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How Do the best-paid general counsel spend their money? In past issues, we’ve looked at the homes, cars, horses, and Harleys owned by the men and women who appeared in our annual compensation survey of the 100 highest-paid GCs. Heading into an election cycle, we decided to scrutinize the political contributions made by the GCs in this year’s survey. We found that this group is tight-fisted when it comes to political donations � even given the limits imposed by law. To put it in perspective, the top 25 general counsel on our list � a group that collectively pocketed nearly $39 million in cash compensation during 2002 � gave a scant $67,525 to federal candidates or political action committees last year. On average, that’s only $2,701 each. Even that amount is misleading, however, because eight among the top 25 gave nothing last year. No one came remotely near the $95,000 total cap imposed by the federal government on all individual political giving (for both federal and state races) during a two-year election cycle. The largest single gifts the GCs gave were $5,000. And when it comes to voting with dollars, most of our surveyed GCs pulled the lever for Republican candidates. To find out about the political giving habits of our select group of GCs, we scoured Federal Election Commission records for 2002. Federal law requires that all contributions over $200 made to federal campaigns or political action committees be disclosed. But there are a few caveats: The FEC does not track contributions made to state and local campaigns. Although some states do, we did not examine their records. The agency also doesn’t track donations under $200. AUTOMATIC CHECK-OFFS The corporate PAC is fast becoming a top target for political fund-raisers. This type of PAC used to play a pretty puny role in federal politics. But thanks to the campaign finance reform legislation passed last fall, that’s changing. The new law, officially named the Bipartisan Campaign Finance Reform Act of 2002, bans “soft money” � unregulated funds that flowed from corporate or union treasuries, not individuals’ pockets, and went directly to political parties. Last year, the two major parties received roughly half a billion dollars of soft money. With that enormous fountain of cash now stoppered, candidates are desperately seeking alternatives. And corporate PACs are one of the biggest. For GCs, this new pressure on corporate PACs will mean more work (and, possibly, may mean they’ll kick in more to the PAC). GCs are typically in charge of compliance, so they’ll have to enforce contribution limits and guard against coercion by top executives. Companies may only solicit contributions from senior management and shareholders. Any coercion, harassment, or discrimination conducted in order to garner contributions is illegal. And, according to Donald Simon, general counsel of the Washington, D.C.�based political watchdog Common Cause, the recent campaign reform law increased penalties and criminalized offenses. Donors can each give only $5,000 a year to their company PAC. That limit makes $416 the magic number for GCs who want to give the max to their employers’ PACs every month. Number 1 on our list, General Electric Company’s Benjamin Heineman, Jr. � who pocketed $3,930,000 in salary and bonus last year � gave $416 per month for a total contribution to the company PAC of $4,992 in 2002. And Wayne Budd (number 65) of John Hancock Financial Services, Inc., who made $830,000 in salary and bonus, gave $416 monthly to his employer’s PAC from June 2001 to June 2002. Budd appears to be a creature of habit. In his prior job, with Verizon Communications Inc. subsidiary Telesector Resources Group, Inc., he chipped in $400 monthly to Verizon’s Good Government Club from January 1999 to June 2000. Bryant Danner, general counsel of Edison International and number 58 on our list with $905,000 in 2002 compensation, made monthly contributions of $400 to his company’s PAC starting in July 2000. THE POLITICOS Company PACs aren’t the only beneficiaries of GC largesse. Some chief legal officers put their money where their beliefs are. The Altria Group, Inc.’s Charles Wall (number 7), who made $1,533,269 in cash compensation in 2002, gave $1,000 last year to a leadership PAC called Rely On Your Beliefs Fund (aka: RoyB), which is chaired by House majority whip Roy Blunt of Missouri. Leadership PACs are created for politicians to contribute to the campaigns of other politicians. In 2002 Blunt’s leadership PAC distributed funds exclusively to Republican candidates. Separately, Wall also gave $1,000 to Virginia Republican congressman Tom Davis. David Frick, chief legal officer of Indianapolis-based Anthem, Inc., and number 25 on our GC compensation survey with $1,235,000 in cash compensation, describes himself as a steadfast Republican donor. He was the biggest political contributor among the top 25 on our list, giving a total of $8,500 last year. “I have a long history of supporting conservative candidates with monetary contributions and contributions of my time,” he says. Last year Frick gave $5,000 to the Indiana Republican State Central Committee to help elect members of Congress. He made three separate contributions, totaling $1,250, to Indiana’s powerful Republican U.S. senator, Richard Lugar. The GC also spread a total of $2,250 among five other Republican congressional politicians from the state. There’s support for the other side of the aisle, too. Deval Patrick (number 4), general counsel of The Coca-Cola Company and former head of the Department of Justice’s civil rights division, gave $2,000 last year to KidsPAC, as well as $1,000 to Democratic National Committee Services Corporation and another $1,000 to New York representative Charles Rangel. In years past, Patrick and his wife Diane, a partner at Ropes & Gray, have individually and together given to such liberal groups as EMILY’s List and PeacePAC, as well as the campaigns of Al Gore, Hillary Rodham Clinton, and Barney Frank. “They are all personal contributions, and have nothing to do with my company,” says Patrick. “We support what we believe in: people and initiatives committed to helping more vulnerable people.” Some GCs occasionally cross party lines, if only occasionally. Verizon GC William Barr (number 8), U.S. attorney general during Bush senior’s administration, made $1,507,000 last year and gave only $6,000 in political contributions. But he choose creatively, supporting a variety of candidates. A Virginia resident, Barr nonetheless wrote checks for $1,000 each to Republican senators Chuck Grassley of Iowa, John Sununu of New Hampshire, and Arlen Specter of Pennsylvania. And Barr reached across the aisle to give $1,000 to Michigan’s Democratic congressman John Dingell. Closer to home, he donated $1,000 to Virginia’s Republican senator George Allen and another $1,000 to Allen’s PAC, which has the amusing name of Over the Hill. Barr did not return calls for comment. Capitol Hill may be making more calls to general counsel now that it’s operating in what Common Cause GC Simon calls “a hard-money world.” With the ban on soft money, candidates will be pressing contributors to give more out of their own pockets. And that means one thing from now on, says Simon: “Life is going to be much more expensive for individual donors.”

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