The News Journal from Wilmington, Delaware • Page 8

MBNA's Growing Campaign Clout A8 SUNDAY NEWS JOURNAL MARCH 12, 2000 'We care about America' BOO top ponnin WSiUfl confFOnitit ns by stet States where MBNA has contributed money and has regional and sales offices Stivers MBNA, through its executives, ranks among America's largest political contributors, state and federal campaign records show. Totals for each executive include others in their household. Michael G. Rhodes Vice chairman of marketing $23,875 Maine $3,000 N.H.-l Vt. $4,000 $2,000 $1,000 $8,000 $1,000 Mass.

$3,000 R.I. $4,000 Conn. $6,000 $28,000 $1,000 Richard K. Struthers Senior vice chairman of international $4,000 $3,000 fTfS 1 $12,000 N.J. $13,000 $2,000 $2,000 $503 $7,530 i I $1,000 -Del.

$19,500 $312,100 $4,000 $14,000 $7,000 $4,000 $11,000 $1,000 $12,500 $2,000 Md. $118,850 $30,850 $1,030 $4,000 $10,000 $4,000 $10,030 John R. I Cochran III lj-aw i Executive vice I chairman and chief marketing I 1 i officer CJ $22,350 1 i David W. Spartin l4 Vice chairman $22,350 John W. Scheflen ult Vice chairman y.

and chief coun- fw i se) treasurer of 5 MBNA Federal jLsaf-LA $20,600 The top receiving states Below: MBNA's Wilmington headquarters' Ohio: MBNA supported Republican Rep. John Delaware: Texas MBNA's Maryland: MBNA is ThP rnrnnratinn which contributions inrlllrifi SUDDOltina DOSSible has headquarters in backing Republican Democratic gubernatorial Kasich in his early Wilmington, is backing presidential candidate Dutch presidential bid. congressional and candidate George W. Ruppersberger, a longtime gubernatorial candidates. Bush.

friend of Charles M. Cawley. ltfK 0 IET1T! ii Bins! iipicit Contributions increase $1,600,000 1,400,000 1,200,000 1,000,000 800,000 irl Lance Weaver Senior vice chairman $20,300 Includes 13 months nf a 24-month election cycle an! 7 I 'in inmifci 600,000 400,000 200,000 0 1 Bruce 1999-2000 1991-92 1993-94 1995-96 1997-98 Source Federal Election Commission, slate elections offices and News Journal analysis V- Hammonds Executive vice chairman and chief operating officer $19,950 FROM PAGE A1 Cawley would not be interviewed, but answered written questions via a spokesman, who read them over the phone. "We care about America," he said of executives at MBNA, the world's third-largest credit card company. "When we come across a good candidate, and they request our support, we are inclined to do so.

All we want is good government." Many major corporations, through their executives, donate large sums of money to politicians. This is the way the game is played these days. It's the system," said Bert Ely, a consultant to the financial industry who monitors legislation in Congress. But it's the level of MBNA's generosity that raises concerns among political watchdog groups. They say that during a time when bankruptcy reform and other major banking legislation are being debated, the company is trying to buy access to state houses, Capitol Hill and the White House.

Some political experts say the pattern of MBNA donations dozens of executives financing the same candidates at the same time, a practice known as "bundling" is a common practice companies use to circumvent federal election laws. Those laws forbid corporations from making donations directly to politicians. "They don't necessarily break the letter of the law when they send 100 $1,000 checks from their top executives," said Larry Makin-son, executive director for the Center for Responsive Politics, a nonpartisan watchdog group. "But it certainly flies in the face and spirit of the law. All that candidate sees is that he got $100,000 from MBNA." The stakes are high MBNA's record donations come amid increasing calls for campaign finance reform by watchdog groups, led by Republican John McCain, who has put his presidential campaigning on hold.

Reform proponents say they want to free politics from special interests such as the financial, health care, tobacco and gun industries, whose donations continue to skyrocket. MBNA's "type of corporate giving distorts the process," said Peter Eisner, managing director of the Center for Public Integrity, an independent group that studies links between money and politics. "Our leaders should make decisions based on the public good, not on the interests of MBNA or other corporations." For MBNA which posted $5 billion in revenues and $1 billion in profits in 1999 the stakes are high. "It's a matter of having access," Ely said. "It's the great lesson Microsoft Corp.

learned and the Silicon Valley people. They tend to be standoffish, and they're learning that to be at the table, you need to pony up." MBNA, which ranked 310th on the 1999 Fortune 500 list, is one of corporate America's biggest political contributors. This season, the company ranks eighth in executives' donations to federal campaigns, behind such companies as Goldman Sachs, accounting firm Ernst Young and Microsoft. MBNA's executives and PACs have given nearly twice that of Citigroup, parent company of Citibank, the world's largest credit card company. MBNA, the second-largest company in Delaware, with half of its work force based here, also dwarfs the state's biggest employer, DuPont in donations.

The chemical giant's executives and PACs have given $70,000 this season 5 percent of MBNA's total. Everyday lobbying MBNA executives have been generous in recent years to key members of Congress, including Delaware's congressional delegation Roth, Democratic Sen. Joe Biden, and GOP Rep. Mike Castle. Roth, chairman of the powerful Senate Finance Committee, has met with MBNA lobbyists to discuss bills.

He said they present the bank's viewpoint on an issue without seeking favors. "You try to give everybody the opportunity to talk to you," Roth said. "Too often we pass things and find they don't work." MBNA has given to candidates in three other states Texas, Maine and Ohio -where it has major operations. It has donated to influential senators such as Majority Leader Trent Lott, Banking Committee chairman Phil Gramm, R-Texas; Ted Kennedy, and Olympia Snowe, R-Maine. It has donated to the campaigns of 17 of 20 Senate Banking Committee members, and 13 of 19 on the Senate Finance Committee.

In the House, the company has given to 28 of 60 members of the Banking and Financial Services Committee, of which Castle is a member. Paramount to MBNA are efforts in Congress to reform bankruptcy laws. MBNA has estimated it loses $1 billion a year to bankruptcies from its $72 billion loan portfolio. The bank and other financial institutions have lobbied Congress to toughen bankruptcy laws so that borrowers cannot just walk away from what they owe. Last year, the House passed just such a bill.

Last month, the Senate passed its version one that was a little more lenient to-wqrH HoKtnre are working on a compromise bill. MBNA Senior Vice Chairman Lance L. Weaver said bankruptcy was a rare instance in which MBNA had a stake in legislation. Weaver said the company's lobbyists mostly monitor bills. "We don't want to be surprised," he said.

Federal lobbying disclosure records show MBNA has spent more than $4 million since 1996 to lobby Congress and the Clinton administration not only on bankruptcy reform, but on bills dealing with credit reports, debt collection and other banking issues. MBNA lobbyists include a top executive, Joseph R. Crouse, and two Washington firms. Lobbying is not unusual in banking circles. Financial institutions spent $273 million lobbying in 195)8, more than any other in-dustry according to the Center for Responwve Politics.

MBNA and other companies successfully M. Scot Kaufman Senior vice chairman and chief financial officer $18,375 Kenneth F. Boehl Vice chairman of control and audit $18,275 Michael Balthis Senior vice president $17,850 Charles M. Cawley Chairman and chief executive officer $17,350 Jules J. Bonavolonta Vice chairman of administration $17,100 1 Scheflen's 1994 memo suggesting donations to Ruppersberger's campaign for Baltimore County executive stressed he was a "close friend of Charlie Cawley and other MBNA people." Ruppersberger, who once did legal work for MBNA, also owns a debt-collection firm, Rupp and Associates, that does business with the bank.

In November, Cawley served as host of a fund-raiser at his Delaware estate for Ruppersberger, who has formed an exploratory committee for Maryland's 2002 gubernatorial race. His donations so far from MBNA employees: $111,850. Bush in search of cash Cawley and Weaver said financing the same politicians en masse is merely coincidence. "No one knows when I give personally to a candidate," said Cawley, who was paid $58 million in 1998, including $47 million from stock options. "When you work together as many years as we have, no one should be surprised that we think alike on many issues." Weaver explained that employees often discuss candidates they support during hallway chats or at social gatherings.

He compared the executives' political giving to the United Way campaign, noting that 90 percent of MBNA employees gave $5 million to the charity in 1999. But Weaver acknowledged the bank's PACs are organized. In 1999, 394 MBNA employees gave $600,000 to the political action committees through payroll deductions. Weaver said employees choose the amount they want to give. Nearly all 13 members of the executive committee, however, gave the same amount to PACs $3,900.

Political watchdog Makinson, author of the "Follow the Money Handbook," said the pattern speaks for itself. "MBNA wants people to believe it's not trying to manipulate the system," he said. "With this continuing effort, they have picked a curious way of not trying to influence politicians." MBNA will be free to send more money Bush's way if he wins the GOP nomination, a his strintr of victories in last week's Super Tuesday primaries indicates. Many MBNA executives already have given him the $1,000 maximum for a primary campaign, but each can give another $1,000 for the general election. Bush might need the cash.

Although he has raised about $70 million, Bush only has about $10 million left. Bush campaign officials said they would welcome more MBNA money. "Some donors give more than others, but that doesn't mean anyone gets any more special treatment," Bush spokesman Scott McClellan said, Reach Cris Barrish at 324-2785 or cbarrishwilmingt.gannett.com Reach Robert Long at 324-2428 or rlongwilmingt.gannett.cofn Reach Jonathan Epstein at 324-2880 or jepsteinwilmingt.gannett.com contacted by The News Journal would not comment or referred reporters to bank spokesmen. But a handful said they give of their own volition. "That's my choice, the candidates I support," said senior executive vice president Steven Walczak, who has given $6,300 this season.

Most favor found with Republicans MBNA donors traditionally have favored Republican candidates. In Delaware, one-third of Bush's MBNA donors are registered Democrats or independents. Bush was not the first presidential candidate MBNA supported this season through bundled donations. In March 1999, executives began giving exclusively to Ohio Rep. John Kasich, a Republican who heads the House budget committee and who was pondering a run for the White House.

By June, the total swelled to $94,250. Donors included 74 of MBNA's top executives. By then Kasich was foundering, trailing Bush in polls and fund-raising $36 million to $3 million. That's when MBNA executives abandoned Kasich. Through February, Bush had received $243,250 from MBNA, including 90 of its top executives.

Cawley also held a fall fund-raiser for Bush at his Westover Hills mansion near Wilmington. Republicans McCain and Alan Keyes and Democrats Bradley and Al Gore received a total of $5,350 from MBNA executives. MBNA employees long have supported Bush, contributing more than $80,000 to his two gubernatorial races. While Bush has been governor, Texas passed a constitutional amendment allowing home equity lending and a law permitting banks to sell insurance. Besides its core credit card business, MBNA makes home equity loans and sells auto insurance.

Cawley said he does not know Bush as well as Bush's father, president from 1989 to 1992, but thinks the candidate would "be a fabulous president." "He is a man of integrity, character and intelligence," Cawley said, "with a terrific record." In Delaware, MBNA also is bundling donations in the U.S. Senate race that pits five-term incumbent Roth against Democrat Tom Carper, two-term governor and former congressman. MBNA donated $140,089 to Roth in 1994, and Carper received $58,310 in 1996. Campaign reports filed last month showed Roth with $99,500 in MBNA money, most given on two days in December. Carper's report showed him with no money from MBNA executives.

In the Delaware gubernatorial race, Bur-ris is MBNA's choice. The bank has given $147,400, one-third of the total amount Burns has raised. Delaware Speaker of the House Terry Spence, a Republican who quit the race last week, received $1,200 from Cawley but nothing from MBNA executives. Republican Bill Lee and Democratic Lt. Gov.

Ruth Ann Invent received any money. A Then there's Ruppersberger. lobbied to defeat legislation requiring bill payments to be credited on the day they were mailed a major change for an industry that charges late fees. The company supported a bill to exempt from taxes certain investment trusts that wealthy investors buy. MBNA uses such trusts to finance loans to consumers.

A version of that bill passed. And it worked in support of a new law that lets banks such as MBNA buy brokerage and insurance companies. The law took effect Saturday. Eisner of the Center for Public Integrity disputed Weaver's claim that MBNA's lobbyists only monitor bills. "What they say about lobbying and the reality are quite two different things," Eisner said.

"The lobbying industry has flourished over the past 20 years because companies like MBNA need an earpiece." Power of suggestion Founded in 1982 at an Ogletown strip mall by Cawley and others from Maryland National Bank, MBNA only dabbled in politics for its first decade. But in 1994, Cawley's growing company burst onto the national scene with $1.1 million in campaign donations. That also was the year MBNA's donating methods came into question, after The News Journal obtained internal memos sent to top executives by John W. Scheflen, chief counsel for the bank and treasurer of the MBNA's state and federal political action committees. Scheflen's memos to more than 150 of MBNA's top brass offered advice on who should give, how much and to which candidates.

Scheflen asked for photocopies of the checks. A follow-up memo asked executives to inform Scheflen "if you do not plan to make any suggested contributions." Some public interest groups said Scheflen's memos were heavy-handed and bordered on violating laws against coerced donations. MBNA officials insisted no one was pressured. Federal Election Commission officials would not comment then on the MBNA memos, nor did they investigate, because no complaint was filed. Weaver said the company no longer issues such directives, nor does it monitor executives' donations.

"We encourage employees to vote, but we never talk about candidates," he said. He said executives do not discuss how much they have given. "It's like when I go to church on Sunday, I put an envelope in," Weaver said. "I don't know what anybody else is giving." In the six years since Scheflen's memos, money from MBNA's upper echelons kept flowing into federal and local campaigns $870,369 in the 1995-96 cycle and $1.46 million in 1997-98. The largest MBNA donors this season are in the hierarchy's top ranks.

The 24 executives who have given $10,000 or more include all 13 members of the executive committee, MBNA's top rung, and seven members of the management committee, one step down the corporate ladder. As in previous years, MBNA executives are givinfcf.mostly to the same candidates at the same time and in the same amounts. Most Jf some two dozen MBNA donors Ronald W. Davies Senior vice chairman and chief technology officer $15,775 Gregg Bacchieri Senior vice chairman of consumer services $15,400 Robert J. A.

Fraser Senior executive vice president of technology, division president of systems operations William H. Daiger Jr. Chairman of MBNA International Bank $14,055 Frank McEntee Senior executive vice president $13,900 For more details, check out The News Journal Web site: www.del3Aar8online.ccm.