Lobbying – truthful politics

Putting A Face On Revolving Door Politics

Posted by Michael Van Dorn Corruption, Government Spending, Health Care Comments Off

Jul 152013

Where does a Congress member or Senator go when they leave the Hill; be it a calculated exit or otherwise? It’s true they have opulent post-employment compensation plans but even with a sturdy safety net many aren’t necessarily ready to trade in their careers or ambitions for leisurely weekday afternoons on the golf course, senior’s cruises and early bird dinners. Like many Americans, this transition usually means they either have another gig lined up if it was a planned departure or they are scrambling to find one if it came unexpectedly.

For many former politicians their new endeavor usually means they end up with a very familiar work commute—right back to Capitol Hill. Equally comforting and advantageous for both the new employee and their employer it usually means a lot of time spent speaking with old, familiar faces—though now it’s from the opposite side of the desk. It certainly doesn’t hurt that the pay also tends to be much more lucrative. And though they’ll likely still be referred to by the honorary title of Senator or Congressman or Congresswoman, their new professional title would be lobbyist or consultant.

This transition from elected public servant to well paid influence peddler is commonly referred to as “Revolving Door Politics” and its ubiquity and acceptance in the contemporary mechanics of Washington is often cited as one of the major contributing factors to political/corporate cronyism and the bastardization of our representative government.

Current participants in revolving door politics would likely argue that there is nothing inherently unethical about their new careers; they’re merely earning a living using their experience and expertise to navigate within the confines of a complicated system. And it certainly isn’t illegal in any way, they might add. There is one gentleman who has been extremely successful in the post-Congressional lobby occupation that would likely be the first to offer up this particular defense of the practice.

Meet former Louisiana Congressman Billy Tauzin:

Congressman Tauzin, “the Cajun in the Capitol”, began his formal political career way back in 1972 when he won a seat in the Louisiana State House of Representatives. He served there until 1980 when a series of fortuitous events catapulted him to a seat in the US House of Representatives. Eventually, in 2001Tauzin landed the chairman position of the House Energy and Commerce Committee. This powerful committee has an exceptionally broad jurisdiction, but one particular area of oversight it’s charged with is the pharmaceutical industry. The pharmaceutical industry also happened to be a big campaign contributor to Congressman Tauzin—contributing over $200,000 throughout his 20+ year congressional career though $91,500 of it came in 2002, just shortly after he landed the chairmanship.

While chairing this committee, Congressman Tauzin co-sponsored and steered a rather large bill through the House titled the Medicare Prescription Drug, Improvement, and Modernization Act. With Tauzin’s help, the bill eventually passed through the House (by a razor thin margin) and the Senate and was signed into law. The bill radically altered Medicare, turning much of the business of caring for America’s seniors and disabled people to private insurance companies. Part of the bill, known as Medicare Part D, mandated that the Federal government cover a significant portion of prescription drug costs for beneficiaries under Medicare. It simultaneously dictated that the Federal Government could not negotiate in any way for lower costs of prescription drugs for the program as it had been allowed to in other programs like the Veterans Health Administration. It also restricted the Medicare system from purchasing cheaper, imported drugs from other countries like Canada and Mexico.

So, plainly stated for anyone not fully understanding the implications, this bill provided the pharmaceutical industry with an absolutely massive expansion in its customer base—with the deepest pockets in the world picking up a large portion of the tab—while at the same time guaranteeing they got to dictate, without protest or the slightest hint of competition, what the prices would be for these new customers. Calling it a sweetheart of a deal would be a serious understatement. Whether they said so or not, the heads of the pharmaceutical industry must have been greatly appreciative of Tauzin’s effort to steer the bill through to completion.

Two months after the Medicare Modernization Act was signed into law by President George W. Bush, Tauzin resigned his chairmanship of the Energy and Commerce Committee and announced that he would not seek reelection for his House seat. Tauzin had a new gig. Citing a successful battle with cancer and his new found appreciation for the pharmaceutical industry, it seems that Congressman Tauzin was called to do even greater work as the head of the Pharmaceutical Research and Manufacturers of America (PhRMA), the largest lobbying entity for the pharmaceutical industry in Washington. The new position came with a modest salary increase of course. As a congressman, Tauzin had a base salary of $154,700 in 2003. His starting salary at PhRMA was $2,000,000. Phenomenal timing on his part since he probably needed a more reliable way to pay for the lavish 1.1 million dollar Texas ranch he had just purchased months prior.

Tauzin would go on to head PhRMA until 2010, ultimately amassing a total of $19,359,927 in pay— $11.6 Million of which he received in his last year with the organization. (There are varying explanations as to why Tauzin left, but it’s largely irrelevant here.) Following his departure from PhRMA, Tauzin once again decided against retirement. Perhaps closing out his winter years languidly on his Texas ranch, hunting deer and comparing ATM receipts with old colleagues seemed a bit unfair to all those poor souls who needed him and his expertise the most. So instead, in addition to heading his own lobbying firm, Tauzin lathered up in elbow grease and found more work with the lobbying firm Alston & Bird where he parlayed what could have been a new found respect for fossil fuels into crusading on the Hill for companies like ConocoPhillips.

Nobody on Capitol Hill or K Street so much as batted an eye during any of this. Why should they? Tauzin is just another name in a long list of lawmakers who have behaved similarly. I’ll take a second to note here that there is a somewhat analogous profession where this behavior would not be tolerated.

The Model Code of Judicial Conduct dictates that, “[a] judge shall avoid impropriety and the appearance of impropriety in all of the judge’s activities”. There is a very important reason that the court system wants to avoid even the appearance of impropriety: It reflects the serious and warranted concern that, “…some conduct which is in fact ethical may appear to the layman as unethical and thereby could erode public confidence in the judicial system or the legal profession”.

The conduct of Congressman Tauzin following his departure from his congressional seat doesn’t necessarily constitute an unquestionable impropriety—there is some chance that it was all completely above board—but it would be a difficult to argue that it doesn’t, at the very least, bear some appearance of impropriety. It’s incredible that these types of immediate and questionable employment and pay-grade transitions are not only common but generally accepted as business as usual in Washington. Congressman Tauzin’s brand of revolving door politics is a major contributing factor in the American People’s eroded confidence in the Congress. The legislative branch should have the same concern about maintaining public confidence in their institution as the court system does.

Why They Can’t Trust Us

Posted by Michael Van Dorn Corruption, Government Spending Comments Off

Jul 072013

As everyone is well aware by now, Egypt’s President Mohamed Morsi was overthrown last week in what some are calling a military coup and there are legitimate concerns about the possibility of a civil war erupting. Whether it does or not, it’s obvious at this point that Egypt will remain in some state of turmoil for the foreseeable future. It’s heartbreaking for all of the Egyptians that have simply been looking for a better government and way of life. It all seemed within reach just two years ago.

The years since have been a roller coaster ride, starting with the Egyptian people banding together and orchestrating a successful and relatively peaceful overthrow of Hosni Mubarak’s government. Shortly thereafter they elected a president, drafted a constitution and then, rather quickly devolved back into chaos. While the future for this ancient nation is uncertain, one thing is a pretty safe bet:

The Egyptian People do not trust the US Government and won’t likely be looking to it for guidance in reestablishing and stabilizing their shaky government.

In the now constant flux of the Middle Eastern political landscape, the United States’ long history of financial and political support for tyrannical (many now toppled) regimes has not allowed it much real influence in the way the region is now being restructured. Egypt, for example, has a number of legitimate grievances against the US Government and is a prime example of the United States’ new found diplomatic impotency in the region.

Why am I discussing the United States’ role in the region? Well, at the risk of sounding solipsistic (after all, this is an Egyptian story, not an American one), I think it’s impossible to ignore the peripheral role the United States played in the oppression of the Egyptian People by the Mubarak government that eventually sparked the revolution and led to the current turmoil. Let’s take a look:

The Mubarak Regime– which ruled for its entire duration under an emergency law which gave the executive (the Interior Ministry) extensive powers including the ability to detain citizens indefinitely without charge or trial (sound familiar?)– was notorious for torture and other flagrant violations of human rights. In one example listed in a report by Human Rights Watch released in the early days of the Egyptian Uprising, a young CairoUniversity law student protesting the US invasion of Iraq in 2003 was detained and brutally tortured:

“He stayed a long time upstairs, up to four hours at a time. He was tortured by electricity as well as beatings—he told us. He didn’t even have to tell us though, you could tell by his condition. We saw the burn marks from the electrocution. He was nearly comatose when they carried him [into the cell]. His face was extremely swollen and bruised. He was shaking. There were burn marks on his hand and elbows, and the feet and toes.”

There is little argument now that it was this type of torture and police abuse which can generally be credited with sparking the revolt in January 2011. As the protest, international exposure and political pressure grew and Mubarak’s fate became increasingly apparent, the Obama Administration rolled out its official position via Secretary of State Clinton who came out publicly for “an orderly, peaceful transition to real democracy”.

What was not included in this Sunday Morning News Show discussion—at least not by Hillary Clinton—was any mention of the long, dark history of cooperation with the Mubarak government. Indeed, up until that point, Egypt was not only touted as a major ally but was also a major recipient of US Foreign Aid—only second to Israel in total dollars received, though it’s discussed much less than Israeli aid.

There are a number of reasons that Egypt was privy to over $50 Billion dollars in aid since 1975. It’s strategically important to have access to Egypt’s Suez Canal. It was one of the only Middle Eastern states relatively friendly with Israel, following its controversial entry into the Egypt-Israel Peace Treaty of 1979. Later on, shortly after the 9/11 attacks, Mubarak would prove his loyalty to the US during the “War on Terror” by participating in the infamous extraordinary rendition program which allowed the CIA to send detainees to other countries like Egypt for torture—they were, after all, well practiced with torturing detainees as I previously mentioned—and interrogation. Just a little trade-off: they torture our detainees to extract information and we don’t say anything about them torturing theirs. All in all, it could and most likely would be argued by any State Department official that Egypt got our political and financial support because, in a tumultuous and unfriendly region, it was the devil we knew.

But there’s another reason, rarely acknowledged in political circles, that Mubarak’s government got the amount of aid money and political support that it did. They asked for it the Washington way. They lobbied for it. Right up until the very end.

Even as the truths about torture and oppression became increasingly articulated, even as the Egyptian people began rallying to overthrow the government that had committed such atrocities for three decades, even as the civilized world began to turn its back on the dictator, an influential number of former congressmen turned powerful lobbyists worked the back channels of Capitol Hill to protect Mubarak’s government from potential embarrassment—for just a minor fee, of course.

Podesta Livingston Moffett.jpg

Over the course of the last six months of 2010, the PLM Group—a joint venture between the lobbying groups of former congressman Toby Moffett, former congressman Bob Livingston and K-Street superstar Tony Podesta—pulled in roughly $400,000 from the Egyptian government to stop a Senate Resolution that called on Mubarak to support “free, fair, transparent and credible” elections as well as bring an end to the Emergency Law that allowed authorities to “harass, intimidate, arbitrarily detain, and engage in violence against peaceful demonstrators, journalists, human rights activists and bloggers.” In the end, their efforts were undeniably successful and the resolution was killed thanks in large part to the bi-partisan efforts of Senators Diane Feinstein of California and (Bob Livingston’s close friend) Roger Wicker of Mississippi.

A little over a month after the resolution died, the people of Egypt made Mubarak’s lobbying effort irrelevant and exposed the US Government on the wrong side of its supposed anchor value of freedom for all. The Egyptian People won’t soon forget.

The Coal, the Cash and the Lobby

Posted by Michael Van Dorn Corruption, Economic Performance Comments Off

Jul 012013

Raw Coal on white background In spite of (or perhaps because of) all the recent chaos over embarrassing revelations of the surveillance habits of the US government, the Obama Administration pushed forward with its climate agenda last week and announced plans to further curb future carbon emissions. The plan, unveiled by the President during a speech at Georgetown University, called for the Environmental Protection Agency to establish more stringent carbon pollution standards for already active coal plants. As expected, the coal industry was quickly up in arms over the speech’s implications and moving forward with a massive, multi-million dollar public relations assault to counter the policy push by the Executive Branch. Of course, these types of PR expenditures by the coal industry have become increasingly commonplace as they enlist some friendly voices to push the narrative that the Obama Administration is actively trying to kill the coal industry.

Coal can be a highly charged subject depending on which area of the country you live in and which party you tend to vote for. The argument for and against are generally framed in familiar fashion. On one side, we have the progressive, environmentalist argument—generally accompanied with images of billowing smoke stacks and/or the sad, soot smeared faces of coal workers—that, regardless of the general accessibility and its claims of being inexpensive, coal is incredibly harmful to the environment and people and should be held to a high regulatory standard if not eliminated altogether. On the other side of the coin, we have the conservative, economic angled argument—replete with images of smiling, relatively clean coal miners standing proudly outside a mine lift and/or pictures of happy families gathered closely together, bathing in the warm glow of inexpensive electricity provided by coal power—that coal is not as hazardous as many deem it to be. In addition, they point out that as of right now, it’s cheap and locally sourced which means it provides Americans with jobs and spurs growth for the American economy with dependable, inexpensive energy. Both sides, at times, make valid arguments. What can’t be argued is that the coal industry is spending a veritable mountain of cash to convince Congress and the American public that it is still a viable energy option but in the process is ignoring some painful truths.

Last year, the Coal Industry spent $17,361,948 on lobbying the Federal Government. (They also spent plenty of money lobbying various state governments as well, but that number is much more difficult to quantify.) In addition to pushing for favorable regulatory legislation, these lobbyists also work to make sure the subsidy spigot stays wide open.

Along with official lobbying, the Coal Industry also spent a considerable amount ($13,391,247) on political donations in the 2012 election cycle. One such recipient of this campaign cash is Republican Congressman David McKinley of West Virginia. McKinley receives the lion’s share of his campaign financing from the Mining industry—an amount more than any other member of Congress. Does this mean that Congressman McKinley owes an oath of fealty to the Coal Industry? Not necessarily. After all, as Mr. McKinley likes to point out, coal mining is one of West Virginia’s largest industries and provides jobs to his constituents. But it becomes rather apparent when Mr. McKinley introduces legislation like H.R.2273—a bill which, among other things, sought to prevent the EPA from designating coal ash (“Coal Combustion Residuals”) as hazardous—that the Coal Industry isn’t exactly throwing their money away when they write him checks. Sure, it can be argued that the Coal Industry provides jobs for West Virginians but outside of the strange semantic wonderland of a well lobbied Congress and the halls of the Coal Industry, nobody in their right mind is arguing that coal ash is not hazardous.

There is just way too much scientific evidence that confirms that coal ash is indeed hazardous. Not to mention, the recent instances of real world destruction that should lay rest to any notion that coal ash is some benign externality of necessary economic progress. Plainly stated, coal particulates are extremely hazardous and harmful, there’s just no way around it. Mitt Romney knew it before it became politically expedient to say otherwise. And that’s the bottom line. The coal industry spends a lot of money to make it politically difficult to state an obvious truth.

Another plain truth that the coal industry can’t admit is this: it isn’t over-regulation or some deep grudge the Obama Administration has against it that is killing coal. It’s the market and the massive increase in Natural Gas production. Here is a chart showing the Coal Industry’s lobbying expenditures in recent years:

Information from www.opensecrets.org

Interestingly, in 2005, the executives in the coal industry made a decision to increase their lobbying expenditures by quite a large margin. Why the sudden increase then? After all, in 2005, they had a coal-friendly president in the White House and Barack Obama had just come onto the national political scene as a junior Senator from Illinois and didn’t pose much of a threat to them yet. Likely, the Shale Gas revolution that kicked off in late 2005 has a lot more to do with it. See here:

(source data: US Energy Information Administration)

The correspondence between coal lobbying expenditures and natural gas production is a hard coincidence to shrug off. Why do they fail to mention this more often?

It’s more palatable to say that your industry is beleaguered by a spiteful administration with unreasonable regulatory standards than it is to say that your industry is taking a beating because it produces a more expensive product with more negative externalities than your competitors’.

Perhaps worst of all for the coal industry, the argument that it is a major jobs creator in the US is becoming increasingly more difficult to make. As of 2012, the coal industry employed a total of 87,520 people according to the Bureau of Labor Statistics; a number that is only impressive without proper context. When compared to other industries, the number becomes rather paltry. The automotive industry, for instance, employs nearly ten times as many people. The Natural Gas Industry, coal’s closest competitor, employs 106,770. Even wind energy clocks in at a relatively formidable 85K employed.

This isn’t to trivialize the number of jobs created by the industry or the plight of the common coal worker. That’s 87,520 people who rely on coal to put food on their table, a roof over their head, and in many cases pay for the needs of their children. They are justifiably concerned about their future. But the writing is on the wall. The sun is setting on the coal industry, just as it did on the once gargantuan whaling industry a century and a half ago. And this isn’t a bad thing. Just like the coal industry, whaling also supported and fed families, but if we had allowed whaling to exist continuously on life support through legislative favors and lobbied subsidies solely for the sake of the employment of a relatively small segment of the population we might still be filling lanterns with whale oil or, most likely, long ago witnessed the self-imposed death of the industry after it had extinguished the whale species from the oceans entirely. Instead, thankfully, we found more efficient sources of the energy the country needed to expand and thrive. We’ll do it again. It looks like we already are.

Lockheed Martin No Stranger To Ethically Questionable Lobbying

Posted by Michael Van Dorn Corruption Comments Off

Jun 242013

In a previous post, I briefly went into the lobbying expenditures of Lockheed Martin—currently the largest US Federal Government contractor—and also highlighted a couple of blatant ethical transgressions. I wanted to follow it up by answering a question that many people might have: What is lobbying?

There are two answers. The short, simple answer of what lobbying is supposed to be and the much longer, much more complicated reality of what lobbying actually can be and predominately is.

Before we get in too far, let me first clarify that I’m not reflexively opposed to lobbying per se. The concept of having direct communication between constituents and their government is an important and essential piece of representative democratic infrastructure. It was, in fact, considered so important a function to the nation’s founders that it was protected in the very first amendment of the Constitution: “Congress shall make no law … abridging … the right of the people peaceably … to petition the Government for a redress of grievances.”

In its simplest incarnation lobbying works like this (please forgive me if this comes across as patronizing, my intent is to provide a comparison, so just bear with me): Under the protection of the First Amendment, citizens in Congressional District ABC might discover that they have a collective problem with issue XYZ. They decide that they should get together and petition their representative to have issue XYZ resolved legislatively. They do so. After hearing the collective’s concerns, the representative makes the decision on whether issue XYZ truly affects the majority of his constituency and attempt to legislate accordingly.

Why does this work as a system? In theory, a representative must rely on the majority of his constituents to vote for him to remain in office and would therefore be directly accountable to them. If he doesn’t do what the majority of his constituents desire of him he runs the risk of being voted out in favor of someone who will. Simultaneously, the representative has to develop working relationships with his colleagues in order to be an effective legislator and achieve the goals of his constituency so necessary to stay in office. Thus, a congenial congress would necessarily emerge and ultimately a legislative equilibrium which would generally benefit the nation as a whole.

It should be apparent, particularly after examining the last three decades in Washington that this ideal scenario has not played out.

To be fair, the authors of the Constitution weren’t naïve to the potential corruption of the lobbying system—James Madison famously weighed the implications of “faction” throughout his Federalist #10 essay— and certainly anticipated there to be questionable practices in small proportion as well as the possible rise of powerful professional lobby agents, like the 19^th century “King of the Lobby”, Samuel Ward. What they couldn’t have reasonably anticipated though, and what has frequently debased the good intentions of the lobbying system, was the powerful rise of the modern corporation over the course of the late 19^th and 20^th centuries and the increased importance of campaign finance in the modern political landscape. Both of these factors have converged to give us the lobbying system and its rampant, systemic corruption.

(I’m going to avoid getting derailed here on the history and details of these two factors. Suffice to say, they deserve and will soon get much more than a simple paragraph synopsis from me.)

Having quickly covered the short, simple answer to what lobbying is, let’s take a look at one real world example of what lobbying actually is via Lockheed Martin.

The first complication in defining lobbying is that, in reality, lobbying is actually an amalgamation of tools and tactics that various parties use to solicit influence. For instance, the amount of money that Lockheed Martin officially spent on lobbying last year (2012) was $15,347,350. What this number actually represents is the reported amount of money that Lockheed officially paid to lobbying firms like Podesta Group or Venable LLP or Carliner Strategies to lobby on their behalf—that is, to show up on Capitol Hill and arrange for time to speak with politicians on a variety of key issues with the hopes of influencing them to legislate in a particular direction. These conversations often occur in all sorts of ideal, vacation-like settings. Still, this doesn’t paint close to the entire picture.

In addition to spending $15 million plus on official lobbying, Lockheed Martin is also responsible for a total of $4,034,489 in campaign contributions for the 2012 election cycle. $1,143,092 of this went to Political Action Committees, Parties and various other outside spending groups, while $2,891,397 went directly to candidates like Kay Granger (R-TX) whose district just so happens to contain a number of Lockheed locations and has, for reasons that should be apparent to anyone after viewing her political donation disclosure, helped the company out in numerous ways including pressing Taiwan to purchase Lockheed F-16’s that they didn’t want.

For politicians like Granger, making sure Lockheed is happy is an easy win/win calculation. After all, legislating favorably for Lockheed means they stand to not only gain the hefty political donations that are so necessary for reelection but also, during their next campaign, they can point to all the jobs that they have created or saved via the Lockheed projects they supported on Capitol Hill. No politician wants to be perceived as a job killer.

The problem is that what amounts to a win/win for politicians and congressional districts intertwined with Lockheed Martin, in many cases, ultimately amounts to a net loss for the rest of the country and the American taxpayer. I discussed the C-130 scenario in my last post, in which Lockheed, via direct lobbying of Congress in the late 1970’s, had managed to pull down a contract for 256 of the airplanes when the Department of Defense had only wanted five—many of which sat idle on tarmacs and in hangars afterward. Now, I’ll turn quickly to a modern program with similar results: the infamous F-35 Joint Strike Fighter.

The F-35 is the most expensive military weapons program in US history. In accordance with standard practice, Lockheed has strategically stretched the influential jobs programs (and the corresponding congressional influence) for the project out across the country, covering over 47 states as well as Puerto Rico. The fighter jet program, which was initially quoted at $226 billion for around 2,900 planes and an operational start date estimated at 2012 has now ballooned into a cost of $400 billion for 2,400 planes, an additional $1 Trillion in maintenance and repairs over the programs lifetime and an operational start date now estimated at 2017. The increased cost had also made the Pentagon under Robert Gates consider terminating portions of the project. Lockheed consultant’s immediately rejected the cuts as unreasonable. When cuts to the program were formally submitted by House Representative Todd Akin, Lockheed lobbyist marched on the House Armed Services Committee. Unsurprisingly, the suggested cuts never came. Sound familiar? It should.

It’s happened with numerous programs like the C-130, the F-35, and recently, in another example, when the Pentagon wanted to end General Dynamics’ M1-Abrams battle tank program, largely considered to be a cold war relic without much use in today’s defense (a program which already had more tanks sitting idle than actually deployed), they found their efforts thwarted “…after a well-organized campaign of lobbying and political donations involving the lawmakers on four key committees that…decide the tanks’ fate…”.

It’s fairly standard play in the US armaments industry. The Pentagon wants to cut or drastically reduce an outdated or ineffectual weapons program that nets your company a significant sum, so you do an end-around the Department of Defense, toss some money to key congressional members, scare them about job cuts, pay some lobbyist to talk to the other representatives and voila, the program isn’t ended or cut and in some cases—like the C-130— might even be expanded. Your company and its shareholders win, the American military and taxpayers lose. This is what lobbying can be.

In his farewell address of 1961, President Eisenhower offered up a prescient warning on the potential corruption in maintaining a war-ready private armaments industry:

“This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence-economic, political, even spiritual-is felt in every city, every state house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.”

It’s a shame the American public didn’t listen then.

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Michael Van Dorn lives in Atlanta, GA and writes about Lobbying Corruption on his blog Lobby Exposure.