Countdown

The Buying of the President 2004

Bob Graham

Bob Graham was worried. The information that the Florida senator had seen while serving on the Senate Select Committee on Intelligence had convinced him that terrorists in hidden sanctuaries are primed to attack Americans, repeating or perhaps surpassing the horrors visited on September 11, 2001. The only hope, he said, would be to use whatever force necessary to eradicate terrorist organizations — wherever they might be.

So on October 10, 2002, a day he predicted that Americans would soon regret, Graham made his intentions clear. He voted against the resolution to use force in Iraq.

“The president should be in the most advantageous position to protect Americans — to launch pre-emptive strikes and hack off the heads of these snakes,” he said on the Senate floor. “With the resolution before us, we are denying the president that opportunity.”

Graham had unsuccessfully submitted an amendment that would have given President Bush the authority to use whatever force necessary on countries harboring five specified terrorist groups: the Abu Nidal Organization, Hamas, Hizballah, Palestine Islamic Jihad, and the Palestine Liberation Front. Some of those groups, according to the U.S. State Department, drew support from Iran, Lebanon, Sudan, and Syria, as well as Saddam Hussein’s Iraq.

“The resolution I had hoped we would pass would contain what the president has asked for relative to the use of force against Saddam Hussein’s regime in Iraq and more,” Graham said on the floor of the Senate. “It also should provide the president all necessary authorities to use force against the international terrorist groups that will probably strike the United States as the regime of Saddam Hussein crumbles.”

But because he voted against authorizing the use of force in Iraq, Graham has painted himself as an opponent of the war, even though his failed amendment would have authorized it — along with conflicts in other countries.

In the wake of the September 11, 2001, terrorist attacks on New York and Washington, Graham, who served as Senate Intelligence Committee chair for two years, saw his profile rise. A man who was well known for his peculiar habit of meticulously recording even the lackluster minutes of his days was suddenly among those at the center of the question gripping the nation: How did this happen, and how should the United States respond? In more than three decades as a politician, Graham had earned respect in his home state, but this was his first dose of major national attention.

In the months since, Graham has been a critic of the president’s policies in the war on terror. He has demanded additional funding for the protection of U.S. ports and infrastructure, and he criticized Attorney General John Ashcroft for exercising the powers granted him by the USA Patriot Act, the controversial legislation passed in the wake of September 11 to expand the Justice Department’s powers to fight terrorism.

Graham, incidentally, was one of the main authors of the act he criticized.

That’s typical of Graham. Over the years, he’s cultivated a reputation as a friend of the environment and a fighter for the interests of the common person. But Graham’s image is at odds with his background as a millionaire developer and his career as a long-serving, skillful politician who has taken money from a host of special interests.

DEVELOPING IN FLORIDA

Sugar brought the Graham family to southern Florida. In 1931, before Graham was born, Pennsylvania Sugar Corporation recruited Graham’s father, Ernest “Cap” Graham, to run a new sugar cane operation — built by draining and otherwise demolishing the Florida Everglades.

Ten years later the sugar operation failed, and Ernest Graham acquired 7,000 acres in northwest Dade County as severance pay. He used the land to start a dairy farm, a venture that would eventually make millions for his family. He also entered state politics.

D. Robert Graham was born November 9, 1936, in Coral Gables, less than a week after his father was elected to the State Senate. He grew up on his father’s dairy farm, which by that time had expanded to include beef cattle. He attended high school in Miami, where he was elected student body president. In 1944, he won the title of Dade County’s “Best All-Around Boy.” He then left home to attend the University of Florida. After graduating Phi Beta Kappa in 1959, Graham went on to follow in his older brother Phillip’s footsteps and earn his law degree from Harvard University.

By the time Graham left for law school, big-time developers were offering to buy the land owned by the Graham family, which had by that time started the Graham Companies. Development had crept to the edge of their property, which was now in a prime location. But instead of selling out, the family decided to create a planned community — Miami Lakes. When Graham returned from law school, he took an active role in its development. The Graham Companies, run by Graham’s brothers and their children, would continue to operate the family’s real estate and agriculture venture empires.

Miami Lakes, which opened in 1962, has now reached a population of 23,000 and is Graham’s Florida residence. Though many of the pastures were converted into shopping malls and apartment complexes, there are still two dozen cows grazing in a vacant area across from Miami Lakes’ Main Street — the Grahams pay lower taxes because they are using some of the land for grazing.

Though they transformed most of their farmland into a bustling suburb, the Graham family continues to make millions in the dairy business. The Graham Companies runs a dairy farm in Highlands County that produces more than 13,000 gallons of milk a day. The family also profits from growing and selling sugar.

Graham, who has been a Florida politician for much of his life, first entered the government as a state representative in 1966, serving two terms before moving on to the State Senate in 1970. In 1978 after completing his second term in the Florida Senate, Graham ran for governor. To warm his image, Graham started his workdays series, in which he worked in a variety of jobs such as a police officer and a construction worker. He even hit the street with $15 in his pocket and spent two days as a “homeless” person in the Tampa area.

“These non-workdays, if you will, were extremely rough,” he wrote.

When he decided to run for governor, he said he stopped participating in the Graham Companies’ business decisions. He continued to attend meetings but had no vote in operations. He told the St. Petersburg Times he didn’t “want any questions either about conflicts of economic interest or conflicts of loyalty and time commitment.”

Helped by $500,000 of his own money, mostly from the Graham Companies’ agriculture and real estate profits, Graham won 56 percent of the electorate and was elected governor. Voters reelected him in 1982 with 65 percent of the vote. As governor, Graham stressed education and the environment. Although he failed to fulfill promises to vastly increase teachers’ salaries, standardized test scores for Florida’s schoolchildren increased during his tenure. Also as governor, he doubled the size of Florida’s budget.

In 1983, Graham initiated the Save Our Everglades program, which was designed to restore the Everglades and protect Florida’s wetlands and endangered species. He also brought environmentally endangered lands into public ownership, including vulnerable lands surrounding rivers, beaches, and barrier islands.

Graham strongly supported the death penalty. During his watch, the state sent 16 people to the electric chair — more than under any other governor at the time — and he signed at least 153 death warrants. One of the first he signed was for convicted murderer Willie Jasper Darden — a man whose guilt Amnesty International and the Northwestern University Center on Wrongful Convictions came to question. A federal judge ended up granting Darden a stay, and he lived on death row through another six death warrants before the state executed him. “I don’t believe any justice is served by procrastination or timidity,” Graham said of his legal philosophy. By the time he left the governor’s mansion, the prison system was overcrowded; his successor, Bob Martinez, freed thousands of inmates before building new penitentiaries.

In 1986, after serving his second and final term as Florida’s governor, Graham decided to run for the U.S. Senate. He faced Senator Paula Hawkins. President Ronald Reagan supported Hawkins, a first-term legislator, in an attempt to keep Republican control of the Senate. In the most costly Senate race in Florida history to that time (they spent more than $12.6 million) Graham won with 55 percent of the vote. He was reelected in 1992 and 1998. To this day, he has never lost an election.

On Capitol Hill, Graham became known for his personal eccentricities. Along with his polyester neckties speckled with little pictures of Florida — he owns about four dozen — Graham keeps meticulous notes on all of his activities. He records these in a succession of red, yellow, blue, and green notebooks, each color pertaining to a different season. Not a journal in the traditional sense, these notepads contain records of everything he does during a day — even the time spent writing notes. Graham has also continued his “workdays” program and has now completed over a year’s worth. For his 365th day, he helped to check in customers and handle baggage for US Airways.

Graham also founded and currently chairs the Senate New Democrat Coalition, a group of pro-business Democrats most visibly represented by former President Bill Clinton.

SUGAR’S SWEETHEART

The Florida Everglades is a unique ecosystem blending tropical and temperate flora and fauna, boasting wood storks and great blue herons. It is the only place in the world where crocodiles and alligators live side by side. And over the last century, it has taken a beating. Development has reduced the unique natural treasure to half of its original size and drained and polluted its water. Dozens of plants and animals are now near extinction.

“The east is moving west. The west is moving east,” Mel Martinez, President George Bush’s housing secretary and a Floridian, told The Washington Post in June 2002. “Unless you can contain all that, forget the Everglades.”

Developers have not been the only threat to the Everglades. The sugar industry is also partially to blame. There are currently 450,000 acres of sugar fields blocking the natural flow of water through the Everglades. The sugar industry uses phosphorous to fertilize its crops even though the Everglades are phosphorous-intolerant. The phosphorous pollution has destroyed and altered parts of the fragile ecosystem.

Yet in May 2003, when a controversial bill landed on the desk of Governor Jeb Bush that would push back plans to clean phosphorous pollution until 2016, Graham did not join environmentalists in opposing the measure.

That might have been because at the time Graham was in a mad dash to obtain the money he would need for his late-start campaign, which he had joined several months later than his competitors due to double-bypass heart surgery on January 31, 2003. The former governor had to balance his image as an environmentalist with his loyalty to his top career patron — Florida Crystals, a West Palm Beach-based agribusiness that runs three sugar mills and farms 180,000 acres of cane.

Graham has taken in more than $92,000 from the company. Florida Crystals made a $50,000 contribution to the Bob Graham Leadership Forum, which was organized under Section 527 of the Internal Revenue Code and can legally take contributions in any amount directly from individuals, corporations, or labor unions. Several members of the Fanjul family, which owns Florida Crystals, made $2,000 personal contributions to Graham’s campaign. Pepé Fanjul, one of the brothers who runs Florida Crystals, is a longtime friend to Graham. Fanjul is also a longtime Republican. He was vice chairman of the finance committee of the 1988 campaign of George Herbert Walker Bush, a member of the Republican Team 100 soft-money donors — those who kicked in $100,000 or more — and a guest at the Bush White House in 1990. He was a large contributor to Bob Dole’s 1996 presidential campaign and contributed to the campaign of George W. Bush in 2000.

In the Senate, Graham is a member of the Committee on Environment and Public Works and sits on its Subcommittee on Fisheries, Wildlife and Water. He is in a position to influence the fate of the Everglades. It’s an odd place for a son of the sugar industry to be. In addition to accepting tens of thousands of dollars in contributions from the sugar industry, Graham’s family business sells the sugar it grows to the U.S. Sugar Corporation.

In 2003, Florida’s sugar industry, spearheaded in part by the Florida Sugar Cane League, a political action committee, pushed the bill to delay pollution clean up through the Florida
legislature. Democratic presidential rivals John Kerry and Howard Dean had already demanded that Jeb Bush veto the bill. But Graham waited until it was already signed and then faxed a letter to Bush.

Graham denounced Jeb Bush’s environmental policy and accused both him and the president of “malfeasance” because they catered to big business. He called the bill Jeb Bush had signed a “grave injustice.” In a June 2003 op-ed in The Boston Globe, Graham criticized Bush’s environmental policies, questioning the administration’s commitment to “real environmental protection.”

“The silence of the EPA and the Department of the Interior is not the only threat to the Everglades,” he wrote. “The comprehensive lack of action by all federal agencies on a variety of pending issues that affect the Everglades is more problematic.”

In response, Governor Bush said Graham’s interest came too late, if it was actually sincere to begin with. “With all due respect to the senior senator, I got a faxed letter from him 30 minutes after I signed the bill, urging me to veto the bill,” Governor Bush said. “And he says, ‘I look forward to talking to you about this and I’m going to call your office,’ and he didn’t call.”

Graham’s reluctance to join the environmentalists on this issue was by no means exceptional. In fact, he has a history of siding with the sugar industry. In 1995, he voted against ending the price support program for sugar, a quota on imports that guarantees growers a higher price for their crop than the prevailing world market will bear. Opponents of the bill argue that the program leads to higher food prices and doesn’t help small farmers — just a few large producers. When the Clinton administration suggested taxing Florida sugar to clean up the Everglades, Graham opposed it. He suggested instead that sugar growers be required to pay fees to participate in the price support program. Graham explained that he was looking for a compromise, where the sugar industry and environmentalists could coexist.

POWERING THE SUNSHINE STATE

Part of the rationale for Graham’s candidacy is the notion that Florida decided the last presidential election, and that he can win Florida. His base of support in the state is strong, particularly when it comes to money. The Bob Graham Leadership Forum, his 527 committee, took in more than $218,000 in 2002, about half of that from contributors in Florida. And more than 90 percent of the Forum’s reported expenditures went to beneficiaries inside the state.

Miami-based Greenberg Traurig, one of the country’s biggest law firms, is Graham’s second largest contributor. The firm and its employees have given Graham $88,766. Graham is connected to the firm on several levels. Not only does the firm represent the Graham Companies, but Graham has also hired people who have ties to Greenberg Traurig for his campaign.

In June 2003, Graham tapped Marvin Rosen, a Miami lawyer, to be his national finance chairman. Rosen, a former partner at Greenberg Traurig, worked on the presidential campaigns of Bob Kerrey, Gary Hart, Ted Kennedy, and Bill Clinton. He is perhaps best known for his part in planning the Clinton administration’s White House coffees and sleepovers, in which large soft-money donors were granted access to top administration officials, including Clinton himself, to discuss their interests before the federal government.

As he did as governor, Graham has battled for the interests of his Florida constituents. In June 2003, Graham attempted to amend the Energy Policy Act to block the secretary of the interior from conducting an inventory and analysis of gas and oil resources off the U.S. coasts. Proponents of the amendment said the inventory was just a step toward exploration, then drilling. Many Floridians fear that offshore drilling would harm the state’s tourist industry, dependent in part on miles of sandy beaches that can be visited year-round.

Though Graham says he opposes oil and natural gas offshore drilling in Florida, his wife owns stock in a petroleum company that does just that, according to Graham’s financial disclosure forms. In December 2002, Adele Graham, who has an investment portfolio worth millions of dollars, bought between $15,001 and $50,000 in petroleum stock in a holding company that owns majority interest in Royal Dutch/Shell Group, which drills for both oil and natural gas. About a year before, Shell Offshore, a subsidiary of the company, was the top bidder for permits to drill on a stretch of ocean floor in the Gulf of Mexico, not far from the Florida coast.

Graham’s financial disclosure forms also show that he owns between $62,000 and $232,000 of stock in energy and utility companies. He has bought and sold stocks or bonds in Exxon, Florida utilities, and Halliburton, the oil field services company that Vice President Richard Cheney headed from 1995 until he was tapped to be George Bush’s running mate.

Graham’s eighth largest patron in contributions is Florida Power & Light, which generates 25 percent of its power from nuclear fuel. Since 1998, Graham has cosponsored three bills in which Florida Power & Light expressed an interest. He has supported legislation that would benefit Florida Power & Light at the expense of the environment while also taking in $64,605 from the company.

In 2002, Graham voted to extend the Price-Anderson Act, originally passed in the 1950s, which caps the liability for a potential nuclear accident from utilities like Florida Power & Light and their insurers. In May 2001, Cheney told The Economist that without Price-Anderson, “nobody’s going to invest in nuclear power plants.” Graham also voted to create a repository for the nation’s nuclear waste at Yucca Mountain in Nevada. Both bills helped Florida Power & Light, which was running out of space to dump its nuclear waste in Florida.

Graham’s support of the company is longstanding. In 1990, he sponsored an amendment to the Clean Air Act that permitted Florida Power & Light to emit more pollutants than the original act allowed. The bill passed, but not without criticism from environmental groups. In response, Graham praised Florida Power & Light, saying the company had cleaned up its power plants years ago and should not be punished just because other companies had not.

SOFT MONEY AND WEAK PROMISES

The savings-and-loan debacle of the 1980s and early 1990s affected nearly every state in the union, as high-flying thrift institutions proved anything but thrifty. Various S&L executives had solicited the aid of members of Congress to avoid federal regulators. Charles Keating, who ran Lincoln Savings and Loan into the ground, became emblematic of the political elements of the scandal; a group of congressmen that included Senator John McCain and was later dubbed the Keating Five, took tens of thousands in campaign contributions and ran interference with banking authorities in exchange.

In Florida, 39 savings and loans with deposits of nearly $15 billion collapsed in the course of the scandal. One of the biggest was CenTrust Savings and Loan, an institution whose failure cost taxpayers $1 billion. Its chairman, David Paul, was a politically connected wheeler-dealer who was ultimately convicted of improperly investing his depositors’ money in junk bonds and using the bank’s money to finance his luxurious lifestyle.

As governor of Florida, Graham met several times with the CenTrust chairman, and in 1987 Graham’s special counsel — who had also done work for CenTrust — arranged a private meeting between a CenTrust lobbyist and federal regulators and urged them to go easy on CenTrust.

Also while he was in the U.S. Senate, Graham signed a letter complaining that regulators were being too aggressive in their investigation of the Florida savings and loans. One regulator later said that David Paul, during one discussion, “threw Graham’s name at me maybe 8 to 10 times” in an attempt to show he had supporters in Congress. In response to questions about his relationship with Paul, Graham said the meetings were “limited” and “appropriate.”

Graham’s ties to the bank and savings-and-loan industry continue to pose problems, even after the CenTrust scandal. He sits on the Senate Finance Committee while at the same time accepting tens of thousands of dollars from the banking industry.

On March 6, 1991, Graham announced to the press and public that he would stop taking money from PACs representing federally insured banks, savings and loans, and credit unions in order to avoid a conflict of interest. He said he would continue, however, to take money from individual bankers. Federal Election Commission records show that at least 42 executives from Florida’s Barnett Bank each gave $250 or more to Graham at a fundraiser in Jacksonville in 1991.

Graham’s pledge to forgo contributions from banking PACs came at a time when the Senate Banking Committee was considering legislation to overhaul the nation’s banking system. He told the Orlando Sentinel that he did not want to “create some inappropriate perception if we’re accepting and soliciting contributions from the PACs of those institutions.” For good measure, he refunded nearly $60,000 he had already taken in from those bank-related PACs for his 1992 reelection bid.

But the pledge lasted about two weeks. On March 20, 1991, while he was refunding donations from NationsBank, Bank of America, and others, he accepted $1,000 from SunTrust bank. Then on March 28, he accepted $2,000 from the America’s Community Bankers’ PAC. On April 14, he accepted $1,000 from the Consumer Bankers Association.

When asked why Graham continued to take money from bank PACs after promising not to, staffer Jay Howser told the Center for Public Integrity that Graham intended to honor the pledge during the 1992 reelection cycle because Graham didn’t want “even a hint of impropriety during his campaign and during his work in the Senate.”

While the pace of bank PAC donations diminished somewhat until 1997, Graham has since returned to full swing. Even with the six-year hiatus, Bank of America and Citigroup, who contributed heavily to Graham’s campaigns in earlier years, remain among his biggest career patrons.

Since 1998, Graham has sponsored two bills and cosponsored three in which Bank of America expressed an interest. On February 4, 1999, Graham introduced a bill aimed at “relief” for Central American and Caribbean countries hit by Hurricane Georges and Hurricane Mitch in 1998. The bill would have lowered tariffs charged on products from the blighted counties, and encouraged them to join the proposed Free Trade Area of the Americas or strike other NAFTA-like trade deals with the United States.

Called the United States-Caribbean Basin Trade Enhancement Act and Central American and Caribbean Relief Act, the bill also provided humanitarian and agricultural aid for the countries hardest hit by the hurricanes. But that wasn’t all. The act would have encouraged the federal Overseas Private Investment Corporation, which gives loans and insurance to U.S. firms investing abroad, to support the activities of its customers in Central America. Bank of America, which lobbied on the bill, is among OPIC’s customers.

Bank of America and its employees have given Graham more than $72,000.

As for Citigroup, the world’s second-largest financial services firm, its leading credit card issuer, and the first U.S. bank with more than $1 trillion in assets, Graham has sponsored 5 bills and cosponsored 12 others on which the firm has lobbied. Citigroup and its employees have given Graham $70,500 since 1985.

THE IRAQI CONNECTION

Graham has made much of the intelligence failures that led to September 11 and criticized Bush and his administration for its reliance on intelligence reports suggesting Saddam Hussein attempted to purchase uranium from Africa. “President Bush should come clean with the truth,” he said of the uranium claim. “Unfortunately, he continues to display an arrogant pattern of hiding information from the American people and ducking questions that need to be answered.”

That’s advice Graham may want to consider taking himself. During his 1986 race for the Senate, Graham sold his Miami Lakes residence for $575,000, about the going rate for the market at the time. The buyer, who purchased it through an intermediary, turned out to be Carlos Cardoen, a Chilean national in the arms-trading business. Cardoen and his business associates, including Anthony Mijares, Abbey Kaplan, and Augusto Giangrandi, organized a fundraiser for Graham that raised about $29,000, according to Graham’s campaign. Cardoen attended the fundraiser; he was invited by Bob Graham.

In 1992, Roll Call, the respected Washington, D.C., publication that covers Congress, reported that on November 21, 1986, Graham invited Cardoen to a dinner, asking him to attend “the first event for a select group of supporters who have in large measure made our success possible.” The letter went on to say that the supporters would “act as my core group of key advisors on critical issues we face in the United States Senate.”

Graham’s opponents for his Senate seat and the Republican Party of Florida tried to make an election issue of the contributions. The state GOP went so far as to file a complaint against Graham with the Federal Election Commission, charging Graham with soliciting illegal donations from Cardoen. Foreign nationals are prohibited from donating to political candidates, and the Republicans argued that Cardoen’s support was illegal. The FEC ruled that there had been no violation; Cardoen had not written a check.

Cardoen’s name was in the news for more than just campaign contributions. In May 1993, the government indicted him for illegally selling arms to Iraq. Cardoen, who fled the country and is believed to be in Chile, allegedly sold cluster bombs to Iraq during the Iran-Iraq war and allegedly continued to deal in arms with the Iraqi regime as late as 1990. The Bureau of Industry and Security, a government agency that ensures U.S. industry complies with arms control laws, has a picture on its website showing Cardoen shaking hands with Saddam Hussein.

Graham told the St. Petersburg Times that he had dropped Cardoen from his core group of supporters in April 1992, when he first learned of the allegations against him. “If there are people who are known to have relationships that are suspect, we do not accept their contributions,” said Graham. “But that was not the case with Mr. Cardoen in 1985 and 1986.”

But Cardoen’s role as an arms dealer was widely known by 1984, when NBC News aired a story showing he had sold U.S. weapons to Iraq. Cardoen’s business dealings with that country continued over the years, and on June 4, 1990, U.S. News & World Report published an article saying that Cardoen’s companies were suspected of shipping oscilloscopes used to test nuclear detonators to Iraq.

Apparently, Graham’s continuing association with Cardoen was just an intelligence failure.

Note: Graham formally announced his decision to bow out of the race on October 6, 2003.

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