Cuddling with Power

Herbalife donates to Tom Harkin's policy institute shortly after dinner meeting, documents reveal

Sen. Tom Harkin / AP
January 24, 2013

Sen. Tom Harkin (D., Iowa) met with representatives from the nutrition and supplement company Herbalife less than two months before it donated to the senator’s public policy institute, according to documents obtained by the Washington Free Beacon.

Herbalife has been Harkin’s largest financial donor throughout his political career, campaign finance records show.

According to a copy of the senator’s daily schedule for the August 2011 recess, Harkin was scheduled for a "Dinner with Herbalife" at the Four Seasons Hotel in Beverly Hills, Calif., on Aug. 16, 2011, at 8 p.m. following a meeting with leftwing moneyman Steve Bing at 6:30 p.m.

Herbalife pledged $100,000 to the Harkin Institute on Oct. 11, 2011. According to a detailed list of donations to the Harkin Institute obtained by the Free Beacon, the company , based in Torrance, Calif., has paid out two-thirds of that money. A congressional disclosure form indicates that Herbalife donated $33,333 on Oct. 5, 2011.

Neither Herbalife nor Harkin’s office returned a request for clarification of the content of the senator’s meeting with Herbalife.

The meetings with Bing and Herbalife were the only two items on the senator’s schedule during his five-day stay in California. His wife, Ruth Harkin, joined him there.

Mrs. Harkin sits on the Iowa Board of Regents, which created and oversees the Harkin Institute.

Congressional ethics experts said that possible solicitations made by the senator for his institute would not be illegal.

"The senate rules basically follow the federal law that for congressmen and senators they are not allowed to solicit gifts," said Jan Baran, a government ethics requirements expert at the Wiley Rein, LLP law firm.

However, these rules exempt solicitations for organizations that the IRS designates as tax-exempt charitable organizations (or 501(c)3).

"In those cases senators are permitted to solicit donations," Baran said.

"The Senate allows senators to create institutes in their own name and raise money for them," said Ken Gross, a lawyer and gift rules expert at the Skadden, Arps, Slate, Meagher and Flom, LLP law firm.

Baran and Gross noted that some restrictions still apply on these solicitations. Senators and congressmen may not solicit from foreign agents or registered lobbyists.

However, senators may solicit from the companies that hire lobbyists. They may solicit donations from a company’s CEO and other chief executives, Gross said, "as long as they stay away from soliciting the lobbyists."

Herbalife hired two outside lobbying firms in 2012 and has one in-house lobbyist, according to the Center for Responsive Politics.

Gross noted that congressional ethics rules also prohibit any sort of agreement or quid pro quo deal involving solicitations for donations.

Viveca Novak, editorial and communications director for the Center for Responsive Politics, said that while the situation presented by Harkin’s relationship to Herbalife may not be illegal, it does raise ethical questions.

"It’s clearly another way for a donor to ingratiate him or herself with a member of Congress," she said.

There are multiple "pockets" to which businesses and other interests can donate to support a politician, including campaign committees and leadership PACs, Novak said.

An institute named after a politician, she said, "helps to cement the lawmaker’s image as a substantial person." Donations to the institute help bolster the institute’s strength and visibility.

"It’s another avenue to make their way in," Novak said of the donors.

The Harkin Institute has been dogged by controversy since its inception.

Mrs. Harkin rushed the institute’s approval through the Iowa Board of Regents in April 2011 before two of the senator’s allies on the board rotated off. She excluded two "conservative Republicans" from internal board discussions about the institute, according to current board president Craig Lang, because they might not have supported the institute.

The Harkin Institute’s original proposal predicted it would be funded completely by private donations.

PMX Industries came under scrutiny after it and its owner, a South Korean businessman, donated $500,000 to the Institute. PMX, a metal alloy manufacturer, has made hundreds of millions of dollars doing business with the U.S. Mint, including on the dollar coin.

Harkin has introduced legislation that would replace the paper dollar bill with the one-dollar coin.

Herbalife also has a close relationship with Harkin. The senator has championed wellness and healthy living as part of America’s healthcare plan, and he wrote the wellness title of the 2010 Affordable Care Act as chairman of the Senate Health, Education, Labor, and Pensions Committee.

Herbalife sells weight loss products, nutritional supplements, and other healthy-living products. Harkin himself has promoted Herbalife’s products.

The Iowa Board of Regents voted to prohibit future institutes from being named after an active politician after it approved the Harkin Institute.