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One Executive's Defense of Doing Business With Washington

Federal Express chairman offers views on why it was fitting for the White House to open its doors to him.

Frederick Smith is unswayed.

And why shouldn't he be? The Federal Express chairman says he played by the rules, flawed though they may be, in seeking President Clinton's help with a nettlesome business problem.

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If the press or the public sees influence-peddling behind Federal Express's $100,000 contribution to the Democratic National Committee (DNC) - made three weeks after Mr. Smith's meeting last year with Mr. Clinton in the Oval Office - they need a lesson in the Constitution, he says.

"The image of impropriety is one built by the modern popular press," Mr. Smith said during a recent Monitor interview at FedEx's lobbying office here. "If you read the Constitution, our system is designed to be a system of competing interests. But that very fundamental principle has almost become a pejorative."

In the complex world of Washington policymaking, Mr. Smith's words raise a simple question: Is there a legitimate way for corporate America to solicit government help without creating the appearance of impropriety?

It's the question underlying past and current efforts to amend campaign-finance laws in the US. In a surprise statement Sunday, Senate majority leader Trent Lott raised expectations that lawmakers will vote this year on revamping the rules for donors, candidates, and political parties.

Meanwhile, Senate hearings continue into campaign-finance irregularities during the 1996 campaign, with most of the questions focused on White House and Democratic Party practices. The House opens its hearings Wednesday under the gavel of Rep. Dan Burton (R) of Indiana.

As the meetings proceed, testifiers may well include the Federal Express founder and other corporate leaders whom the White House targeted for big political donations.

For Smith, whose August 1996 meeting with Clinton made headlines last month, the right to lobby is constitutionally guaranteed - and political contributions are but one part of FedEx's wider lobbying strategy. "In the modern era with the modern political campaign system, if you are going to be politically active, you have to participate in the political contribution area," he says.

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But Smith also sees changes that could be made in campaign-finance laws to allay concerns of voters.

"The most important, fundamental campaign-finance reform that could take place is for there to be instantaneous disclosure of who made what contribution to whom and why," Smith says. It's an idea that's been put forward before, but it is not included in the current Senate bill.

Clinton has refused to "unilaterally disarm," as he puts it, saying he will not stop aggressive fund-raising under the existing system until Republicans do the same.

The administration and Smith insist FedEx's donations last fall to the DNC were not a quid pro quo for the August meeting. The 45-minute session was set up for Smith to appeal directly to the president about Japan's refusal to open its markets to US air carriers. He urged trade sanctions against Japan, a move Clinton and his advisers have not taken.

"What I was there to see him about was to communicate how serious I thought the whole situation was, not just for FedEx but for US aviation," Smith says.

FEDERAL Express has been trying for three years to get Japan to change its restrictive market-access policies. The effort involves persistence, not just money, he says. (Around that time, FedEx gave $400,000 to the GOP and $275,000 to the DNC.) Urging the federal apparatus to represent the interests of a $13 billion industry - one that is vital to the US economy and that creates tens of thousands of jobs - is a legitimate activity, Smith says.

US-Japan trade talks now under way may resolve FedEx's complaint, along with a host of other related issues.

Watchdog groups, however, see in Smith's approach much of what is troubling about the current campaign-finance system. "You have to recognize [FedEx] has made aggressive soft-money campaigns contributions and made its jets available for officials," says Bill Hogan of Investigative Projects at the Center for Public Integrity in Washington.

"The president doesn't have the time to meet with every businessman with a concern," he adds. FedEx's donations, he says, helped Smith to appear on the president's radar screen.

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