OUCH!: Newt's Friendly Skies

Call it Newt Gingrich's parting gift to the special interests. An October 22 memo written by a top lobbyist for the airline industry -- first reported in the Washington Post but little-noticed because of the rush of pre-election coverage -- credits the outgoing House Speaker with successfully blocking the implementation of proposed rules that would open up the industry to more competition and reduce fares for many beleaguered consumers.The President of the Air Transport Association, Carol B. Hallet, wrote that "a significant victory" had been won over the Department of Transportation's effort to make it more difficult for major airlines to engage in predatory pricing. (Predatory pricing takes place when airlines artificially set low fares, drive new competitors out of business, and then jack up prices.) "This victory stems from the June 1998 commitment made to the ATA board by Speaker Gingrich in our meeting with him and the Republican leadership, when he directed Chairman [Bud] Shuster to work with us," Hallet wrote.Rep. Shuster (R-Pa.), heads the House Transportation Committee, which this summer wrote legislation requiring further study of the pricing issue and deferring the introduction of any regulatory guidelines into next year. Hallet's memo to the airline executives boasts that the delay will allow the industry to make the proposal an issue in the next presidential elections. "By interjecting presidential politics into the debate, we hope to change the political dynamic and make it difficult or impossible for DOT to act," she wrote.Gingrich and Shuster were both among the top ten recipients of individual and PAC contributions from the airline industry in 1997-98, Shuster at #3 with $22,000 and Gingrich at #5 with $15,250. According to the Center for Responsive Politics, overall airline contributions were up by two-thirds compared to the 1995-96 election cycle. Of the $3.1 million contributed to parties and candidates by the industry, its PACs and individuals associated with it, Republicans have gotten fifty-seven percent. And a large chunk of that, $147,000 in soft money, rolled into Republican coffers between the end of May and the end of June -- around the time of Gingrich's meeting with the ATA board.Nevertheless, Republicans like Senators John McCain (R-AZ) and Charles Grassley (R-IA) are among the loudest critics of Gingrich and Shuster's deal-making. Iowans are particularly aggrieved, as Des Moines-based travelers suffer from some of the highest fares in the country. Said Rep. Greg Ganske (R-IA), "This is another example of why we need campaign-finance reform. The airlines give great big sums of money to the parties" for a reason.


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