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."

In 1991, the United States Senate created the Senate Select Committee on POW/MIA Affairs to examine the possibility that U.S. POW/MIAs might still be held by the Vietnamese.
As chairman of the Select Committee, Kerry proved himself to be a masterful chameleon portraying to the public at large what appeared to be an unbiased approach to resolving the POW/MIA issue.

But, in reality, no one in the United States Senate pushed harder to bury the POW/MIA issue, the last obstacle preventing normalization of relations with Hanoi, than John Forbes Kerry.

In fact, his first act as chairman was to travel to Southeast Asia, where during a stopover in Bangkok, Thailand, he lectured the U.S. Chamber of Commerce there on the importance of lifting the trade embargo and normalizing relations with Vietnam.

During the entire life of the Senate Select Committee, Kerry never missed a chance to propaganderize and distort the facts in favor of Hanoi.

In December of 1992, not long after Kerry was quoted in the world press stating "President Bush should reward Vietnam within a month for its increased cooperation in accounting for American MIAs," Vietnam announced it had granted Boston, Massachusetts based Colliers International, a contract worth billions.

Colliers International became exclusive real estate agent representing Vietnam.

That deal alone put Colliers in a position to make tens of millions of dollars on the rush to upgrade Vietnam's ports, railroads, highways, government buildings, etc.

In a Nov. 21, 1993 column, Schanberg wrote, "Highly credible information has been surfacing in recent days which indicates that the headlines you have been reading about a 'breakthrough' in Hanoi's cooperation on the POW/MIA issue are part of a carefully scripted performance. The apparent purpose is to move toward normalization of relations with Hanoi.

"Sen. John F. Kerry, chairman of the Senate Select Committee on POW/MIA Affairs, is one of the key figures pushing for normalization. Kerry is currently on a visit to Vietnam where he has been doing two things: (1) praising the Vietnamese effusively for granting access to their war archives and (2) telling the press that there's no believable evidence to back up the stories of live POWs still being held. "Ironically, that very kind of live-POW evidence has been brought to Kerry's own committee on a regular basis over the past year, and he has repeatedly sought to impeach its value.

Moreover, Kerry and his allies on the committee - such as Sens. John McCain, Nancy Kassebaum and Tom Daschle - have worked to block much of this evidence from being made public."

In the Senate debate itself, Kerry, rather than embarass Vietnam by demanding the truth, launched a highly publicized diversionary investigation of the POW/MIA families and activists, who were demanding an honest accounting.

Kerry labeled them "professional malcontents, conspiracy mongers, con artists, and dime-store Rambos" who were only involved in the POW/MIA issue for money.

Pictured right, Sen. John Kerry in Hanoi seated under a bust of Communist Vietnam's deceased leader, Ho Chi Minh.

The Senate Select Committee on POW/MIA Affairs published in its January 1993 Final Report (page 6) that American servicemen were left behind alive and in captivity.

Kerry's Select Committee staff, in order to soft pedal this abandonment, added in the report "We acknowledge that there is no proof that U.S. POWs survived."

Kerry's "no proof" assertion, was an outright lie. It was an effort by Kerry's pro-Hanoi staff to bury our POW/MIA's and further open the doors to trade with Vietnam.

Kerry maintained there was "no proof U.S. POWs survived," but never produced evidence proving the left behind POWs were dead, or who was responsible for their deaths or where their remains were located.

Kerry never demanded that Vietnam explain.

2003 Kerry stopped Vietnam Human Rights Act

Montagnard Christians forced to drink a mixture of
goat's blood and alcohol and renounce Christianity.

By Former Vietnam POW Mike Benge

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