In February, with customer complaints about air travel at an all-time high, Senate Commerce Committee Chairman John McCain (R-Ariz.) took off on a passenger rights crusade. He filed an Airline Passenger Fairness Act to force airlines to clean up their acts, then held a dramatic hearing to spotlight tales of marooned, bumped and otherwise mistreated travelers. The issue was so hot that several senators began sharing their own airline horror stories.

In June, though, after the airline industry announced a voluntary plan to improve customer service -- and directed a hasty infusion of "soft money" donations to both political parties -- the issue seemed to disappear. McCain replaced his bill with a much weaker version that simply encourages airlines to follow their own plans, and his committee overwhelmingly approved the substitute. "We were stunned," recalled Aviation Consumer Action Project director Paul Hudson. "This wasn't just a sweetheart deal; it was a giveaway."

For the last week, McCain has focused on a different crusade -- his unsuccessful quest to persuade the Senate to ban soft money, the unregulated, unlimited contributions that corporations and others are permitted to give to political parties. All week long, the Senate's critics of campaign finance changes have attacked McCain's main argument, the idea that such contributions make the entire system look corrupt -- even when there's no evidence of any specific politician doing anything corrupt. But there are few more vivid illustrations of his argument about dirty appearances than this spring's furor over passenger rights. It's just that in this case, McCain -- unfairly, he insists -- is at the center of the controversy.

"I don't think you can argue that I changed my view on this issue because of soft money; maybe other senators did, but I didn't," said the blunt-spoken McCain, a candidate for the GOP presidential nomination. "But the fact is, the system tars all of us. . . . Appearances definitely count."

As it turns out, the airline industry had a June giveaway of its own; in just the week before the committee vote, it shelled out $226,000 in soft money. American Airlines, for example, pumped $85,000 into National Republican Senatorial Committee coffers the day before the vote; it gave $50,000 to another GOP committee the day of the vote. Overall, in the first six months of this year, the airlines spent more than $1.3 million on political donations -- including $982,000 in soft money -- and nearly $3 million on lobbying.

This month, Common Cause published a report arguing that the industry escaped the proposed regulations through "well-timed large political contributions and intensive lobbying." The report does not accuse anyone of specific wrongdoing. It simply suggests that on Capitol Hill, money usually talks.

"The average citizen has no illusions about what's going on," said Common Cause president Scott Harshbarger, a former attorney general in Massachusetts. "The airlines gave generously, and they gave at the right time. It's no accident that they got first-class treatment."

In an interview, McCain said he was never told about the industry's last-minute donations to his party, and noted that NRSC Chairman Mitch McConnell (R-Ky.), who decides how a great deal of the GOP's soft money is spent, is "not exactly a dear friend." And he did make clear when he filed his original bill that he might back off if the airlines agreed to improve service; he warns that he will refile the bill if the industry does not keep its word.

Then again, McCain readily concedes that no matter how strong their arguments against federal mandates may have been, the airlines probably expected more than good government for their money. As chairman of one of the Senate's most powerful committees, he is a magnet for campaign donations from those with interests in federal legislation -- he is the Senate's fourth-largest beneficiary of airline money -- and he acknowledges cash can buy access.

"I've admitted that I've fallen prey to it myself," McCain said. "Big people have access to my office that ordinary Americans don't have. That's one reason we need reform."

On the Senate floor, McConnell and other critics of campaign changes have attacked McCain for refusing to point out specific examples of corruption, and no one has suggested that anyone did anything illegal. Al Becker, a spokesman for American Airlines, said there was "no linkage whatsoever" between his company's donations and the committee's decision to back off his industry for now. "People always think campaign contributions are tied to this or that," Becker said. "The fact is, we participate in the political process, just as every company of any size does."

The question, consumer activists and campaign finance overhaul advocates like McCain ask, is what if you're not a company of any size? Then how do you participate in the political process?

This spring, consumer advocates thought there was an excellent chance that Congress would crack down on airlines. Vice President Gore was touting the administration's support for a Passenger Bill of Rights, and McCain joined forces with Sen. Ron Wyden (D-Ore.) on the lead bill in Congress.

The issue reached its cruising altitude after McCain's hearing, which featured angry citizens testifying about their nightmarish encounters with airline bureaucracies -- unexplained delays, lost luggage, sudden cancellations, rude employees and so on.

McCain and Wyden rounded up broad support for new federal requirements that airlines tell passengers when flights are overbooked and whether they were offered the cheapest fares, and give prior notice and honest explanations for delays and cancellations. McCain scoffed at industry claims that his bill would boost fares: "How does telling the truth about delays increase costs?"

"These were very modest reforms," recalled Wyden, the only member of the Commerce Committee to vote against the watered-down bill. "We weren't talking about a constitutional right to fluffy pillows. I was very surprised when I got creamed in committee."

In mid-June, after negotiations with McCain and other committee members, industry executives announced a voluntary plan to come clean about delays, deliver baggage on time and help passengers find low fares. McCain promptly congratulated them and announced a bipartisan compromise to scale back his bill. But passenger groups, which were not included in the talks, denounced the deal. One consumer group issued a news release titled "Airlines Promise to Be Nice and Stop Lying in Exchange for Senate Killing Passenger Rights Legislation." The overbooking issue was not even addressed in the airlines' voluntary plan.

"Something's not right when the chief sponsors abandon a reform bill without consulting any consumer groups," said Hudson of the Aviation Consumer Action Project. "There was an awful lot of money floating around. I find it pretty ironic to hear McCain talking about campaign finance reform now."

The airlines have contributed more than $11 million to candidates and parties over the past decade; Phoenix-based America West has been one of McCain's top benefactors. But McCain also supports airline deregulation on ideological grounds -- he generally prefers industry solutions to government rules -- and every committee member except Wyden agreed with his solution in June. So while David Fuscus of the Air Transport Association of America conceded that the industry's latest donations "look bad" because of timing, he said the notion that it ducked regulations because of its contributions is "absolutely ludicrous."

"The committee just wanted to give us a chance to improve on our own," Fuscus said. "Look, the airline industry is no different than any other industry. When an issue is important to us, we get involved in the process. That's an important part of American democracy."

Soft Money Lands in Committees

"Soft money" given by top airline donors to national party committees, Jan. 1 through June 30, 1999


Democrats Republicans Total

American Airlines

$120,000 $228,056 $348,056

Air Transport Association of America

55,300 110,550 165,850

US Airways Group Inc.

15,250 103,168 118,418

United Airlines

55,000 63,120 118,120

Northwest Airlines

90,000 6,500 96,500

Continental Airlines

41,250 37,500 78,750

Southwest Airlines

15,000 10,400 25,400

Soft money contributions from airlines on June 22 and 23, 1999



Date Amount

American Airlines

National Republican Senatorial Committee

June 22 $85,000

US Airways

National Republican Senatorial Committee

June 22 10,000

US Airways

Republican Dinner Committee

June 22 20,000

American Airlines

Republican Dinner Committee

June 23 50,000

Continental Airlines

Republican Dinner Committee

June 23 25,000

United Airlines

Republican Dinner Committee

June 23 20,000

NOTE: The Republican Dinner Committee divides its proceeds between the NRSC and the National Republican Congressional Committee.

SOURCE: Common Cause