A Project of The Annenberg Public Policy Center

Special Favors from Nancy Pelosi?


Q: Did Nancy Pelosi get wage breaks and tax credits for the American Samoan operations of a company in which her husband owns $17 million worth of stock?

A: This widely e-mailed claim is false. Pelosi’s husband doesn’t own that stock, despite what a bogus Wikipedia entry briefly claimed. Furthermore, American Samoa never got the minimum wage exemption it sought.

FULL QUESTION

I received this e-mail. Is it true? 

Speaker of the House Nancy Pelosi’s home House District includes San Francisco.

Star-Kist Tuna’s headquarters are in San Francisco, Pelosi’s home district.

Star-Kist is owned by Del Monte Foods and is a major contributor to Pelosi.

Star-Kist is the major employer in American Samoa employing 75% of the Samoan workforce.

[EET ]Paul Pelosi, Nancy’s husband, owns $17 million dollars of Star-Kist stock.

In January, 2007 when the minimum wage was increased from $5.15 to $7.25, Pelosi had American Samoa exempted from the increase so Del Monte would not have to pay the higher wage. This would make Del Monte products less expensive than their competition’s.

Last week when the huge bailout bill was passed, Pelosi added an earmark to the final bill adding $33 million dollars for an "economic development credit in American Samoa".

Pelosi has called the Bush Administration "corrupt".

She should know.[/EET]

FULL ANSWER

This is the latest version of a falsehood that’s been circulating since January 2007, when Congress was debating a minimum wage increase. The central claims are all wrong.

No $17 Million in Stock

To start, it’s simply not true that Pelosi’s husband owns $17 million worth of Del Monte stock, giving her a "corrupt" motive to aid the company. (Nor does he own such an interest in Del Monte’s primary shareholder, Heinz, as alleged in some versions of this message.)

We traced this false claim back to a 2007 article in the conservative NewsBusters blog, which attributed it only to a single, unsupported sentence in Wikipedia’s article on Del Monte. That’s hardly an authoritative source. Wikipedia articles may be written or edited by any user, making the site notorious for its vulnerability to false entries, pranks and vandalism. NewsBusters editors later admitted that its claim "has not otherwise been verified" and that "there is reason to believe that the claim of such ownership interest on the part of Paul Pelosi is suspect." Actually, NewsBusters fell for a Wikipedia hoax.

The sentence about Paul Pelosi was added to the Del Monte Foods article on Jan. 12, 2007, the same day that the NewsBusters article was published. Within six hours, a Wikipedia editor flagged it as "not verified" and "unsourced" and then quickly deleted it altogether. Pelosi’s 2007 financial disclosure statement, which lists between $9 million and $11 million in stocks owned by her husband, shows no StarKist, Del Monte or Heinz stock holdings. Neither do her 2006 or 2005 reports. Filing a false disclosure statement is a serious offense, carrying a fine of up to $10,000, and we’ve seen no evidence that Pelosi’s report is inaccurate.

No "Major Contributor"


I
t is also untrue that Del Monte is a "major contributor" to Pelosi, or a contributor at all. The company doesn’t rank among her top contributors in any year, and neither does the National Food Processors Association PAC, to which Del Monte contributes. A search of contribution records covering the last 18 years shows that Pelosi has not received any contributions of $200 or more from Del Monte or StarKist employees.

No Evidence of Favortism

Stripped of the false claims that Pelosi stood to profit personally from her action, or that she was acting to favor a campaign donor, the e-mail’s claim amounts to nothing more than accusing her of doing favors for a company located in her home district. That’s pretty much what House members are elected to do. But even this claim rests on flimsy evidence.

It is true that StarKist Tuna was, until recently, owned by Del Monte Foods and headquartered in Pelosi’s home district. On October 7, the company was bought out by South Korean conglomerate Dongwon Industries, which moved the headquarters to Pittsburgh. It’s true that StarKist is a major employer in American Samoa, where tuna canning is a backbone of the economy. And it’s true that American Samoa was exempted from the minimum wage increase that the House passed in 2007. But that’s where the solid parts of this e-mail end.

It’s not at all clear that Pelosi pushed to shield American Samoa from minimum wage increases. A spokesperson for Pelosi has said that the exemption was requested by delegate Eni Faleomavaega, who represents American Samoa in a nonvoting capacity. We can’t say for certain that Pelosi had no hand in pushing the Samoan exemption. But there’s no evidence that she did. For his part, Faleomavaega was vocal about his concerns regarding the impact that automatic minimum wage increases would have on the Samoan economy. Faleomavaega supported a minimum wage increase, but wanted Congress to work out a different way to improve wages in Samoa, one that would have less impact on the territory’s economy.

Faleomavaega also criticized Del Monte for failing to respond to rumors that Pelosi was showing them favoritism because of their political contributions:

Letter to Del Monte president, May 11, 2007: Throughout the minimum wage debate, Del Monte has chosen to remain silent while Speaker of the House Nancy Pelosi has been unfairly attacked by Republicans who suggested that she received campaign dollars from you in exchange for lower minimum wages in American Samoa. As you know, neither Speaker Pelosi nor I have ever received or accepted one penny from Del Monte or Star Kist and a respectable company would have gone on record and made this known.

Once accusations of favoritism started circulating, House Democrats were under pressure to deny Samoa special treatment. In the end, a new bill was passed in which Samoa saw the same automatic minimum wage increases as the incorporated parts of the United States. In November 2008, StarKist laid off 20 workers and cut employee benefits at its Samoan cannery, citing "dramatically escalating costs" due in part to automatic wage increases.

Finally, the e-mail implies that Pelosi added a new credit for American Samoa’s economic development to the bailout bill. In fact, the bill extended an existing development credit first established by the Tax Relief and Health Care Act of 2006. As Speaker of the House, Pelosi was instrumental in drawing up the House version of the bailout amendment, though records don’t show exactly who wrote what. But the extension of American Samoa economic relief also appears in the Senate version, before it was sent to the House for consideration.

– Jess Henig

Sources

Stouffer, Rick. "StarKist headquarters headed back to Pittsburgh." Pittsburgh Tribune-Review. 8 Oct. 2008.

 

Washington Times. "Pelosi moves to close Samoa wage loophole." 13 Jan. 2007.

Blumer, Tom. "Catch of the Day: The Pelosi-Samoa Connections May Be Even Deeper." NewsBusters. 12 Jan. 2007.

Associated Press. "Democrats pledge to extend federal minimum wage to all US territories." 13 Jan. 2007.

Office of Rep. Faleomavaega. "Faleomavaega Responds to StarKist’s Threats Regarding Minimum Wage." 11 May 2007.

Office of Rep. Faleomavaega. "Senator Inouye Agrees to Faleomavaega’s Request to Offer Amendment Regarding Minimum Wage in American Samoa." 18 May 2007.

Associated Press. "StarKist announces cuts in American Samoa." 19 Nov. 2008.