Selling Washington Part 1

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http://www.nybooks.com/articles/18075

Selling Washington

By Elizabeth Drew
Part 1

As the criminal investigation of the Washington lobbyist Jack Abramoff was underway this spring, a spokesman for the law firm representing him issued a statement saying that Abramoff was "being singled out by the media for actions that are commonplace in Washington and are totally proper." Abramoff has since said much the same thing. The lawyer was half right. Like many other lobbyists, Abramoff often arranged for private organizations, particularly nonprofit groups, to sponsor pleasant, even luxurious, trips for members of Congress, with lobbyists like himself tagging along and enjoying the unparalleled "access" that such a setting provides; i.e., they get to know congressmen and sell them on legislation. They take over skyboxes at sporting events, inviting members of Congress and their staffs.

But Abramoff has differed from other lobbyists in his flamboyance (he owned two Washington restaurants, at which he entertained), and in the egregiously high fees he charged clients, in particular, Indian tribes in the casino business. The Senate Indian Affairs Committee, headed by John McCain, found last year that Abramoff and an associate, Michael Scanlon, a political consultant and former communications director for House Majority Leader Tom DeLay, received at least $66 million from six tribes over three years. Abramoff also instructed the tribes to make donations to certain members of Congress and conservative causes he was allied with. And he was careless—for example in putting on his credit card charges for DeLay's golfing trip to the St. Andrews golf course in Scotland in 2000, with a stop in London for a bit of semi-serious business to make the trip seem legitimate. It's illegal for a lobbyist to pay for congressional travel, but Abramoff is reported to have paid for three of DeLay's trips abroad. A prominent Republican lobbyist told me that the difference between what Abramoff did and what many other lobbyists do was simply "a matter of degree and blatancy."

Abramoff's behavior is symptomatic of the unprecedented corruption—the intensified buying and selling of influence over legislation and federal policy —that has become endemic in Washington under a Republican Congress and White House. Corruption has always been present in Washington, but in recent years it has become more sophisticated, pervasive, and blatant than ever. A friend of mine who works closely with lobbyists says, "There are no restraints now; business groups and lobbyists are going crazy—they're in every room on Capitol Hill writing the legislation. You can't move on the Hill without giving money."

This remark is only slightly exaggerated. For over ten years, but particularly since George W. Bush took office, powerful Republicans, among them Tom DeLay and Senator Rick Santorum, of Pennsylvania, have been carrying out what they call the "K Street Project," an effort to place more Republicans and get rid of Democrats in the trade associations and major national lobbying organizations that have offices on K Street in downtown Washington (although, of course, some have offices elsewhere).

The Republican purge of K Street is a more thorough, ruthless, vindictive, and effective attack on Democratic lobbyists and other Democrats who represent businesses and other organizations than anything Washington has seen before. The Republicans don't simply want to take care of their friends and former aides by getting them high-paying jobs: they want the lobbyists they helped place in these jobs and other corporate representatives to arrange lavish trips for themselves and their wives; to invite them to watch sports events from skyboxes; and, most important, to provide a steady flow of campaign contributions. The former aides become part of their previous employers' power networks. Republican leaders also want to have like-minded people on K Street who can further their ideological goals by helping to formulate their legislative programs, get them passed, and generally circulate their ideas. When I suggested to Grover Norquist, the influential right-wing leader and the leading enforcer of the K Street Project outside Congress, that numerous Democrats on K Street were not particularly ideological and were happy to serve corporate interests, he replied, "We don't want nonideological people on K Street, we want conservative activist Republicans on K Street."

The K Street Project has become critical to the Republicans' efforts to control all the power centers in Washington: the White House, Congress, the courts—and now, at least, an influential part of the corporate world, the one that raises most of the political money. It's another way for Republicans to try to impose their programs on the country. The Washington Post reported recently that House Majority Whip Roy Blunt, of Missouri, has established "a formal, institutionalized alliance" with K Street lobbyists. They have become an integral part of the legislative process by helping to get bills written and passed—and they are rewarded for their help by the fees paid by their clients. Among the results are legislation that serves powerful private interests all the more openly—as will be seen, the energy bill recently passed by the House is a prime example —and a climate of fear that is new. The conservative commentator David Brooks said on PBS's NewsHour earlier this year, "The biggest threat to the Republican majority is the relationship on K Street with corporate lobbyists and the corruption that is entailed in that." But if the Republicans are running a risk of being seen as overreaching in their takeover of K Street, there are few signs that they are concerned about it.

When the Republicans first announced the K Street Project after they won a majority in Congress in the 1994 election, they warned Washington lobbying and law firms that if they wanted to have appointments with Republican legislators they had better hire more Republicans. This was seen as unprecedentedly heavy-handed, but their deeper purposes weren't yet understood. Since the Democrats had been in power on Capitol Hill for a long time, many of the K Street firms then had more Democrats than Republicans or else they were evenly balanced. But the Democrats had been hired because they were well connected with prominent Democrats on Capitol Hill, not because Democratic Congresses demanded it. Moreover, it makes sense for lobbying firms that want access to members of Congress to hire people with good contacts in the majority party—especially former members or aides of the current leaders. But the bullying tactics of Republicans in the late 1990s were new.

DeLay, Santorum, and their associates organized a systematic campaign, closely monitored by Republicans on Capitol Hill and by Grover Norquist and the Republican National Committee, to put pressure on firms not just to hire Republicans but also to fire Democrats. With the election of Bush, this pressure became stronger. A Republican lobbyist told me, "Having the White House" has made it more possible for DeLay and Santorum "to enforce the K Street Project." Several Democratic lobbyists have been pushed out of their jobs as a result; business associations who hire Democrats for prominent positions have been subject to retribution. They are told that they won't be able to see the people on Capitol Hill they want to see. Sometimes the retribution is more tangible. The Republican lobbyist I spoke to said, "There's a high state of sensitivity to the partisanship of the person you hire for these jobs that did not exist five, six years ago—you hire a Democrat at your peril."

In one instance well known among lobbyists, the Ohio Republican Michael Oxley, chairman of the House Financial Services Committee, put pressure on the Investment Company Institute, a consortium of mutual fund companies, to fire its top lobbyist, a Democrat, and hire a Republican to replace her. According to a Washington Post story on February 15, 2003, six sources, both Democratic and Republican, said that members of Oxley's staff told the institute that a pending congressional investigation of mutual fund companies "might ease up if the mutual fund trade group complies with their wishes." It apparently didn't matter to them that House ethics rules prohibit congressmen or their staff "from bestowing benefits on the basis of the recipient's status as a supporter or contributor, or partisan affiliation." A Republican now holds the top job at the Investment Company Institute.

Last year retribution was taken against the Motion Picture Association of America, which—after first approaching without success a Republican congressman about to retire— hired as its new head Dan Glickman, a former Democratic representative from Kansas and secretary of agriculture in the Clinton administration. Republicans had warned the MPAA not to hire a Democrat for the job. After Glickman was hired, House Republicans removed from a pending bill some $1.5 billion in tax relief for the motion picture industry. Norquist told me, "No other industry is interested in taking a $1.5 billion hit to hire a Clinton friend." After Glickman was selected, the Capitol Hill newspaper Roll Call reported last year, "Santorum has begun discussing what the consequences are for the movie industry." Norquist said publicly that the appointment of Glickman was "a studied insult" and the motion picture industry's "ability to work with the House and the Senate is greatly reduced." Glickman responded by hiring prominent Republicans, including House Speaker Dennis Hastert's former spokesman, for major MPAA jobs.

Norquist's organization, Americans for Tax Reform, keeps watch on other K Street firms and calls attention on its Web site to the ones that are out of line.[1] According to a report in The Washington Post in 2003, an official of the Republican National Committee told a group of Republican lobbyists that thirty-three of the top thirty-six top-level K Street positions had gone to Republicans.

Despite its effectiveness, "the K Street Project is far from complete," according to Norquist, who says, "There should be as many Democrats working on K Street representing corporate America as there are Republicans working in organized labor—and that number is close to zero." He wants the project to include not just the top jobs in K Street firms, but "all of them—including secretaries."

A prominent Democratic Party fund-raiser believes that in 2001, after nineteen years as head of a trade association, he was fired because he was not a Republican. Another Democratic lobbyist told me that one of his major clients was put under pressure to drop him because he was a Democrat. A staff member in DeLay's office called the second of the two men and told him that he was "in DeLay's crosshairs," and warned him that if he attempted to work with any committees on Capitol Hill, he would get nowhere because of his political leanings.

Episodes of this kind have created a new atmosphere of fear in Washington. (Because of that atmosphere, these people as well as several others insisted on talking "on background," to protect themselves against retribution.) The Democratic lobbyist whose client was pressured by Republicans to drop him remarked, "It's a dangerous world out there," a world where, he said, "You'd better watch what you say. People in the Republican party, in the agencies, will say, 'I hear you were badmouthing X.' You know that you're being watched; you know that it's taken into account in your ability to do public policy things—[like] get a meeting with a government agency." Another lobbyist says, "It's scary now. People are afraid to say what they feel. It's had a chilling effect on debate." According to the head of a public policy group who frequently deals with lobbyists and corporations, "They don't have to say it," but he finds them now "intimidated by the atmosphere in this town—you hire Republicans."

Business groups are under heightened pressure to support the administration's policies—even those that are of no particular interest to them. A recent article in Business Week told of business organizations, including the Business Roundtable—an association of CEOs of major corporations—being summoned to meetings with Mike Meece, a special assistant to the President, various cabinet officers concerned with business affairs, and Karl Rove. They anticipated a friendly give-and-take about economic legislation but instead they were told to get behind the President's plan to privatize Social Security. As a result, these organizations have spent millions of dollars promoting Bush's new program, particularly through ads. Business groups have been notably reticent about criticizing administration policies—even ones they deeply dislike, such as the huge budget deficit. In the past, when they differed from administration policies, for example on trade or tax issues, they spoke out. An adviser to business groups says, "They're scared of payback, of not getting their own agenda through."

End Part 1

[beltman713]

Selling Washington

By Elizabeth Drew

Part 2

The connections between those who make policy and those who seek to influence it have become much stronger in recent years because of lobbyists' increasing use of nonprofit groups to sponsor trips that give them access to lawmakers, as with DeLay's trip to Scotland and England. Jack Abramoff arranged for the trips of DeLay and other members of Congress to be officially sponsored by the National Center for Public Policy Research, of which he is a member of the board. According to the congressional ethics rules a lobbyist cannot repay the cost of a free trip for a congressman by reimbursing the nonprofit group that organized the trip. But there's nothing to prevent him from giving large contributions to the organization or encouraging his clients to do so. Abramoff urged the Indian tribes he represents to contribute to the National Center, which paid for DeLay's trips. Owing to a major loophole in the ethics rules, nonprofit groups do not have to disclose their contributors. "It's a real abuse," the Republican lobbyist told me. Such trips are also a way of getting around the ban on gifts of more than $50 to members of Congress.

For the Washington lobbyist, the most-sought-after access is to someone who writes the nation's laws and appropriates federal money. Trips offer the best opportunity for the lobbyist to make an impression on a congressman. Since congressmen can no longer make use of soft money under the McCain-Feingold campaign finance reforms, they are increasingly using golfing weekends and hunting trips for fund-raising. The politicians in effect charge the lobbyists to play golf or hunt with them. (Members of the middle class and the poor have scant opportunity to play golf with members of Congress.)

Many congressional trips have a serious purpose; some members restrict their travel to hazardous places like Iraq and Afghanistan. Such trips can be paid for out of congressional committees' funds—but they are usually less glamorous, harder to explain to the voters since the public pays for them, and they don't include lobbyists. The rules for privately funded trips, for example that they must be "in connection with official duties," have been interpreted quite loosely. Larry Noble, executive director of the Center for Responsive Politics, a nonpartisan group that studies money in politics and its influence on public policy, says, "Even where they touch base with the rules, they don't take them seriously."

According to a study of congressional travel over the past five years paid for by nonprofit institutions, the Aspen Institute, a think tank based in Aspen, Colorado, and Washington, has spent the most on congressional travel; but Aspen is a serious organization that conducts seminars in the US and abroad, and lobbying isn't involved.[2] More interesting is the nonprofit that spends the next highest amount: the Ripon Society, actually the Ripon Educational Fund, an offshoot of the Ripon Society, which was founded in the 1960s by liberal Republicans as a serious organization concerned with public policy. Now that liberal Republicans are virtually extinct, Ripon has become an organization for relatively moderate Republicans.

Like other policy groups that also lobby, Ripon has set up an ostensi-bly separate "educational" group, or 501(c)(3), to which contributors can make tax-deductible donations. The Ripon Educational Fund sponsors a large annual "Transatlantic Conference," held in such pleasant places as Rome, London, and Budapest, to which it invites between 150 and 200 US citizens. These are vaguely described in the filings by the members of Congress who participated in them as "listening tour," or "fact finding."

The Ripon trips are famous among lobbyists for the opportunities they present for pressing their cases with members of Congress. A Republican lobbyist says that a Ripon Fund excursion has "become the trip to go on, because of the luxury and the access." The Washington Post reported that a Ripon Educational Fund trip to London in 2003 was attended by more than a hundred lobbyists, including representatives from American Express, AOL/Time Warner, and General Motors. They pay the Ripon Fund an annual membership fee of $9,500, and in addition finance their own trips abroad to Fund meetings.

Both the Ripon Society and the Ripon Educational Fund are headed by lobbyists. Former Representative Susan Molinari, of Staten Island, New York, a lobbyist whose clients now include Exxon, the Association of American Railroads, and Freddie Mac, is the chair of the Educational Fund. The president of the society itself is Richard Kessler, whose lobbying firm's clients include drug and cigarette companies. According to The Hill, the other Capitol Hill newspaper, Kessler's firm paid for a trip by five members of Congress to Ireland in August 2003, including four days at Ashford Castle, where the elegant grounds include a golf course. Of the members of Congress who went on Ripon Educational Fund trips, almost all took along their wives, an additional perk that contributes to the holiday atmosphere of the excursions. While lobbyists are prohibited from paying directly for congressional trips, trade associations and private corporations are allowed to do so—not much of an ethical distinction, since practically all of them engage in lobbying.

A recently released Congressional Quarterly study said that the disclosure forms filed by members of Congress "frequently show a direct correlation between a member's legislative interests and the sponsors of his or her trips." For example, Representative Michael Oxley, who is particularly concerned with corporate finance, took several trips underwritten by companies such as MCI. A political observer who closely studied congressional trips concluded that the Republicans are invited so they can be "worked on" to pass pending legislation, while the Democrats are there largely for "maintenance," in case they take power in the future. Moderate, "swing" Democrats who can affect the outcome of legislation come in for special attention.

The McCain-Feingold campaign finance reform bill in 2002 didn't stop powerful companies and members of Congress from buying and selling influence. Representative Barney Frank, a major backer of the reform bill, says, "It works about the same as it did before." But, he adds, because the new law banned large soft money contributions by individuals, corporations, and labor unions to campaigns for federal office, and maintained overall limits on how much a person can contribute to federal elections—doubling them from $2,000 to $4,000 per election cycle—everyone has to work harder to raise the money.[3] Still, congressmen are seldom heard to complain that they can't raise enough money and in fact, according to data compiled by the Center for Responsive Politics,[4] both the political par-ties and individual candidates are raising more money than ever. Lobbyists still manage to deliver large amounts to legislators by "bundling" smaller contributions.

They contribute most of the money they raise to incumbents who can be depended on to do favors—a major reason (in addition to gerrymandering) why there is serious competition in only 10 percent of House races, and only about five seats change hands in each congressional election. Members of Congress expect to receive contributions from local industries (and their workers)—say, the coal industry in West Virginia—and they back legislation to help them out as a matter of doing constituent work. It's illegal for a firm to compensate employees for their political contributions, but, a Republican lobbyist says, a job applicant is often told that he or she is expected to make contributions, and salaries are adjusted accordingly.

It's virtually impossible to show that a particular campaign contribution resulted in a specific vote—such quid pro quo is illegal. Fred Wertheimer, of the public advocacy group Democracy 21, told me, "The system's designed so that you don't see who gets what for their money. It's designed for me to give money to you and you do something for me in the Congress—without either of us saying a word about it. But if I give money, I know it and the candidate knows it. It's an investment, and down the road you collect on it." While much of the money buys access to a member of Congress, or key staff members, that is only the entry point to making one's case. As John McCain puts it, "You give money, you get an ear." Still, one can sometimes even trace what Larry Noble carefully calls "correlations" between contributions and legislative successes.

The energy bill passed by the House in April is a striking case in point. The oil-and-gas industry, a top contributor of campaign money—80 percent of it to Republicans—benefited from several of its new provisions. A study by the staff of Representative Henry Waxman, Democrat of California, shows that perhaps the most indefensible provision gave a waiver against lawsuits to manufacturers of MTBE, or methyl tertiary-butyl ether, a gasoline additive that's a pollutant and suspected carcinogen. According to Waxman's staff, this waiver is worth billions to energy companies; the major beneficiaries would be Exxon, which, according to the Center for Responsive Politics, contributed $942,717 to candidates in the last election cycle; Valero Energy, $841,375; Lyondell Chemical, $342,775; and Halliburton, $243,946. The bill also exempted from the Safe Drinking Water Act the practice of hydraulic fracturing, which is used to make natural gas wells more productive and can also have an adverse effect on drinking water. Halliburton would benefit from this provision as well.

Another provision provided compensation to oil companies that bought leases, supposedly a speculative venture, on offshore sites where there is a moratorium on drilling. The compensation is worth billions of dollars to the oil industry. The bill also provided for the opening of the Arctic National Wildlife Refuge (ANWAR) to oil drilling—an invasion of the refuge that environmental groups have long tried to prevent. (Now that it contains more Republicans, the Senate passed a similar provision as part of its budget bill earlier this year.) The Democrats on the House Energy and Commerce Committee were effectively shut out of the drafting of the energy bill. House Democrat Edward Markey, a member of the Subcommittee on Energy and Air Quality, told me, "The energy companies got everything they wanted. Eight billion dollars in subsidies go to the energy companies, but to say that the conservation measures in it are modest would be a generous description."

An analysis by the Center for Responsive Politics shows that pharmaceutical manufacturers, who received a windfall from the new prescription drug program in the 2003 Medicare bill—including a provision prohibiting the federal government from negotiating with drug companies on prices— contributed more than three times as much to those who voted for the legislation as those who voted against it. A bill passed this year in the Senate and the House to tighten the rules for filing bankruptcy had long been sought by finance, insurance, and real estate interests, and particularly by credit card companies. Taken together, they all contributed $306 million to congressional campaigns, 60 percent of it to Republicans, during 2003 and 2004. The richest interests also spend the largest amounts of money on lobbying. According to a recent study by the Center for Public Integrity,[5] the makers of pharmaceuticals and health products spent the most—$759 million —on lobbying between 1998 and mid-2004, when the last lobbying reports were filed. Next came insurance companies. Oil and gas companies were seventh on the list.

The effects of the new, higher level of corruption on the way the country is governed are profound. Not only is legislation increasingly skewed to benefit the richest interests, but Congress itself has been changed. The head of a public policy strategy group told me, "It's not about governing anymore. The Congress is now a transactional institution. They don't take risks. So when a great moral issue comes up— like war—they can't deal with it." The theory that ours is a system of one-person-one-vote, or even that it's a representative democracy, is challenged by the reality of power and who really wields it. Barney Frank argues that "the political system was supposed to overcome the financial advantage of the capitalists, but as money becomes more and more influential, it doesn't work that way."

Two House Democrats, Rahm Emanuel, of Illinois, and Martin Meehan, of Massachusetts, have introduced legislation to tighten the rules on privately funded travel, strengthen the lobbying disclosure rules, and slow down the revolving door by which former members of Congress take jobs with the trade associations and, after a year, can lobby their former colleagues. Some Republicans are talking about placing more restrictive rules on trips. But the record shows that new regulations can often be evaded.

Perhaps the greatest deterrent to ethical transgression is that members of Congress don't want to read unfavorable stories about themselves. A Republican lobbyist says that the biggest factor in the growth of corruption has been "the expectation that all this goes undetected and unenforced." He added, "If Jack Abramoff goes to jail, that will be a big message to this town." Since the scandal broke over Abramoff's payments on behalf of DeLay, members of Congress have been scrambling to amend their travel reports, in some cases listing previously unreported trips, or filling in missing details. Public outrage can also have an inhibiting effect: after the Republicans changed the ethics rules earlier this year to protect DeLay, the adverse reaction in the press and from constituents was strong enough to make the Republican leadership back down.

But the public can't become outraged about something that isn't brought to its attention. The press tends to pounce on the big scandals but usually fails to cover the more common ones that take place every day. Some of the politicians I talked to hoped that the scandal over DeLay and Abramoff might lead to real changes, including more prosecutions and stricter disclosure requirements. But even they admit that, like so many other scandals, it may simply blow over.