Elizabeth Brown stories from The Center for Public Integrity

Lobbying FAQ

2011-09-16T10:58:56-04:00

Below is a list of the most frequently asked questions and misconceptions about federal lobbying.

What is lobbying?

Federal statute defines lobbying as any communication made on behalf of a client to members of Congress, congressional staffers, the president, White House staff and high-level employees of nearly 200 agencies, regarding the formulation, modification, or adoption of legislation.

Who is a lobbyist?

A lobbyist is a person hired directly by an organization or through a firm for services that include making more than one "lobbying contact" on behalf of a client, and who spends at least 20 percent of his or her time during a six-month period engaged in lobbying activity.

According to the Center for Public Integrity more than 22,000 companies and organizations have employed 3,500 lobbying firms and more than 27,000 lobbyists since 1998.

Who lobbies?

Corporations, organizations, much of the Fortune 500, universities, environmental and non-profit groups, and even churches lobby the federal government.

According to the Center for Public Integrity, the most commonly lobbied issue is budget and appropriations.

Who regulates lobbying?

The Secretary of the Senate and the Clerk of the House of Representatives oversee federal lobbying. According to the Lobbying Disclosure Act of 1995, those offices are charged with providing guidance on lobbying disclosure, ensuring the timeliness and accuracy of required reports, and making those reports available to the public.

According to a Center for Public Integrity report, nearly 14,000 documents that should have been filed periodically with the Senate Office of Public Records are missing.
Forty-nine out of the top 50 lobbying firms failed to file required forms during the last six years.

Who must register to lobby with the federal government?

Organizations that employ lobbyists in house must register with Congress if their lobbying expenditures exceed $24,500 during a six-month period. Lobbying firms must file a separate registration – at least 45 days after first contact – for each client whose lobbying billings exceed $6,000 for a six-month period.

According to a Center for Public Integrity report, nearly 300 individuals and entities lobbied without filing proper registration forms.
In addition, more than 2,000 initial registrations were filed after the 45-day time frame.

What information must organizations lobbying disclose to the federal government?

Organizations must disclose on a semiannual basis: (1) the issues lobbied during that period, including specific bills and regulations; (2) the names of lobbyists employed by the client; and (3) the federal agencies contacted. Lobbying firms filing on behalf of a client must disclose an estimate of the total lobbying-related income earned from the client during the period. Organizations employing their own lobbyists must disclose an estimate of total lobbying-related expenditures for that period.

What are the penalties for non-compliance with lobbying disclosure laws?

A lobbyist who knowingly fails to comply with any provision of the law may be subjected to a civil fine, the maximum of which can be $50,000.
The House and Senate office must refer such alleged non-compliers to the U.S. Attorney for the District of Columbia, the principal prosecutor for federal criminal and civil offenses committed in Washington, D.C.

Can a former member of Congress, legislative staff or senior executive branch staff lobby on the Hill (revolving door)?

Government ethics law prohibits former members of Congress, senior legislative staff and senior executive branch staff from lobbying their former department or agency for one year after leaving government. These officials must report their past positions on their lobbying registration forms for the first two years after leaving government.

Former members of Congress retain access to the members-only dining facilities, gymnasiums, cloakrooms and the chamber floors—areas not accessible to others.
According to a Center for Public Integrity report, more than 2,200 former federal employees, including 273 former White House staffers, and nearly 250 former members of Congress and agency heads have registered as federal lobbyists between 1998 and 2004.

Can relatives of members of Congress work as lobbyists?

Relatives of members of Congress can and do register to lobby. According to the Senate Ethics Manual,

"the decision on whether a spouse may lobby the Senate is generally a decision for the Senator and his or her spouse, giving due regard to the potential reflection upon the Senate."

Relatives of Congress members who have registered to lobby include the wife of Rep. Roy Blunt R-Mo., the wife of former Sen. Tom Daschle, D-S.D and the son of Sen. Harry Reid D-Nev.

Can lobbyists pay for travel for members of Congress?

According to House and Senate Ethics Rules:

Lawmakers and their employees cannot accept payment for travel from lobbyists or lobbying firms, even if a non-lobbyist client promises later reimbursement.

Can lobbyists arrange travel for members of Congress?

Lobbyists may set up, book, and travel with members of Congress on vacations, as long as they do not use personal or lobbying firm funds to pay for the trip.

Can lobbyists give gifts to members of Congress?

Lobbyists can give gifts (from meals to clothing to rounds of golf) to members of Congress that are less than $50 in value. The total value of gifts given to one member cannot exceed $100 in a year.

Lobbyists may not contribute to the legal expense funds of members of Congress or the charities controlled by a member of Congress.

Can lobbyists make political donations?

Lobbyists may make political donations under the same guidelines as other Americans. Lobbyists cannot give more than $5,000 to any political action committee per calendar year. They can, however, work on campaigns and serve as the treasurers of political action committees.

According to a Center for Public Integrity report, federally registered lobbyists served as the treasurers of at least 800 political action committees since 1998.
These lobbyist led committees have spent more than $525 million to influence the political process since 1998.
At least 79 members of Congress have appointed lobbyists to head their campaign committees or leadership PACs since 1998.

Can lobbyists write legislation?

Lobbyists can and at times do write legislation, sometimes at the behest of a member of Congress or their staff. Often, lobbyists will submit language to a member who has a working relationship with the industry which the lobbyist represents.

Candidates for GOP House Leader also have ties to K Street

Missouri,United States — 2011-11-17T16:12:13-05:00

The three candidates running to replace Rep. Tom DeLay as Republican Majority Leader in the House of Representatives have their own multiple "revolving door" connections to lobbying firms, each sending former staff members, and staff members of the committees they chair, to work for major K Street operations.

Rep. Roy Blunt, (R-Mo.), Rep. John Boehner, (R-Ohio), and Rep. John Shadegg, (R-Ariz.), are linked to more than a dozen lobbying firms and other organizations that lobby through employees who worked in their Capitol Hill offices, making the major differences between their operations and Delay's not immediately perceptible.

In the shadow of Jack Abramoff's guilty pleas to three lobby-related felony charges, the public, the press, and state and federal prosecutors are scrutinizing members of Congress and their relationships with lobbyists and the K Street firms.

Rep. Boehner, the chairman of the House Committee on Education and Workforce, who once handed out lobbyists' re-election campaign contributions on the floor of the House, has connections to at least 14 lobbyists:

George H. Conant, a lobbyist for California State University since 2003, worked as a staff member on the Committee on Education and Workforce under Boehner.
David A. Connolly Jr. was a professional staff member on the House Committee on Education and Workforce under Boehner before registering to lobby with Capitol Associates, Inc. in 2004.
Allison L. Dembeck, a lobbyist for the human resources outsourcing company Ceridian Inc. beginning in 2004, previously was an executive assistant on the Committee on Education and Workforce under Boehner.
Christy Carson Evans was a special assistant to Boehner before registering to lobby with the firm Cassidy and Associates (owned by the Interpublic Group of Companies) in 1998.
Terry Holt, a former press secretary for the House Republican Conference under Boehner, opened up his own consulting firm Holt Strategies last week, which Holt said currently has no lobbying clients. He previously lobbied for the firms Quinn Gillespie & Associates and Dutko Worldwide (formerly the Dutko Group).
Kristin Wolgemuth Fitzgerald was a professional staff member on the House and Education Workforce Committee under Boehner before opening up her own firm Fitzgerald Consulting in 2004.
Marc Lampkin served as general counsel to the House Republican Conference under Boehner before registering to lobby with Quinn Gillespie & Associates in 2001.
Patrick Lyden was a staff member on the Committee on Education and Workforce under Boehner, before registering to lobby with the National Federation of Independent Business in 2003.
Josh Mathis, a former political aide to Boehner, lobbies for Washington Advocates. He registered to lobby in 2003 with the Petrizzo Group before the firm merged with Bockorny, Castagnetti, Hawkins & Brain in 2004 to form Bockorny Petrizzo.
Alanna Miller was an aide on the House and Education Workforce Committee under Boehner before registering to lobby for Venn Strategies in 2005.
Tyson R. Redpath, a former legislative assistant to Boehner, registered to lobby for the firm Lesher & Russell, Inc. in 2005. Redpath has previously lobbied for the firm Olsson, Frank and Weeda and the industry organization National Grain Trade Council.
Brenda B. Reese, who worked as the conference coordinator for Boehner when he chaired the House Republican Conference lobbies for Bockorny Petrizzo. She first registered to lobby in 1999 with Bergner, Bockorny, Castagnetti, Hawkins & Brain.
Benjamin T. Peltier, who first registered to lobby for the firm Arent Fox PLLC in 2003, was part of the professional staff to Boehner on the House Committee on Education and the Workforce.
Heather Valentine, vice president for policy for the Council for Opportunity in Education, was a press secretary for the Committee on Education and Workforce under Boehner. Valentine previously lobbied for the MWW Group until 2005.

Rep. Blunt, the acting majority leader, has connections to at least three lobbyists:

Samantha Cook, a former senior legislative assistant to Blunt, has worked for the lobbying firm Fierce Isakowitz & Blalock beginning in 2001.
Lobbyist John Dutton served as Blunt's legislative director before registering to lobby with Manatt, Phelps & Phillips in 2003.
Gregg L. Hartley who has worked for the lobbying firm Cassidy and Associates Inc. (owned by the Interpublic Group of Companies) since 2003 was previously chief of staff in Blunt's whip office.

Rep. Shadegg, who resigned as chairman of the House Republican Policy Committee to run for DeLay's former position, has connections to at least two lobbyists:

Teddy Eynon, a lobbyist for Davidson and Co., previously served as Shadegg's deputy chief of staff. Before joining Davidson and Co. in 2005, Eynon lobbied for several years for DCI Group.
Jennifer Macdonald, a lobbyist for Association of American Railroads since 2001, previously was the district director for Shadegg.

In all, more than 2,200 former federal government employees had registered as federal lobbyists between 1998 and 2004, as the Center for Public Integrity reported in April 2005. This includes nearly 250 former members of Congress and agency heads.

In addition to these links to lobbyists that went through the proverbial "revolving door," the Center found that Blunt made similar transactions – albeit legal – to those that led to DeLay's money laundering indictment charges in Texas.

Blunt, who has temporarily replaced DeLay, accepted hundreds of thousands of dollars in contributions from corporations to his 527 organization (Rely On Your Beliefs Fund) and sent $661,000 to the Missouri Republican State Committee. 527 committees—nicknamed for the section of the tax code under which they receive a tax exemption—are political nonprofits that can spend money in support of specific issues, but not on behalf of particular candidates.

The difference is that unlike Texas, Missouri state law allows corporate donations to state candidates, political action committees and parties. While it does not limit the amount a state party can take in, it does impose a $1,200 limit on corporate donations to candidates, according to the Missouri Ethics Commission.

These donations to Blunt's 527 group include contributions from four of the same companies that were implicated in the DeLay indictment, including:

PAC-Men lobbyists

2011-11-17T16:12:27-05:00

WASHINGTON, October 3, 2005 — When lobbyist William Oldaker sits down to negotiate with a member of Congress, he brings years of experience working for the federal government to the table, as well as the legislative resources of his own firm. He also brings quite a bit of money.

As the treasurer of 23 political committees, groups that raise funds to elect or defeat politicians, Oldaker has signed off on more than $2 million in donations since 1998 to the parties and candidates he is paid to influence, according to a study by the Center for Public Integrity. At the same time that these committees doled out millions to politicians, some 100 companies paid Oldaker's lobbying firms $14 million to influence some of the same lawmakers.

For example, in 2004 four committees that he managed donated a combined $30,000 to Sen. Patty Murray, D-Wash., the ranking member of the transportation appropriations subcommittee. In that same year, Oldaker lobbied Congress on transportation appropriations issues for at least five of his clients. Odaker did not return repeated calls from the Center.

Oldaker is just one of hundreds of Washington, D.C., lobbyists who play this dual role, influencing members of Congress while also controlling donations that finance their campaigns. Lobbyists have served as treasurers for at least 800 political action committees and 68 campaign committees in the past six years, according the Center's study. In that time these committees have spent more than $525 million to influence the political process. In other words, these lobbyist-led committees spent more money than President George W. Bush and Sen. John Kerry raised in combined contributions during the 2004 presidential campaign.

"That is truly a lot of money," said Frances Hill, the tax program director at the Campaign Legal Center and a professor of election law at the University of Miami law school. "I think it is all right for people to band together and hire a lobbyist in an expensive suit to represent their interests, but I don't think it is OK to use [campaign] money as the clincher," she said.

Although there are no restrictions on who can be a committee treasurer, Hill said she was "seriously concerned" that so many lobbyists are filling the position. According to federal election law, the treasurer is responsible for all of a committee's expenditures and is also responsible for monitoring contributions.

Meanwhile as these lobbyist-led PACs donate millions, their firms have raked in $3 billion from 10,610 companies and organizations between 1998 and 2004—constituting one quarter of all federal lobbying expenditures for that period. In addition, 557 companies that spent more than $3.5 billion lobbying employed PAC or campaign treasurers as in-house lobbyists.

Most PACs with lobbyist treasurers were actually formed by their clients. New York Stock Exchange lobbyist Cecile Srodes, for example, was the treasurer of two NYSE PACs in 2004. Under her management that year, the committees donated $11,000 to Rep. Michael Oxley, R-Ohio, while Srodes simultaneously lobbied on the "Broker Accountability through Enhanced Transparency Act," which Oxley co-sponsored.

Lobbying expert Bertram Levine said that appointing a lobbyist as the treasurer of a corporate PAC is a "very poor practice." He said that because corporate PACs raise money from the company's employees, they should be the ones designating where the money goes, not lobbyists.

"It buys access," said Levine, a professor of political science at Colgate University in Hamilton, N.Y., and co-author of a book about lobbying. "And that is not something that should be taken lightly; the opportunity to make the argument is the opportunity to win the argument."

'How you buy influence'

Although Levine said that allowing lobbyists to run corporate PACs raises "red flags," he characterized the practice of having them run campaign committees and leadership PACs as the "most obvious conflict of interest." Campaign committees raise money for a candidate's election; leadership PACs are committees formed by politicians to fund other candidates' campaigns.

"Raising money is how you buy influence," Levine said. "There is a loophole here that needs to be closed or at least more closely monitored."

Since 1998, 79 members of Congress have appointed lobbyists as the treasurers of their campaign committees or leadership PACs. There are 39 sitting members of Congress who currently have lobbyists at the helm of such committees. Lobbyists have also been treasurers for major presidential contenders, including Al Gore's 2000 campaign.

For instance, Harold Ickes, a partner at Ickes & Enright Group, is the treasurer of New York Democratic Sen. Hillary Clinton's campaign committee "Hillary Rodham Clinton For U.S. Senate Committee Inc." Ickes clients have included the insurance company Equitas Ltd. and Verizon Services Group. Rep. Rahm Emanuel, D- Ill., co-sponsor of the recently introduced lobbying reform act, the "Emanuel-Meehan bill" also appointed a lobbyist to oversee his campaign committee, "Friends of Rahm Emanuel." Emmanuel's committee raised more than $4 million under the watch of lobbyist William Singer, whose clients include Sara Lee Corp. and United Airlines.

But these lobbyist-led campaign committees are not limited to the Democratic side of the aisle. Lobbyist Timothy McKeever is the treasurer of Alaska Republican Sen. Ted Stevens' campaign committee, "Stevens for Senate." McKeever said that he has worked on the committee since 1980, before he became a lobbyist.

During McKeever's last two election cycles as treasurer, the committee raised nearly $3 million to influence the political process. He insists, however, that his work as a fund-raiser has no impact on his role as a lobbyist.

"I really don't think there is a connection between the two (positions)," McKeever said. "I do relatively little lobbying work for the senator."

Still, in 2003, McKeever reported lobbying on a Senate appropriations bill rider authored by Stevens that would have eliminated funding for certain habitat protection programs in the North Pacific Ocean. The measure was supported by the commercial fishing industry, including Seattle-based Arctic Storm Management Group, one of McKeever's clients. Despite much opposition by environmentalists and other Republicans in Congress, Stevens attached the rider to the bill. In the end, the bill passed, but without the rider.

McKeever did not comment on the specifics of his lobbying, but said that his committee position does not give him any special advantages in attracting clients. "I don't believe they hire me because of it," McKeever said. "Whether (an advantage) is something they perceive, I don't know."

Among the lobbyists overseeing leadership PACs is the Republican political consultant Mark Valente. He serves as the treasurer of 15 PACs, nearly all of which are leadership PACs, including those of House Republicans Joe Wilson, S.C.; Mike Ferguson, N.J.; and Mike Rogers, Mich.

Valente, who heads his own lobbying firm Valente & Associates, said he does not believe any conflicts of interest result from heading the leadership PACs of several members of Congress while lobbying. Although at times the job requires fund-raising, Valente said that the majority of his tasks as treasurer involve filling out forms and keeping banking records.

"The members are looking for people they can trust, and we want to help our friends out," Valente said. "And they are already our friends."

Only a few of his clients donate to the PACs he oversees, Valente said, and not many of them have PACs that could make contributions. "Just as we encourage our clients to donate to like-minded members of Congress, we would not exclude the PACs," he said.

By the book

While lobbyists like William Oldaker and Mark Valente are connected to many PACs, neither of them hold the record for the most committees controlled by a registered lobbyist. That distinction belongs to political savant Barbara W. Bonfiglio.

During her tenure as a lobbyist from 1998 to 2001, Bonfiglio mastered the demanding jobs of both overseeing the finances of 31 political committees—more than half of which were campaign committees and leadership PACs—while lobbying for six companies at the D.C. law firm Williams & Jensen. In addition to running FEC-regulated committees, Bonfiglio was also the treasurer of five 527 organizations once connected to members of Congress, which were allowed to raise money without contribution limits.

Though balancing such a vast array of lobbying and campaign finance interests at one time may seem difficult, Bonfiglio could be considered an expert. She wrote the book on it—literally. The attorney is author of How to Cross the Potomac without Falling In, a guide to following the Lobbying Disclosure Act, Federal Election Commission regulations and House and Senate gift rules.

Lobbying the watchdogs

Zhong Guo Shi You Hua Gong Gu Fen You Xian Gong Si — 2011-11-17T16:30:01-05:00

When it comes to lobbying in Washington, ChevronTexaco Corp. knows how to distribute its energy. The petroleum powerhouse is a high-profile fixture on Capitol Hill, spending millions to curry legislative favor. The company's hired guns routinely seek to influence regulations at the Department of Energy, rulemakings at the Environmental Protection Agency—and even independent investigations at the Government Accountability Office.

But ChevronTexaco is hardly unique. The GAO has launched thousands of inquiries into government programs during the past six years. During that time nearly 300 companies and organizations have sought to influence those investigations, according to a study of federal lobbying records by the Center for Public Integrity.

In fact, many of the federal offices responsible for overseeing the integrity of American democracy are among the more than 200 agencies lobbied during the past six years—agencies such as the Federal Election Commission, the Office of Government Ethics and the GAO, which serves as the investigative arm of Congress.

"So many lobbyists cover so many issues, it is not surprising to find them popping up almost everywhere," said lobbying expert Burdett Loomis. Lobbying these oversight agencies, he added, may be a "more indirect" way of influencing government, but it can still be quite effective.

For example, although the GAO writes no legislation and issues no rules or regulations, lobbyists contacting the agency can "affect the context of legislation," said Loomis, a professor of political science at the University of Kansas. "There is lots of interest in shaping the debate, even if there is not a rule."

The Nuclear Energy Institute ranks high among the organizations trying to shape the legislative debate. The pro-nuclear power trade association is one of the groups that reported contacting the GAO the most during the past six years, Center findings reveal.

The GAO recently issued three reports affecting the interests of the nuclear energy industry, said Steve Kerekes, a spokesman for the group. These reports included recommendations to Congress about how to handle the oversight of security at nuclear power plants, what funds were needed for nuclear decommissioning and other issues.

Kerekes said his group works with the GAO in order to provide accurate information for the investigations and also a "sound basis for policymaking." He said the GAO periodically contacts the NEI itself when it launches an investigation involving energy industry, but added, "I guarantee we would proactively contact them to make sure they have all the accurate information."

Terry Draver, a senior analyst at the GAO, agreed that contact between agency investigators and interested parties can be initiated by both groups, especially when they are working on a report that affects a certain industry.

"It does not surprise me that other groups would come to make their pitch when the GAO is doing work in their area," Draver told the Center.

Draver said the balance of views expressed to the GAO could be "a concern," but said he thinks the investigators are "professional enough" not to let the loudest voices of special interests interfere with the integrity of their reports.

"We stress that we are nonpartisan, but that does not mean we close our eyes and our ears," Draver said. "It can be helpful; more information is better than less."

The Federal Election Commission, the office responsible for overseeing federal election laws, is also accustomed to hearing the voices of interest groups. More than 40 companies and organizations have reported contacting the agency during the past six years. Unlike the GAO, however, the FEC issues campaign finance law regulations, and that is where most of the lobbying takes place, said FEC spokesman Bob Biersack.

"Most commonly," Biersack said, "[the lobbying] probably comes in the context of our writing and revising regulations and there is a standard process for [submitting comments]. Anyone can do it."

Although many of the companies and organizations that reported contacting the FEC are public advocacy groups such as Common Cause, Democracy 21 and Public Citizen, which lobby to support changes in campaign finance laws, others with less-obvious motives contact the agency as well.

For example, the Air Conditioning Contractors of America is one of the groups that reported contacting the FEC the most during the past six years. The specific lobbying issues listed on the trade association's disclosure forms ranged from "political action committee prior approval" to "blacklisting" and "bid shopping." Representatives from the group declined to comment on its lobbying activities.

Biersack said he was unsure what the association meant by the descriptions on the forms, but said that groups "can't lobby on enforcement [of election laws], so it must be on the rule changes or regulation issues."

Lobbying of the FEC increased notably during the first half of 2004, as the commission interpreted a new law that would regulate the donations of political non-profits. In fact, 13 of the 16 groups that contacted the agency that year did so because of the change in regulation, which Biersack said "triggered lots of controversy in the non-profit community."

The Office of Government Ethics—the body charged with preventing conflicts of interest on the part of government employees—also feels the pressure of special interests. Although the agency was lobbied considerably less than the GAO and the FEC, four groups reported contacting the agency to advance their agenda during the past six years. Most recently the Senior Executives Association, an association of current and former high-level government employees, lobbied the OGE for a change in—what else?—lobbying laws.

In 2004 the group contacted the OGE in favor of a proposed rule change that would reduce the number of senior government employees who are subject to a ban on lobbying their former agencies for one year after leaving government. The rule has not been changed, according to OGE officials.

"Our goal is to work together with them," Carol Bonosaro, president of the Senior Executives Association, said about contacting the OGE.

And according to lobbying expert Burdett Loomis, it's reasonable to expect that industries will work with oversight agencies. These agencies, he said, need to get their information from somewhere, and they generally do hear all sides of the issues.

But, Loomis added, "The moneyed interests may weigh in more. Well, welcome to the real world."

Influencing the IRS

DTE Energy Company — 2011-11-17T16:30:01-05:00

When average Americans need help with their federal income taxes, they hire an accountant or buy a computer program to ensure that they don't miss out on any deductions. But when corporate giants like Detroit-based DTE Energy want to save millions, they turn to Washington, D.C., lobbyists.

The energy services provider relied on its lobbyists—not accountants—when the Internal Revenue Service began reviewing, in 2003, a controversial tax credit that benefits it and other companies that turn coal into synthetic fuels. But after only four months of investigation and heavy industry pressure on Congress and the IRS, the agency dropped the inquiry, preserving the program that gave DTE Energy more than $200 million in tax credits that year.

"We wanted to make sure [the IRS] had all the available information and technical expertise needed to make the final determination," said Renze Hoeksema, the director of government affairs at DTE Energy about contacting the IRS on the company's behalf.

DTE Energy is not alone. Nearly 500 companies and organizations have reported lobbying the IRS between 1998 and 2004, putting the nation's revenue collector among the top 30 most frequently lobbied federal agencies, according to a study of federal lobbying records by the Center for Public Integrity. In fact, more companies and organizations reported lobbying the IRS than the Navy, the Joint Chiefs of Staff and the President of the United States combined.

Indeed, among the top 250 companies and organizations that have spent the most money lobbying the federal government, one in three has lobbied the IRS.

Some of the biggest groups in Washington, D.C., —such as the U.S. Chamber of Commerce, the American Gaming Association and even the AFL-CIO—have pressed their case to the IRS either through their own in-house lobbyists or by hiring specialists who have ties to the agency or the congressional panels that oversee it.

Leonard Oursler, chief of congressional affairs at the IRS, said he was surprised to learn that so many groups have reported contacting the agency in order to advance their interests. Although it is unlikely the IRS would do anything to try to shape legislation, Oursler said, lobbyists may attempt to influence how the IRS administers its rules. Such rules, however, could be worth tens if not hundreds of millions of dollars to a company's bottom line.

"We fight hard to stay out of the political fray," Oursler said. "You would want your tax collector to stay out of it."

Under the Lobbying Disclosure Act of 1995, lobbyists can offer vague descriptions of why they are contacting a federal agency, so it is impossible to determine exactly how the nearly 500 companies sought to influence the Internal Revenue Service. But Keith Ashdown, vice president for policy and communications at the federal-budget watchdog Taxpayers for Common Sense, called the lobbying on the synthetic fuels credit a "perfect example" of how special interests get their way with the IRS.

"There is this assumption that lobbying begins at the doors of Capitol Hill, but that is a fallacy," Ashdown said. Many private companies have found that lobbying federal agencies, including the IRS, has been "very effective," he added.

It has also been very effective for the K Street firms that represent the companies. Government relations giant Van Scoyoc Associates, which reported nearly $90 million in lobbying fees during the past six years, was retained to represent the interests of more than 50 clients in front of the IRS between 1998 and 2004—more than any other private law firm, according to the Center for Public Integrity's LobbyWatch analysis of public filings.

Jeffery Trinca, a vice president at Van Scoyoc, said most of the time he spends lobbying the IRS is used to work out policy that coordinates the interests of his clients along with the interests of the agency.

"I work on issues that involve tax administration, but I rarely take a cab down to 1111 Constitution Ave. and go in and say 'please, Mr. Commissioner,'" Trinca, who worked for the National Commission on Restructuring the IRS during a one year sabbatical from the law firm, told the Center.

Not all lobbying of the IRS has to do with influencing tax regulations; some include contracts that benefit a particular company. For example, Trinca's client Computer Sciences Corp. , which is one of the companies that reported contacting the IRS the most during the last six years, lobbies mainly on issues that pertain to congressional budget allocations, he said. The more money Congress gives the IRS means the more the agency can spend on computers, which benefits his client, Trinca said.

Trinca worked for a congressional commission, not actually for the IRS. But at least 30 registered lobbyists have previously held positions within the agency, including two of its former commissioners: Donald Alexander, a partner at Akin Gump Strauss Hauer & Feld, and Fred Goldberg Jr., a partner at Skadden, Arps, Slate, Meagher & Flom.

Although neither Goldberg nor Alexander has reported lobbying the IRS on their disclosure forms, both specialize in tax law at their respective firms. According to Goldberg's biography on his law firm's Web site he has "represented clients and groups of companies on issues of industry-wide significance in administrative proceedings before the IRS."

In an interview with the Center, Goldberg said he does not consider his actions in front of the IRS as "lobbying in the traditional sense" but more as protecting a client during an audit.

"There is an audit, a controversy over the law and the facts, and the practitioner represents the taxpayer during audit, in appeals and in court," he said.

Goldberg said the activities more commonly associated with lobbying, such as pushing for changes in the tax rules and influencing legislation, generally take place with the House, the Senate and the Treasury Department, not the IRS.

The Congressional Record bears Goldberg out. During the last six years more than 6,800 bills sought changes to U.S tax policy and procedure. And in the first three months of the 109th Congress, lawmakers introduced a total of 413 bills in the House and Senate to amend the Internal Revenue Code that governs the federal tax system.

That tinkering with the tax code has provided lobbyists with a lot of work. Since 1998, more than 3,500 companies or organizations lobbied the federal government on tax issues directly, or hired one of 885 outside firms to do so on their behalf. And as companies such as DTE Energy can attest, the time and money spent lobbying can be a small price to pay for the tax help even the best accountants could not provide.

More than 2,000 spin through revolving door

2011-09-16T11:41:21-04:00

Specifically, Zimmer wanted to increase the one-year-ban on lobbying for former members to two years and strip former lawmakers registered as lobbyists of their special access to gyms, dining rooms and other members-only areas on Capitol Hill. The goal, he said, was to level the lobbying playing field.

The legislation did not pass. But Zimmer did—right through the revolving door. In 2001, five years after he left Congress, Zimmer registered as a lobbyist with the Los Angeles firm Gibson Dunn & Crutcher, where the former member of the Ways and Means Committee now lobbies on taxation and other issues.

"I thought it was appropriate to abide by my own standards," Zimmer said in an interview with the Center. But, he added, "I did not say anyone could never lobby."

Zimmer is just one of the more than 2,200 former federal government employees registered as federal lobbyists between 1998 and 2004, according to a study of federal records by the Center for Public Integrity. Altogether, records show, more than 12 percent of current lobbyists are former executive and legislative branch employees. This includes more than 200 former members of Congress (175 from the House, 34 from the Senate) and 42 former agency heads.

These former government officials are indispensable to Washington's lobbying firms. Whether they saw the legislative process from the vantage point of Capitol Hill or in an office of the federal bureaucracy, they bring their new employers the unique understanding of government and the connections to key decision-makers that only an insider can develop.

While some question the conflicts of interest inherent in "revolving-door" connections, most lobbying firms along Washington's K Street corridor are not shy about disclosing their employees with prior positions. Indeed, many of these firms' Web sites openly boast about their transplants from the public sector.

'Second-career option'

While it's impossible to assign an exact dollar figure to the amount these revolving-door lobbyists bring in, the Center found the reported billings associated with them to be substantial. Former government employee lobbyists, who routinely work in concert with other lobbyists, appear on almost 80,000 lobbying disclosure forms amounting to $4.7 billion—a quarter of self-reported lobbying expenditures* and two thirds of lobbying firm fees reported for the period between 1998 and mid-2004.

Lobbying industry expert James Thurber said he was not surprised by the number of former government officials working as lobbyists. After all, he noted, the revolving door allows for "undue influence" by former government employees and those that can afford their services.

Thurber called lobbying "a second-career option" for those leaving government—one that can be much more lucrative than working in the public sector. "No one wants to leave Washington," said Thurber, director of the Center for Congressional and Presidential Studies at American University. "You either work for the government or someone who is trying to influence the government."

Employing one or more former members of Congress is standard operating procedure for Washington's top lobby shops. For example, Preston Gates Ellis & Rouvelas Meeds, which reported $54 million in lobbying fees between 1998 and 2004, has three on its roster, including former senator Slade Gorton, a Republican from Washington, and two retired Democratic representatives, Lloyd Meeds of Washington and Robert Davis of Michigan.

"The advantages are that they know how the system works," Mark Ruge, director of the policy group at the firm, said about having the former legislators on staff. He said former government officials offer contacts, expertise on the issues and knowledge of the legislative process. "They have a sense of how it works on the inside, so they do a better job on the outside," Ruge said.

'Once a member, always a member'

Another advantage for lawmakers-turned-lobbyists is access. Former members of Congress retain access to the members-only dining facilities, gymnasiums, cloakrooms and the chamber floors—areas not accessible to others.

In an interview with the Center, former Illinois Rep. Mike Flanagan characterized his unhampered access to legislative offices and lawmakers by saying: "'Once a member, always a member' is the axiom, and it's pretty much true."

Flanagan, who founded Flanagan Consulting, LLC after leaving Congress, said he uses his access to impress clients and their families during their visits to Washington. For example, Flanagan can treat them to the view from the Speaker of the House's balcony.

"Mrs. CEO and the children of CEOs like to do the Capitol tours, and I can go places that ordinary mortals can't in the Capitol," Flanagan said. "I can make them open the House floor if they're not in session, so they can have a private House floor view. It costs the taxpayer nothing; they just have to turn a lock and let me in."

It is common for former lawmakers, staffers and regulators to lobby on the very issues they worked on during their public service. In fact, 82 percent of revolving door lobbyists identified by the Center have reported lobbying their former agency or government office since registering as a lobbyist.

For instance, J. Bennett Johnston, a Louisiana Democrat who once served as chairman of the Senate Committee on Energy and Natural Resources, has lobbied on energy bills for such clients as Lockheed Martin and Westinghouse Electric Co. since leaving Congress. Similarly, Brian Thiel, who formerly served as chief operating officer for civilian healthcare programs and policies at the Defense Department's Office of Health Affairs, now lobbies the Pentagon for scores of clients, including Ardiem Medical Inc., Conemaugh Health System and Health Net Federal Services.

Thomas Bliley, who represented Virginia's 7th district for two decades before joining the law firm Collier Shannon Scott, called his move from lawmaker to lobbyist "a natural progression" after retiring from Congress.

Bliley, whose former district includes Richmond—home of Philip Morris USA—was known as an outspoken supporter of the tobacco industry during his tenure in Congress. He now lobbies on tobacco regulation issues for two clients: the Tobacco Products Manufacturers Coalition and the National Association of Convenience Stores.

"You represent a client. You open doors and the client goes in and makes his case or he doesn't," Bliley said. "It is all disclosed. There is not a hidden agenda."

The former chairman of the Committee on Energy and Commerce said his "old friends" in the House still receive him well. In fact, he said, he's at times better received these days, now that those former colleagues don't need his votes.

Government ethics law prohibits senior executive branch staff from lobbying their former department or agency for one year after leaving government. Similarly, former members of Congress and senior legislative staff may not lobby Congress for one year—a so-called cooling off period Bliley characterized as "unfortunate."

"What is a year supposed to do?" he asked, noting that any given group of representatives will be in the House for at least two years anyway. "It is an unnecessary impediment."

Rep. Robert Andrews (D-N.J.) also finds the one-year cooling off period to be ineffective, although for entirely different reasons: the main problem with the revolving door, he said, is not that lobbyists have relationships with people currently in government, but those still in public office may feel a temptation to consider a prospective employer's needs. To remedy this, Andrews has twice introduced bills designed to extend the time between serving as a member of Congress and lobbying Congress from one year to five years.

"We can only serve one master at a time," Andrews said. "When you are in elected office and hold the public trust, your only master can be the public. If you could lobby [a year from now] I don't believe all of your decisions today would be guided by your constituents, but by your future employer."

But as Andrews and some colleagues are pressing for stricter reforms, other government regulators have been loosening rules for revolving-door lobbyists.

The Office of Government Ethics eased the "covered positions" rule in November for some cabinet heads and other top cabinet officials. The change allows senior officials in the Department of Homeland Security and various other agencies to lobby their former colleagues immediately after leaving government, provided none of them worked in the same division of the agency.

Andrews called the rule change a "terrible idea," insisting that it only exacerbates the problem of public officials serving two competing interests while still in government: one public and one private.

Note to readers: This story has been reposted. Since the report was originally released, the Center for Public Integrity has changed the way it calculates lobbying expenditures to reflect a more stringent methodology for determining the total amounts. The change was made to correct the potential overstatement of totals. Figures or relevant text that have been changed are indicated with asterisks. (5/2/2006)

The big business of small business

2011-09-16T14:56:14-04:00

Titan is not alone. Thirty percent of all defense contract money reported as going to small businesses and special minority-owned businesses has ended up in the hands of the top defense companies, the Center for Public Integrity has found.

Between 1998 and 2003, the Pentagon awarded more than $47 billion in contracts designated for small businesses to companies that have each earned more than $100 million from Defense Department contracts alone during that six year period.

More than half of the top 100 defense contractors—55 of them in all—received at least $10 million in contracts with small business designations over the past six years. All told, the small business contracts won by the largest defense firms amounted to $9.3 billion, the Center found.

Titan, the 34th largest defense contractor, has received more than half a billion dollars in preferential small business contracts by absorbing smaller companies and continuing to win awards on their small business contracts. This large amount accounted for 23 percent of the $2.39 billion in defense contracts the company received from 1998 to 2003.

Nearly 45 percent of Titan's small business awards came in the form of small business set asides, which not only carry a preferential classification for government contracting, but are exclusively reserved for small companies. Nearly 80 percent of the $176 million Titan received from 2000 to 2003 through awards on contracts SenCom Corp. won were recorded as funds set-aside to go to small businesses.

"We have no problem with the government procurement systems and how they handle these things," Titan spokesperson Ralph 'Wil' Williams told the Center.

According to current regulations, if a business is awarded a contract while it is classified as small, the business is considered small for the life of the contract. This allows millions of small business dollars to go to big companies when a small firm outgrows the classification or is acquired, as noted in a General Accounting Office investigation last year.

"In fact there is a lot of change going on with the small business awards" said Deidre Lee the Director of Defense Procurement and Acquisition Policy at the Department of Defense. "If it is truly a buy … we should novate the contract, which would change the name, which would change the status. That is what should happen."

Contracting expert Charles Tiefer called the percent of contracts classified as going to small business that actually go to top companies "disheartening." He said government agencies have an incentive to award contracts to small businesses.

"Whether by goals or quotas departments are obliged to make sure that small businesses are taking contracts," said Tiefer, a professor of government contracting at the University of Baltimore law school.

According to government-wide goals set by Congress, 23 percent of prime contract dollars are supposed to be awarded to small businesses annually. The Small Business Administration reported that the Defense Department exceeded that goal by 2.4 percent in 2003.

L-3 Communications, which the Center found received $5.15 billion in contracts during 1998-2003, collected 11 percent–or $582 million–of its total contracts as those classified as going to small businesses. More than $219 million of those contracts come from the management and technical services company EER Systems, which L-3 Communications acquired in 2001 to become part of its Government Services division.

Other top contractors receiving small business dollars include the military equipment support services company, Engineered Support Systems Inc.. More than one third of the company's $1.57 billion in contracts during 1998 to 2003 came from contracts classified as going to small business.

Engineered Support Systems received $188 million in small business dollars through Keco Industries, which it acquired in 1998. Radian Inc. also brought in $162 million in small business dollars since Engineered Support Systems acquired the company in 2002.

'Get it right'

The Small Business Administration recently made changes to its regulations, set to go into effect December 2004, that would require companies to re-certify themselves as small businesses after they have been acquired by another company, said Gary Jackson, the assistant administrator for size standards at the SBA.

"The problem came up that a company may grow or be bought out but still gets recorded as small for the purposes of that contract," Jackson said. "In December we will look at situations when the contract is bought. The company would have to certify if the company is still a small business."

Jackson noted that the new regulations would not deny a company work on a contract previously won, but would remove the preferential classification for government reporting. He said the acquisition problem arose over the past five years after the government developed contracts that can last up to 20 years — plenty of time to grow out of a small business or be acquired by a larger company.

Tiefer said he was cautious about the Small Business Administration's introduction of certification regulations.

"[The regulation] sounds like a great idea, but many more promises are made about protecting the small business community, especially before an election," Tiefer said.

The GSA has already been requiring recertification of small businesses that win contracts through its schedules said David Drabkin, the deputy chief acquisition officer at the General Services Administration. "Under current regulations if you are small you remain small for the life of the contract, there is no requirement in regulation or law to investigate the size because of the SBA rule," Drabkin said.

But beginning in 2002, Drabkin said, General Services Administration contract officers were required to ask for recertification of small business size after the base period of the contract had ended, which is usually five years, to "keep in the spirit of what we are trying to do" with the small business program.

Drabkin said the General Services Administration's new "Get It Right" campaign, launched to re-educate federal contracting employees about proper contracting methods, will include a review to see if contracting officers have been making the inquiry into business size.