Harold Simmons, the billionaire Dallas investor, has grown
accustomed to using his vast wealth to influence the outcome of elections.
For decades, Simmons has poured millions of dollars into the
campaign coffers of mostly Republican lawmakers to get legislation introduced
that would greatly benefit his financial holdings.
Simmons has had a close relationship with President George
W. Bush and the Bush family for more than a decade. He contributed at least
$90,000 to Bush�s Texas gubernatorial campaign, was one of the largest donors
to Bush�s presidential campaign in 2000, and donated $100,000 to Bush�s 2004
In 1998, Bush backed a highly controversial plan to
construct a radioactive waste dump near the New Mexico border that Simmons�s
company, Waste Control Specialists, would operate.
�I basically told George that I was involved in the company
as a major investor,� Simmons said in an interview with the Dallas Morning News
in early 1998. �And wanted him to be aware of it in case the issue ever came
The Austin Chronicle reported last December that �Simmons
seemingly greased every palm in the statehouse to smooth his radioactive plans,
with his company, Waste Control Specialists, giving more than $2 million in
political cash since 2001 while spending $2.8 million on 63 lobby contracts, according
to Texans for Public Justice.�
Simmons was one of the main financial backers of the Swift
Boat Veterans For Truth, the organization that ran a series of damaging
television advertisements against John Kerry, the 2004 Democratic presidential
nominee, attacking the senator�s service record during the Vietnam War.
In the 1980s, Simmons, who has been referred to as a
�corporate raider,� waged a two-year battle to win control of military
contractor Lockheed Martin before the company merged with Martin Marietta Corp.
Simmons has built his fortune by orchestrating hostile takeovers. He controls
an empire of sugar, manufacturing, metal, chemical, oil, real estate, insurance
and other companies.
Now Simmons has reemerged as the main financial backer of
American Issues Project, the latest in a long list of political groups Simmons
has financed with the intended goal of influencing public perception of
Democratic candidates and derailing their political aspirations. The groups
have operated under tax-exempt status under section 501(c)4 of the United
States tax code, giving them free rein to raise unlimited amounts of cash to
run negative campaign ads.
Critics believe these swift-boat type groups have abused the
tax-exempt code and should be categorized as a political committee under
federal election and campaign finance laws, which would limit donations to
$42,000 and require the organizations to disclose the identity of their donors.
Up until last week, Democrats have not issued a forceful
challenge to the way the swift-boat groups have operated. In the past,
Democratic candidates decided to ignore the attack ads funded by individuals
like Simmons so as not to draw more attention to the negative claims contained
in the ads -- even though many of the allegations are untrue -- or provide the
groups with additional publicity.
But when the American Issues Project rolled out a stinging
television advertisement against Sen. Barack Obama, tying the Democratic
presidential nominee to domestic and foreign terrorists, the Obama campaign
responded swiftly, urging the Department of Justice to launch a criminal
inquiry into the American Issues Project, as well as the organization�s
officers and donors, alleging violations of the Federal Election Campaign Act.
Ed Failor Jr., a former aide to Sen. John McCain�s presidential campaign, heads
Papers filed with the Federal Election Commission show that
Simmons, who has raised between $50,000 and $100,000 for the McCain campaign,
donated $2.9 million to the group on Aug. 12, all of which is being used to
finance the attack ads against Obama.
Robert Bauer, general counsel for the Obama for America
campaign, said in an Aug. 21 letter to John Keeney, the deputy attorney general
of the DOJ�s criminal division, that the organization Simmons has funded is
attempting to �evade the structures of election law� by advocating the �defeat
of the presidential candidacy of Barack Obama,� which would require the group
to operate under the rules of a political action committee.
On Tuesday, Bauer stepped up his call for a DOJ probe,
sending a second letter to the Justice Department demanding the agency
specifically investigate and prosecute Simmons.
�We reiterate our request that the Department of Justice
fulfill its commitment to take prompt action to investigate and to prosecute
the American issues Project, and we further request that the Department of
Justice investigate and prosecute Howard [sic] Simmons for a knowing and
willful violation of the individual aggregate contribution limits,� Bauer
A Justice Department spokesman said the agency was
�reviewing� the letter and had no further comment.
In an Aug. 25 letter to the Dallas Morning News, Simmons
said his �political contributions are dwarfed by my charitable contributions of
In early 1998, Simmons settled a lawsuit filed against him
by his two daughters paying them $100 million to drop their claims that he
mismanaged the family trust.
�Those girls are no longer part of the family,� Simmons said
after the settlement deal was announced. �They�re divorced from us.�
Moreover, his daughters had alleged that Simmons violated
campaign finance laws by donating at least $130,000 to Republican candidates
through his family trust and in his daughters� names between 1991 and 1995.
The Justice Department investigated Simmons to determine
whether he violated federal election, tax or other laws. The Federal Election
Commission leveled hefty fines against Simmons and longtime friend, former Sen.
Phil Gramm, an aide to McCain�s presidential campaign, in 1993 for campaign
finance law violations. Simmons paid a $19,800 fine to the FEC for exceeding
campaign finance limits.
In a deposition, Simmons admitted he made about $200,000 in
contributions in the names of his family members in excess of campaign finance
If the DOJ launches a probe into the American Issues Project
-- and Simmons -- it could lead to a radical change in the way these
freewheeling, unregulated, Republican-connected organizations have operated
over the past five years.
Last year, Simmons, along with Dallas oilman T. Boone
Pickens, and Houston homebuilder Bob Perry, bankrolled an effort to derail Sen.
Hillary Clinton�s presidential hopes by launching the organization Stop Her
Now. That group�s mission was identical to American Issues Project that the
Obama campaign asked the DOJ to investigate.
Simmons has been an adversary of the Clinton�s since Bill Clinton�s
second term as president. In 1997, Clinton became the first president in
history to issue a line-item veto in a federal budget bill, removing a
provision that would have granted Simmons a $104 million tax break on the sale
of his sugar plant, the Amalgamated Sugar Company, to beet farmers in Oregon
�A provision in the tax bill, included at the behest of
several members of Congress, including freshman Rep. Kenny Hulshof, R-Mo.,
would have granted Simmons something both he and 2,000 beet farmers in Oregon
desired: a graceful exit out of a joint venture deal that they had struck for
the sole purpose of reducing, or eliminating altogether, a bill for $80 million
in capital gains taxes Simmons was facing,� the St Louis Post Dispatch reported
in an Aug. 12, 1997 article.
�To avoid capital gains, Simmons came up with a cumbersome
arrangement: form a joint venture with the Snake River Sugar Cooperative, a
group of 2,000 Oregon beet farmers formed for this purpose, and have the joint
venture own the refinery and share the profits. Under the tax laws, this
arrangement was not technically a sale, and Simmons owed no capital gains
taxes, even though the cooperative paid him $260 million in the deal.�
Simmons fired off a letter to Clinton prior to the line-item
He said that because the sale of the sugar beet refinery was
closed in January 2007, the measure backed by Hulshof�s measure would not
benefit him financially. Simmons claimed that the sale was structured in such a
way that he or his company would not have paid capital gains taxes for 30 years
�The new legislation would not provide me . . . any
additional deferral above what I have already received,� Simmons wrote
President Clinton. �Reports of an additional tax benefit to me are based on
inaccurate information and are incorrect.�
No less than a dozen members of Congress, including Sen.
Phil Gramm, (R-Texas), supported the provision. Simmons had contributed tens of
thousands of dollars to the lawmakers� campaign coffers.
McCain, who was a supporter of the president�s right to use
line-item veto, changed his stance when Clinton said he would invoke it and
remove the obscure provision that would benefit Simmons.
�I strongly urge you not to use this important tool at this
time,� McCain said.
But Clinton�s treasury secretary, Robert E. Rubin, said
Simmons was not being forthcoming and pegged the billionaire�s tax break at
more than $100 million if the budget bill was passed with the provision intact.
�This is a vendetta against Harold Simmons, and that�s sad,�
said Allan Lipman, president of Snake River, after Clinton vetoed the
provision. �They tried to shoot Harold Simmons and instead they shot our 2,000
Two years later, Sen. Larry Craig (R-Idaho), who was one of
the original backers of the budget provision that would have given Simmons a
massive tax break, resurrected the issue on Simmons behalf. Craig is the
senator who pleaded guilty to soliciting sex from an undercover male police
officer in an airport bathroom last year.
The anti-Obama ad that Simmons funded was rejected by CNN
and Fox News, although some local Fox affiliates have been airing the spot.
Sinclair Broadcasting, however, which drew fire in 2004 for an anti-Kerry
documentary it aired prior to the election, has been running the Obama ad.
Simmons was also a financial backer of the Kerry documentary.
Obama supporters inundated Sinclair with more than 93,000
emails criticizing the company for airing the spot.
�Other stations that follow Sinclair�s lead should expect a
similar response from people who don�t want the political discourse cheapened
with these false, negative attacks,� the Obama campaign said in a prepared
Leopold is the author of �News Junkie,� a memoir. Visit
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