Company Finds Clinton Useful, and Vice Versa

By MIKE McINTIRE and RAYMOND HERNANDEZ

04/12/06 "New York Times" -- -- Corning Inc., one of upstate New York's largest and oldest employers, has supported Republican candidates for so long that its chairman once joked that it had not raised money for a Democrat since 1812.

But since Hillary Rodham Clinton was elected to the Senate in 2000, Corning and its mainly Republican executives have become one of her largest sources of campaign contributions. And in that time, Mrs. Clinton has become one of the company's leading champions, delivering for it like no other Democratic lawmaker.

In April 2003, a month after Corning's political action committee gave $10,000 to her re-election campaign, Mrs. Clinton announced legislation that would provide hundreds of millions in federal aid to reduce diesel pollution, using, among other things, technology pioneered by Corning. It was one of several Congressional initiatives Mrs. Clinton has pushed that benefit the company.

And in April 2004, Mrs. Clinton began a push to persuade the Chinese government to relax tariffs on Corning fiber optics products, inviting the Chinese ambassador to her office and personally asking President Bush for help in the matter. One month after the beginning of that ultimately successful effort, Corning's chairman, James Houghton, held a fund-raiser at his home that collected tens of thousands of dollars for her re-election campaign.

It is part of a senator's job description to help a major employer in his or her home state, and it is not unusual for that employer to encourage that help or to reciprocate with campaign contributions. In Mrs. Clinton's case, her alliance with Corning provides a window into how she has used her singular clout as a former first lady on behalf of new constituents in her adopted home state, and how those efforts in turn have helped her to bolster her already powerful fund-raising machine and win over previously skeptical New Yorkers.

Indeed, her work on behalf of Corning began even before company officials had made a single contribution to her as a senator.

"She's there when you need her," said Amo Houghton, a former Republican congressman and the brother of Corning's chairman.

Mrs. Clinton, who is running for re-election this year, has been cultivating leaders in upstate communities like Corning, in central New York, hoping to exceed her 2000 results, including those in Republican strongholds, to demonstrate that she has appeal beyond her traditional base, Democrats and her associates say.

Corning has proved doubly helpful on that front. The company and its employees contributed $137,000 from the time she was elected in 2000 through the end of 2005. Although it was a small portion of the $33 million the senator raised for her re-election during that time, it was the most from any single source other than MetLife — more even than politically active Wall Street firms like Goldman Sachs. In addition, Corning twice paid for her to travel upstate to be briefed on issues important to the company and the region.

Beyond financial support, Corning has also defended Mrs. Clinton against upstate critics. When, for instance, The Buffalo News suggested in 2003 that she was failing to win over local leaders, Corning's vice chairman, James B. Flaws, sent a letter to the paper listing ways she had helped the company and its region.

"She has delivered and continues to deliver for us," Mr. Flaws wrote.

The Clinton-Corning alliance is so new and unexpected that John W. Loose, who retired as Corning's chief executive in 2002, after 38 years, reacted in disbelief when told of the company's contributions to her campaign after he left.

"No kidding?" said Mr. Loose, who raised money for Mrs. Clinton's Republican opponent, Rick Lazio, in 2000. "I'm really surprised to hear that. Very surprised. A lot of the executives there were Republicans. There were only a handful of Democrats."

Corning's support of Mrs. Clinton stands in contrast to its less enthusiastic backing of other Democrats, including New York's senior senator, Charles E. Schumer. While contributing $51,000 to Mrs. Clinton in 2004, Corning employees gave $5,000 to Mr. Schumer that year — even though he was running and she was not. And its political action committee gave $10,000 to Mrs. Clinton's Democratic predecessor, Daniel Patrick Moynihan, during the 1990's.

Like her husband, Mrs. Clinton has been closely scrutinized for her aggressive fund-raising. Her spokesman said that she takes pride in helping a company that is a major employer upstate. "A relationship that began with glass is now a bond as strong as steel," said the spokesman, Philippe Reines, referring to Corning's origins as a glass maker.

"Corning, in upstate New York, whom I'm privileged to represent, has come through tough times and thrived," Mrs. Clinton said in remarks last summer at the Aspen Institute, discussing the challenges American manufacturers face.

Corning, a Fortune 500 company, has 26,000 employees worldwide, and its major presence upstate is one of the bright spots of an economically battered region. The company makes glassware and ceramics used in fiber optics, diesel emission controls and liquid crystal displays.

Its contributions to Mrs. Clinton often tracked her support for the company, records show. Their mutual support started small, but grew in significance, and dollars, over time.

In early 2002, at the company's urging, Mrs. Clinton helped secure $5 million for a program that would provide federal grants to help school districts overhaul diesel-powered school buses by using a kind of ceramic-filter technology that Corning was beginning to market.

During the 2000 Senate campaign, Corning's political action committee gave $3,000 to Mrs. Clinton, compared with $9,000 for Mr. Lazio, the Republican. But in March 2003, the company gave $10,000 to Mrs. Clinton. A month later, she announced a measure that would provide hundreds of millions of dollars in additional federal money to reduce school bus diesel emissions.

In another initiative, Mrs. Clinton played a key role in persuading Congress to provide millions to state and local governments to upgrade other kinds of diesel-powered vehicles, said Conrad Schneider, advocacy director for the Clean Air Task Force, a nonprofit environmental group that lobbied for the legislation along with Corning and other companies.

"She was really using shoe leather, making member contact, convening meetings and that sort of thing," Mr. Schneider said.

But it was Mrs. Clinton's work on the Chinese tariff dispute that helps explain why Corning might have sought her assistance to begin with. Though a junior senator, Mrs. Clinton apparently used her status as former first lady and high-profile senator not only to intercede with Chinese officials, but also to prod President Bush himself to help the company.

The dispute began in early 2004 when the Chinese Commerce Ministry announced a preliminary decision to impose a 16 percent duty on Corning fiber optics products, saying Corning had deliberately undercut Chinese manufacturers.

Corning appealed to Mrs. Clinton for help, and in April 2004 she reached out to the Chinese minister of trade when he visited Washington. In a strongly worded letter, Mrs. Clinton asserted that the issue was "of great importance to me," that she held Corning in "high esteem" and that she considered the accusations against the company "unfair," according to a copy of the letter.

That month and the next, Corning executives contributed $46,000 to her campaign committee, campaign finance records show.

Next, Mrs. Clinton invited the Chinese ambassador to her Capitol Hill office, where she again stressed the issue's significance to her, said a person with direct knowledge of the exchange, who spoke on the condition of anonymity, citing the private nature of the conversation. The ambassador agreed to take that message to his superiors in Beijing, the person said.

Finally, in November, Mrs. Clinton pulled President Bush aside during the opening of her husband's presidential library in Arkansas to press Corning's case. "She explained the issue and she asked the president to be personally involved," the person said.

Mr. Bush told her he would look into the matter, aides to Mrs. Clinton said. The United States trade representative's office and the Department of Commerce also pressed the Chinese to lift the tariff. By December, the Chinese government had reversed its decision and lifted the duty. Corning officials credited Mrs. Clinton's work with making a difference.

"Her ability to reach out in Washington and outside Washington — I mean, she's the former first lady of the United States," said Timothy J. Regan, the senior vice president of worldwide government affairs at Corning. "No question that her involvement helped move things."

It is difficult to assess how much Mrs. Clinton influenced the Chinese. Corning took other steps to press its complaint, including hiring Akin Gump Strauss Hauer & Feld, an influential Washington lobbying firm, which assigned a former undersecretary of commerce to the case.

A lawyer in China who represented Corning before the Chinese Commerce Ministry, John Yong Ren, declined to comment.

Former President Bill Clinton has made several visits to China since leaving office, taking part in AIDS symposiums and giving paid speeches to Chinese businesses. But Senator Clinton's aides said her husband was not involved in the Corning matter.

What is indisputable is that China's decision to rescind the tariff came at a critical juncture for Corning, company officials said. The collapse of the telecommunications boom of the 1990's caused Corning's revenue to drop to $3 billion in 2003, from $6.9 billion in 2000, heightening its need for new markets for its pollution control technology and fiber optics products.

That explains why the company has become one of Mrs. Clinton's biggest supporters, Mr. Regan said.

"When you are down and somebody gives you a hand," he said, "you have to remember that."

Copyright 2006 The New York Times Company

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