Fruit of the Loom Inc. is feeling deep pain these days. The company whose name has long been synonymous with underwear has lost money in the last three quarters. Its stock has dropped from $40 in 1997 to below $3 yesterday.
So a bill that would eliminate tariffs that it and other companies pay to bring in certain garments from their factories in the Caribbean looks awfully attractive.
On Capitol Hill, the company that industry people simply call Fruit has emerged as a prime promoter of the Senate bill, which is part of the United States' Caribbean Basin Initiative. The company also has become a big contributor to Republican causes.
Contribution records show that Fruit gave $350,000 in "soft money" to GOP groups, $265,000 of it to the National Republican Senatorial Committee, in the 1997-98 election cycle. That placed the company in the same league as the National Rifle Association and much bigger companies, such as drugmaker Novartis Corp. and Atlantic Richfield Co.
Fruit also gave almost $90,000 in soft money to the Democratic cause, all of it to the Democratic Senate Campaign Committee.
Contributions have continued in 1999. Records show an additional $73,000, all of it to Republicans.
At the same time, Fruit's chairman, William Farley, has been an active donor to key Republicans, giving $2,000 in May to the group Trent Lott for Mississippi, which supports the Senate majority leader, and $2,000 to the Keep Our Majority Political Action Committee, which supports GOP candidates.
"It's a company in bad shape giving money fairly lavishly to the [political] process, with incredible things to gain," said Charles Lewis, executive director of the Center for Public Integrity.
Fruit doesn't deny the bill would help it--a spokesman said it expects to gain $25 million to $50 million a year if the Senate bill is enacted--but argues it will also help American industry and jobs.
"We don't look on this bill as corporate welfare," said Ronald J. Sorini, Fruit senior vice president for government affairs.
Sorini said that his company and the industry are "getting hammered" by imports from Asia and that the Senate version of the bill, which limits import benefits to clothes made abroad from U.S.-produced textiles, would help the company compete by helping team its U.S. textile workers with its low-cost garment stitchers overseas. The House bill does not require use of American cloth.
He denied the contributions are targeted at the Caribbean bill, saying Fruit has more issues than that to worry about in Congress. "We support those who generally support our industry," he said.
The Clinton administration also backs the Senate bill, as does the American Textile Manufacturers Institute, which represents companies that make cloth.
The Senate bill, along with one to offer similar tariff benefits to Africa, was caught up in maneuvering last night, with a vote to limit debate set for today. The measure is opposed by a coalition of labor groups and companies that still make garments in the United States. They contend it will further erode U.S. garment jobs and unfairly reward companies like Fruit that have sent garment jobs overseas.
Fruit's U.S. employment has fallen from 33,000 to 17,000 people, the company says. About 3,500 Fruit employees are based in Kentucky, and the bill has caused a split between the state's two senators, Mitch McConnell and Jim Bunning, both Republicans.
McConnell favors it. "It's not unusual for a senator to support the interests of a major employer in his or her state," said Kyle Simmons, his chief of staff.
McConnell heads the Republican committee that has been the beneficiary of Fruit's soft-money contributions. Simmons said the money has no connection to McConnell's position, adding that he has always been a "free-trader."
Bunning has spoken out against the bill, on the grounds that too many jobs are going abroad.
All in all, the bill would cost the Treasury about $1 billion in lost tariff revenue over five years.