How Hillary Courted Corning, Inc.

As the new chairman of the Democratic Leadership Council, Sen. Hillary Clinton (D.-N.Y.) pledged last week to increase college funding by “getting rid of wasteful business subsidies.”

If she really wanted to do that, she could start by marching up to Corning, N.Y., and informing the executives at Corning, Inc. that she’s turning off the spigot of federal aid she has showered on them.

Mrs. Clinton and the formerly Republican-leaning Corning once had a rather cold relationship. But they have grown curiously fond of each other in recent years.

Contributions Swell

According to the Center for Responsive Politics, individuals who listed themselves as employees of Corning contributed only $15,240 to Clinton when she first ran for the Senate in 2000. At the same time, Corning employees contributed $23,500 to her GOP opponent, Rep. Rick Lazio. The Corning employees’ PAC, meanwhile, contributed no money at all to Clinton in the 2000 election cycle. In the 2002 cycle, only two Corning employees contributed a grand total of $500 to her.

But by 2004, the Clinton-Corning relationship had warmed up. The Corning employees’ PAC that year gave Clinton $10,000 and Corning employees individually gave her $51,250.

So far in this election cycle, as she is running for reelection, Clinton has picked up $61,359 in contributions from Corning employees, and, according the Center for Responsive Politics, she has become the fifth highest lifetime recipient of contributions from the company’s employees and its employee PAC. They have given her a combined $133,400, according to an analysis completed in May.

Just as Clinton has become a major recipient of Corning-related contributions, Corning has become a major recipient of Clinton-related legislative largesse.

The Environmental Protection Agency is on schedule to enforce a new clean air rule, called the “2007 Highway Diesel Rule,” which mandates all model-year 2007 heavy-duty diesel trucks and buses reduce emissions by more than 90%. The mandate does not apply to older-model diesel trucks and buses. Yet Clinton has pushed for millions of tax dollars to be used to “retrofit” older vehicles exempted from the mandate so that they, too, can meet the new standard.

Cutting emissions from these older vehicles can be done in three ways: by installing a diesel-oxidation catalyst, by installing a diesel particulate-matter filter or by using cleaner fuels. (Both the diesel-oxidation catalysts and diesel particulate-matter filters must use cleaner fuels, such as ultra-low sulfur diesel, in order to work properly.) Corning, it turns out, is a leading manufacturer of both diesel-oxidation catalysts and diesel particulate-matter filters.

Securing Earmarks

At the direction of former Bush EPA Administrator Christie Todd Whitman, the EPA called for 444,000 school buses to voluntarily reduce emissions by 2010. Sen. Clinton put an earmark in the 2003 omnibus spending bill to provide $5 million for a pilot program, called Clean School Bus USA, to give money to schools to purchase diesel-emission-reduction equipment. Both Clinton and then-Rep. Amo Houghton (R.-N.Y.), who for 20 years represented the district where Corning is headquartered, took credit for securing that earmark. (Before coming to Congress, Houghton had himself served as chairman and CEO of Corning Glass Works.)

A month after getting a check from Corning’s PAC for $10,000 in 2003, Clinton traveled to Corning Inc.’s headquarters, at Corning’s expense, to say she would introduce legislation to authorize “hundreds of millions” of dollars in federal grants to school districts to purchase Corning-manufactured devices to make their school bus exhaust cleaner. There, a Corning executive showcased a school bus fitted with Corning products to make its exhaust cleaner and Clinton said she would “create major opportunity for Corning.”

Corning Vice-Chairman and Chief Financial Officer James B. Flaws praised Clinton for helping Corning. When Clinton came under fire in 2003 for reportedly not satisfying local New York leaders, Flaws rushed to her defense. He wrote a letter to the Buffalo News that said: “She has delivered and continues to deliver for us.” He also applauded her plans to “get hundreds of millions in federal funding to retrofit diesel-powered school buses with technology made in Corning.”

Since then, Clinton has taken credit for substantially increasing Clean Bus USA, which has seen its funding double from $5 million in 2003 to $10 million in 2006.

Corning money started to pour into Clinton’s campaign in March 2004, when Corning CEO James Houghton, former Rep. Houghton’s brother, held a fundraiser for her. Between April 28 and June 21 that year, 35 persons who listed Corning as their employer gave Clinton’s campaign a combined total of $48,250.

A Favor in China

Clinton did a large favor for Corning a few months later. In 2004, China’s Ministry of Commerce ruled that Corning and eight other companies had been dumping cheap optical fiber products at below market rates and tacked a 16% tariff on Corning’s optical fiber exports. Clinton quickly went to work to get the tariff lifted. When she succeeded, Houghton told the Elmira (N.Y.) Star-Gazette: “The Chinese were seemingly unaware of our reputation for integrity, so we needed a character witness. Sen. Clinton provided that witness.”

The New York Times reported that Clinton’s advocacy included writing a letter to the Chinese minister of trade supporting Corning, inviting a Chinese ambassador to her Capitol Hill office and personally lobbying President Bush about the deal. The tariff was not lifted for any other company.

In March 2005, Clinton introduced legislation to designate a segment of Interstate Route 86 in Corning, N. Y., as the “Amo Houghton Bypass.” In November, she got two checks from him and his brother James for $1,500 each.

In 2005, Clinton co-sponsored the Diesel Emissions Reduction Act, which was signed into law as an amendment to the energy bill. DERA mandates that heavy-duty diesel vehicles that are state-owned or used for work on state projects be fitted with emission-reducing technology. The law also authorizes the EPA to dole out $1 billion over five years to states and localities to buy emission-reducing devices for their trucks, trains, vessels and other diesel-powered equipment.

Senior Vice President of Government Affairs at Corning and President of the Emissions Control Technology Association Tim Regan was invited to testify at the Senate Environment and Public Works Committee about DERA. (Clinton is a member of the committee.) While calling on Congress to pass DERA, Regan estimated that each diesel particulate-matter filter would cost $7,500 and said the grant-making program would “accelerate deployment of diesel retrofit technology, which is good for human health and good for the economy.”

Clinton then slipped two amendments into the 2005 transportation bill to provide more money for retrofitting diesel-powered vehicles. She cosponsored an amendment to allow states and local governments to access the $8.6 billion Clean Air fund to purchase emission-reducing technology for construction equipment used on federal highway projects in areas with low air quality. She also co-sponsored an amendment to authorize a $110 million expansion of the Clean Bus USA program.

At Corning’s headquarters, Clinton had bragged that her plan to bring “hundreds of millions” to Corning would create New York jobs. Three years later, Corning is prospering, but the company is not reinvesting its earnings solely in creating new jobs in New York—or even in the United States. Thomas R. Hinman, general manager of Corning Diesel Technologies, told investors in 2005 that the diesel-emissions products market would balloon to approximately $1.2 to $1.3 billion by 2010 and that Corning expected to capture as much as $500 million to $600 million of the total market. In 2003, Corning built a new highly automated diesel plant that now employs 400, but no more growth is anticipated.

In March, Corning announced it would invest $15 million to open a new manufacturing plant in Shanghai, China, to produce emission-reduction products for light-vehicles that use ordinary gasoline as opposed to diesel. Over all, 60% of Corning’s workforce is outside the United States.

Hinman told the Star-Gazette in June 2006: “We don’t see significant new hiring locally in the near future.”

‘Bigger Than Life’

So why did Corning get so cozy with Clinton?

“Sen. Clinton’s interests and our interest in this particular area precisely coincide,” Regan told Human Events.

Corning had made it a point to speak with everyone on the Senate Environment and Public Works Committee and initially approached Clinton sometime in 2003, he said. Although Corning lobbies many members of Congress, Regan said, “I don’t want to underestimate her role in all of this. Sen. Clinton is bigger than life.”

Regan said Clinton’s involvement in securing the grants program for diesel-emissions reduction, was critical because “funding is very hard to get. It’s been tough, the EPA budget has been cut three years in a row and when all the other programs are being cut and we’re asking for new money, it’s hard, it’s really hard.”

“We started with her three fiscal years ago and we got $5 million,” he said. “This year, we got $28 million out of the House appropriations process and we got $20 million out of the Senate appropriations process. This is a program that has been scaling up over time and she has consistently been there with us.”

On the campaign trail, Clinton talks like an old-school Democrat, vowing to slash ties between government and big business, but Corning readily admits their relationship with Clinton is a two way street. As Corning CFO Flaws told the Star-Gazette after Clinton first promised to start bringing home the bacon for the company: “The Clinton-Corning partnership is very rewarding for both of us.”