Where There's Smoke...

Few business leaders worked harder to see George W. Bush elected president than his old Yale classmate Thomas Kuhn. As chief of the Edison Electric Institute, the lobbying arm of the electric-utility industry, Kuhn led a parade of corporate trade groups that threw its support to Bush early in the 2000 campaign. Kuhn also wanted to make sure that the Bushies remembered who was generous when it counted. In a May 1999 memo urging electric executives to write $1,000 checks, he reminded them to include a special "tracking code" devised to "insure that our industry is credited" for its contributions. By Election Day, electric utilities had donated $12.4 million to Bush and other GOP candidates.

Kuhn's efforts appear to have paid off, big time. Bush stunned environmentalists and their congressional allies last week by reversing a campaign promise to require that electric-power plants reduce emissions of carbon dioxide, regarded by most scientists as a major contributor to global warming. His announcement capped two weeks of ferocious lobbying by energy interests, mainly oil, coal and, in the person of Kuhn, the electric utilities. Sources tell NEWSWEEK that Kuhn called senior White House aides to urge that Bush back away from the emissions cap. Kuhn downplayed his own role. "It doesn't take any special phone calls from me to make our views known," he said.

In Washington, there's rarely a clear thread connecting the quid with the pro and the quo. But by any standard, the carbon decision was the latest in a remarkable run of triumphs for a business establishment that invested heavily in Bush futures. With Republicans now holding the Oval Office and both houses of Congress for the first time in a half century, corporate interests are achieving goals that seemed out of reach in the Clinton era.

Earlier this month the House and Senate repealed workplace rules designed to limit repetitive-motion injuries. Last week credit-card companies and financial institutions (MBNA America Bank was Bush's largest single corporate donor, at $240,000) saw the Senate pass bankruptcy legislation--vetoed last year by Bill Clinton--that will make it harder for most people to dissolve their debts in court.

All in all, some fat days for big business. "We feel pretty good," says Fred Webber, president of the American Chemistry Council, which pushed to kill the carbon cap. The original emissions plan was more of a whisper than a promise, slipped into the middle of a September speech by Bush's Austin policy shop and never repeated. But it broke surprising new ground, promising more regulatory muscle than Clinton or Al Gore had ever tried to flex--a mandate for power plants to reduce emissions of four planet-warming pollutants: CO2, sulfur dioxide, nitrogen oxide and mercury. Enviros who regarded Bush as a walking subsidiary of Big Oil and Gas began to hold out hopes of a Nixon-goes-to-China scenario. Conservative activists, long skeptical about forecasts of planetary warming, took notice but held their fire, eager to smooth the GOP's path back to the White House.

But by February, the right was on alert. Bush's new EPA chief, Christie Todd Whitman, the moderate former New Jersey governor with green credentials, announced that she would enforce a Clinton-administration regulation setting tough new standards for the sulfur content of diesel fuel in trucks and buses. Soon there were rumors that Bush would mention the emissions rollback in his Feb. 27 address to Congress. Grilled by columnist Bob Novak on "Crossfire" on the eve of the speech, Whitman offered no confirmation (White House aides deny it was ever in the speech) but did say that Bush was "very clear that the science is good on global warming... There is a real problem." Whitman had every reason to believe she was still on message. Before flying to Trieste, Italy, for a meeting of G8 environmental ministers, she checked with a senior Bush aide who affirmed the campaign position. In Trieste, she announced that the United States was committed to the goals of the 1997 Kyoto accords, which call for industrialized nations to bring carbon emissions below 1990 levels.

But her words had galvanized many conservatives, who consider Kyoto a sellout of economic sovereignty. Activists like Grover Norquist of Americans for Tax Reform and Fred Smith of the Competitive Enterprise Institute, a corporate-funded think tank, began funneling their complaints to White House political guru Karl Rove. Bush got the message. "I want to re-evaluate," he said at a March 5 meeting with advisers. A small working group quietly convened to study the question. Bolstered by a Clinton-administration report warning that a cap on CO2 emissions could boost electric rates by forcing utilities to shift to cleaner but more costly natural gas, the group recommended that it be dropped.

Bush agreed, and on March 13 he broke the news to Whitman. She went underground for a few days, but emerged last Friday to defend Bush and knock down resignation rumors. "Democracy isn't always pretty," she told a youth conference. To a newly resurgent business lobby, democracy these days looks like a beautiful thing.