhi subsidiary NL Industries, Inc.; and members of Contran founder Harold Simmons’s family.
6. Includes contributions from employees of Joseph E. Seagram & Sons, and from employees of Universal Studios/MCA, which Seagram acquired in 1995. Contributions come from employees of the U.S. subsidiaries.
7. Includes contributions from employees of Glaxo, Inc.; Burroughs Wellcome (which Glaxo acquired in 1995); and Glaxo Wellcome. Contributions come from employees of the U.S. subsidiaries.
Books
The Buying of the President 2004
- Introduction
- Equal Rights, Unequal Protection
- Private Parties
- George W. Bush - The Texas Years
- George W. Bush - The War President
- George W. Bush - The Administration
- Wesley Clark
- Howard Dean
- John Edwards
- Richard Gephardt
- Bob Graham
- John Kerry
- Dennis Kucinich
- Joe Lieberman
- Carol Moseley Braun
- Al Sharpton
- Conclusion
- Acknowledgements
The Buying of the President 2000
