- The Washington Times - Thursday, February 5, 2004

Sen. John Kerry intervened to keep open a loophole that had let a major insurer divert millions of federal dollars from the nation’s most expensive construction project, then received tens of thousands of dollars from the company in the next two years, documents show.

American International Group (AIG) paid Mr. Kerry’s way on a trip to Vermont and donated at least $30,000 to a tax-exempt group that Mr. Kerry had used to set up his presidential campaign. Company executives also donated $18,000 to his Senate and presidential campaigns, according to records obtained by the Associated Press.

But Mr. Kerry, the current leader of the Democratic presidential race, said there was no connection between his actions in 2000 and the donations in 2001 and 2002.

Responding to an AP report Wednesday about the donations, the Massachusetts senator said he had worked to block the legislation because it would have cost Boston’s “Big Dig” project $150 million. The legislation in 2000 aimed to close a loophole that had allowed the insurer to divert millions of federal dollars from the project.

The entire Massachusetts delegation “fought to hold on to $150 million for the Big Dig, which is the most important single project in Massachusetts and New England, and it had absolutely nothing to do with the industry,” Mr. Kerry said.

He said he had opposed the insurance industry on other legislative issues, including bankruptcy changes and terrorism insurance.

But some government watchdogs said Mr. Kerry’s story is a textbook case of the Washington special-interest politicking that he rails against on the presidential 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 that 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,” Mr. Lewis said. “He needs the donors’ money. The donors need favors. Welcome to Washington. That is how it works.”

The documents obtained by AP detail Mr. Kerry’s effort as a member of the Senate Commerce Committee to persuade committee chairman Sen. John McCain, Arizona Republican, to drop legislation that would have stripped $150 million from the Big Dig project and ended the insurance funding loophole.

Mr. Kerry actually was critical of the loophole but didn’t want money stripped from the project because it would hurt his constituents who needed the Boston project finished, Kerry campaign spokeswoman Stephanie Cutter said.

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

Asked why Mr. Kerry subsequently would accept a trip and money from AIG in 2001 and 2002 if he was concerned by the investment scheme, Ms. Cutter replied: “Any contributions AIG made to the senator’s campaign came years after the investigation.”

The New York-based insurer, one of the world’s largest, declined to comment on its donations to Mr. Kerry, simply stating, “AIG never requested any assistance from Senator Kerry concerning the insurance we provided the Big Dig.”

In September 2001, AIG paid an estimated $540 in travel expenses to cover Mr. Kerry’s costs for a speech in Burlington, Vt., according to a Senate report filed by Mr. Kerry.

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

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

The insurer wasn’t the only company to donate to Mr. Kerry’s new group that had connections to the Big Dig — a plan to alleviate congestion in downtown Boston by building an eight-to-ten-lane underground expressway directly beneath the existing six-lane Central Artery.

Two construction companies on the project — Modern Continental Group and Jay Cashman Construction — each donated $25,000, IRS records show.

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