Even after Obama's promise, lobbyists still run the White House

Published: 21 May, 2012  - RT


If you’re looking for someone busier than US President Barack Obama, try finding his doorbell repairman. New records reveal that the White House has had millions of visitors since Obama entered office, and many were lobbyists.

Since the start of his term, President Obama has been adamant on eradicating ties between administration officials and Washington lobbyists. He vowed to keep himself from appointing former K Street execs to White House roles and even outlined it as part of his campaign agenda back in 2008. Now to settle a lawsuit, the Obama administration has released the White House’s visitor logs dating back to just after the current commander-in-chief took the oath of office, and although preliminary research reveals that there aren’t a lot of notorious names littering the logs that would raise eyebrows, one thing is for certain: lobbyists are without a doubt welcome at 1600 Pennsylvania Avenue.

Dating back to January 2009, the president’s palatial Washington, DC mansion has seen more than just a few guests. In all, the logs suggest that 1.3 million distinct visitors have dropped by for more than 2 million individual visits. A fair share of those are chalked up to holiday parties, diplomatic receptions and bill signing ceremonies, but besides from tour groups, the president’s most popular guests appear to be lobbyists working for companies that usually have cushy relationships with the White House.

In a report published on Monday by the Washington Post, the paper notes that lobbyist Marshal Matz has made more than two dozen drop-bys since inauguration day, often accompanied by some pretty big names in the world of business. In particular, the Post notes that Matz has swung by the White House from time to time with the general counsel for the company that runs General Mills cereal and the owner of Beef Products, Inc.

“I appreciate Marshall’s ability to have access,” Federal Forest Resource Coalition President Howard Hedstrom tells the Post, “…He opened the door, but basically the conversation was carried by those of us who know the issues.”

Testimonies from others suggest that being buddy-buddy with a lobbyist might be the only way to get in, though.

Vivature Health CEO Andrew Menter tells the Post that he met with Obama towards the end of the president’s first year in office after lobbyist Tom Downey arranged for a meeting between the two. He wasn’t the only one helped out by the former New York congressman, but he was one of just a few that felt comfortable talking to the Post about his experience. Menter says that the meeting was made so that he could discuss the effects of Obama’s new health-care law on his small-time business, to which he offers the Post a unique reflection:

“The whole process was interesting for me. It’s a little scary,” he says. “You need a lobbyist to get a meeting.”

The White House is not holding back by publishing the logs, and offers little commentary as to why each visitor dropped by. If anything, though, it finally accounts for explaining just how strong the relationship between lobbying and legislation really could be.

Among other frequent visitors include Tim Hannegan, who lists Taser International as a client. He’s been to the White House more than 30 times since the start of the president’s first term. Bill Samuel, lobbyist for the AFL-CIO, has been by more than 50 times.Elsewhere Michael Taylor, a lobbyist for the Monsanto the devil corporation that formally served as an attorney for the US Department of Agriculture, is listed 25 times in the database. Chris Dodd, the former congressman that left his Senate position to help lobby in favor of the Stop Online Piracy Act on behalf of the Motion Picture Association of America at a $1.2 million annual salary, made more than a dozen trips too.

“The administration’s stance on lobbying may be a great applause line for people outside the Beltway but there are people here in D.C. who are lobbying on behalf of a multitude of worthy causes,” Laura Murphy, a lobbyist for the American Civil Liberties Union, tells the Post.

In the end, a visitor’s pass into the White House doesn’t always guarantee that you’ll win Obama’s endorsement. It does, however, help get you that much closer to Washington royalty — even after insisting that the revolving door between the White House and corporate lobbying would be closed on his watch, 17 former lobbyists were appointed to the Obama Administration – during his first two weeks in office alone.

The Trouble With That Revolving Door...

Monday, December 19, 2011 by the New York Times

by Thomas Edsall

 

Last week, an inside-the-Beltway newsletter, First Street, published a unique top-ten list. It reveals which former members of Congress are among the most important Washington lobbyists.

The first four on the list — Senator John Breaux, of Louisiana (who served in Congress from 1972 to 2005), Representative Tom Downey, of New York (1974 to 1993), Representative Victor Fazio, of California (1979 to 1999), and former Democratic House Majority Leader Richard Gephardt (1977 to 2005) – are all members of the Democratic Party, which historically has represented the bottom half of the income distribution.

These former Democratic members of the House and Senate are on the cutting edge of a revolution in the political culture of the nation’s capitol. Without attracting the attention of the general public, the career path of retired legislators has transformed the thinking of those still in Congress, Democrat and Republican alike.

When Washington politicians leave office, many, if not most, no longer return home. Instead, they head straight to the lucrative world of K Street, the nation’s lobbying corridor, which runs through the heart of Washington. A former member of the House or Senate with even modest seniority can now expect to walk into a job paying up to $1 million or more a year – and much more when bonuses are paid for bringing in new clients.

There are various estimates of the number of living former members of the House and Senate. The Association of Former Members of Congress has a listing of 592, and estimates there may be as many as 1,000, a large number of whom are no longer employed at all. The Congressional Research Service reported that as of Oct. 1, 2009, there were 455 former members receiving some form of federal pension.

The Center for Responsive Politics has found that 370 former members are in the influence-peddling business, including at least 285 who are now registered as federal lobbyists. The remaining 85 who are not formally registered as lobbyists are described by the center’s website, OpenSecrets.org, as providing “strategic advice” to corporate clients or as performing work classified as public relations.

For Obama and Democratic leaders who are trying to set an election agenda focused on income inequality, wage stagnation, and downward mobility for the middle and lower class, the prominence of Democratic lobbyists has become problematic.

President Obama, in his Dec. 6 speech in Osawatomie, Kan. sought to shift the 2012 election debate onto terrain favorable to Democrats. “Look at the statistics,” the president said. “In the last few decades, the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year.” Obama also pointed out that:

For the top one hundredth of 1 percent, the average income is now $27 million per year. The typical C.E.O. who used to earn about 30 times more than his or her worker now earns 110 times more. And yet, over the last decade the incomes of most Americans have actually fallen by about 6 percent.

Jeff Hauser, a spokesman for the A.F.L.-C.I.O., said the role of former Democrats in representing corporate America is one of the reasons that the umbrella labor organization has recently broken its firm allegiance to the Democratic Party. “We can’t be positioned as attached to the Democratic Party because there are elements of the party that have contributed to the 99 percent versus 1 percent division in this country,” he said. Hauser cited a key speech by A.F.L.-C.I.O. president Richard Trumka on May 20 declaring organized labor’s independence from either party:

Our role is not to build the power of a political party or a candidate. It is to improve the lives of working families and strengthen our country. It doesn’t matter if candidates and parties are controlling the wrecking ball or simply standing aside — the outcome is the same either way.

A case in point is Richard Gephardt, who represented a working-class district in south St. Louis for 28 years. Gephardt served one year as chairman of the House Democratic Caucus, six as Democratic majority leader, and eight as Democratic minority leader. Through much of his congressional career he was a staunch ally of organized labor (his father was a member of the Teamster’s Union) fighting for the interests of trade unions on issue after issue.

An unsuccessful candidate for the Democratic presidential nomination in 1988 and in 2004, Gephardt had substantial labor backing in the form of get-out-the-vote efforts and key endorsements from the Teamsters, the Machinists, the Steelworkers, and the Ironworkers. In 2003 John Sweeney, then president of the A.F.L.-C.I.O., said, ”Dick has been a real friend of working people and a powerful voice for working families on issue after issue.”

Upon leaving Congress in 2005, Gephardt joined the Washington offices of DLA Piper as senior counsel. Two years later, he founded his own lobbying firm, the Gephardt Government Affairs Group.

By 2010, annual firm billings had shot up from $625,000 in 2007 to $6.59 million. Gephardt’s client list was blue chip, Goldman Sachs (paid Gephardt $200,000 in 2010); Boeing Co. ($440,000); Visa Inc. ($200,000); Ameren Corp, the energy holding company ($200,000); and Waste Management Inc., the leading provider of trash and garbage removal ($320,000).

A normally voluble political strategist and committed liberal who has worked with Gephardt in past elections said about the former Congressman’s lobbying clientele, “I don’t want to talk on the record, it sucks. It’s a sad situation for us.”

For an ex-member of Congress of either party, the financial appeal of lobbying is hard to resist.

In 2010, former representative Billy Tauzin, Republican of Louisiana, set a record for ex-members, making just over $11.5 million running the drug industry’s major lobbying arm, the Pharmaceutical Research and Manufacturers of America.

In 2009, former representative James Greenwood, Republican of Pennsylvania, who became C.E.O. and president of the Biotechnology Industry Organization after retiring from Congress, made $1.16 million, along with fringe benefits of $60,000.

That same year, former representative Daniel Glickman, Democrat of Kansas, received $1.33 million and $23,398 in fringe benefits as C.E.O. of the Motion Picture Association of America, according to I.R.S. filings.

With examples like this before them, most incumbent members, as they go about their daily routine of casting votes and attending committee meetings, must have in the back of their minds an awareness that they are likely to go into the influence-peddling business in the future. This knowledge inevitably influences – and arguably corrupts – their votes on legislation crucial to the interests most likely to hire them after they leave the halls of Congress.

The corruption inherent in the open revolving door between Congress and K Street is well described by Lawrence Lessig, a professor of law at Harvard, in his new book Republic, Lost.

Both Fazio and Downey defend their decisions to become lobbyists. Each contends he remains committed to advancing and defending the interests of the less well off.
“When I had options, I made some decisions, one thing led to another, and here I am,” Fazio, who is a member of the Akin, Gump, Strauss, Hauer & Feld law firm, said in an interview. “Clearly when you’ve been in the public sector, you know the system, you know the arguments that are most effective. You can be a very effective advocate.”

“What matters is what the Senate is doing on the payroll tax, not whether some old members of Congress do lobbying,” Downey argued. Downey noted that he has a number of pro bono clients, including advocates of AIDS research, homeless organizations and groups seeking to stop trafficking in women. “At the end of the day, I feel quite satisfied having spent at least half my time on projects for which I am not paid,” he said. In 2010, his firm, Downey McGrath Group, reported lobbying income of $3.32 million from such clients as Time Warner Cable, FedEx, the National Association of Chain Drugstores and the investment bank Lazard Ltd.

Of the four top lobbying Democrats, Breaux — who served as chairman of both the Democratic Leadership Council and the Democratic Senatorial Campaign Committee — fits most comfortably into his lobbying role. Breaux won fame in 1981 when, after getting huge sugar subsidies inserted into Republican-sponsored tax-cut legislation, he told reporters, “My vote can’t be bought, but it can be rented.” In 2010, his firm, the Breaux Lott Leadership Group, a subsidiary of the Patton Boggs LLP law firm, had billings of $11.83 million from such clients as Citigroup, Goldman Sachs, General Electric, AT&T, Tyson Foods and the Pharmaceutical Research and Manufacturers of America.

Gephardt, in turn, has posted on his firm’s web site a link to an article about the release of First Street’s newsletter, under the headline “Dick Gephardt Named To 2011 List of Top Lobbyists.”

Who Will the Super Committee Fight For?

Thursday, September 8, 2011 by The Nation

by Katrina vanden Heuvel

 

 

While President Obama’s highly anticipated jobs speech seems to be all political junkies are paying attention to today (that is, if you’re not a football junkie), attention must also be paid to the first meeting of the infamous super committee.

Today these 12 men and women begin the business of finding $1.2 trillion to $1.5 trillion in new revenues and spending cuts over the next decade. What this committee comes up with might go a long way towards determining the kinds of resources that will be available (or not) for any lasting economic recovery.

Before embarking on a GOP “cuts only” approach that too many Democrats seem willing to buy into, the super committee members—six from the House and six from the Senate, evenly divided between the parties—should look homeward to their own districts and states and see how their constituents are doing. That should serve as a reminder of just whom it is they were elected to serve—it’s not K Street and the nearly 100 registered lobbyists who used to work for super committee members and now expect to be “heavily involved” in this debate, according to the Washington Post. It’s their constituents back home.

That’s why Half in Ten—a national campaign to reduce poverty by 50 percent over the next 10 years—along with the Center for American Progress Action Fund, have put together a comprehensive fact sheet for each of the twelve members, describing the conditions in their districts and states—from the jobs picture, to the impact of tax policy, to poverty and education.

For example, in the district of Committee co-chair Jeb Hensarling—a Republican Congressman from Texas who raises nearly 40 percent of every $100 in campaign donations from finance, insurance, or real estate—the poverty rate is over 14%, including more than 1 in 5 children. More than 1 in 5 residents are living without healthcare.

30 percent of families in his district are dealing with hunger. Since August 2008, the state has lost nearly 95,000 manufacturing jobs as well as 84,000 construction jobs, and the teen unemployment rate is 60%. Meanwhile, those who are doing well can thank a skewed tax policy that’s making the rich richer: individuals earning more than $200,000—3 percent of the state’s residents—reduced their tax liability by $23 billion on capital gains and dividend earnings write-offs alone in 2009. Too bad that for every individual earning $200,000, 24 earned $50,000 or less.

Should Hensarling be looking to cut Pell Grants for the 578,000 recipients in his state? Or the benefits of nearly 71,000 people in his district who receive Social Security income? Or food stamps for 21,000 households in his district that turned to them over the past 12 months? Maybe instead he should simply say thank you very much to his corporate donors, but then allow the government to negotiate lower drug prices for seniors just like the VA does for veterans. Or eliminate the tax deduction for vacation homes. Maybe even support a modest financial transaction tax that reins in speculation—such as the one called for by French President Nicolas Sarkozy and German Chancellor Angela Merkel, or used in the UK—which could raise up to $175 billion per year. (Hey, combine that with closing the corporate tax havens that cost $100 billion in lost revenues every year and your job is done, super committee.)

But it’s not just Republicans who need to take stock of conditions back home. For starters, two-thirds of the lobbyists with committee ties are Democrats. Thirteen of them worked for committee co-chair, Senator Patty Murray, who has strong ties to the defense industry in Washington State. Although she has a record of standing up for at-risk populations, The Nation’s Ari Berman reports that both she and fellow super committee member Senator John Kerry signed a letter in March calling for a “grand bargain” deal that would include “discretionary spending cuts, entitlement changes and tax reform.”

But nearly 30 percent of Murray’s constituents are already living on less than $44,100 for a family of four, and more than one-quarter live on income from Social Security. Since August 2008, the state lost nearly 63,000 construction jobs and 29,000 manufacturing jobs. With one in five families now dealing with hunger, more than 250,000 households needed food stamps in the past 12 months. One in five children under age five are now living in poverty, and over 1.1 million people receive Medicaid or Children’s Health Insurance Program benefits.

In contrast, the state’s richest 2.9 percent earning $200,000 or more decreased their tax liability by over $6.5 billion in 2009 through capital gains and dividend earnings deductions alone.

The story is the same virtually everywhere in the country. If you look only at the eleven states represented on the committee (Michigan has two members—Republican Congressmen Dave Camp and Fred Upton), the wealthiest states’ residents aggregated over $94 billion in capital gains and dividend earnings deductions just in 2009. 11 states—nearly $100 billion in deductions just for capital gains and dividends for the richest 1.6 to 4.4 percent. And we’re having a hard time finding revenues? Please.

“Super committee members have a choice: to represent the interests of their constituents or protect the wealthy and special interests,” says Melissa Boteach, manager of Half in Ten. 

“With so many of their constituents living in poverty, struggling to access good quality jobs, and relying on Social Security, Medicare, Medicaid, and other effective services, the choice is clear.”

And yet more and more Congress and statehouses are looking to balance budgets on the backs of those already struggling.

The GOP with it’s human slashonomics approach has now set its sights on the earned income tax credit and the child tax credit, which give thousands of dollars a year to working families and lifted 7.2 million people out of poverty (below $22,400 per year for a family of four) in 2009 alone. Many states are reducing unemployment benefits and state earned income tax credits, as well as cash assistance to poor families. Phil Oliff, policy analyst at the Center on Budget and Policy Priorities, reports this week on lawmakers in Missouri who want to eliminate a property tax credit for low- and moderate-income seniors and people with disabilities in order to help finance new tax credits for businesses. This would continue a nationwide trend of enacting expensive tax cuts while slashing education, healthcare and other vital public services needed by vulnerable citizens.

The grand bargain isn't grand if it only lifts a few yachts while letting millions of boats flounder or sink. Get the facts.

The Truth About Capital Gains

How the Rich Game the System
By GERALD SCORSE

When it comes to taxes on capital gains, the emperor suddenly has no clothes. He’s been stripped bare, in bipartisan fashion, by the co-chairs of President Obama’s fiscal commission.

The chairs are Republican Alan K. Simpson and Erskine Bowles, a Democrat. Their initial report included a call for equal taxes on capital gains, dividends and ordinary income such as wages. This upends the current tax code, and it contradicts almost the entire history of capital gains taxes in America.

Implicitly, it also rejects the K Street claim that tax breaks for capital gains grow jobs, grow businesses and grow the economy. If the claim had any truth, Messrs. Simpson and Bowles would never support equal taxes on all income as a way to help cut the national deficit.

Liberals instinctively attacked the right-leaning aspects of the report. House Speaker Nancy Pelosi, in full "no" mode, labeled its recommendations “simply unacceptable”. Not quite, Madam Speaker; apropos investment income, Simpson/Bowles is a Democratic dream come true.

Income from wealth and income from work were taxed at the same rate in only two widely-separated times in America—from 1916-21, and after Ronald Reagan’s Tax Reform Act of 1986. President Clinton restored the tax break on capital gains in 1997, cutting the rate on long-term gains from Reagan’s 28 percent to 20 percent. Six years later, President Bush lowered the levy to 15 percent and did likewise for dividends. The Bush cuts were written to expire in 2010, but it’s not certain they will. Even if they did, the capital gains rate would still be less than the rate on middle-class wages.

The Simpson/Bowles recommendations could die a quick death: a unified final report needs the votes of 14 out of the commission’s 18 members, comprised of nine from each party. If a super-majority of 14 can agree, their report arrives at the White House on December 1.

But the proposals are now on the table, so the genie is out of the bottle. President Obama and Congress were already facing a showdown on extending the Bush tax cuts. Now, in addition, Congress and the Administration have a rare opportunity to set a new course for the nation’s fiscal future.

They could start by revisiting the tax code and creating capital gains tax breaks that really would grow jobs and stimulate the economy. Small companies with big dreams raise seed money through initial public offerings (IPOs) and secondary offerings; larger companies sometimes do the same (e.g., the resurgent GM). In a move that would give a built-in boost to the market for new issues, capital gains on these investments could accrue tax-free. Interest on corporate bonds, now taxed as ordinary income, also deserves a tax break. Corporate bonds raise the money to build corporate infrastructure, much like municipal bonds raise money to build local infrastructure. Interest from municipal bonds gets tax breaks; why not corporate interest?

How to pay for these new tax breaks? Easy: the money would come from ending the unproductive tax break on stock market gains, along with the 2003 tax break on dividends.

In 1986, President Reagan essentially traded tax breaks on capital gains for another round of cuts in the marginal rates. A generation later, the initial draft from Obama’s fiscal commission holds the makings of a similar endgame.

One major milestone has already been reached. The notion that investments deserve a lower tax than wages has been vaporized. The emperor has no clothes, and really never did.

Good for Wall Street AND K Street

K Street cashes in on bill
By: M.B. Pell - Center for Public Integrity and Joe Eaton
May 21, 2010

The Democrats’ regulatory reform bill may not be a hit with Wall Street, but it’s been very, very good to K Street.

According to an analysis by the Center for Public Integrity, 850 businesses, trade groups and other corporate interests have hired more than 3,000 lobbyists to shape the bill — roughly five lobbyists for each member of Congress.

And if their efforts haven’t paid off, it’s not for a lack of trying.

Lobbying disclosure data for all of 2009 and the first quarter of 2010 show that all the big players in American business lobbying were active as regulatory reform proposals worked their way through Congress.

The U.S. Chamber of Commerce deployed 85 lobbyists, including 49 hired from outside lobbying firms. The Securities Industry and Financial Markets Association employed 54 lobbyists, including 37 from outside firms.

The American Bankers Association deployed 53 lobbyists; the Business Roundtable, 42; and the Mortgage Bankers Association, 29, according to CPI data.

In the financial services industry, some 175 companies and groups — ranging from Goldman Sachs Group Inc. to CME Group Inc. to the Private Equity Council — hired lobbyists to try to weaken or eliminate reform proposals aimed at banks and the capital markets. A distant second was the energy and utilities sector, with 91 companies and organizations, followed by manufacturing, with 66 firms.

The companies and groups that lobbied on financial reform spent a total of $1.3 billion in 2009 and the first quarter of 2010 on their overall lobbying efforts, the data show. The exact dollar amount they devoted to financial regulation reform remains unclear because lobbyists are not required to itemize how much money in a given contract is spent on a specific issue. But if only 10 percent of that spending was targeted at financial regulation bills, lobbyists would have received $133 million.

In this debate, however, public perception of big U.S. banks as freewheeling gamblers relying on taxpayer-funded safety nets trumped Wall Street’s lobbying, some experts said.

Anger over bailouts, lavish bonus payments to top executives and the Securities and Exchange Commission’s fraud lawsuit against Goldman galvanized public opinion against Wall Street.

“Political backlash overwhelmed lobbying,” said Arthur Wilmarth Jr., a banking law expert at The George Washington University.

“When you see the tsunami of money flowing into Capitol Hill from these big financial players and their customers, it’s hard to imagine that the broader public interest will be taken into account,” Wilmarth said. “Earlier this year, there was a sense that we’ve gotten past the worst of it, so let’s not overreact. Now, the fact that all of these [European] governments have taken on all this debt — I think people now realize the crisis isn’t over yet and don’t really want the financial industry going back to taking risks.”



Banks and the financial industry spared little expense in lobbying. Citigroup Inc. deployed 38 lobbyists; Moody’s Corp., 13; and Bank of America, 11 — all dedicated to the financial reform legislation, according to disclosure documents.

Although the bill seems to be on the road to passage, corporate interests have had their victories along the way.

Peter Garuccio, a spokesman for the American Bankers Association, said the industry’s accomplishments, at least up to now, include preserving the Federal Reserve’s oversight of state member banks and eliminating a proposal for a $50 billion fund to help pay for dismantling large banks considered too big to fail.

“Some of the concerns we’ve raised have been addressed, others have not, and others have been partially addressed,” Garuccio said. “It’s still an ongoing process.”

No lawmaker wants to support a provision that could be responsible for the next financial crisis, said Bill Himpler, executive vice president of the American Financial Services Association.

The challenge for lobbyists that represent banking and finance organizations — which generally support some form of reform, Himpler said — is to demonstrate how various popular provisions do more harm than good for consumers and the financial industry. “I think we’ve got our work cut out for us,” he said.

Reform advocates have their own victories to point to in the legislation’s current form. They include the creation of a federal consumer financial protection agency, fee limits on debit card transactions and a one-time audit of the Federal Reserve’s role in the financial bailout.

What happens as the House and Senate reconcile separate versions of reform legislation remains to be seen, but Amaya Tune, a spokeswoman for the AFL-CIO, which supports reform measures, feels confident that consumers, not Wall Street, will come out on top.

“I think the chances of this staying a strong bill and not getting watered down are pretty good,” Tune said. “That being said, we’ll cross our fingers.”