An Edgar candidacy brings us a pungent whiff from the past. Just as George Ryan's scandals start fading into the mist, ethical problems associated with Edgar's governorship will be resurrected in primary and general elections. As the U.S. attorney's office for the central district of Illinois reported, ''public corruption became a major focus of the office beginning in 1994. In a case that had statewide impact, Management Services of Illinois and its principals were charged with bribing state officials in order to obtain lucrative contracts for computer services.''

The federal report continued: ''One state official was acquitted in the case, but two others, the corporation and two of its principals were convicted. Substantial testimony indicated that members of Gov. Jim Edgar's staff were instrumental in directing the awarding of contracts. Three days after the first round of convictions, Gov. Edgar indicated he would not seek re-election.''

Any thought that his old news would not be made issue No. 1 by the Democrats is hopelessly naive. All told, MSI gave more than $270,000 to Edgar's election campaign, becoming his No. 1 contributor. In return, the Better Government Association (on whose board I serve) says MSI was awarded ''illegal, super lucrative 'no bid' government contracts that ended up defrauding Illinois taxpayers of more than $7 million. Not surprisingly, the corrupt contracts were negotiated by the governor's closest aides.''

Then there is the story of Robert Hickman, Illinois Tollway director, who, with former state Rep. Joseph Kotlarz (D-Chicago), was convicted of theft by deception and conspiracy to commit theft in DuPage County Circuit Court in a plot to buy land for the tollway during Edgar's administration. Hickman raised approximately $12 million for Edgar's gubernatorial races.

Finally, there is Edgar's 10-year service as secretary of state preceding his governorship. How many low-digit license plates and friendly office leases--quaint practices extending back many decades--were there in Edgar's term? They seemed innocent then (indeed many were), but how will the culture of the secretary of state's office look now that we have had such tawdry experience with George Ryan? Did the drivers licenses for bribes scandal begin and end with Ryan? Negative campaign researchers will have a motive for finding out.

As if these items were not enough, perhaps the president should consider what might happen if ''moderate'' Edgar were in the Senate today. As a firmly committed abortion rights advocate (although as governor he signed the bill banning partial-birth abortion), would Edgar vote to confirm the generally pro-life nominees the president names to federal courts--or would he align with such moderates as Susan Collins (R-Maine) and Lincoln Chafee (R-R.I.)? On tax policy, would he vote for the $726 billion tax cut the president says is needed--or would he side with fellow moderate George Voinovich (R-Ohio) and argue that the cuts are too generous at a time when the deficit is looming?

As he marks time, Edgar obviously is awaiting the result of polling by the state GOP. It may bring good news, but the campaign might not be so comforting--waged on the issues of ethics, MSI and tollway, and laced with rebellion from the GOP's powerful conservative base--and could well persuade the former governor to stay moored in the safe harbor of academia and lucrative board directorship.

Just as we counseled last spring in the aftermath of 9/11 that the President's approval numbers would begin to settle out in the months leading up to election day 2002, expect the current high approval numbers to drop to a more realistic level. After 9/11 the President's approval rating settled at a slower rate over several months with some pundits and Democrats predicting the "sky is falling" each step of the way. The current approval number should settle out beginning fairly soon and happen much faster this time but you can expect a chorus of the "sky is falling" again.

The main difference between then and now is the Democratic base is solidly against the War in Iraq and therefore the approval rise was never going to be as high as the numbers after 9/11 or as long lasting. Our two most recent Presidents to win re-election provide some historical perspective for the relationship between approval ratings and electoral success. President's Clinton and Reagan were both re-elected by large margins with each having approval ratings in the 50s.

As we get closer to the start of the 2004 Presidential election campaign, the Democratic base vote will continue to solidify. And as President Bush is tested in media polls on head to head ballot questions, it will not be surprising to see the President behind in some polls against potential Democratic candidates and generic Democratic opposition. Every incumbent President in the last 25 years has been behind the opposition in the latter part of his first term- the sky is not falling.

*Throughout 1983, former President Reagan was behind Walter Mondale by as many as nine points, and against possible opponent John Glenn, Reagan was behind by as much as 17 points in 1983. Even at the beginning of 1984, the polls showed the race between Reagan and Mondale was a statistical dead heat. Reagan won in a landslide carrying 49 states.

*In 1987 and 1988, Vice President George Bush was behind in generic ballot polls by as many as 15 points, and against Michael Dukakis throughout 1988 Bush was behind by as many as 17 points. It was not until the Republican convention in late summer 1988 that Bush took a small solid lead. Bush went on to win by a fairly good margin in November.

*In 1995 and early 1996, former Senator Robert Dole was often ahead of Clinton in ballot polling. The Wall Street Journal showed Dole with a two point lead in 1995. And Gallup had Dole with small leads in 1995 and January 1996 Dole had a three point lead over Clinton.

In addition to approval numbers, pundits and Democrats will place an emphasis on re-elect numbers. Again it is important to have an understanding of historical precedent. Throughout 1995 President Clinton's re-elect hardly ever got above 40%. In a Battleground poll in April, 1995, Clinton's re-elect was 21%. The highest point Clinton's re-elect reached in 1995 was 43% in a poll due in December 1995 for Associated Press. In spite of the low re-elect number, President Clinton ending up winning re-election comfortably.

More recently, in 2002, every major statewide candidate with a re-elect of 45% or higher --- won! The average actual result on election day 2002 showed incumbents finishing 5 to 10 points above their re-elect numbers. It is no longer accurate to suggest that a candidate is vulnerable based solely on an incumbent having a re-elect number under 50%.

As the inevitable discussion proceeds in the months ahead, this memo should provide both perspective and a reality check. President Bush's approval numbers will again fall back to more realistic levels fairly quickly, and in head to head polls in the months ahead President Bush will at times likely be behind potential Democrats just as former Vice President Bush and Presidents Clinton and Reagan were going into the election. All were quite successful on Election Day.

Senator Fitzgerald chaired a hearing today of the Senate Commerce subcommittee on Consumer Affairs and Product Safety. The hearing examined how corporate behavior would be modified by the elimination of the double taxation of dividends. The proposal is a significant element of President Bush’s tax reduction program to spur economic growth.

"Ending the double taxation of dividends would be the most significant corporate reform in decades," said Fitzgerald, a former commercial banking attorney. "By encouraging companies to pay dividends rather than focus solely on lifting their share prices, we could help prevent future Enron-like pump-and-dump schemes."

Fitzgerald outlined three specific ways the president’s dividend tax reform would improve corporate governance and restore investor confidence in corporate America:

Protect investors. Promoting the distribution of dividends would lessen corporate emphasis on earnings statements and provide investors with a better basis for judging companies’ financial health. Currently, the investing-public tends to judge stocks by looking at companies’ earnings statements. Earnings statements, however, can be manipulated, and "earnings" themselves are intangible and subject to varying definitions. In contrast, dividends are tangible and well-defined and offer proof of authentic profits.

Reduce corporate debt and promote sound investment and operating decisions. The current tax system has distorted corporate financing decisions by encouraging reliance on excessive corporate debt. However, corporations that rely more heavily on equity have more flexibility to meet fluctuations in the business cycle and are better able to weather economic downturns than companies which accrue excessive debt. By eliminating the double taxation of dividends, the administration’s proposal would end the tax advantage that debt financing now enjoys over equity financing.

Discourage corporate inversions. The tax reform proposal calls for providing tax-free status only to those dividends paid from corporate income that has been taxed. This requirement would reduce the incentives for companies to reincorporate off-shore or engage in other transactions which have no legitimate purpose other than to shield income from taxes. Fitzgerald noted that had President Bush’s proposal been in effect in the late 1990s, Enron probably would not have been able to fool investors into believing its profits were real. Between 1996 and 1999, Enron reported $2.3 billion in earnings to its shareholders. At the same time, the company reported a $3 billion loss to the IRS. Under the president’s proposal, none of the dividends Enron paid out to its shareholders during that period would have been entitled to tax-free treatment.

==>– Ronald Reagan