Best Government Money Can Buy

CORRECTION: 8-16-97 B6 In Molly Ivins’ Aug. 9 column, the distinction was not made between Amway Corp. and its two Asain affiliates, Amway Japan Ltd. and Amway Asia Pacific Ltd. Amway says that on behalf of its two affiliates, it sought a change in the 1997 budget bill, Section 1123: Valuation of Assets for Passive Foreign Investment Company Determination. Total revenue loss to the Treasury from all amendments of the PFIC provisions of the bill is $280 million, but according to the Joint Committee on Taxation, the estimated cost of the change in Section 1123, which applies to the two Amway affiliates and four other companies, is $19 million over 10 years. -Creators Syndicate<

My favorite tax break in the new budget package is worth $283 million to one corporation: Amway. The company and its top leaders have contributed at least $4 million to the Republican Party during the past four years, so that’s a $4 million investment in campaign contributions with a $283 million payoff for Amway.

That’s quite a deal; that’s better than 70 times your money back. Wall Street may be flying high, but Wall Street can’t offer anything like the payoffs people get playing the political system instead of the stock market.

The payoff for Amway was not in the original House or Senate version of the tax bill. House Speaker Newt Gingrich intervened at the last minute to help get the special tax break inserted in the bill.

Of course, it helps that Amway has its own caucus in Congress. Yes, the Amway caucus. Five Republican House members are also Amway distributors: Reps. Sue Myrick of North Carolina, Jon Christensen of Nebraska, Dick Chrysler of Michigan, Richard Pombo of California and John Ensign of Nevada. Their informal caucus meets several times a year with Amway bigwigs to discuss policy matters affecting the company, including China’s trade status.

House Majority Whip Tom DeLay, a onetime Amway salesman, also remains close to the company. Mother Jones magazine, which has followed Amway’s shenanigans closely, reported last fall that Myrick owes her election to the company - almost half of her total campaign funds came from Amway people.

The company has a curious corporate culture. It was under investigation for 10 years by the Federal Trade Commission as a pyramid scheme. It looks like a pyramid scheme, acts like a pyramid scheme and smells like a pyramid scheme, but according to the FTC, it is not a pyramid scheme. It is, however, rather cult-like and extremely active politically, always in the conservative and Republican causes.

Mother Jones got hold of a hilarious tape of a message sent by Dexter Yager, one of the largest Amway distributors in the country, to his many underlings: “If you analyze Bill Clinton’s entire inaugural address, it is nothing but a New Age pagan ritual. If you go back and look at how it was arranged and how it was orchestrated, he talked about forcing the spring. So what they’re trying to do is … force the emergence of deviant lifestyles, of a socialist agenda, and force that on us as American people.”

OK, everyone knows businessmen with wacky political ideas - Texas is crawling with them - but Amway truly stands out.

Canada has twice levied huge fines against the company for illegal dealings (a $25 million fine in 1983 and a $38 million tab to settle a $128 million lawsuit in 1989 brought by Canada’s trade office). Meanwhile, Amway’s next big target market is China, where it has launched a $100 million recruitment campaign.

Amway tried to get this same tax loophole passed last year as an amendment to the minimum-wage bill, but Sen. Byron Dorgan of North Dakota shot it down. So, they tried again.

You will be pleased to learn that the endless cycle of money from special interests going to politicians who in turn write specially tailored laws for those same special interests continues on its merry way. In the first six months of this year, the R’s and D’s have already raised a record amount in soft money, according to Common Cause. The 1997 amount far outpaces the amounts raised in comparable post-election periods. For example, after the ‘92 presidential race, the parties raised only $13 million in soft money. This year, it’s $34 million and counting.

“These numbers show there really is no sense of shame,” said Ann McBride, president of Common Cause. “This is a system out of control. Democrats and Republicans are out eagerly raising record amounts of huge, unregulated and corrupting soft money.”

We see the results of this corruption in the budget package. According to Citizens for Tax Justice, almost half the tax relief in the package goes to the richest 5 percent of Americans: The richest 20 percent get more than 75 percent of the benefits. The average tax cut for middle-income families and individuals will be less than $200 - the richest 1 percent, however, will be paying $16,000 less in taxes each year.

The beloved readers have responded magnificently to my request for help with a campaign finance reform slogan. They are so good that I plan to use a different one with every column. Starting with:

“Get the government off the corporate payroll!”

MEMO: Molly Ivins is a columnist for the Fort Worth Star-Telegram.