Corporate America: Wary Of Kerry?

(CBS)  By Beth Lester of the CBS News Political Unit.

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After a Democratic primary season which saw the candidates take a fairly anti-corporate tack, some of those early words may come back to haunt John Kerry where it hurts most: the wallet. Kerry's policy plans for rolling back tax cuts and his more personal attacks, including comparing outsourcing CEOs to "Benedict Arnolds," have generated concern within the business community. Although most Democratic donors say there is a unified focus on beating President Bush, some major fundraisers say Kerry should mind his words.

Says James Neal, a member of Kerry's national finance committee: "It would behoove him to tone down the rhetoric on Benedict Arnold CEOs. … CEOs are doing what they're supposed to do: maximizing growth for their shareholders. To criticize them as being unpatriotic is not consistent with the values of a democratic society."

Although the rumblings are mostly below the radar at the moment, anxious CEOs who are reluctant to give money themselves or raise money from friends is certainly not welcome news for the Kerry campaign. The complication for Kerry is that, after voting for free-trade agreements throughout the 1990s, he took a much more critical line during the primaries, calling for a 120-day review of all trade agreements and demanding new standards on labor and environmental provisions. While his evolution might have been necessary to win skeptical primary voters and secure major union support, it has led some to question where Kerry stands on the continuum from protectionism to free trade. As one Democratic strategist who has raised millions for the party explains, "Clinton was able to straddle the line because of his financial objectives … the word on Kerry is that he flip-flops and that scares corporate America."

The Kerry campaign, not surprisingly, dismisses any nervousness. Spokesman Michael Meehan says they are not concerned about being able to raise money from corporate sources. "We've been very pleased with the overwhelming financial support we've received throughout the primaries and in the just-started general election campaign. We're on the verge of raising historic amounts of money for a Democrat," Meehan said.

And the Kerry campaign can point to some major donations from big corporate interests. Executives at Citigroup, Morgan Stanley, AOL Time Warner and Goldman Sachs have contributed over $186,000 to Kerry's coffers. In his Senate career, Kerry can count Goldman, Citigroup, Time Warner and FleetBoston Financial Group among his top all-time donors.

But that history may not be enough to reassure those thinking about joining the Kerry team for the first time. Some Wall Street analysts have suggested that Kerry is bad for corporate confidence. State Street Global Advisors chief investment strategist Ned Riley said in February, "I think, for market psychology, that (Kerry's election) would be damaging." Democrats of varying levels of involvement say there is skittishness about what Kerry would do for business in office. As one well-connected D.C. lobbyist told CBS News, "There are some Democratic-leaning CEOs who are worried about this."

So how can Kerry regain corporate confidence? Many advisers are pushing the vice-presidential choice as a way to send a signal to the business community and beyond. Top choices for a business-friendly running mate include Sen. Bob Graham of Florida and Sen. Evan Bayh of Indiana. Says one Democratic donor from a Midwestern swing state, "If you accept the premise that corporate America is wary of Kerry, Gephardt won't fix that. Bayh, I suppose, would."

John Edwards, high on many running-mate lists for both his charisma and Southern roots, ran a very anti-corporate primary campaign that underscored his background as a plaintiff's attorney, but did not endear him to the business world. Explains a major New York City fundraiser in the pharmaceutical industry: "Kerry's got to pick someone who is kind of in the middle; he's pretty liberal. He needs to find someone who can pull it back towards the middle." For the corporate moneymen who are a tad nervous about Kerry, the vice-presidential choice appears to be an important signal.

With the timing of a running-mate announcement unclear, the Kerry camp may need to do some corporate handholding in the interim. As the D.C. lobbyist concludes, "There are some people who are very troubled."