Did firm reward Kerry for legislative help? Insurer donated after Kerry kept loophole open

WASHINGTON -- A Senate colleague was trying to close a loophole that allowed a major insurer to divert millions of federal dollars from the nation's most expensive construction project. John Kerry stepped in and blocked the legislation.

Over the next two years, the insurer, American International Group, paid Kerry's way on a trip to Vermont and donated at least $30,000 to a tax-exempt group Kerry used to set up his presidential campaign. Company executives donated $18,000 to his Senate and presidential campaigns.

But to some government watchdogs, the tale of the Massachusetts senator's 2000 intervention, detailed in documents obtained by the Associated Press, is a textbook case of the special-interest politicking that Kerry rails against on the presidential campaign trail.

"The idea that Kerry has not helped or benefited from a specific special interest, which he has said, is utterly absurd," said Charles Lewis, head of the Center for Public Integrity, which just published a book on political donations to the presidential candidates.

"Anyone who gets millions of dollars over time, and thousands of dollars from specific donors, knows there's a symbiotic relationship. He needs the donors' money. The donors need favors. Welcome to Washington. That is how it works."

The documents obtained by the AP provide a window on Kerry's involvement in a two-decade-old highway and tunnel construction project in his home state of Massachusetts. Known as the "Big Dig," it had become infamous for its multibillion-dollar cost overruns.

Kerry's office confirmed yesterday that as a member of the Senate Commerce Committee, he persuaded committee Chairman John McCain (R-Ariz.) to drop a provision that would have stripped $150 million from the project and ended the insurance funding loophole.

The Massachusetts Democrat actually was angered by the loophole but didn't want money stripped from the project because it would hurt his constituents who needed the Boston project finished, spokeswoman Stephanie Cutter said.

Instead of McCain's bluntly worded legislation, Kerry asked for a committee hearing in May 2000. Kerry thanked McCain at the start of the hearing for dropping his legislation and an AIG executive was permitted to testify that he believed the company's work for the Big Dig was a good thing even though it was criticized by federal auditors.

Asked why Kerry would subsequently accept a trip and money from AIG in 2001 and 2002 if he was angered by the investment scheme, Cutter replied: "Any contributions AIG made to the senator's campaign came years after the investigation. Throughout his career, John Kerry has stood up to special interests on behalf of average Americans. This case is no different."

The New York-based insurer, one of the world's largest, declined to comment on its donations to Kerry, simply stating: "AIG never requested any assistance from Sen. Kerry concerning the insurance we provided the Big Dig."

The project has become a symbol of government contracting gone awry, known for cost overruns that now total several billion dollars, and its admissions of mismanagement.

During the 1990s, Sens. Kerry and Edward Kennedy (D-Mass.) helped win new federal funding for the project as its costs skyrocketed and threatened to burden the state's government. In 1998, Kerry was credited with winning $100 million in new federal funding.

But in 1999, the Transportation Department uncovered a financing scheme in which the project had overpaid $129.8 million to AIG for worker compensation and liability insurance that wasn't needed, then had allowed the insurer to keep the money in a trust and invest it in the market. The government alleged AIG kept about half of the profits it made from the investments, providing the other half to the project.

Outraged by the revelations, McCain submitted legislation that would have stripped $150 million from the Big Dig and banned the practice of allowing an insurer to invest and profit from excessive premiums paid with government money.

"Any refunds of insurance premiums or reserve amounts, including interest, that exceed a project's liabilities shall be immediately returned to the federal government," McCain's legislation declared.

But Kerry and Kennedy intervened, and McCain withdrew the legislation in 2000 in favor of the hearing.

In September 2001, Kerry disclosed to the Senate ethics office that AIG had paid an estimated $540 in travel expenses to cover his costs for a speech in Burlington, Vt.

A few months later, in December 2001, several AIG executives gave maximum $1,000 donations to Kerry's Senate campaign on the same day. The donations totaled $9,700 and were followed by several thousand dollars more over the next two years.

The next spring, AIG donated $10,000 to a new tax-exempt group Kerry formed, the Citizen Soldier Fund, to lay groundwork for his presidential campaign. Later in 2002, AIG gave two more donations of $10,000 each to the same group, making it one of the largest corporate donors to Kerry's group.

The insurer wasn't the only company connected to the Big Dig to donate to Kerry's new group. Two construction companies on the project -- Modern Continental Group and Jay Cashman Construction -- each donated $25,000, IRS records show.

Rep. James McGovern (D- Mass.), a Boston area lawmaker, credited Kerry for getting McCain's legislation blocked in favor of a hearing, saying Massachusetts lawmakers "were on the side of good government here but also concerned the language might go too far and put more of a burden on a Massachusetts project."

At 64, one of the richest women in the country, Heinz Kerry is not your standard-issue political spouse. She has called campaigns ''the graveyard of real ideas and the birthplace of empty promises'' and once described the prospect of being first lady as ''worse than going to a Carmelite convent.''

(she has her own chief of staff)

''I have to figure out and [campaign staffers] have to tell me initially what it is they feel comfortable with,'' Heinz Kerry says of her role in the campaign. ''And if I think it is too handicapping of being myself, I'd rather not go certain places or talk about certain things because then I'll be phony, and I can't be phony. The last thing I want is someone to say, `You blew it for John.' ''

Born Maria Teresa Thierstein Simoes Ferreira in the former Portuguese colony of Mozambique, Heinz Kerry is ebullient where her husband is stiff, dramatic where he is reserved. The mother of three adult sons, she coos over her first granddaughter, nurtures yellow and white orchids in her plush Beacon Hill living room, distributes herbal treatments to staffers and friends alike.

''She is not a conventional person,'' explains Frank Gannon, Heinz Kerry's speechwriter and a former speechwriter for Richard Nixon. ''She is not so much a loose cannon as she is mobile heavy artillery. She is very deliberate in what she says.''

Five years older than Kerry, she is a smallish rounded figure whom one Boston writer describes as ''the sexiest 60-year-old I've ever seen.'' She hikes in Sun Valley, exercises regularly at Pilates studios in Washington, D.C., and Boston, and speaks a melodic English heavily flavored by her native Portuguese. She favors Hermes and Chanel, yet has been known to wear the same jacket two days in a row. She wears just a hint of makeup on her freckled skin.

She does not live small.

There are five residences: the Heinz family farm in Pittsburgh, homes in Nantucket, Georgetown, and Beacon Hill, and a ski retreat in Idaho -- a 15th-century barn that she and Heinz had imported from England and then reassembled. There is a combined domestic staff of more than half a dozen people and a private 10-seat Gulfstream jet.

There is also a Heinz ''family office'' in Pittsburgh and Washington that manages her personal philanthropic work and the properties and personal matters for Heinz Kerry and her sons, Christopher, Andre, and John IV. (They declined to be interviewed for this story; so did Vanessa and Alex Kerry, John Kerry's daughters from a previous marriage.) The offices have about 23 people, two of whom do nothing but pay bills. Roughly half of them worked for Heinz, one of the most popular politicians in Pennsylvania, and they seem almost as devoted to his widow as she was to him.

Although she works largely from her Georgetown home, she is closely involved in the development of many of the undertakings spawned by her mini-empire and can talk in arcane detail and often does. She is an ardent environmentalist as well as a keen supporter of the arts, both interests she shared with John the First. She is generally credited with revamping the endowments to make them more results-oriented and takes a personal interest in the recipients of the annual Heinz Awards -- five $250,000 grants, given to leaders in their fields, that she created in her late husband's memory.

And when she shows up in the lemon-colored corridors of her Washington office or at the Pittsburgh headquarters, gold-rimmed glasses perched on her nose, she invariably has a lot of questions.

''I think my greatest virtue is that . . . I ask a lot of questions,'' declares Heinz Kerry. ''Questions I don't have answers for sometimes. And I think one of the biggest missing things in our society today is a value of questioning, a Socratic discussion of the roundtable. I do that for people. Nobody has to tell me I am good or bad at it. I know I do that. Because when I speak, they shut up. It is dead quiet. Then it is questions, questions, questions.''

It is a trait that was not particularly in vogue in 1950s Mozambique, where the dictatorship silenced virtually all public political discussion. The daughter of a prominent Portuguese doctor, Heinz Kerry was raised a proper girl in prosperous colonial surroundings, the second of three children.

Although she sometimes accompanied her father on his rounds, she was largely isolated from the native population, not to mention the turbulent events of the time. At 13 she traveled to Durban, South Africa, to attend boarding school and recalls with a giggle ''these wonderful African guys, big guys, you know. Our guys weren't so black and so big. In the south of Mozambique there was a different tribe. I thought all this was like some of the films I had seen.''

Four years later she married John Heinz and took up residence on the Heinz's 90-acre Pittsburgh farm, a lavish estate with luxurious gardens and walls heavy with artwork of the masters. Despite its beauty, the house was an isolated place for a young pregnant wife in a new country.

Teresa Heinz, according to Martz, campaigned well for her husband and won people over quickly. But even then, her outspokenness generated smoke. In an interview with The Washington Post, just days after Heinz was elected to his first term in Congress in 1971, Teresa Heinz declared, ''Ted Kennedy I don't trust, like I don't trust Nixon, although I think Nixon's done a helluva lot better than I thought he would.'' The remark did not sit well with the White House, and John Heinz, according to some political veterans, suffered the consequences.

Today, Heinz Kerry says Nixon was ''one of our greatest presidents,'' although she personally did not trust him. As for her remark about Kennedy, Heinz Kerry says it was in reference to what she felt was his poor treatment of his former wife, Joan, who is her friend. Heinz Kerry says she ''felt badly for [Joan]. And so I spoke my heart about that and not my knowledge of him back then. I regret I said that, because I was talking about [personal] feelings.''

When Heinz considered running for the White House, she declared he would do so ''over my dead body.'' When Kerry started talking about it last year, she said the same thing and a little more.

She strategizes with Kerry daily. She has switched party registration, declaring that Republicans have grown too intolerant. Heinz Kerry, who when marrying Kerry was adamant that she would not change her name, has even started using Kerry's name, although she does not intend to legally change hers. But for a woman who has lived close to the political fires for three decades, and who has seen many of them go out, it is still just another race.

''Washington,'' she says, ''is not quite the bellybutton of the world.''

“The United States must . . . bring itself to understand that the policy of intervention”—against Communism—“that was right for Western Europe does not and cannot find the same application to the rest of the world.”

Kerry went on:

In most emerging nations, the spectre of imperialist capitalism stirs as much fear and hatred as that of communism. To compound the problem, we continue to push forward our will only as we see it and in a fashion that only leads to more mistakes and deeper commitment. Where we should have instructed, it seems we did not; where we should have been patient, it seems we were not; where we should have stayed clear, it seems we would not. . . . Never in the last twenty years has the government of the United States been as isolated as it is today.

There is, nonetheless, something slightly off-putting about the speech. The portentous quality, the hijacking of Kennedyesque tics and switchbacks (“Where we should have instructed . . .”), the absence of irony, the absence of any sort of joy—all these rankle, and in a familiar way. This has been the knock against John Kerry for the past thirty years, ever since he captured the nation’s attention as the spokesman for Vietnam Veterans Against the War, a group whose members staged a dramatic protest in Washington in April of 1971, camping out on the Mall and tossing their medals and combat ribbons onto the Capitol steps.

He seemed the world’s oldest twenty-seven-year-old that week, even though he was dressed in scruffy combat fatigues, his extravagant thatch of black hair gleaming, flopping over his ears and eyebrows—he looked a bit like the pre-hallucinogenic George Harrison. Kerry spoke to the Senate Foreign Relations Committee in much the same style as he’d spoken at Yale.

Even as Kerry delivered his Senate testimony, he distorted his natural speech to sound more like that earlier J.F.K.; for example, he occasionally “ahsked” questions. (Kerry had befriended Robert F. Kennedy’s speechwriter Adam Walinsky and consulted him about the speech, bouncing phrases and ideas off the old master.)

This sort of thing had been a source of merriment for his classmates ever since prep school, where the joke was that his initials really stood for “Just For Kerry.” He had volunteered to work on Edward Kennedy’s 1962 Senate campaign, had dated Janet Auchincloss, who was Jacqueline Kennedy’s half sister, had hung out at Hammersmith Farm, the Auchincloss family’s estate in Newport, and had gone sailing with the President.

William Bulger, a state senator from South Boston and the dean of that city’s clever politicians, nicknamed Kerry Live Shot, for his homing instinct when it came to television cameras. Indeed, Kerry’s every move—the fact that he tossed his combat ribbons, not his medals, onto the Capitol steps; the fact that he had corrective jaw surgery (to fix a clicking sound, which had been compounded by a hockey injury);

Martin Nolan, a recently retired member of the Boston Globe’s mostly Irish and extremely raucous stable of political writers, says. “He was an empty suit, he was Live Shot, he never passed a mirror without saying hello.”

There isn’t an excessive use of the pronoun ‘I.’ says Bob Kerrey.

That Kerry is a Massachusetts liberal does not recommend him highly, either: the last three such candidates were Ted Kennedy, Paul Tsongas, and Michael Dukakis, and the latter’s campaign has become shorthand for the disastrously effete, National Public Radio tendencies of the Democratic Party. Kerry has consistently voted for gun control, for abortion rights, and for environmental protection, and has opposed the death penalty; he has voted with Kennedy about ninety-six per cent of the time.

Today's PageSix column in the NY Post reports:

DEMOCRATIC presidential front-runner John Kerry and Richard M. Nixon have something in common - Sen. Kerry's political history is scarred by its own version of Watergate.

During Kerry's 1972 bid for Congress, his younger brother, Cameron Kerry, was arrested for "breaking into . . . the headquarters of a Kerry opponent," the New York Times reported on Sept. 19 of that year. Kerry's headquarters were in the same building in Lowell, Mass.

Cameron Kerry and another campaign worker pleaded not guilty to charges of "breaking and entering with the intent to commit grand larceny."

John Kerry characterized the break-in as a preemptive strike and told the Times the two men "entered the building after receiving an anonymous telephone threat . . . that the telephone lines at his [own] headquarters were to be sabotaged."

Cameron, now a partner in a Boston-based law firm, has been a key supporter of all of his brother's campaigns.

According to the Center for Public Integrity, Kerry-the-younger's law firm "has been the biggest financial backer of the Massachusetts Democrat's two decades-long political career in elected office, with its employees contributing nearly $187,000 to various Kerry races, including his current presidential campaign."

Meanwhile, State Attorney General Eliot Spitzer might want to rethink his support for Kerry, considering the records being circulated by Howard Dean's campaign.

Spitzer, who endorsed Kerry earlier this week for the nomination, has crusaded against financial shenanigans on Wall Street. And some of his investigations have targeted the same firms that made big contributions to the Kerry campaign.

Citigroup, which gave Kerry $71,500, paid $400 million in penalties as part of a settlement with regulators. Goldman Sachs, which gave Kerry $62,600, and Morgan Stanley, which gave him $40,000, were party to a $1.4 billion settlement with Spitzer over charges that their analysts gave investors bad advice to win investment banking business. FleetBoston Financial, which gave $32,050, suspended a trader last April when the New York Stock Exchange launched a probe.

One Democrat wonders: "Did Spitzer know the connections between Kerry and the financial companies he investigates?"

At a time when 50,000 U.S. servicemen had already died on the battlefields of Vietnam, Fonda sided with the communists, making radio broadcasts from Hanoi designed to break the morale of U.S. fighting forces while encouraging the North Vietnamese to fight harder and kill more Americans. Fonda's Hanoi radio broadcasts and propaganda films were especially painful and damaging to American servicemen held as prisoners of war by the Hanoi Reds. Communist interrogators used the Fonda recordings, along with starvation and torture in attempting to brainwash American POWs into becoming turncoats.

Upon returning to the United States, Fonda told the world press that U.S. prisoners of war were being well treated and not tortured. Her outrageous claims were later exposed when American POWs were finally freed and told of years of agonizing tortures and inhuman treatment. Fonda responded, not with an apology, but with an accusation calling our returned POWs "liars and hypocrites." Fonda's actions stirred up a firestorm in America, prompting nationwide demands that she be tried for treason.

David Hoffman, a former POW who was shot down over North Vietnam in 1971, said that he had been tortured because of Fonda's visit to Hanoi. "The torture resulted in a permanent injury that plagues me to this day," says Hoffman, who suffers a disfigured arm inflicted by brutal communist guards at the POW camp known as the "Zoo."

SNIP

In late January, 1973, Fonda divorced her husband and three days later married pro-communist radical leader Tom Hayden, who had founded the revolutionary Students For Democratic Society in 1962 and was a defendant in the conspiracy trial of the "Chicago Seven."

In 1975, after North Vietnam violated the 1973 "Peace Agreement" resulting in the takeover of South Vietnam, Cambodia and Laos, Hayden greeted the news by saying "I see this as a result of something we have been working toward for a long time." That "we" includes Fonda of course.

Another infamous deed of Fonda is the naming of her son, Troy. Fonda returned to Vietnam shortly after the war ended in 1975, with her small son, to attend a special service being held in her honor. Fonda was still a recognized idol and hero to the Communist regime from her earlier years of sending money, food and moral support to the North Vietnamese.

But the ceremony, it turned out, was not just to recognize and honor Fonda for her love of the Communists. Her newborn son was formally christened and named for the Communist hero Nguyen Van Troi. Troi was a Viet Cong sapper who was executed by the South Vietnamese in 1963 for attempting to assassinate U.S. Secretary of Defense Robert McNamara.

Immediately after the christening ceremony, the baby developed a serious case of bronchitis, according to reports. The Vietnamese and Fonda panicked and called for a Russian doctor. The child was treated and Fonda and her child returned to the United States.

As a result of the communist takeover of South Vietnam, Fonda's friends in Hanoi turned all of Vietnam into a communist Gulag of slave labor camps with police-state oppression and no freedom of speech, press and worship. Millions of Vietnamese were forced to flee their country and turned into homeless "boat people."

Years later, Fonda was invited by NASA as V.I.P. to witness the first space shuttle launching. Apparently, one source said, NASA and its officials felt little or no threat from Fonda's taste for Red Government.

In late 1987, when it became known that Fonda planned to film her new movie "Stanley & Iris," in Waterbury, Conn., there was a huge backlash from local veterans. Veterans held rallies, promising violent demonstrations if the filming began. Many bumper stickers reading "I'M NOT FONDA HANOI JANE," begin appearing throughout the community. On June 18, 1988, Fonda flew to Waterbury in an attempt to pacify the veterans. She met with them for four hours. Fonda later recalled "I told them my story - why I was antiwar and why I had gone to Vietnam."

A few weeks later Fonda appeared on TV with Barbara Walters and apologized saying: "I'm very sorry for some of what I did...I'd like to say something not just to the veterans in Waterbury but to the men in Vietnam who I hurt, or whose pain I caused to deepen because of the things I said or did. I feel I owe them an apology...There were times when I was thoughtless and careless...I'm very sorry that I hurt them."

The vets did not buy it.

They said Fonda, an award winning actress, was faking an apology because veterans were protesting against her all over the country. As a result of the protest, the vet said, her movies were doing badly and she had been removed from Nabisco Shredded Wheat boxes.

The vets said "no apology will ever erase the pictures of Jane Fonda in giggly bliss, laughing and clapping her hands, as she mounted the gunner's seat of a communist Vietnamese anti-aircraft gun." Bui Tin, a former high ranking Vietnam Communist Party official and North Vietnamese Army colonel who served on the North Vietnamese Army general staff during the war, became disillusioned with communism after the war and went into exile in Paris and the United States. He testified in 1991 before the Senate Select Committee on POW/MIA Affairs about his knowledge of U.S. prisoners of war.

SNIP

When Fonda appeared at a press conference in Hanoi wearing a red Vietnamese dress and declared she was "ashamed of American actions" in the war and that she would struggle along with the communists, "we were elated," Bui Tin said.

He said the American antiwar movement was "essential" to the North Vietnamese strategy for victory. "I'd say a lot of American boys lost their lives because of the encouragement she gave the North Vietnamese," said a former rifle platoon leader from Texas.

In December of 1991, Hanoi Jane, the once fiery communist activist, who advocated violent revolution to overthrow America's democracy and the free enterprise system, married billionaire Ted Turner, a leading American capitalist and chairman of the Atlanta based Turner Broadcasting System Inc., the parent company of Cable News Network.

Today, the communist architects of Ho Chi Minh's brutal war against democracy, freedom and capitalism, which resulted in the deaths of over 3 million North and South Vietnamese, and 58,000 American servicemen, are now "best friends" with Western bankers and capitalist businessmen. They are even traveling the world appealing to foreign investors to bring more big business and money back to Vietnam, so like Hanoi Jane, they too can be rich.

A veteran summed it up: "It is a shame that some of those who fought so well for America can be treated as 'forgotten ghosts' and left to rot as POWs in Hanoi's prisons, while those like Fonda, who so passionately supported our enemy and condemned our system of government, are now overwhelmingly blessed by its wealth."

Hanoi Jane: Yesterday's Fiery Communist Revolutionary
She's today's very rich capitalist

John Kerry's fellow Hanoi activist, Jane Fonda, traveled to North Vietnam in 1972 where she visited that country's anti aircraft emplacements. Pictured right, Fonda cheered the spirits of communists gunners by wearing a gunners steel helmet and peeping thru the gunsight, "looking for one of those blue eyed murderers."

October-December 1996 Issue
By Ted Sampley
U.S. Veteran Dispatch

When Jane Fonda traded in her Ho Chi Minh sandals and Viet Cong pajamas for a pair of tights and a leotard, most Americans quickly forgot how the illustrious star of stage and screen had only a few years earlier been one of communist Vietnam's most loyal and fiery supporters. Fonda's involvement with the Vietnam War began in 1967, after several visits with French Communists and underground revolutionaries in this country convinced her America was the bastard nation of the world.

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