Were US Motorists Shucked By Clinton's Ethanol Action?
THE Clinton administration recently handed down a clean-air ruling that could cost American motorists and refiners millions of dollars. Critics ask: Was that decision influenced by large political contributors to the Democratic Party?
At a presidential dinner on June 22, Democrats collected $3.5 million in campaign donations. Among the gifts was $100,000 from industrialist Dwayne Andreas, the chairman and chief executive officer of Archer Daniels Midland (ADM) of Decatur, Ill.
Just eight days later, regulators at the Environmental Protection Agency (EPA) ordered the nation's refiners to begin blending ethanol into their gasoline by Jan. 1, 1995. Mr. Andreas's company is the largest producer of corn-based ethanol in the United States.
The EPA decision, strongly supported by the White House, could be a windfall for ADM and for American corn farmers. But critics charge that political influence won out over common sense.
ADM and Andreas together are the nation's largest contributors of ``soft,'' or unregulated, campaign money to US politicians, according to the Center for Responsive Politics.
In the 1992 campaign, ADM and Andreas contributed $1,374,500 in unregulated funds to the Republican and Democratic parties. While Republicans were once the chief beneficiaries of ADM's largess, most ADM contributions have gone to Democrats since President Clinton took office.
Andreas's $100,000 gift to the presidential dinner was made at the request of Vernon Jordan, a Washington attorney, according to the Wall Street Journal. Mr. Jordan was chairman of Clinton's presidential transition team.
Political scientist Larry Sabato, an authority on campaign reform, says the coincidence of Andreas's large, solicited contribution and the EPA decision ``is shocking.'' He says: ``This smells to high heaven.''
BLAKEMAN EARLY, Washington director of the Sierra Club, says the EPA decision makes no sense and has ``no environmental benefits.''
Charles DiBona, president of the American Petroleum Institute, charges that the EPA mandate was done for ``blatantly political purposes.'' He says the ``single purpose'' of the EPA rule is to ``transfer wealth from one part of the country to another, or to benefit some individual company or group.''
To meet new fuel standards of the Clean Air Act Amendments of 1990, most refiners would prefer to use a clean-burning methanol-based additive, MTBE - usually made from natural gas - rather than ethanol.
EPA will require refiners to use approximately 325 million gallons of ethanol in 1995 and 650 million gallons in 1996. Oil industry sources say that ethanol, also known as grain alcohol, absorbs water, so it cannot be shipped through petroleum pipelines. It also is produced largely in the Farm Belt, far from refineries in Texas and Louisiana.
Getting that ethanol to refineries will require costly new distribution systems involving tanker-trucks and barges.
David Deal, an attorney with the American Petroleum Institute, says the EPA mandate is unlawful because there is no environmental advantage to ethanol over less costly MTBE and no basis for such discrimination. A Senate committee report on the bill notes: ``It is intended that this be a fuel-neutral program.''
Federal officials insist that any problems in using ethanol are manageable and deny that their mandate will lead to shortages or to significantly higher costs for motorists.
EPA Administrator Carol Browner denies that ADM influenced her ethanol decision - or even contacted her about it. She says that requiring a ``renewable'' fuel like corn-based ethanol rather than MTBE will not only improve the environment, but will also foster US energy independence.
Sen. Bob Kerrey (D) of Nebraska supports the Browner rule. He says that using renewable ethanol ``means tens of millions of dollars a year for corn farmers and new jobs and opportunities for our rural communities. In addition, this is the right decision for the environment and for our energy security.''
Even so, there is uneasiness on Capitol Hill. The Clean Air Act Amendments were highly contentious in Congress. Insiders worry that any controversy could undermine future clean-air initiatives.
ADM officials were asked, but declined, to comment on their role in the EPA decision. Rather than be interviewed, ADM Vice President Howard Buffett faxed 24 pages of material discussing the advantages of ethanol.
In an earlier comment quoted in the press, Chairman Andreas explained that his contributions to the major political parties are designed ``only to get out the vote.''
Dr. Sabato, who teaches at the University of Virginia, says such statements strain credulity. He says: ``Don't make us laugh. They're giving that money primarily for their own welfare. And this [latest contribution] proves it.''
Sheila Krumholz, a research associate at the Center for Responsive Politics, calls ADM ``an enormous force out there.''
In addition to its soft-money contributions in the 1992 election, ADM also chipped in $345,650 in regulated donations. Those were split evenly between the two major parties. A computer search also turned up at least $178,000 that was given to state parties during the 1992 campaign, including the Democratic Party of Illinois and the Illinois Republican State Committee, Ms. Krumholz reports. Since Mr. Clinton took office, ADM has showered Democrats with funds - including $35,000 on Dec. 31, 1993, to the Democratic Congressional Campaign Committee and a string of $10,000 contributions to the Democratic National Committee in September, 1993.