Max Baucus — Senate Finance Committee

An Unflinching Defender of Earmarks

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Raised on a Montana ranch, Sen. Max Baucus now wrangles tax policy as head of the powerful Finance Committee. The Big Sky State Democrat, 69, was elected to the U.S. House in 1974, and made the jump to senator four years later. He is currently the fifth-longest-tenured senator and the third among Democrats.

The top Democrat on the tax-writing Finance Committee since 2001, Baucus has served three stints as chairman — the current one beginning in January 2007. The committee’s purview is broad and its members often find themselves at the center of Washington’s most contentious debates. The Finance Committee oversees all measures affecting taxation and other revenue measures generally, as well as U.S. bonds, customs, tariffs, Social Security, and other programs funded by specific taxes and trust funds, such as Medicare, Social Security and other entitlement programs. Major legislation, including Bush’s 2001 tax cuts, the 2010 health care reform law, and the recent Small Business Job Creation Act, became law in large part due to Baucus’ work in the Finance Committee. In an e-mail, Baucus Communications Director Kate Downen also touted the work of her boss on health insurance for children, government oversight, fighting George W. Bush’s plan to privatize Social Security, and clean air and green energy initiatives.

Baucus has frequently collaborated with Iowa Republican Sen. Chuck Grassley, who was long the committee’s ranking member, and also the panel’s chair for part of 2001 and from January 2003 to January 2007. Baucus has defended his bipartisan approach, saying, “I care about results, and to get results, you have to work together and truly compromise.” This has at times earned the ire of liberal activists, such as Markos Moulitsas Zúñiga, founder and publisher of Daily Kos who wrote an October 2009 blog post entitled “MT-Sen: Getting Rid of Baucus,” urging a 2014 primary challenge to the Montanan. According to the National Journal, in 2007 Baucus voted the liberal position just 57 percent of the time — one of the lowest scores of any Democrat.

In November, Baucus defended the use of earmarks in an exchange with Republican Rep. Dennis Rehberg. Rehberg, who represents Montana’s sole current Congressional district, had challenged both Montana senators to ban the use of earmarks. Rehberg wrote, “Even in the Senate, Republicans have voted to forgo earmarks. That leaves you and Senate Democrats as the final holdouts of an antiquated spending culture where elected officials fight to spend more and more tax dollars.”

In a plainly worded response, Baucus defended the practice, saying that federal dollars amounted to 43.5 percent of Montana’s general fund in 2010. “Montana depends on the federal dollars you have long supported,” Baucus wrote. “So-called earmarks have been responsible for vital projects to bring jobs, infrastructure and resources to Montana.” The senator listed four projects that he said Rehberg had supported: a bio-science facility at Montana State University, funds for a secondary highway, rural water improvements and a regional water system. “Our ability to bring money home for these projects is particularly important to a rural state like Montana … as representatives of Montana we know the true value of projects like this to the people of our state. It’s our job to fight for them.”

Accordingly, Baucus obtained more than $401 million in earmarks between 2008 and 2010, according to Taxpayers for Common Sense.

A long career in the Senate has resulted in a queue of former staffers lining up to lobby their one-time boss. Former chief of staff David Castagnetti is now a partner at Mehlman Vogel Castagnetti, Inc., a well-known K Street lobbying shop. Former staffers Greg Mastel, Patrick Heck and Nick Giordano lobby on a bevy of issues that come before Baucus’ committee, including health care, banking, and defense funding.

Top PAC Contributors

  • Altria Group Inc., the parent company of Phillip Morris USA, the cigarette and tobacco giant — at least $39,000
  • Comcast Corp., the cable and telecommunications company — at least $32,000
  • Microsoft Corp., the software behemoth — at least $32,000
  • American Society of Pension Professionals & Actuaries, the national organization for career retirement professionals — at least $31,500
  • American Society of Anesthesiologists, professional society for anesthesiologists — at least $30,000
  • National Association of Home Builders, the builders and development advocate — at least $30,000
  • PPL Corp., electricity and natural gas provider to about 5.2 million customers in the United States and the United Kingdom — at least $30,000

Revolving Door

  • David Castagnetti is a founder of Mehlman, Vogel and Castagnetti, a DC-based government affairs company. A former chief of staff for Baucus, his many clients include eBay and Genworth Financial
  • Michael Evans, Baucus’ legislative director from 1983-1990, is a lobbyist with K&L Gates whose clients include JPMorgan Chase and the ESOP Association (a trade association for Employee Stock Ownership Plans around the country)
  • Jeffrey A. Forbes is a former chief of staff to Baucus who has since formed lobbying firm Cauthen Forbes & Williams and now lobbies on behalf of clients such as health care companies Merck and United Health Group
  • Nick Giordano was legislative director for Baucus and now works at Ernst & Young, where his clients include Charles Schwab, Hartford Financial, and the Securities Industry and Financial Markets Association
  • Patrick G. Heck, a former staffer for Baucus on the finance committee, now lobbies with K&L Gates for clients including JPMorgan Chase and the ESOP Association
  • Dawn Levy is a lobbyist with Cassidy & Associates. A former staffer for Baucus on the finance committee, her clients now include Hunt Oil and the American Bus Association
  • Greg Mastel served as both chief of staff to Baucus and chief economist for the finance committee before going into the private sector. Now with lobbying firm Dutko Worldwide, he works on behalf of groups including billing company Convergys and arms manufacturer Olin Corporation
  • Peter L. Scher is a former chief of staff to Baucus who also ran the vice presidential campaign of John Edwards in 2004. He was hired in 2008 to lead JPMorgan Chase’s government relations arm

Earmarks

  • Between 2008 and 2010 Baucus obtained more than $401 million in earmarks, according to Taxpayers for Common Sense.
  • Baucus obtained more than $108 million in earmarks in 2010. They included earmarks for defense-related projects, including $3.2 million for Blackfeet Nation and Radiance Technologies for a missile defense-related project, and $7.6 million to MSE Technology Applications, Inc. for a hypersonic wind development program. Baucus’ office had slightly higher figures in its tally of earmarks, Downen wrote. The discrepancy is likely due to some Congressionally-directed spending items requested by large groups of senators that were not included in the Taxpayers for Common Sense totals.

Ethical Issues

  • In February 2009, Baucus recommended a member of his staff with whom he was having a romantic relationship to be the U.S. attorney for Montana. Melodee Hanes, who was then the senator’s state director, was nominated along with two other potential candidates. Hanes later pulled her name from consideration. “We are living together and enjoying spending time with each other and our families,” Baucus told The Washington Post at the time. Republican National Committee Chairman Michael Steele said Baucus should have been investigated by the Senate Ethics Committee. A number of watchdog groups also raised ethical concerns. Many admitted, though, that the practice of nominating family members, friends, or loved ones is commonplace in Congress, if frowned upon. Baucus rejected calls for an inquiry, saying “I went out of my way to be up and up.” Downen told the Center that Baucus and Hanes decided to withdraw her name, though, after they decided to live together in Washington. Hanes now works at the Department of Justice and Baucus announced their engagement this month.
  • Baucus was accused of sexual harassment in 1999, when his former chief of staff, Christine Niedermeier, sued the senator amid allegations he had intimidated and sexually harassed her. Baucus was steadfast in his denials and the sexual harassment suit, as well as an appeal, were dismissed. Niedermeier had been fired from her job for being “abusive to Sen. Baucus’ staff,” according to Downen.

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