Senator Strongarm

How Al D'Amato threatened African AIDS funding to help a big campaign contributor.

Topics: Charlie Rangel, D-N.Y.,

When the nation’s largest and most influential gay rights organization, the Human Rights Campaign (HRC), last week endorsed Sen. Alfonse D’Amato, R-N.Y., in New York’s closely contested Senate race, it stunned the gay rights community. It also led one HRC board member, Marylouise Oates, to resign in protest, citing Sen. D’Amato’s “long record of hostility and indifference to women’s issues and to the fundamental issues of civil rights to African-Americans and other minorities.”

But HRC officials didn’t know the whole story about D’Amato’s record on AIDS. Salon has uncovered new details about the New York senator’s role in carrying water for a major corporate campaign contributor, a maneuver that jeopardized thousands of AIDS victims in Zimbabwe, a country that suffers from one of the world’s worst HIV infection rates. At the behest of the New York-based multinational insurance conglomerate the American International Group (AIG), D’Amato threatened to introduce an amendment to the Senate foreign operations appropriations bill in 1996 that would have dramatically reduced U.S. aid for Zimbabwe, over a dispute between the Zimbabwe government and an AIG subsidiary. Both the State Department and the Agency for International Development (AID) opposed D’Amato’s move. The tale is described in confidential AIG documents.

In the spring of 1996, AIG executives were concerned that its subsidiary in Zimbabwe, Unity Insurance Co., would be forced to sell a majority of its stake to local owners if it wanted to continue to do business there. AIG, which is one of the top 100 political party contributors in the United States, turned to its influential friends in Washington to press the Zimbabwean government to drop its plan. According to the Center for Responsive Politics, AIG, its subsidiaries and its officers gave nearly $160,000 to Republican and Democratic candidates during the 1995-96 election cycle, as well as $428,000 in so-called soft money contributions to both parties. In January 1996, AIG gave $25,000 to the Republican Senatorial Campaign Committee, which D’Amato chaired. The New York senator also has received more than $20,000 in PAC and individual contributions from AIG since 1991.



AIG’s largesse was to be rewarded. On May 30, 1996, Rep. Charles Rangel, D-N.Y., the ranking Democrat on the House Ways and Means Committee, wrote a letter of protest to Zimbabwe Ambassador Amos Bernard Muvengwa Midzi: “As I and other members of Congress continue to promote U.S. investments and trade in Africa, I encourage you to reconsider this policy that may effectively discourage investors,” wrote Rangel.

Shortly thereafter, Rep. Benjamin Gilman, R-N.Y., chairman of the House International Relations Committee, and Rep. Ileana Ros-Lehtinen, R-Fla., chair of its subcommittee on Africa, followed up with their own letter of protest to the Zimbabwe ambassador: “A free and open insurance market is a key component to any successful financial system and builds confidence among foreign investors,” they wrote on June 3, 1996. “We believe that the Zimbabwean Government should reconsider this policy and encourage reinvestment instead of disinvestment in its economy.”

Despite such pressure, President Robert Mugabe’s government stood its ground, informing AIG that he would not grant preferential treatment to AIG over other insurance companies wanting to do business in Zimbabwe. It was then that AIG decided to play hardball, turning to its friends on Capitol Hill.

“Based on our experience in this region, this situation is a form of expropriation,” stated one AIG memo dated July 9, 1996. It continued, “After 23 years of investing substantial human and capital resources to build a profitable company, we do not want to be forced to sell our operations and lose management control.”

Only three days later, on July 12, 1996, AIG made a $10,000 donation to an obscure campaign committee called New York Salute 1996, the sponsor of major fund-raising events hosted by D’Amato and New York Gov. George Pataki. The fund-raisers also were attended by then-Republican presidential nominee Bob Dole, whose campaign was co-chaired by D’Amato.

Shortly after making this contribution, AIG executives discussed the Zimbabwe problem with aides to Sen. Mitch McConnell, chairman of the Senate Appropriations Foreign Operations Subcommittee, which oversees the funding of U.S. foreign aid to Zimbabwe. Edmund Lee, AIG’s director of international and corporate affairs, wrote to Robin Cleveland, staff director of the Foreign Operations Subcommittee on July 17, 1996:

“Dear Robin, I want to thank you again for taking time out of your schedule to meet with us yesterday afternoon on an extremely important issue to AIG. Attached for your review and consideration, is draft language of the amendment we discussed during our meeting. It would cap AID funding to Zimbabwe in FY 1997 at $10 million, roughly a 50% cut from 1996 expenditures, unless Zimbabwe waives the localization requirement for U.S. insurance companies.”

In an interview, Cleveland said, “I don’t remember anything about it,” adding, “I don’t know anyone from AIG.” (Both AIG and Lee declined to respond to inquiries from Salon.) Cleveland
insisted that her committee does not accept amendments from corporations and that such amendments are never used in drafting legislation. “I have the same rule I do about having lunch with them,” she said. “It never happens.”

But documents obtained by Salon clearly contradict those claims. They show that AIG’s corporate affairs staff even drafted its own proposed amendment for McConnell and D’Amato. It read:

“To amend H.R. 3540, as reported on June 27, 1996, by the Committee on Appropriations of the United States Senate, by inserting at Title II a new subheading, entitled ‘Zimbabwe’ that reads:

“Of the funds appropriated by this Act, the amount available to Zimbabwe or to support activities in that country shall not exceed $10,000,000 unless and until the government of Zimbabwe has repealed or permanently waived the application of any and all measures requiring the sale of equity in subsidiaries of US financial services companies located in Zimbabwe to nationals of that country.”

In Lee’s letter to Cleveland, he downplayed the impact this aid cut would have on the African country. “It is not our intention to deny humanitarian assistance to Zimbabwe or jeopardize US-Zimbabwe bilateral relations. Under our amendment, AID would still have the ability to finance high-priority humanitarian projects with the remaining $10 million, while Zimbabwe would know it cannot expect more US assistance until such time as it waived the localization requirement. “

But U.S. State Department and Agency for International Development officials were concerned about cutting the level of aid to Zimbabwe, which they had proposed at about $26 million for fiscal year 1997. Zimbabwe has stagnant infant and child mortality rates, and immunization rates have fallen significantly in recent years. The State Department was particularly concerned about the AIDS problem in Zimbabwe:

“USAID is just beginning to play a larger role in helping Zimbabweans face and fight the HIV/AIDS epidemic,” U.S. officials wrote in a confidential “talking points” memo prepared by the State Department for congressional staff. “Over 25% of Zimbabwean adults are now HIV seropositive and AID efforts will help motivate other donors to play supporting roles in fighting an epidemic that is out of control and has global implications.”

Zimbabwe’s skyrocketing incidence of HIV infection is one of the world’s highest. According to a working group of the United Nations and the World Health Organization, 90 percent of the 16,000 new HIV infections worldwide occur in developing countries. Zimbabwe has one of the worst rates: More than a quarter of the adult population is infected with HIV and life expectancy is expected to plummet soon to the 40s.

In the talking points memo, State Department and AID officials praised the USAID assistance program to Zimbabwe as “one of the most impressive on the continent, achieving successes in agricultural markets liberalization, advancing low cost housing development, enhancing wildlife conservation, and decreasing population pressures. Cuts to the program proposed by [the] amendment will have a negative impact on the sectors in which USAID works.” The memo also suggested that “reliance on US diplomatic channels offers a more reasoned approach to solving this problem than cutting US assistance to Zimbabwe which has been beneficial to the US, Zimbabwe and the region as a whole.”

Disregarding the objections of AID and the State Department, congressional sources say, D’Amato played the leading role on behalf of AIG, threatening to insert the amendment restricting aid to Zimbabwe into the final appropriations bill. The government of Zimbabwe received the message. “After the threat of reduction in aid, the government looked at the issue more critically and changed its mind,” says Lloyd Sithole, counsel for the Zimbabwe Embassy in Washington. “Our government later agreed it made sense based on a cost-benefit analysis.”

McConnell acknowledged Zimbabwe’s change of mind on the Senate floor on July 25, 1996. “We congratulate the government of Zimbabwe for its constructive actions and hope there will be no further need for this committee to review this matter nor contemplate action to remedy complaints by U.S. citizens,” he said in a floor speech. In this case, of course, the “citizens” were big-time contributors to political war chests.

Sithole defends Zimbabwe’s change of mind, but added, “When Congress pushes our government directly, it tends to instill a sense of urgency. American companies are very effective at pushing their representatives.” Sithole acknowledges that a greater than 50 percent cut in aid to Zimbabwe would have had drastic repercussions. “It would have had a very serious impact on women and children and AIDs,” he says. “The threat worked.”

USAID officials agree such a reduction would have had dire consequences. “Certainly a 50 percent cut in funding would have reduced the impact and reduced the effectiveness of these programs,” says Maureen Dugan, deputy director of AID’s Office of Southern Africa Affairs. “The AIDS problem in Zimbabwe is enormous and one of the fastest growing in the world.”

Others in the AIDS community say U.S. assistance is crucial to countries battling HIV infection. “We need to do more, not less, to support programs in African countries, especially in places like Zimbabwe,” says Daniel Zingale, executive director of AIDS Action in Washington. “We can’t just fight AIDS within our own borders.”

D’Amato’s office has not returned repeated phone calls from Salon about this matter. When Time magazine disclosed portions of this story in the fall of 1996, a D’Amato spokeswoman told the publication he was proud to have assisted a New York company “unfairly treated by a foreign country.” Les Munson, a legislative aide to Rep. Gilman’s International Relations Committee, said “I’m not going to help you with this story,” and then abruptly hung up on a Salon reporter.

But Jeanean Mann, a retired State Department legislative officer, remembers when D’Amato raised the threat of cutting aid to Zimbabwe. “The State Department and AID agreed the funding shouldn’t be cut,” she says. “The issue wasn’t that clear-cut.” Mann adds that the State Department never took it that seriously since the Zimbabwe government backed down anyway. These kinds of political tactics “are more common than we like,” she says. “But the threat occurs more often than the fact.”

For D’Amato and his political allies, the political threats had their intended effect. Fortunately, say AIDS experts, they were never put to the test.

When the nation’s largest and most influential gay rights organization, the Human Rights Campaign (HRC), last week endorsed Sen. Alfonse D’Amato, R-N.Y., in New York’s closely contested Senate race, it stunned the gay rights community. It also led one HRC board member, Marylouise Oates, to resign in protest, citing Sen. D’Amato’s “long record of hostility and indifference to women’s issues and to the fundamental issues of civil rights to African-Americans and other minorities.”

But HRC officials didn’t know the whole story about D’Amato’s record on AIDS. Salon has uncovered new details about the New York senator’s role in carrying water for a major corporate campaign contributor, a maneuver that jeopardized thousands of AIDS victims in Zimbabwe, a country that suffers from one of the world’s worst HIV infection rates. At the behest of the New York-based multinational insurance conglomerate the American International Group (AIG), D’Amato threatened to introduce an amendment to the Senate foreign operations appropriations bill in 1996 that would have dramatically reduced U.S. aid for Zimbabwe, over a dispute between the Zimbabwe government and an AIG subsidiary. Both the State Department and the Agency for International Development (AID) opposed D’Amato’s move. The tale is described in confidential AIG documents.

In the spring of 1996, AIG executives were concerned that its subsidiary in Zimbabwe, Unity Insurance Co., would be forced to sell a majority of its stake to local owners if it wanted to continue to do business there. AIG, which is one of the top 100 political party contributors in the United States, turned to its influential friends in Washington to press the Zimbabwean government to drop its plan. According to the Center for Responsive Politics, AIG, its subsidiaries and its officers gave nearly $160,000 to Republican and Democratic candidates during the 1995-96 election cycle, as well as $428,000 in so-called soft money contributions to both parties. In January 1996, AIG gave $25,000 to the Republican Senatorial Campaign Committee, which D’Amato chaired. The New York senator also has received more than $20,000 in PAC and individual contributions from AIG since 1991.

AIG’s largesse was to be rewarded. On May 30, 1996, Rep. Charles Rangel, D-N.Y., the ranking Democrat on the House Ways and Means Committee, wrote a letter of protest to Zimbabwe Ambassador Amos Bernard Muvengwa Midzi: “As I and other members of Congress continue to promote U.S. investments and trade in Africa, I encourage you to reconsider this policy that may effectively discourage investors,” wrote Rangel.

Shortly thereafter, Rep. Benjamin Gilman, R-N.Y., chairman of the House International Relations Committee, and Rep. Ileana Ros-Lehtinen, R-Fla., chair of its subcommittee on Africa, followed up with their own letter of protest to the Zimbabwe ambassador: “A free and open insurance market is a key component to any successful financial system and builds confidence among foreign investors,” they wrote on June 3, 1996. “We believe that the Zimbabwean Government should reconsider this policy and encourage reinvestment instead of disinvestment in its economy.”

Despite such pressure, President Robert Mugabe’s government stood its ground, informing AIG that he would not grant preferential treatment to AIG over other insurance companies wanting to do business in Zimbabwe. It was then that AIG decided to play hardball, turning to its friends on Capitol Hill.

“Based on our experience in this region, this situation is a form of expropriation,” stated one AIG memo dated July 9, 1996. It continued, “After 23 years of investing substantial human and capital resources to build a profitable company, we do not want to be forced to sell our operations and lose management control.”

Only three days later, on July 12, 1996, AIG made a $10,000 donation to an obscure campaign committee called New York Salute 1996, the sponsor of major fund-raising events hosted by D’Amato and New York Gov. George Pataki. The fund-raisers also were attended by then-Republican presidential nominee Bob Dole, whose campaign was co-chaired by D’Amato.

Shortly after making this contribution, AIG executives discussed the Zimbabwe problem with aides to Sen. Mitch McConnell, chairman of the Senate Appropriations Foreign Operations Subcommittee, which oversees the funding of U.S. foreign aid to Zimbabwe. Edmund Lee, AIG’s director of international and corporate affairs, wrote to Robin Cleveland, staff director of the Foreign Operations Subcommittee on July 17, 1996:

“Dear Robin, I want to thank you again for taking time out of your schedule to meet with us yesterday afternoon on an extremely important issue to AIG. Attached for your review and consideration, is draft language of the amendment we discussed during our meeting. It would cap AID funding to Zimbabwe in FY 1997 at $10 million, roughly a 50% cut from 1996 expenditures, unless Zimbabwe waives the localization requirement for U.S. insurance companies.”

In an interview, Cleveland said, “I don’t remember anything about it,” adding, “I don’t know anyone from AIG.” (Both AIG and Lee declined to respond to inquiries from Salon.) Cleveland
insisted that her committee does not accept amendments from corporations and that such amendments are never used in drafting legislation. “I have the same rule I do about having lunch with them,” she said. “It never happens.”

But documents obtained by Salon clearly contradict those claims. They show that AIG’s corporate affairs staff even drafted its own proposed amendment for McConnell and D’Amato. It read:

“To amend H.R. 3540, as reported on June 27, 1996, by the Committee on Appropriations of the United States Senate, by inserting at Title II a new subheading, entitled ‘Zimbabwe’ that reads:

“Of the funds appropriated by this Act, the amount available to Zimbabwe or to support activities in that country shall not exceed $10,000,000 unless and until the government of Zimbabwe has repealed or permanently waived the application of any and all measures requiring the sale of equity in subsidiaries of US financial services companies located in Zimbabwe to nationals of that country.”

In Lee’s letter to Cleveland, he downplayed the impact this aid cut would have on the African country. “It is not our intention to deny humanitarian assistance to Zimbabwe or jeopardize US-Zimbabwe bilateral relations. Under our amendment, AID would still have the ability to finance high-priority humanitarian projects with the remaining $10 million, while Zimbabwe would know it cannot expect more US assistance until such time as it waived the localization requirement. “

But U.S. State Department and Agency for International Development officials were concerned about cutting the level of aid to Zimbabwe, which they had proposed at about $26 million for fiscal year 1997. Zimbabwe has stagnant infant and child mortality rates, and immunization rates have fallen significantly in recent years. The State Department was particularly concerned about the AIDS problem in Zimbabwe:

“USAID is just beginning to play a larger role in helping Zimbabweans face and fight the HIV/AIDS epidemic,” U.S. officials wrote in a confidential “talking points” memo prepared by the State Department for congressional staff. “Over 25% of Zimbabwean adults are now HIV seropositive and AID efforts will help motivate other donors to play supporting roles in fighting an epidemic that is out of control and has global implications.”

Zimbabwe’s skyrocketing incidence of HIV infection is one of the world’s highest. According to a working group of the United Nations and the World Health Organization, 90 percent of the 16,000 new HIV infections worldwide occur in developing countries. Zimbabwe has one of the worst rates: More than a quarter of the adult population is infected with HIV and life expectancy is expected to plummet soon to the 40s.

In the talking points memo, State Department and AID officials praised the USAID assistance program to Zimbabwe as “one of the most impressive on the continent, achieving successes in agricultural markets liberalization, advancing low cost housing development, enhancing wildlife conservation, and decreasing population pressures. Cuts to the program proposed by [the] amendment will have a negative impact on the sectors in which USAID works.” The memo also suggested that “reliance on US diplomatic channels offers a more reasoned approach to solving this problem than cutting US assistance to Zimbabwe which has been beneficial to the US, Zimbabwe and the region as a whole.”

Disregarding the objections of AID and the State Department, congressional sources say, D’Amato played the leading role on behalf of AIG, threatening to insert the amendment restricting aid to Zimbabwe into the final appropriations bill. The government of Zimbabwe received the message. “After the threat of reduction in aid, the government looked at the issue more critically and changed its mind,” says Lloyd Sithole, counsel for the Zimbabwe Embassy in Washington. “Our government later agreed it made sense based on a cost-benefit analysis.”

McConnell acknowledged Zimbabwe’s change of mind on the Senate floor on July 25, 1996. “We congratulate the government of Zimbabwe for its constructive actions and hope there will be no further need for this committee to review this matter nor contemplate action to remedy complaints by U.S. citizens,” he said in a floor speech. In this case, of course, the “citizens” were big-time contributors to political war chests.

Sithole defends Zimbabwe’s change of mind, but added, “When Congress pushes our government directly, it tends to instill a sense of urgency. American companies are very effective at pushing their representatives.” Sithole acknowledges that a greater than 50 percent cut in aid to Zimbabwe would have had drastic repercussions. “It would have had a very serious impact on women and children and AIDs,” he says. “The threat worked.”

USAID officials agree such a reduction would have had dire consequences. “Certainly a 50 percent cut in funding would have reduced the impact and reduced the effectiveness of these programs,” says Maureen Dugan, deputy director of AID’s Office of Southern Africa Affairs. “The AIDS problem in Zimbabwe is enormous and one of the fastest growing in the world.”

Others in the AIDS community say U.S. assistance is crucial to countries battling HIV infection. “We need to do more, not less, to support programs in African countries, especially in places like Zimbabwe,” says Daniel Zingale, executive director of AIDS Action in Washington. “We can’t just fight AIDS within our own borders.”

D’Amato’s office has not returned repeated phone calls from Salon about this matter. When Time magazine disclosed portions of this story in the fall of 1996, a D’Amato spokeswoman told the publication he was proud to have assisted a New York company “unfairly treated by a foreign country.” Les Munson, a legislative aide to Rep. Gilman’s International Relations Committee, said “I’m not going to help you with this story,” and then abruptly hung up on a Salon reporter.

But Jeanean Mann, a retired State Department legislative officer, remembers when D’Amato raised the threat of cutting aid to Zimbabwe. “The State Department and AID agreed the funding shouldn’t be cut,” she says. “The issue wasn’t that clear-cut.” Mann adds that the State Department never took it that seriously since the Zimbabwe government backed down anyway. These kinds of political tactics “are more common than we like,” she says. “But the threat occurs more often than the fact.”

For D’Amato and his political allies, the political threats had their intended effect. Fortunately, say AIDS experts, they were never put to the test.

Murray Waas is a frequent contributor to Salon.

William Kistner is a freelance journalist in Washington, D.C.

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