Democratic gubernatorial nominee Henry E. Howell said today that 27 per cent of his opponents's compaign contributions over $100 come from people in a circle of "interlocking economic interest," many of which are linked to the Virginia Electric and Power Co.
Howell charged today that "these large and powerful corporate interests" see his election as a threat. "Through the years (they) have dominated the lobbying processes of this state. During many decades (these interlocking economic interests) had a strong impact on the (utility) regulatory decisions that affect all Virginians." Howell said.
A continuing thread through Howell's more than 30-year legal and political career in Virginia has been his opposition to "the big boys" who propose rate increases and surcharges for customers of Vepco, which he refers to as the "very expensive power company."
Howell's opponent, Republican John N. Dalton, responded to the charges today by saying "his conspiracy theory is ridiculous. Mr. Howell is obviously getting desprate as he sees his lead slopping away."
At a news conference here today, Howell released 17 pages of material prepared by a research staff of five during the past seven weeks to buttress his charge.
"Economic power is being marshaled like it's never been marshaled before to stop Henry" he said.
He charged that at least 19 of the 32 banks whose board members gave money to Dalton have a direct relationship with Vepco. In addition, other members of the same bank boards work for Vepco's law firm, investment firms or the engineering consultant firm that has done $17 million in business with Vepco in the last five years.
Specifically, Howell said that 151 of Dalton's contributors who gave a combined total of $180,931 are either on a bank board or work for Wheat First Securities, the Whitney Stone engineering consulting firm or for the Hunton and Williams law firm. Four of Dalton's contributors of more than $100 are Vepco board members or officers.
Dalton reported contributions and loans of $1.2 million when campaign reports were filed Oct. 11. More than 14,000 people contributed.
Howell said the real significance of the "interlocking interests" lay in the "sweetheart deals."
He said that Whitney Sone, of the Stone and Webster engineering consultant firm, owned Vepco prior to the utility divestment act, and even now is the largest individual stock-holder of Vepco stock, with 53,000 shares. In the last five years, he said, Vepco has paid $17.5 million to Stone and Webster for work contracted for without competitive bidding.
Stone, in turn, is a director of the Chase Manhattan Bank, which has received $1.6 million from Vepco over the last five years in fees for transfering the ownership of various securities. Chase Manhattan, he said, holds about 700,000 shares of Vepco stock as well as being the largest voting stock-holder in Exxon. Exxon sold Vepco $110.5 million worth of heavy fuel in 1975 and 1976 without competitive bids, Howell said. A Vepco spokesman immedintely denied the Exxon charge.
The spokesman said that it contracted with Stone and Webster without competitive bidding because "no major contractor would bid on services for a multi billion dollar project to be built over a decade and subject to continually changing government regulations." The spokesman said that contracts with Vepco for equipment and materials for major projects are the result of competitive bidding.
Whitney Stone contributed $2,000 to Dalton's campaign.
Another example cited by Howell is the payment of nearly $6 million in legal fees over the last five years to the firm of Hunton and Williams in Richmond. Lawyers from the firm gave Dalton $1,300. Four lawyers from the firm also sit on the boards of four of Virginia's largest banks, United Bank of Virginia, United Virginia Bank Shares, Virginia National Bank, and Bank of Virginia. (An individual can be a member of only one bank board.)
The United Bank of Virginia, Howell said, extends a "credit line" to Vepco of $15 million, in return for which Vepco deposits $1.5 million in an interest free account or 10 per cent of the line of credit. Thirty-nine officers of United Viriginia Bank contributed a total of $40,620 to Dalton's campaign. These contributors include the wife of a Vepco officer and a member of Vepco's board, R. Roy Smith, Howell said.
The Vepco spokesman said that Howell's figures on United Virginia Bank were accurate, but disputed the amount he said Vepco had in interest free accounts in several other banks."Ten per cent is the maximum we have in these accounts: through negotiations we get lower rates," the spokeswoman said, adding that these accounts are not strictly "noninterest accounts" as Howell described them.
Howell said that most of the fees paid to Hunton and Williams are for their representation of Vepco in justi-fying "multi-million dollar rate increases, which yoy pay.
"When Vepco paid Stone and Webster over $17 million in the last five years, you, my fellow Virginian, paid that sum. When Vepco pays Chase Manhattan Bank more than $1 million in the last five years for securities transfer fees, you pay it."
Howell gave four other examples of "sweetheart" arrangements between Vepco and banks that he said resulted in interest fees that have been "reflected by multimillion rate increases that show up in monthly utility bills.
Howell said his information about the links between Dalton's contributors and Vepco came from State Corporation Commission records bank directories, Dalton's campaign finance report, documents given to a Senate subcommittee, and other records.
Dalton said today that he was "proud of the broad base" of his campaign, which he said has received "no contributions from any bank or utility," and the contributions he has received, he said, came from "individuals of all walks of life." There have been more than $14,000 individual contributions to my campaign." he said. "I understand that's more than in any campaign in the history of Virginia.
He acknowledged that many of his contributions came from bankers and businessmen and that 40 per cent of his contributions of more than $100 came from 2 per cent of the contributors.
He said no single large contributor had given as much as Howell's largest contributor.