The small, one-story office building nestled along a major thoroughfare in Virginia Beach couldn't be more nondescript. But when The Virginian-Pilot decided to use a database of state campaign contributions to see which addresses were generating the most money for political candidates, we found something astonishing.
The tiny building at 1120 Laskin Road had generated nearly $200,000 in contributions to candidates for statewide and legislative offices in Virginia over the past four years. That made it easily the richest stop in our area for politicians raising cash. What, we wondered, was going on? Reporter Toni Whitt and news researcher Diana Diehl teamed up to find out.
After six weeks of hard reporting and research, they were able to tell our readers more than simply who the money was coming from. Through interviews, database searches of obscure business publications and public records, they were able to determine what the contributions were buying. Their story was a classic example of using good, old-fashioned investigative reporting to transform a good CAR story into a great story about what politicians mean when they say that big contributors are only buying "access" - and nothing more.
Hidden agenda
In the case of Edward S. Garcia Sr., the man behind the contributions, that access helped him bring in $6 million for one of his many business ventures.
Virginia is an Eastern but is the Wild West of campaign finance. Anything goes. There are no limits on campaign contributions from individuals or companies, but Garcia funneled the money through half a dozen corporations, his relatives or his employees. Four of those companies were located in the Laskin Road building, setting off the alarm bells when we ran our address analysis. We can't say why Garcia chose to contribute his money that way. But the effect was clear: the real source of the money was hidden from anyone looking over candidates' campaign finance reports.
Garcia has long had a reputation as something of a swashbuckler, involved in controversial real estate developments and indicted on gambling charges. At one point, U.S. Sen. Charles Robb of Virginia refused to accept campaign contributions from Garcia. (Robb later changed his mind, accepted $8,000 and helped Garcia with his business venture.)
Seeking the source
Pinpointing Garcia as the source of the money was relatively easy. Using property tax and incorporation records, Whitt and I quickly found that all of the Laskin Road companies had connections to Garcia.
We began assembling a list of other companies Garcia controlled and running them through the campaign contribution database, turning up even more contributions to state politicians. When we ran the same entities through the Federal Election Commission database, we found contributions to members of Congress, such as Robb, and to congressional leadership PACS. The total over four years came to $257,000. And of that, a whopping $110,000 went to one candidate: a state senator from Virginia Beach named Kenneth Stolle.
Where's the catch?
From the Virginia General Assembly Web site, we downloaded and plowed through copies of bills sponsored by Stolle. We retrieved and read through 20 years' worth of clips on Garcia. We used Nexis and Dialog to search newspapers nationwide for references to Garcia and his companies. We used online financial databases such as Dun's Market Identifiers to pull up information on the finances of Garcia companies. Whitt called those we knew were plugged into the power network in Virginia Beach. We came up empty. Diehl returned to online databases and drilled down to the next level, searching the thousands of obscure magazines and newsletters that cover specific industries in detail.
From one covering the insurance industry, Diehl found that United Benefit Administrators Inc., a Garcia company, was embroiled in a dispute with insurance regulators in several states who claimed it was operating an unlicensed health insurance plan. The article opened the door.
Whitt found that Garcia, who employed a handful of police officers at his amusement park, had actually launched the health insurance venture in partnership with the officers' union. By claiming to be a union health plan, rather than regular insurance company, Garcia and the union could sell policies to anyone they wanted without undergoing the scrutiny of state insurance regulators. At least 10,000 signed up in five states from 1992 to 1997. To our knowledge, none were actually police officers.
Enter politicos, stage left
How the plan stayed alive for so long is where the politicians came in. Garcia had received an entrée to the office of then-Gov. George Allen from Stolle, the single biggest beneficiary of the businessman's campaign contributions.
Regulatory relief
We can't be sure exactly what happened after that. But employees in Virginia's legislative liaison office in Washington - basically the Commonwealth of Virginia's official lobbyist - were soon squiring a Garcia employee around the capital, introducing her to politicians and officials at the Labor Department to get federal relief from troublesome state regulators.
Amendments were tacked onto bills making their way through Congress. Virginia's U.S. senators wrote letters to federal regulators. A lawsuit was filed to force the Labor Department to rule that Garcia's venture was in fact a legitimate union health plan.
When Garcia's health plan was sued by Virginia insurance regulators, he was represented by Norfolk lawyer Tom Moss, who moonlights as Speaker of the Virginia House of Delegates and received $20,000 in campaign contributions from Garcia.
A Pyrrhic victory?
In the end, the regulators won. The insurance plan shut down late last year. But not before Garcia and the union made a pile of money. The best part of any story is the one tiny detail that by itself means nothing, but speaks volumes when placed in context. Whitt found it while plowing through the records of Virginia insurance regulators' case against Garcia's health plan: After bringing in $800,000 in dues and $6 million in management fees for Garcia's company, the plan faced a fine for operating in violation of Virginia's insurance laws. The amount of the fine: $30. Ray Robinson can be reached by email at rsquared@pilotonline.com
more than simply who the money was coming from. Through interviews, database searches of obscure business publications and public records, they were able to determine what the contributions were buying. Their story was a classic example of using good, old-fashioned investigative reporting to transform a good CAR story into a great story about what politicians mean when they say that big contributors are only buying "access" - and nothing more.
Hidden agenda
In the case of Edward S. Garcia Sr., the man behind the contributions, that access helped him bring in $6 million for one of his many business ventures.
Virginia is an Eastern but is the Wild West of campaign finance. Anything goes. There are no limits on campaign contributions from individuals or companies, but Garcia funneled the money through half a dozen corporations, his relatives or his employees. Four of those companies were located in the Laskin Road building, setting off the alarm bells when we ran our address analysis. We can't say why Garcia chose to contribute his money that way. But the effect was clear: the real source of the money was hidden from anyone looking over candidates' campaign finance reports.
Garcia has long had a reputation as something of a swashbuckler, involved in controversial real estate developments and indicted on gambling charges. At one point, U.S. Sen. Charles Robb of Virginia refused to accept campaign contributions from Garcia. (Robb later changed his mind, accepted $8,000 and helped Garcia with his business venture.)
Seeking the source
Pinpointing Garcia as the source of the money was relatively easy. Using property tax and incorporation records, Whitt and I quickly found that all of the Laskin Road companies had connections to Garcia.
We began assembling a list of other companies Garcia controlled and running them through the campaign contribution database, turning up even more contributions to state politicians. When we ran the same entities through the Federal Election Commission database, we found contributions to members of Congress, such as Robb, and to congressional leadership PACS. The total over four years came to $257,000. And of that, a whopping $110,000 went to one candidate: a state senator from Virginia Beach named Kenneth Stolle.
Where's the catch?
From the Virginia General Assembly Web site, we downloaded and plowed through copies of bills sponsored by Stolle. We retrieved and read through 20 years' worth of clips on Garcia. We used Nexis and Dialog to search newspapers nationwide for references to Garcia and his companies. We used online financial databases such as Dun's Market Identifiers to pull up information on the finances of Garcia companies. Whitt called those we knew were plugged into the power network in Virginia Beach. We came up empty. Diehl returned to online databases and drilled down to the next level, searching the thousands of obscure magazines and newsletters that cover specific industries in detail.
From one covering the insurance industry, Diehl found that United Benefit Administrators Inc., a Garcia company, was embroiled in a dispute with insurance regulators in several states who claimed it was operating an unlicensed health insurance plan. The article opened the door.
Whitt found that Garcia, who employed a handful of police officers at his amusement park, had actually launched the health insurance venture in partnership with the officers' union. By claiming to be a union health plan, rather than regular insurance company, Garcia and the union could sell policies to anyone they wanted without undergoing the scrutiny of state insurance regulators. At least 10,000 signed up in five states from 1992 to 1997. To our knowledge, none were actually police officers.
Enter politicos, stage left
How the plan stayed alive for so long is where the politicians came in. Garcia had received an entrée to the office of then-Gov. George Allen from Stolle, the single biggest beneficiary of the businessman's campaign contributions.
Regulatory relief
We can't be sure exactly what happened after that. But employees in Virginia's legislative liaison office in Washington - basically the Commonwealth of Virginia's official lobbyist - were soon squiring a Garcia employee around the capital, introducing her to politicians and officials at the Labor Department to get federal relief from troublesome state regulators.
Amendments were tacked onto bills making their way through Congress. Virginia's U.S. senators wrote letters to federal regulators. A lawsuit was filed to force the Labor Department to rule that Garcia's venture was in fact a legitimate union health plan.
When Garcia's health plan was sued by Virginia insurance regulators, he was represented by Norfolk lawyer Tom Moss, who moonlights as Speaker of the Virginia House of Delegates and received $20,000 in campaign contributions from Garcia.
A Pyrrhic victory?
In the end, the regulators won. The insurance plan shut down late last year. But not before Garcia and the union made a pile of money. The best part of any story is the one tiny detail that by itself means nothing, but speaks volumes when placed in context. Whitt found it while plowing through the records of Virginia insurance regulators' case against Garcia's health plan: After bringing in $800,000 in dues and $6 million in management fees for Garcia's company, the plan faced a fine for operating in violation of Virginia's insurance laws. The amount of the fine: $30. Ray Robinson can be reached by email at rsquared@pilotonline.com