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How heavy was that foot? In Reinert's case, the U.S. government raised the tariff on his most popular product, an herbal foam bath, from just under 5% to 100%. His U.S. Customs bill for the last six months of 1999 spiraled to $37,783 from just $1,851--a 1,941% tax increase.
For a small business, that's strong poison. Indeed, when Reinert called the office of U.S. Trade Representative Charlene Barshefsky to describe his plight, an official there expressed amazement. "[They] were very surprised I was still importing," recalls Reinert. "They thought the tariff would cut off the industry--shut it down. That was their intention. They wanted to kill that industry, whatever industry it is." That, naturally, would have meant killing Reinert's business as well.
Reinert did have an option. He could have found a way around paying the tax. Except it would have been illegal. Sort of like people working off the books to avoid paying income tax on their earnings. That's what many small-business people in Reinert's position are doing--fudging their import records. It's polite language for falsifying government documents. Each distinct type of product imported into the U.S. is assigned an individual code number. The tariff is collected on the basis of the code numbers. Thus changing a single numeral in the code will convert a taxable product into one that is not subject to tax.
Are the people doing this comfortable with their deception, which an ambitious federal prosecutor could turn into a conviction accompanied by a large fine and prison sentence? Absolutely not. But it's a matter of survival. Further, they figure, if the U.S. government decides to take care of a multinational business whose owner, his family and his fellow executives contribute millions of dollars to political candidates and their parties--and to punish small businesses whose owners do not contribute--then why not cheat?
At age 80, Lindner sits atop a corporate agglomeration that includes American Financial Group, Inc., an insurance business (annual revenue: $4 billion); Chiquita Brands International, Inc., the fruit-and-vegetable giant ($2.7 billion); and an array of other businesses, including Provident Financial Group, Inc., a bank holding company (assets: $8 billion); and American Heritage Homes, one of Florida's largest builders.
At American Heritage, Lindner has been a business partner since 1996 with the king of Democratic fund raisers, Terence McAuliffe, described by an admiring Vice President Al Gore as "the greatest fund raiser in the history of the universe." McAuliffe has raised tens of millions of dollars for the Democratic Party, for President Clinton's 1996 re-election campaign, for the President's legal-defense fund, for the President's library and for Hillary Clinton's New York Senate run.
Since 1990, political contributions of $1,000 or more by Lindner, members of his family, his companies and their executives have added up to well over $5 million. Most of the money has gone to the Republican Party and its candidates. But at strategic moments, Lindner has made hefty contributions to the Clinton Administration.