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updated 2/7/2008 5:04:09 PM ET 2008-02-07T22:04:09

How will corporate America react if John McCain lands the Republican nomination? For business, Senator McCain (R-Ariz.) is a candidate of contradictions. He initially opposed President Bush's tax cuts, but now supports making them permanent. He has crusaded against the influence of corporate lobbyists, yet has more K Street fixers raising money for his campaign than any other Presidential candidate. And he says he's a full-bore, free-enterprise capitalist even as he admits that he hasn't understood economics as well as he should. "He doesn't fit neatly into a box," says GOP pollster Whit Ayres, who is unaffiliated with a Presidential candidate.

Major Market Indices

McCain posted strong progress Feb. 5 in his quest for the nomination, winning a string of key states including Arizona, New York, New Jersey, Connecticut, Delaware, Illinois, and Oklahoma. If corporate leaders do fall in line behind McCain's candidacy, it may be somewhat grudgingly after McCain's last remaining rival for the GOP presidential nomination, former Massachusetts Governor Mitt Romney, announced he was suspending his campaign Thursday.

In 2007, business tilted its support heavily toward Romney, as he was certainly a more natural cultural fit for business: As a founder of the investment firm Bain Capital, he's had a successful career in the private sector, which he spoke of repeatedly on the campaign trail, telling audiences he has the economy in his DNA. As voters were going to the polls Feb. 5, Romney warned that the nation's fragile economy needs an experienced leader: "We see our economy getting weaker. People wonder how they are going to pay their bills, gas bills, heating bills," he said.

In contrast to Romney, McCain has joked that he's reading Alan Greenspan's book to learn about the economy. And he has a long history of tangling with a broad range of industries and even individual companies when he thinks they're getting a sweetheart deal in Washington or hurting American consumers. That record could give business representatives pause. "McCain will cause a few corporate government relations offices to sit up straight now that he is all but the GOP nominee," says Republican lobbyist and McCain supporter Scott Reed.

Some business executives worry that McCain's votes against President Bush's 2001 and 2003 tax cuts — which he said were irresponsible since they weren't offset by spending cuts — signal that he is something other than an anti-tax hawk. But on the campaign trail he now argues that allowing them to expire would amount to an unacceptable tax hike. In 2004 and 2005, McCain famously led the Senate's investigation into the wrongdoing of GOP lobbyist Jack Abramoff, to the embarrassment of some of his colleagues who had dealings with the now-jailed influence peddler. At the time he denounced the tight relationships between some lobbyists and members of Congress. But the watchdog group Public Citizen reported that McCain's 2008 presidential campaign has 59 lobbyists raising money, more than any other candidate.

As a candidate, McCain said he is one of the "great enemies of the pharmaceutical companies in Washington." He voted against the 2003 Medicare prescription drug bill, which was avidly pushed by the pharmaceutical industry and provided for billions of dollars of new spending on drugs. McCain said he wanted the government to be able to negotiate lower drug prices and import cheaper drugs from Canada, both ideas that were adamantly opposed by industry lobbyists, and which ultimately failed.

McCain has been active on global warming, proposing a carbon trading system that was opposed by some in the oil and gas industries. McCain was also an early supporter of increasing so-called CAFE standards for automobile emissions. Says one lobbyist who represents oil and gas clients: "If McCain becomes the nominee, our choices aren't very good."

On tobacco, McCain proposed sweeping anti-smoking legislation in the late 1990s that would have raised taxes on cigarettes, restricted the industry's ability to advertise, and given the Food & Drug Administration broad new authority over tobacco companies. He estimated that it would cost the industry more than half a billion dollars over 25 years. The tobacco industry fought it to a standstill in the Senate.

Health maintenance organizations have also tangled with McCain, who once joined forces with Senator John Kerry (D-Mass.) and John Edwards (D-S.C.) to push for new regulations on HMOs. And many corporate leaders felt the campaign finance reform law that McCain co-sponsored with Senator Russ Feingold (D-Wis.) was a threat to freedom of speech, since it limited large "soft money" donations to political parties.

Perhaps McCain's most high-profile fight with an individual company was his years-long opposition to a $30 billion deal that would have allowed Boeing to lease 100 aerial refueling tankers to the U.S. Air Force. During an investigation led from his perch as Chairman of the Senate Commerce Committee, McCain uncovered evidence that led to guilty pleas from a high-level Air Force procurement officer and Boeing's then-chief financial officer, all of which badly embarrassed the aviation giant. Boeing officials declined to speak about McCain's campaign-trail successes, citing a policy of not commenting on Presidential candidates.

Will the money follow?
That long history of sparring with industry may be one reason why Romney bested McCain in corporate fundraising in 2007. According to an analysis by the Center for Responsive Politics, both men depended heavily on business donors: They made up 84% of Romney's 2007 support and 78% of McCain's, but Romney heavily outpaced McCain in total dollars from business, raking in more than $35 million, compared to McCain's haul just shy of $21 million.

Romney also raised more money than McCain in nearly every business sector, including agribusiness, communications and electronics, construction, finance, health, and transportation, according to the same analysis. The only two sectors in which McCain had an edge were defense, where his vocal support of the Iraq war surge has surely had an impact — and lawyers and lobbyists, from which group McCain's long years in Washington have given him a deep Rolodex of names. Corporate donors are famously pragmatic, and their financial backing of Romney may have been a reflection of the state of play of the campaign in 2007 — when McCain had been all but given up for political dead, and Romney appeared to have a strong chance at the GOP nomination.

And compared to a Democrat, many business leaders will overwhelmingly prefer McCain: In its most recent Senate rankings, the U.S. Chamber of Commerce gave McCain an 80% favorable rating, compared with Senator Hillary Clinton (D-N.Y.) at 67% and Senator Barack Obama (D-Ill.) at 55%. The Chamber did not rate Romney, who was not in the Senate. McCain's backers speak of a candidate who they say is a perfect match for the times. They tick off a litany of pro-business positions including McCain's support for low taxes, research and development tax credits for companies, increasing trade and globalization, increased availability of highly skilled workers through immigration, and boosting education to create a competitive American workforce.

"That's an agenda that's good for the American people, and the agents of that agenda will be the businesses of America," says McCain's senior domestic policy adviser, Douglas Holtz-Eakin. "He will be a leader on economic issues the same way he has been on foreign policy issues." McCain also boasts of a list of big business backers including Cisco Chief Executive Officer John Chambers, Merrill Lynch CEO John Thain, and former Hewlett-Packard CEO Carly Fiorina, who has been traveling on the campaign trail with McCain. "His record is far better than the record of the governor of Massachusetts," Fiorina told a business group in Michigan in January.

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