SEN. LLOYD BENTSEN (D-TX)

On February 22, 1991, Sen. Bentsen purchased between 1,000 and 15,000 dollars worth of PRIVATE PLACEMENT STOCK in Morningstar Foods (MSTR's stock became available for public trading on April 4, 1992). He sold this private placement on December 23, 1991 for a reported capital gains between 5,000 and 15,000 dollars. Morningstar Foods is a dairy-concern based in Dallas, TX, and was formerly owned by Southland Corp. Here are some facts surrounding this transaction:

1. Throughout February 1991, junk-bond trader and corporate-raider Thomas O. Hicks (Hicks, Muse and Co.--based in Dallas, TX) was in the final phases of completing a leveraged buy-out of Morningstar Foods. The buy-out was completed on March 1, 1991 (one week after Sen. Bentsen's stock purchase).

2. On February 26, 1991 (four days after Sen. Bentsen's stock purchase), a bill was introduced in the Senate that would appear to help Morningstar Foods. The bill was S. 499: NATIONAL SCHOOL LUNCH ACT, AMENDMENT...To remove the requirement that schools participating in the school lunch program offer students specific types of fluid milk (Sponsored by Sen. Lugar; Referred to the Senate Agriculture Committee; Not enacted during the 102nd Congress). This bill was reintroduced in the 103rd Congress as S. 88; the bill is known informally as the "Lugar Milk Bill," and appears to be gaining support. This Milk-Bill may help Morningstar Foods because it expands the choices of fluid milk beyond the current whole-milk requirement. Morningstar could offer low-fat milk or even lactose-free milk. In short, this bill will offer milk producers new market opportunites.

3. Thomas Hicks secured financing for his Morningstar LBO from two foreign banks (Long Term Credit Bank of Japan; NMB Postbank Groep N.V. of the Netherlands). Interestingly, Morningstar's former parent company (Southland Corp.) was also purchased in March of 1991 by two Japanese buyers (Ito-Yokado Co. and 7-Eleven Japan Co.). The international financing aspect of the Morningstar LBO is interesting when we look at Sen. Bentsen's 1991 Senate Committee Assignments (Chairman of Senate Finance; Senate Finance Subcommittee on International Trade; Senate Commerce Committee; Joint Committee on Economic Growth, Trade and Taxes). The Japanese connection in the Morningstar LBO is interesting because Sen. Bentsen is on public record as strongly opposed to Japanese business/political influence in this country. I wonder how closely Sen. Bentsen's publish views on Japan mesh with his private views?

4. On October 27, 1991, Thomas Hicks gave a $2,000 campaign contribution to Sen. Bentsen. This one contribution is the ONLY recorded Hicks - to - Bentsen contribution from 1987 through 1994.

5. On December 31, 1991 (eight days after Sen. Bentsen sold his stock), Morningstar Foods was notified that it was the target of a Justice Department investigation into bid-rigging to sell milk through the National School Lunch Program.

6. On January 28, 1992, Sen. Lugar received a $500 campaign contribution from Thomas Hicks. Sen. Lugar is the only member of Congress outside the State of Texas to receive campaing money from Thomas Hicks.

POLITICAL MONEY NOTES: Sen. Bentsen accepted $4,000 from the Mid-America Dairymen PAC, and $9,000 from the Committee for Thorough Agricultural Political Education of Associated Milk Producers PAC in the last election cycle. ++++++++++++++++++++++++++++++++++++++++++ *** On January 11, 1989, Sen. Bentsen purchased between 51,000 and 105,000 dollars worth of stock in Caterpillar Corp. He later sold this stock on July 14, 1989. During this time, Congress and the White House were agressively considering Voluntary Restraint Agreements (VRAs) for the steel industry. In 1984, President Reagan initiated the VRAs (i.e., limits on steel imports) to protect the domestic steel producers. These VRAs were set to expire in September of 1989, and the American steel industry wanted another five years of protectionism from the Bush Administration and Congress. Caterpillar (a major steel user) was bitterly opposed to VRAs. They argued that limits on steel imports drove-up the price of steel, and seriously damaged their operations as European and Japanese competition stole their world-wide market share. Caterpillar organized and lead a 200 member coalition of steel users (the American Steel Using Manufacturers) to oppose any and all extensions of the VRAs. On February 8, 1989 (four weeks after Sen. Bentsen's stock purchase), Sen. Rockefeller introduced S. 378: STEEL IMPORT STABILIZATION ACT AMENDMENT -- 5 YEAR EXTENSION...To extend the VRAs another five years (Referred to Sen. Bentsen's Senate Finance Committee; Not Enacted). S. 378 had 56 cosponsors; Sen. Bentsen was NOT a cosponsor. S. 378 was not enacted. In its place, however, H.R. 3275: STEEL TRADE LIBERALIZATION ACT was enacted (Introduced September 14, 1989; Referred to Senate Finance Committee; Became P.L. 101-221). H.R. 3275/P.L. 221 extended the VRAs by 2.5 years. Looks like the compromise between steel producers and steel users was to split the difference! NOTES: During 1989, Sen. Bentsen was Chairman of the Senate Finance Committee.