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The rise of 'revolving-door' consultants

Center identifies firms both advising politicians and lobbying them

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It happens every day: Lobbyists open the right doors, make the right arguments and push their clients' narrow interests to the front of the line.

The results vary. A Native American chief gets a West Wing meeting to fight for tribal status. Forty-story condominium buildings that will transform the San Francisco skyline are approved. Congress earmarks $239 million for a new bridge over the Mississippi. Copper mining representatives meet White House staffers to discuss acquisition of national forest land.

But the lobbyists fronting these causes all have one important advantage in common: They helped the public official they lobbied get elected. They were political consultants who traveled with the candidate or gave strategic advice on media campaigns, fundraising or get-out-the vote efforts.

Top advisors get to know candidates and can become privy to closely guarded secrets. Relationships are forged in the war-like, us-against-them, sleep-deprived atmosphere of a campaign. Consultants who also lobby then have a unique opportunity to trade on this personal capital when pushing the interests of their other clients for new laws, government approvals or funding.

An investigation by the Center for Public Integrity found that increasingly campaign consultants are turning to lobbying once elections are over. And unlike federal legislators and their staff members, who are required to wait a year before lobbying former colleagues, consultants are not bound by rules slowing down the so-called "revolving door" between doing campaign work and lobbying.

A Center computer analysis found 22 firms that do both political consulting and lobbying. This was determined by matching Federal Election Commission reports filed on campaign consultants hired in 2003 and 2004 with federal lobbyist registrations for 2003 through 2006.

Chellie Pingree, president of the citizens' group Common Cause, sees the emergence of this breed of well-connected lobbyists as further evidence that ethics reform is urgently needed.

"It's another part of a very unhealthy system," Pingree said. "We've already called for the ban of lobbyists serving as campaign treasurers and lobbyists hosting fundraisers. It would seem to me that lobbyists working on campaigns is just another thing that should come under that ban."

Rep. Joel Hefley, R-Colo., the former House Ethics Committee chairman who retired this month, said lawmakers should rebuff lobbying entreaties from their campaign workers and consultants.

"Not that there is evil there, but there might be the appearance of evil," Hefley told the Center.

A lucrative sideline business


 

It may not be "evil," but it pays well.

John Whitehurst, a partner in a Democratic campaign consulting  lobbying firm in San Francisco, urges fellow consultants to emulate his firm's "lucrative" business model, with lobbying clients providing a steady stream of income during non-campaign years.

"It evened out my finances, because I would go and be buying dinner for everybody in October of the even year and then begging a McDonald's coupon in the off-year," Whitehurst said to appreciative laughter during a March 2006 panel discussion at the American Association of Political Consultants (AAPC) annual conference in Napa Valley, Calif.

He told the gathering that his firm, Barnes Mosher Whitehurst Lauter, works on campaigns not simply to make money, but to build relationships with elected officials.

"I mean, I have lost significant sums of money on their candidate races. [But] that stuff comes back in volumes — that John Whitehurst helped elect these guys to office," he said.

Through the years, Democratic consultant Joseph Cerrell has found that campaign relationships give him an edge over other lobbyists when approaching an elected official.

"I'm the one who knows him intimately," said the founder of Cerrell Associates, a 40-year-old Los Angeles political consulting firm. "All things being equal … I'll win every time. I'm the guy who just finished running the campaign."

'I think it's wrong'

Some veteran political consultants find the practice appalling.

"I think it's wrong," said Raymond Strother, a Washington-based consultant to national Democratic candidates and former AAPC president. He said he feels uneasy exploiting close relationships developed during campaigns and unqualified to influence the legislative process.

"I don't know about markups. I don't know anything about government. All I know is about getting elected. So why should I make policy? I shouldn't," he said.

Strother recalls the time he walked away from $1 million the founder of a Ft. Lauderdale, Fla., steamship company offered him to lobby a Senate committee chairman for whom he had consulted. Strother declined to name the senator.

In the late 1980s, Strother said Hvide Marine Inc. founder Hans J. Hvide, now deceased, wanted a pending bill rewritten to change the definition of a ship bottom. Strother wrote in his memoir, Falling Up, How a Redneck Helped Invent Political Consulting, it could have been accomplished by changing one word.

"I was tempted. And I called a friend of mine who was a staff member and said, 'Would that be possible?' He said, 'Yeah, it wouldn't be that big a deal. We could do it. Why? Do you want to do it?'" Strother told the Center. "I said, 'I don't know.' And I decided not to."

The ramifications that the one-word change would have had remain a mystery to the consultant. "See, that's way beyond me," Strother said, underscoring his lack of legislative expertise.

Sarah Dufendach, a lobbyist for Common Cause, which promotes an ethics agenda on Capitol Hill, is offended that people who are not schooled in the process of getting legislation passed would take on lobbying clients.

"You also have to know the process. You have to know the timing. It comes from experience," Dufendach said. "You could maybe get somebody an appointment with a congressman, but that's the bare minimum."

"As a lobbyist, I am outraged. This is a dumbing down of the profession. I'm really ticked off. And you can quote me," she said.

Republican consultant Thomas Edmonds raises another objection to the practice of consultants lobbying: He feels it violates the loyalty owed to the candidate.

As a campaign consultant for Alaska Republicans Sen. Ted Stevens and Rep. Don Young, Edmonds said he has been approached by companies with interests in that state's energy and natural resource issues. Feeling conflicted, he did not take them on as lobbying clients.

"I could find myself at cross purposes with the congressman or the senator," if also lobbying for an oil firm, he said.

"Let's say, that that oil firm has an agenda and that congressman or senator stands for re-election, and I'm working with them too and getting paid by them too. I might end up saying, 'Well no, let's not talk about that issue. … Let's talk about natural gas, not oil,' because if we talk about oil it might end up bringing something up that could cost me money. So then I have a conflict of interest."

'Ethical dilemma' of the consultant-lobbyist

James Thurber, director of American University's Center for Congressional and Presidential Studies, has studied what he calls the "ethical dilemma" of political consultants who lobby, and believes more consultants are turning to lobbying to build up a year-round business.

In his chapter of the book, Shades of Gray: Perspectives on Campaign Ethics, Thurber writes that "hundreds and even thousands of people involved in campaigns later lobby politicians." His estimate includes individuals who are primarily lobbyists, but who dip in and out of campaign activity as fundraisers, treasurers, volunteers and advisors to candidates or political parties.

The tight relationship between legislators and lobbyists who serve as campaign treasurers was documented by the Center for Public Integrity in a 2005 report. The Center found that lobbyists had acted as treasurers for the campaign committees or leadership PACs of 79 members of Congress since 1998. Critics fear this sort of affiliation with a candidacy is at times rewarded with special access to the lawmaker.

Some of the 22 firms identified in the Center's analysis downplayed any connection between their consulting and lobbying work. A few said they were bit players in political campaigns, not major advisors who got close to candidates; others said they lobbied only on occasion.

One firm, Westhill Partners, said its employees registered as lobbyists only at the request of an overly cautious client, even though they contacted the news media to promote the client's position, not congressional offices.

High-rises by the 'Frisco Bay

The practice of consultants turning around and lobbying the people they helped to elect is also rampant in state capitols and city halls across the country. A vivid example comes from San Francisco.

Whitehurst, the consultant speaking at the Napa Valley conference, described how his firm traded on its campaign connections to lobby for changes in California law and city zoning, paving the way for high-rises that will dramatically alter the San Francisco skyline along the eastern waterfront.

"And they're breaking ground now," Whitehurst told the audience.

Developers Tishman Speyer and Union Property Capital Inc. wanted to build two 40-story condominium buildings near the San Francisco Bay Bridge in the Rincon Hill district, which had been zoned for less dense residential buildings and low-rise commercial structures, such as warehouses.

They pushed for city zoning approvals and a change in state law that would allow developers to sell condo units before building them — and lower their finance charges.

"We asked one of the people who we got elected to the legislature to carry the bill to allow the presale of condo units … which passed," Whitehurst said.

The 2003 bill's author was Assemblyman Mark Leno. His 2002 campaign was managed by the Whitehurst firm for $113,036 in fees, state disclosure filings show. Soon after taking office, Leno presented the bill. It passed both houses unanimously and became law that year.

No one from Whitehurst's firm registered to lobby state officials regarding the bill. His partner, Sam Lauter, said they didn't register because they didn't actually lobby anyone to vote for the bill; rather, another partner in the firm advised Leno on the bill at the assemblyman's request.

"My partner engaged in helping him put all the stuff in the blender until they came out with something that made good policy," Lauter told the Center. According to its Web site, the Barnes Mosher Whitehurst Lauter firm "crafted" the legislation.

Leno said that he asked the consulting firm to review the language of the bill, but that he came up with the idea himself after a developer complained that California was unusual in banning presale of condo units.

"And I am told by developers that this is helping. …It has produced more housing and it has produced more affordable housing. So it was a win-win-win," he said.

But the consultants did register to lobby city government. For their work advocating city zoning changes from June 2003 through June 2005, Barnes Mosher Whitehurst Lauter charged the two developers $325,000, according to city records. The fee was almost three times greater than the fee to run Leno's campaign — illustrating Whitehurst's point that lobbying can pay better than campaign work.

In pushing for the zoning change, Lauter said he talked with members of the San Francisco Board of Supervisors and with city planning commissioners. One member of the Board of Supervisors whom the firm lobbied was Gavin Newsom, then running for mayor on a platform that included curbing aggressive panhandling. The panhandling issue had a ballot measure campaign of its own, which was run by Lauter's firm.

"We were not involved in the Newsom for mayor campaign. But there was a ballot measure that Newsom was in charge of. We ran a campaign that put his face and name out there. We were very open about doing it. Everyone knew we were doing it. It could be argued and I would not dispute the argument that it helped him in his election," said Lauter.

In November 2003, Newsom and others on the Board of Supervisors voted to approve a favorable environmental review of the high-rises, a step that propelled the project forward.

Then, in February 2004, after Newsom became mayor, the Board of Supervisors voted to lift the maximum heights for the developers' properties from 200 feet to 400 feet, allowing construction of 40-story condominium buildings.

City planners estimated rezoning would increase the properties' value by $98 million. Condo units are selling for a minimum of $700,000 and on the high end, $5 million for two top-story apartments that will be built as one unit, according to Carl D. Shannon, regional managing director for Tishman Speyer.

Land use attorney Tim Tosta, hired by developer Union Property Capital, said the consultants' familiarity with the politicians helped him tailor his presentations.

"A lot of politics is about the right metaphor," said Tosta, who is with the law firm of Steefel, Levitt and Weiss.

With an official who's a devout Christian, Tosta said he may refer to God, "but if you're a good old politically correct Californian, you'll talk about Buddha or your spirituality."

Campaign consultants "sometimes perform miracles," he said.

According to Sue Hestor, attorney for the neighbors who opposed the rezoning, the Rincon Hill neighborhood will become "a very, very tall forest of housing towers," blocking views of the Bay Bridge, "which is one of the iconic things you look for in the city."

When San Franciscans see the results, "they're going to be apoplectic," she said.

The week after condominium towers were approved in 2004, the city passed a law requiring campaign consultants to wait four years before lobbying their consulting clients.

High-level lobbying in D.C.

Federal lobbyists are not required to specify on disclosure forms which lawmaker they seek to influence, and they rarely do so voluntarily. But the Center's investigation found that consultants have been hired to influence the officials they helped to elect.

In 2003 and 2004, a St. Louis business group hired Republican political consultant Tony Feather to lobby for an earmark for construction of a new bridge over the Mississippi River. While an additional river crossing would relieve traffic congestion in the St. Louis area, the estimated cost was $1.6 billion, so local business and government leaders wanted federal assistance.

Feather, whose firm who had helped re-elect Sen. Christopher "Kit" Bond, R-Mo., was involved in at least one meeting with Bond while lobbying for bridge funding, according to a source with knowledge of the meeting. As chairman of the subcommittee that wrote the transportation funding bill, Bond was a key player.

Feather's forte is not one-on-one lobbying on Capitol Hill, but "grassroots" lobbying — the practice of finding constituents who agree with their clients' positions and getting them to support the cause by contacting their congressmen or representatives.

The bill stalled for two years, but when it finally passed in 2005, Bond (who did not respond to requests for an interview for this article) secured a $75 million portion of the earmark for the Mississippi River bridge, according to the St. Louis Post-Dispatch. Two senators and a congressman from Illinois, the state at the eastern end of the bridge, claimed credit for the remainder of the $239 million earmark.

The St. Louis Regional Chamber and Growth Association paid DCI Group about $200,000 for its efforts over the two years. The Web site of Feather's political telemarketing firm, now called FLS Connect, lists Bond's campaign as one of 11 U.S. Senate campaigns it has worked for in recent years.

Ironically, the Mississippi River project may be another federally earmarked bridge that goes nowhere. Construction can't move forward because Missouri and Illinois can't agree on how to finance the balance.

Feather's firm was one of the 22 the Center identified that blend consulting and lobbying.

Feather wears many hats. He is a name partner in the phone bank consulting firm Feather Hodges Larson Synhorst — later renamed FLS-DCI, then FLS Connect. The company boasts an endorsement from George W. Bush adviser Karl Rove on its Web site: "I know these guys well. They become partners with the campaigns they work with."

In 2000, Feather acted as political director of the Bush-Cheney campaign. For the 2004 elections, FLS-DCI was paid $26.9 million by Republican candidates and party committees for telemarketing and get-out-the-vote phone calls, including $7.6 million for its work on the 2004 Bush campaign, federal filings show. Feather also co-founded Progress for America, a group that produced some of the most effective television advertisements during the Bush re-election campaign.

Feather also worked as a contract lobbyist for DCI Group. Many of his clients sought access to the White House.

Phones, fuel cells and federal recognition

From 2001 through early 2006, Feather reported lobbying the White House for 13 clients, who paid a collective $3.9 million to DCI Group for work by Feather and other lobbyists, according to Center analysis of federal filings. His clients ranged from corporate giants such as AT&T and General Motors to an Indian tribe seeking federal recognition.

During the first Bush administration, phone giant AT&T was fighting for its corporate life, looking for help from federal regulators. At issue were the rates a phone company could charge competing carriers for access to its lines. Ultimately, President Bush took a position contrary to AT&T's wishes, declining to get the Justice Department involved in the appeal of an unfavorable court ruling.

DCI charged AT&T $1.26 million in lobbying fees through 2006, according to the filings. The phone company's public affairs office did not respond to Center inquiries about its lobbying activities.

Over three years, General Motors paid DCI Group $360,000 to successfully lobby the White House, Congress and executive branch agencies for fuel cell research and development funds and for approval of the sale of its interest in the DirecTV satellite television business.

"It makes perfect sense that we would hire consultants who have the depth and breadth of knowledge in this town," said Greg Martin, GM director of policy and Washington communications.

Another client that wanted White House access was the Nipmuc Nation of Massachusetts. After Bush took office, the Bureau of Indian Affairs (BIA) had reversed a Clinton administration decision to recognize the group as a tribe. Within months, the Nipmucs hired DCI Group, paying them $160,000 to lobby Congress, the BIA, and the White House. Feather registered as one of the tribe's lobbyists.

Tribal recognition would have allowed the Nipmucs to open a casino, backed by a $6 million investment by Minnesota-based casino resort developer-manager Lakes Gaming Inc.

The Nipmuc chief, Walter Vickers doesn't remember meeting Feather, who is based in Jefferson City, Mo. Vickers said that another DCI lobbyist ushered him into two West Wing meetings with White House staff.

In June 2004, the Bureau of Indian Affairs rejected tribal recognition for the Nipmucs. Their chief was disappointed with DCI Group's inability to get meaningful results.

"I was always questioning what they've done and what they were going to do. And I guess they did open some doors," Vickers said.

Repeated calls to DCI Group seeking comment for this article were not returned.

Opening the right doors

Another man who can open doors in Washington, D.C., is Gordon C. James, a Phoenix-based consultant.

James was an advance man for George W. Bush's presidential campaigns, giving advice that was more technical than political. His company set up lights, sound, and staging for campaign debates, rallies and Bush's election night celebrations. While working on the younger Bush's campaigns and for the George H.W. Bush White House, he developed enduring friendships with the family.

Once the current President Bush took office, James tried his hand at lobbying.

"We can help people navigate the process," he said in a phone interview.

"We have a lot of friends in the federal government," he said, that he calls on behalf of clients. "So would you. … It's all about friends and relationships and trust."

James' fees are modest as lobbyists' go, the largest being less than $30,000 for any six-month period, according to filings. His firm does better financially as a government contractor. For example, it won a $1.5 million job handling the logistics for 55 pandemic flu summits around the country from January through August 2006.

Since 2001, James has registered to lobby for eight clients, including a federal contractor pushing for open bidding on Department of Energy laboratory management contract, a Scottsdale, Ariz., employee assessment firm trying to make a sale to the Department of Education, and a copper mining concern.

Andy Wiessner, a lobbyist who specializes in public land exchanges, worked with James to lobby the White House on behalf of Resolution Copper Co., which seeks to trade private land it owns to acquire a piece of the Tonto National Forest in Arizona.

The proposed swap — 3,025 acres of federal land for 5,539 acres of private property — would give RCC unfettered access to extract copper ore now situated below a campground and recreational rock climbing terrain. According to RCC spokesman Troy Corder, the exchange would include a substitute rock climbing area about 25 miles away.

Some environmentalists say even though the copper company would give up more acreage, the deal would be lopsided.

"This exchange would be the largest loss of [rock] climbing ever," said Steve Matous, executive director of the Access Fund.

Lobbyists Wiessner and James met with White House staffers twice. Wiessner said they were "courtesy calls," but vital because these staffers would later pass judgment on prepared Forest Service testimony for congressional hearings on the bill. By covering all the bases, he said, "there are no surprises."

James also said he'd been in touch with the White House on behalf of the mining company. "We had to keep them informed of what was going on," he said.

Hearings on the land-swap bill were held in May, but no vote was taken before the Congress adjourned this month.

From the outside looking in

James claims the president knows him well enough to chat on the phone — such as, the day after Easter this year, when he says the president called to thank him for organizing the White House egg roll.

Asked whether he's taken up a lobbying issue with the president, he replied, "I'm not sure I want to go into that amount of detail. It's getting very intimate."

Proponents of lobbying reform — expected to be reintroduced in the new Congress — have not addressed the issue of consultants who lobby. Professor Thurber of American University, for one, worries that the undue influence this group of insiders enjoy could undermine the public trust.

"I think in a democracy you need trust in the way decisions are made. You need transparency," Thurber said.

"But it's not transparent and it makes it look like a fixed game to people on the outside."

Additional reporting for this report was done by Chris Landers, Erika Kaneko, Elspeth Reeve and Sarah Laskow. Agustín Armendariz and John Perry served as database editors.