In the 22 months before the 1984 election, commodity traders poured more than $900,000 into the campaign coffers of friendly politicians — an impressive amount for a relatively small special interest group. During the period, $70,500 of that money went to “Campaign America,” a political action committee (PAC) set up by Senator Robert Dole of Kansas who, at the time, was chairman of the Senate Finance committee.
Then, late one night in June, 1984, Senator Dole played a key role in the approval of a special amendment to the 1984 tax bill to help 333 wealthy commodity traders who were having problems with the Internal Revenue Service.
Several former IRS and Treasury officials labeled the special amendment a “giveaway.” The amendment could be worth at least $300 million or an average of $866,000 for each of the traders and was introduced as a way to help the traders overcome tax liabilities they had already incurred prior to the 1981 closing of a tax loophole. That loophole, known as the “commodity tax straddle,” was used by commodity traders as a way to juggle their profit and loss figures and reduce their tax liability. For example, one securities broker with an income of $11 million had sheltered his income using a straddle and ended up paying no taxes at all.
Back in 1981, Senator Dole was instrumental in closing that tax loophole for commodities traders. At the time he criticized Democrats supporting the tax loophole for receiving generous campaign contributions from the traders saying traders are “nice fellows … and they are great contributors. They haven’t missed a fundraiser. If you do not pay any taxes you can afford to go to all the fundraisers.”
Some feel that the six-fold increase in campaign contributions that commodities traders made to Senator Dole before th 1984 election might have helped Dole change his mind about the loophole amendment. Senator Howard Metzenbaum, of Ohio, called the amendment a “giveaway,” adding that the “effect of that provision is virtually to preclude the IRS from pursuing tax cases” against traders. The provision applied only to commodity traders.
At a time when Congress is being forced to reduce social programs which benefit millions of Americans, one would think that it would be interested in saving $300 million which goes to just 333 wealthy commodity traders. COMMON CAUSE MAGAZINE did the extensive investigation that exposed the success of the commodity traders influence peddling; the magazine’s phone calls to Senator Dole about his role in supporting the 1984 tax amendment for commodity traders were not returned.
(Incidentally, Senator Dole is not always as charitable with tax dollars as he was with the 333 commodities traders; in late February, 1985, when he voted against an emergency farm debt credit amendment to help farmers, he warned: “This is never going to become law.)
COMMON CAUSE MAGAZINE, January/ February 1985, “Friends in High Places: How Chicago’s Commodity Traders Get Their Way on Capitol Hill,” by Florence Graves and Lee Norrgard, pp 20-31.