Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, October 21, 1995 TAG: 9510230034
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: MIKE HUDSON STAFF WRITER
DATELINE: LENGTH: Long
The board will license car dealers and investigate complaints against them. It is taking over that power from the Department of Motor Vehicles as part of Allen's push to transform state government.
When the board met in Richmond a couple of weeks ago, the seats around the conference table were filled with representatives of at least seven Allen benefactors - car dealers who gave money to Allen's campaign or inaugural fund through their companies or out of their own pockets.
At one bend of the table sat Arthur Casey, who has four Hampton Roads car franchises. He gave Allen $4,000.
Next to him sat Frank Cowles, a Woodbridge car dealer who is a longtime Allen supporter. He gave Allen $3,450.
A few chairs over sat Tom Barton, a Virginia Beach Ford dealer who is the board's vice chairman. He gave $2,550.
Missing on this day was board member Richard L. Sharp. He is chief executive of Circuit City Stores Inc., which has begun a highly touted chain of CarMax used-car "superstores."
Circuit City and its executives gave Allen $57,500.
In all, the governor reaped $71,800 through eight companies that now have a seat at the table when the Motor Vehicle Dealer Board meets.
Allen says the appointments are a matter of picking the best people - and that money had nothing to do with it. He says the creation of the car-dealer board shows how he's taking power from bureaucrats and letting the private sector breathe business-like efficiency into the regulatory process.
``I think he was looking for people who had the experience and had reputations they've built over the years,'' says board member Richard Kern, a Winchester car dealer who gave Allen $2,300. ``People that certainly weren't going to be `yes men' - and who'd do what's best for the state.''
For some critics, the new board and Allen's appointments are an example of how the governor has turned state agencies over to well-monied special interests who want to control the programs that are supposed to serve as watchdogs of their industries. They say Allen has weakened agencies responsible for protecting the environment and consumers, making it easier for polluters and unscrupulous merchants to operate.
"Virginia is being sold to the highest bidder," says Gary Kendall, a Charlottesville lawyer who works with labor, consumer and environmental groups. ``We're telling businesses: `Come to Virginia, we'll let you have your way.' The theory is: If we have cheap taxes, cheap labor and no government interference, employers will come. We're becoming the Mexico of the U.S.''
Many Allen detractors claim the administration has locked average citizens out of the governing process by turning over regulatory seats to business interests, campaign contributors and Republican loyalists. As an example, they cite the car-dealer board and the fact that 16 of its 19 members represent the car industry. At least 10 of the 16 are Allen contributors or GOP activists.
Del. George Grayson, D-Williamsburg, argues that the dealer board "could be used to reward political allies - be it by a Democratic or a Republican administration. And that was the scuttlebutt around the Capitol - that Allen had some auto dealers who had been especially generous to his campaign and he was looking to reward them."
Not true, Allen says. He says many of the people he put on the board are friends and supporters, but he had no idea how much money they'd given him.
When it comes to state boards, he says, "I want to put people on there who share my philosophy of government, whom I can trust and who are competent to do the job."
He paints critics of his "regulatory reform" efforts as opponents of economic growth.
"We have to have regulatory policies that are balanced," Allen says. "Now there are those who think that all we ought to worry about all the time is to figure out, `Oh Gosh, what is this going to do to the woodpecker? What is it going to do to some rat?' ... .We certainly are very much for clean air, clean land and clean water." But government has to look at the impact on "not just rats, but on people and their property and their jobs.''
`Virginia is not for sale'
When he ran for governor, George Allen said Virginians were sick of bureaucrats telling them what to do. He promised to "put the people back in charge."
Allen blasted his Democratic opponent, Mary Sue Terry, for "shaking down special interests who want to curry favor" with state government.
"Virginians won't be bought," Allen told a group of Ross Perot supporters in Roanoke. "And Virginia government is not for sale."
Allen didn't turn down "special interest" money himself, but said during the campaign that he was making clear "I'm not selling seats on state boards" or other political favors to big-money people.
Now, like his Democratic predecessors, Allen is running state agencies that oversee industries that gave generously to his campaign and inauguration.
For example, Allen received at least $164,000 from coal companies and other mining businesses, $171,000 from oil companies and other energy interests, and $311,000 from manufacturers.
For his campaign, Allen took in $3.9 million from contributors who gave $500 or more. At least $1.6 million of that came from business interests. Eighty-five percent of the $429,000 Allen collected for his inaugural came from businesses or corporate law firms.
Allen says campaign gifts have "no impact on what I believe." He says he made it clear from the start of his campaign that the "No. 1 claim on my time would be jobs." He believes the only way to compete is to create "a pro-business, pro-economic growth environment."
Critics say Allen has eased enforcement of laws aimed at protecting people's pocketbooks and keeping the land, water and air clean, by:
Cutting state agencies responsible for protecting the state's air, soil, lakes and rivers, parks and animals. The Department of Environmental Quality has lost 20 percent of its staff. Some former and current DEQ staffers claim the agency has become too cozy with the businesses it's supposed to watchdog.
Allen and his top regulators say such criticisms come from naysayers who are afraid of change.
Cutting the staff of the state's consumer affairs program by nearly half over three years. The agency has also turned off its toll-free complaint hot line. Consumer advocates say the cuts will leave citizens more vulnerable to unscrupulous telemarketers, shady tin men and other scam artists.
State officials describe the cuts as a reorganization that will let the agency operate more efficiently.
Taking the responsibility for licensing car dealers and investigating complaints against them from the Division of Motor Vehicles and giving it to a new "self-regulating" board that is dominated by car dealers themselves. The new board plans to cut the number of state employees regulating car dealers by nearly half.
Consumer advocates predict the board will put its industry's needs above consumer protection.
Car dealers say the board will do a better job of regulating the industry - and do it more efficiently with fewer people. They say that will save taxpayers as much as $1.5 million a year.
"The board wants to see that the customer is treated fairly," said Art Herberer, a board member who runs an auto-parts recycling business in Salem. "The incentive to do this is to make sure that your customer is happy - so they'll come back and buy another car from you later."
Environmental and consumer causes typically haven't been hot-button issues in Virginia politics. But activists say public sentiment is growing that the state needs to do more rather than less on these issues.
Recent surveys have found strong support for environmental programs in Virginia. A Media General Research poll last month asked voters which of three issues was most important: 61 percent picked "strict enforcement of current clean air and water rules"; 24 percent picked "limits on real estate development"; 15 percent picked "cutting regulation to help business."
`From bad to terrible'
This is not the first time critics have accused the state of falling down on the job when it comes to regulating businesses and protecting citizens. In 1988 - during the administration of Democratic Gov. Gerald Baliles - newspapers lambasted state alcohol and pesticide control officials for being too lax on the industries they were supposed to regulate.
Environmental and consumer activists say Virginia's government has never been overly tough in fighting pollution or marketplace fraud. But many complain the Allen administration is trying to gut even the modest protections the state has provided for people and the environment.
"Things have gone from bad to terrible," says Kendall, the Charlottesville lawyer.
Environmentalists criticized Allen last year for appointing Peter Schmidt, an executive with Allied Concrete Co., as director of the Virginia Department of Environmental Quality. Schmidt and his company contributed $27,500 to Allen's campaign.
Schmidt has promised to excuse himself from regulatory matters directly affecting his former company. However, DEQ has given approval to new regulations that could benefit an Allied subsidiary. The new rules allow greater use of "fly ash" - an industrial byproduct that may contain trace amounts of heavy metals. Before Allen named him agency director, Schmidt served on a DEQ committee that drafted the regulations. Schmidt says he played no role in approving the final rule.
The fly-ash rule is one of the few regulations that have been passed under Allen, who says too many regulations are already on the books.
Allen maintains that Virginia suffers from "regulatory overload." During his campaign, he said 12 years of Democratic governors had turned the state into a "meddling nanny."
His first act as governor was to name a task force to come up with ideas to streamline state agencies.
Neither Allen nor his Democratic opponent Mary Sue Terry - who also drew big corporate gifts - saw the environment as a big issue in the 1993 governor's race. Allen did, however, blast Terry for accepting a $500 contribution for her 1989 attorney general campaign from an investor in Kim-Stan, an Alleghany County landfill that later caused millions of dollars in pollution. Terry said she hadn't been aware the contributor was connected to the dump.
During the governor's campaign two years ago, Allen took $10,000 from Smithfield Foods, a meat-packing company that has since run afoul of environmental laws. According to DEQ records, the Suffolk-based company violated state water pollution regulations at least 23 times between May 1994 and July 1995. In addition, federal officials are investigating the disappearance of thousands of company environmental records.
Julie Lapham, director of Common Cause Virginia, a group that lobbies for stricter campaign finance laws, says contributions from businesses aren't necessarily aimed at getting specific favors. Often they're designed to change the general direction of government.
"Money buys access," Lapham says. There are only so many hours a day and politicians are more likely to return phone calls to a big contributor than an average citizen. "The voice of the average citizen gets drowned out."
Car dealers were one industry group that gave big support to Allen's campaign. The industry gave him at least $125,000 for his campaign and inaugural celebration. Nearly 60 percent of that came through companies that now have a spot on the new Motor Vehicle Dealer Board.
"Any public official who says he understands the money problem and promises to clean up government - then puts auto dealers in charge of their own regulation - underscores the need for clarity of speech," Lapham says. "What you're telling me and what you're doing are two different things, governor. You speak one thing and then you do another. And it's not just Governor Allen. The Republicans and Democrats are both doing it."
Allen says he has always been clear about what he is for. He says he pushed to give power to the car dealers so they could govern themselves and chuck "arcane, idiotic" rules, such as one that says they must post the names of the sales people on duty.
Allen says he appointed respected business leaders to the board. "In fact, every one of these people who I appointed were recommended by the Virginia Automobile Dealers Association," he says. "It's not as if I just picked people out of the air."
Consumer activists say that's the problem: the board was picked by a industry group with no say from average car buyers. VADA, which represents franchise dealers, gave Allen $23,600.
When it came time to appoint, Allen recognized many of the names on the industry's list.
There was Tom Barton, the Ford dealer who gave him $2,550. "He's a good man," Allen says. "Shoot, he was King Neptune, which is a big civic thing down there in Virginia Beach. He's a solid fella."
There was one of his biggest contributors, Circuit City CEO Richard Sharp.
Sharp, who through a spokeswoman declined comment, is leading the creation of a mega-chain of "no-haggle" used-car stores that one stock analyst says may be "one of the most powerful retail concepts of the next decade."
And there was Frank Cowles, a Northern Virginia car dealer who owns an Arabian horse farm in Scottsville. "Gosh, he's a great friend," Allen says. "I still want to go ride horses with him, ride his fences."
Cowles says no strings were attached to the money he gave Allen. He's not even sure how much he gave. Records show he gave contributions totaling $3,450.
About 10 days before the election, for example, he was reading the newspaper and ``I turned to my wife and said: `You know, George Allen needs some money to keep his ads on the air. Why don't we send him a thousand or two?' She said: `What better can we do with money?' So I sent it to him.''
Allen and Cowles have been friends since they met at a GOP dinner a few years ago. Cowles says he "worked like hell" to get Allen elected to Congress and helped him find a home in the D.C. suburbs. Then he worked again to get Allen into the Governor's Mansion.
Cowles says he never talked to Allen about the dealers board. Cowles is a lawyer, sits on a bank board, and runs a hardware store in addition to his car dealerships. He doesn't understand why anyone would fuss about a world-tested businessman being put on the car dealers board.
"What the hell are you going to do: Appoint somebody who's a hillbilly who doesn't know anything about this business? Where is the problem in appointing qualified people?"
Memo: ***CORRECTION***