Making Government Transparent and Accountable
The Sunlight Foundation uses cutting-edge technology and ideas to make government transparent and accountable. Underlying all of our efforts is a fundamental belief that increased transparency will improve the public's confidence in government
The Sunlight Foundation Blog
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Convicted Congressman Tied to Arrested Businessman
R. Allen Stanford, the titan of Stanford Financial, and now the known as the Texas version of Bernie Madoff, spent a lot of time spreading his money around Capitol Hill. TPM Muckraker has done great work examining the Caribbean junkets organized by a nonprofit that received heavy funding from Standford, the Inter-American Economic Council (IAEC).
One of the congressmen shown to have benefited from Stanford’s largess was Rep. Bob Ney. Ney would eventually plead guilty to trading his services for gifts and campaign contributions from Jack Abramoff and his merry band of lobbyists. At the time, Ney held powerful positions as the Chair of the Committee on House Administration and on the House Committee on Financial Services. Stanford’s main interest in wooing congressmen was to block any legislation that could close or effect the operations of his Antigua-based bank.
Ney, and his staff (one of whom, Will Heaton, would later plead guilty in the Abramoff case), received $26,177 in travel to Miami, FL and Caribbean islands paid for by the IAEC. Ney also received $26,200 in campaign contributions from Stanford Financial Group employees. More than half of those contributions ($14,200) came after Ney inserted the following into the Congressional Record:
Mr. NEY. Mr. Speaker:
Whereas, Allen R. Stanford has been recognized as the 2006 Recipient of the “Excellence in Leadership Award” by the Inter-American Economic Council ; and
Whereas, Allen R. Stanford has been acknowledged for his performance and leadership in the areas of finance and investments; and
Whereas, Allen R. Stanford should be commended for his service as the CEO of the Stanford Financial Group based in Houston, Texas.
Therefore, I join with the residents of the entire 18th Congressional District of Ohio in honoring and congratulating Allen R. Stanford for his outstanding accomplishments.
I’m sure that the people of Ohio’s 18th Congressional District love to have been included in the congratulations from one criminal to another. More important than that is Ney’s prior use of the Congressional Record to do favors for Jack Abramoff and pals. In 2000, Ney twice inserted comments into the Congressional Record in support of Abramoff and Adam Kidan’s takeover of SunCruz Casinos, a takeover that would eventually send them both to prison. In exchange for the comments, Abramoff and Kidan contributed $10,000 in Ney’s name to the National Republican Congressional Committee. Ney was under extreme pressure to raise money for the NRCC at the time.
It isn’t entirely clear whether Ney’s use of the Congressional Record to commend Stanford copies the actions he undertook for Jack Abramoff and Adam Kidan. However, after receiving zero contributions for all of 2005, Ney suddenly found himself the recipient of $14,200 in contributions from Stanford and top Stanford Financial Group employees. The majority of the contributions, $10,000, came on October 28, 2005. Ten days later, Stanford contributed $4,200 to Ney’s reelection campaign. One year later, Stanford became a contributor to Ney’s legal defense fund.
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Local Corruption an Issue in Races across Country
In the 2004 Presidential election Ohio was a crucial battleground state, its electoral votes deciding the outcome. The surge in GOP activism and the excitement in the party have since subsided due to a series of high profile corruption scandals resulting in guilty pleas by the Governor, a chief Bush fundraiser, and a sitting congressman. All of these scandals will likely depress Republican voter turnout in a state with a toss-up Senate race, an open governor’s mansion, and four close House races. Local corruption issues, just like national ones, look to have a big impact on the midterm elections in important races.
Bloomberg news service reports that in Ohio, “A public backlash over the scandals has hurt Republicans across the board. A Columbus Dispatch poll released on Sept. 25 found Democratic gubernatorial candidate Ted Strickland leading Republican Ken Blackwell by 19 percent, and had Brown holding a 5-point lead over incumbent Republican Senator DeWine.” Four House races, OH-01, OH-02, OH-15, and OH-18, are all polling incredibly close.
Washington Post reporters Jim VandeHei and Chris Cillizza write, “In a year when Republicans are battling low poll numbers nationally, there are few places where the GOP brand is more scuffed than in Ohio, where, since President Bush’s election-night triumph here two years ago, national and local scandals have polluted the political atmosphere for GOP candidates.”
The national political mood does not usually feed into local corruption stories as is evidenced in the New Jersey Senate race. Speculation is growing that for the second straight Senatorial election New Jersey Democrats may have to replace their candidate. (In 2002, Frank Lautenberg replaced Sen. Robert Torricelli on the ballot after “The Torch” was implicated in a campaign finance scandal with a Chinese businessman.) Sen. Bob Menendez, locked in a tight race against State Sen. Tom Kean, Jr., is already under investigation for allegedly collecting $300,000 from a Union City nonprofit while providing the nonprofit with millions of dollars in government contracts. Today, Menendez dropped his closest political advisor who “was secretly recorded seven years ago boasting of political power and urging a Hudson County contractor to hire someone as a favor to Menendez”. Menendez, who was tapped to fill the seat when Jon Corzine won the 2005 gubernatorial election, has fallen behind in recent polls.
Another tight Senate race is facing the effects of local corruption scandals. In Tennessee Rep. Harold Ford, Jr. (D-Tenn.) is hitting his opponent former Chattanooga mayor and real estate developer Bob Corker over a real estate deal that destroyed an environmental easement to build a Wal-Mart shopping center. Prognosticators had initially predicted that Ford would be the candidate to face ethics charges with his uncle facing bribery charges and the long political history of his family. Unfortunately for Tennessee Republicans they failed to realize that real estate developers almost always are involved in something shady. Ford, unexpectedly, has pulled ahead of Corker in the polls.
Luckily, Senate Republicans do not have to worry about the potential disaster that a continued Jeanine Pirro challenge to Sen. Hillary Clinton would have been. Pirro, who flopped as Senate candidate and is now running to replace Elliot Spitzer as NY AG, is “under investigation for allegedly attempting to hire disgraced nominee for head of Homeland Security, Bernard Kerik, to allegedly record her husband having sex aboard his boat with a woman she is allegedly recorded as calling a good friend of hers”. Now that would have been a midterm election scandal to remember. Too bad it’s an AG race.
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Corruption Not an Issue? Please!
Is corruption an issue or is it not an issue? The Washington Post puts out yet another article explaining how corruption is not a driving issue in campaigns despite the myriad scandals in Washington. They then trot out Sen. Conrad Burns’ reelection campaign as an example where the Senator’s close ties to Jack Abramoff are not affecting the race. Please! Burns has been hit on ethics issues for almost a year now and you’re telling me that has nothing to do with the recent polls showing him down nine points in the polls.
One of the stranger elements to these “corruption isn’t important” articles is how they gloss over the careers already destroyed by the scandals. Rep. Duke Cunningham, a powerful subcommittee chairman; Rep. Bob Ney, the Mayor of Capitol Hill and the man who renamed a fast food staple; Ralph Reed, one of the most influential Republican operatives and a rising star; and Rep. Tom DeLay, the most powerful person on Capitol Hill. These are not insignificant careers. DeLay was perhaps the most powerful and dominant Majority Leader ever and Reed was touted as a future GOP nominee for President.
A Copley News article provides a different take on the corruption scandals than the Post. Ney’s demise, they argue, puts intense pressure on Republicans, particularly in Ohio, at just the wrong moment. The reelection hopes of three endangered Ohio Republicans, Deborah Pryce, Steve Chabot, and Jean Schmidt could all sour due to the Ney conviction (not to mention the race to replace Ney in Ohio-18).
The Democrats are aiming to take the House this fall and to do so they need to win fifteen races while holding all of their own. Ney’s guilty plea could be the tipping point on four races in one state. Perhaps corruption does matter after all. As Paul Kiel says, “C’mon, people! Give muck the respect it deserves.”
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Jack’s Back and The Mayor of Capitol Hill Pleads Guilty
And you thought it was safe? Today, Rep. Bob Ney, R-Ohio, pleaded guilty to conspiracy to commit fraud and violate federal lobbying laws and to making false statements. Ney, formerly known as the Mayor of Capitol Hill, is the first lawmaker to plead guilty in the ongoing investigation into the activities of uberlobbyist Jack Abramoff. (Please read TPM Muck’s Tribute to Bob Ney.) This guilty plea comes one day after the House passed a miniscule earmark reform, a lame replacement for lobbying and ethics reform. Not long ago the Washington Post wrote this, "Some lawmakers and political analysts believe that voters could punish incumbents during the November elections if Congress passes a minimalist ethics bill. The chances of such a backlash could rise, these critics say, if there are more indictments or guilty pleas later this year." Polls are already showing that individual lawmakers involved in the Abramoff scandal are suffering in their chances for reelection.
Rep. John Doolittle, R-Calif., is one lawmaker who is deeply tied to the Abramoff scandal (not to mention his ties to Duke Cunningham briber Brent Wilkes). Doolittle, a recipient of Abramoff’s largesse, was called the "hero" of Abramoff client the Northern Marianas Islands, a U.S. protectorate that specializes in sweat shop labor and forced abortions, and also wrote supportive letters for Indian tribal casinos across the country despite being adamantly opposed to gambling. A recent poll shows Doolittle, a conservative Republican in a conservative Republican district, suffering to hold his seat against opponent Charlie Brown. Doolittle leads Brown 41%-39%. Augh, indeed.
Just south of Doolittle’s district in the East Bay region of California another Abramoff ally Rep. Richard Pombo, R-Calif., is fighting a similarly tough battle for reelection. The last poll released in this race showed Pombo’s opponent Jerry McNerney leading Pombo 46%-42%. Pombo’s ties to Abramoff, former Majority Leader Tom DeLay, and the oil and gas industry are hurting the seven-term Congressman chances in what looks like an anti-incumbent election season.
In Montana the largest recipient of Abramoff cash, Sen. Conrad Burns, R-Mont., is looking like a stone in the water. Abramoff told Vanity Fair that he got "every appropriation we wanted" from Burns. The Montana Democrats wasted no time in tarring Burns with Abramoff’s misdeeds last year and it looks like their early efforts have born fruit. Burns’ opponent, State Sen. leader Jon Tester is locked in a tight race with the three-term Senator, although most polls show Tester with the edge.
Congress watchers consistently predicted this summer that ethics have had little to no impact on the congressional races this year. These are just three races in which they have. DeLay’s former district, Texas-22, looks like it will flip to the Democrats as well. With Ney’s guilty plea all eyes should turn to the four competitive Ohio elections in OH-15, OH-02, OH-01, and Ney’s district, OH-18. Congress should also take a look at itself and decide if it has done enough after the convictions of two sitting members of Congress and at least five former Hill staffers in the past year.
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The Dream
In many a congressman’s heart there is a dream, a dream to one day use the contacts and friendships you’ve created on Capitol Hill and turn them into a million-dollar career as a lobbyist exploiting the system for earmarks and personal wealth. These congressmen fall asleep pondering when they will visit the pearly revolving door and how much better life will be when spin through it. For those with the dream there is nothing worse than ripping it away from them. Fear of facing constituents that want to turn your head into an ornament on Col. Kurtz’ front yard doesn’t faze you. Nor does the fear of an imminent indictment in a wide-ranging public corruption case involving the very people you wish to be. No, for one dreamer (and he’s not the only one), Rep. Bob Ney (R-Ohio), what drove him to forgo reelection was the fear of losing his chance to cash out.
On Tuesday the Washington Post reported that House Majority Leader Rep. John Boehner (R-Ohio) told Ney that he would not receive a “lucrative career on K Street to pay those tuition bills, along with the hundreds of thousands of dollars in legal fees piling up” if he lost his upcoming election. Ney had previously stated that he would not under any circumstances jump from the race. Obviously the dream came first. Now I wonder if you can lobby Congress from a jail cell. Maybe you could if they let you keep a Blackberry. Clients could come during visiting hours and you could offer quid pro quos during conjugal visits.
Apparently, Sen. Joe Lieberman’s (Lieberman-Ct.) wife, Hadassah, wanted the three-term Senator to rake in the big bucks rather than have another go at his current opponent, Democratic voters. Lieberman, unlike Ney and countless other congressmen before him, has a different dream, to be the number one guy in his party — the Connecticut for Lieberman Party.
The problem of congressmen cashing out into the lobbying world is pretty serious one that could use a solution. Ezra Klein, writing at the American Prospect, proposes a raise in congressional salaries to keep members of Congress from trying to keep up with the lobbying Joneses. Nicholas Beaudrot, guest posting at Klein’s blog, has a couple different solutions and one of them I completely agree with, “Congress and the White House ought to find more avenues for ex-Senators and Congressman who do want to stay in public service to continue their work on pet causes, the way Sam Nunn has done since leaving the Senate in the mid-90s.” It would be nice to see more members of Congress take an interest in continuing public service rather than following their own cupidity (often blamed on a wife as Lieberman’s statement suggests) to K Street.
But maybe some members aren’t in it for the public service. They might just be following the dream.
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It Works! Information Is Power
Yesterday, long-time incumbent Rep. Bob Ney announced he wasn’t going to run for reelection after all. The results of his ties to lobbyist Jack Abramoff finally registered on the political Richter scale (e.g. his polls) and he withdrew. (And maybe there are some other reasons too.)
It wasn’t any great surprise to me, though it did take a little longer than I thought. I really believe that information is power and, as important, that as soon as people are armed with the data that it can have consequences. In short, give people the facts and let them decide. The notion that citizens could care less when it comes to political scandal is a myth perpetuated by Washington insiders. I just can’t help but feel a little bit gleeful to see another member of Congress (think former Rep. Tom DeLay) finally see the handwriting on the wall. (Though it would be better for them to see it on the Internet in the form of searchable databases.)
In June of last year the Institute for America’s Future (I was Deputy Director of IAF at the time) and Public Campaign Action Fund (I founded that organization in 1997) decided to make sure that a number of members of Congress felt the heat at home for what they do here in DC. In Ney’s district we ran print ads, then TV ads, and even mounted a billboard along a freeway in the heart of his district to talk about the ethical challenges and charges he was facing here. We got lots of attention from the local press. There’s no way a citizen in Ney’s district missed the stories of what he was doing in Washington.
So I want to declare victory on the part of the people. America is a stronger place when citizens use information to tell their representatives what they like and what they don’t — we have a stronger democracy when information gives people the ammunition they need so they can speak truth to power.
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Announcing Online Poll
Today, Sunlight is posting an online poll asking the public if Congress is doing enough to address ethics and lobbying reform in the wake of recent scandals. We’ve posted one serious question and another one with a touch of humor: do you think it more likely that there would be a live sighting of Elvis before the current congressional leadership showed real leadership on the need for reform? (The poll is viewable here, and bloggers are encouraged to copy the source code and post it on their own sites.)
Why the cynical question? Here’s a brief guide to the issue.
Six months ago, lobbyist [sw: Jack Abramoff] admitted to corrupting government officials and pleaded guilty to three counts of conspiracy, fraud and tax evasion. Two very powerful Members of Congress have resigned their seats under a cloud of ethics charges, one of whom — [sw: Randy Cunningham] — is in jail, and one — [sw: Tom DeLay] — is under indictment in Texas.
Seven other Members — Senators [sw: Conrad Burns] and [sw: Bill Frist], and Congressmen [sw: Dennis Hastert], [sw: William Jefferson], [sw: Jerry Lewis], [sw: Alan Mollahan] and [sw: Bob Ney] — are currently under investigation by either the congressional ethics committees or law enforcement authorities (see this Congresspedia page for details). David Safavian, a top official at the General Services Administration, was found guilty by a jury on four counts of lying and obstruction of justice. And at least 11 government officials and former and current congressional staffers have either pled guilty or are under investigation for bribery, conspiracy, accepting bribes, corrupting elected officials, violations of lobbying rules, and numerous as yet unnamed reasons.
Six months ago, after Abramoff pled guilty, everyone in Congress was for reform:
"I intend to move forward aggressively and quickly to have the House of Representatives address lobbying reform. Over the past several months, I have spoken with many members about the need for such reforms. I have been encouraged by the breadth and boldness of their ideas. Now is the time for action." Dennis Hastert. 1/8/06.
"It’s a good time for us to look at more disclosure. I think you’ll see a congressional reaction to this totally unacceptable situation involving Jack Abramoff that’s both prompt and appropriate." — Roy Blunt (R-Mo.), 1/8/06.
"I believe that to regain the trust of the American people that this institution must go further than prosecuting the bad actors. We need to reform the rules so it’s clear beyond a shadow of a doubt what is ethically acceptable for members of Congress." — Dennis Hastert (R-Ill.), 1/17/2006.
"First, we must ban privately sponsored travel in the House of Representatives. I know fact-finding trips are important. This body considers legislation that affects people that cannot always travel to Washington to petition their government. Private travel has been abused by some, and I believe we need to put an end to it. Second, I think we need to tighten even further the gift rules. A Member of Congress should be able to accept a ball cap or a t-shirt from the proud students at a local middle school, but he or she doesn’t need to be taken to lunch or dinner by a lobbyist. Recent months have shown that we need a more transparent system. Our plan dramatically increases the reporting of lobbyist activities." — Dennis Hastert (R-Ill.), 1/17/06.
"Yesterday we marked the birthday of Dr. Martin Luther King. I thought about one of his letters from a Birmingham jail, in which he wrote that, We should always be careful about the tranquilizing drug of gradualism. And that’s why I believe we’re in a position today where we have an opportunity to be bold and strong, and that’s why this is a terrific opportunity for us. … The speaker has just talked about the issue of a ban on privately funded travel. I believe that it’s also very important for us to proceed with a significantly stronger gift ban, which would prevent members and staff from personally benefiting from gifts from lobbyists. One of the things that we’re considering is the prospect of going to the provisions that have been set forth by the White House, which have existed under Democratic and Republican administrations. … We also are proposing that we increase from one year to two years the post-employment lobbying ban that exists for members and senior staff." — David Dreier (R-Calif.), 1/17/06
That was then.
Now, six months later, the Washington Post reports that these calls for change are "a fading concern." The Post recounts, "Lawmakers considered a range of provisions, including a ban on privately funded junkets, a prohibition against taking gifts and an end to steeply discounted travel by private jet. Instead, they decided to strengthen and double the number of lobbyists’ public disclosure reports, and they discarded — or will probably discard — almost everything else." Powerful members of both chambers objected strongly to a ban on privately financed travel, and they were joined by major lobby groups. An independent office of public integrity was shot down in committee.
Currently there are two versions of lobbying and ethics reform. One is S. 2349, the Lobbying Transparency and Accountability Act of 2006; the other is HR 4975, the Lobbying Accountability and Transparency Act of 2006. Both bills have cleared their respective houses. The vote on HR 4975 fell on mostly partisan lines 217-213. Meanwhile, S. 2349 passed by a margin of 90-8 with the eight votes coming mostly from those who wanted tougher legislation. Both bills are in conference, however only the Senate has named conferees. Senate Conferees: Daniel Inouye (D-HI), Chris Dodd (D-CT), Trent Lott (R-MS), Mitch McConnell (R-KY), Ted Stevens (R-AK)
The House has yet to name conferees. The most current statement from the House and the Senate on reform came on June 9th from Sen. Bill Frist and Speaker Dennis Hastert: "Today, we asked lobbying reform conferees to complete their final package before the Fourth of July recess. Lobbying and ethics reform remains an important priority for Congress. We are confident that the conferees will work hard and deliver a conference report that will build trust with the American people by making our government more transparent and accountable." This Washington Post story gives the most recent account of the legislation.
Despite a series of scandals showing serious abuses of power, including the use of privately financed travel, gifts to legislators and staff by lobbyists, and the secretive earmarking of taxpayer dollars to the benefit of private interests, often with close ties to legislators and lobbyists, we think this Congress has done nothing to restore the trust of the public in the integrity of its work.
It’s time to find out what you think.
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Daylight AM:
- The company ESRI verified that it was issued a subpoena in the [sw: Jerry Lewis] (R-Calif.) investigation. The San Bernardino Sun also reports that the documents released by another subpoena recipient, San Bernardino County, show Lewis recommending "in 2002 that the county hire The Tom Skancke Co., a Las Vegas firm that lobbies Congress and does public-relations work." During the aftermath of the Duke Cunningham conviction when the spotlight turned to Lewis the congressman bluntly declared, "It is an ironclad rule in my office that we do not recommend lobbyists, even if a constituent asks for that recommendation."
- A district aide to [sw: Bob Ney] (R-Ohio) was subpoenaed in the federal investigation into influence peddling by lobbyist Jack Abramoff. According to the Associated Press, "The subpoena for Matthew Parker, director of Ney’s district office in St. Clairsville, was issued by a federal magistrate in Washington and announced Thursday."
- Former DeLay chief of staff Tony Rudy is seeking to escape Washington, DC and move to California. Rudy, who pled guilty in the Abramoff investigation, must get an okay from a judge before he can escape the city that was his undoing.
- Former Alabama Governor Don Siegelman (D) was found guilty of "trading government favors for campaign donations". That makes Siegelman the third Governor to be found guilty by a court over the past few years and the second to go to jail. Kentucky’s Governor Ernie Fletcher has also been indicted and will face trial.
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Ney Shedding Staff:
Josh Marshall reports that [sw: Bob Ney] (R-Abramoff) is hemorrhaging staff:
Roll Call’s John Bresnahan is reporting (sub.req.) that three of Ney’s key staffers are quitting their jobs with the ensnared congressman.
Will Heaton, his Chief of Staff and Brian Walsh, his long-suffering communications director are both leaving. And Chris Otillo, his legislative director, apparently bailed last Friday.
As Marshall notes, that’s basically Ney’s whole staff.
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Daylight AM:
- Bob Ney (R-Ohio) told Senate Indian Affairs Investigators that he could not remember meeting with the Tigua Tribe of Texas, a client of Jack Abramoff, when he was interviewed by the committee. Unfortunately for Ney cameras do not forget. The Cleveland Plain Dealer blog has posted a picture of a smiling Ney posing with the Lt. Governor and a governing council member of the Tigua Tribe.
- Ney’s buddy Jack Abramoff is such a nice guy. Roll Call reports that he called Gabon, a small African nation, a "monkey coloney" [sic]. Abramoff also liked to call Indians "troglodytes" and "morons". He sounds like such a caring man.
- The Press-Enterprise reports on the details of the subpoena issued to San Bernardino County in the ongoing investigation into the ties between Rep. Jerry Lewis (R-Calif.) and the lobbying firm of Lewis’ friend Bill Lowery.
- Earmark reformers are concerned that the exclusion of joint resolutions from restrictions imposed by earmark reforms would cause the resolutions to be a new place to seed pet projects. Meanwhile, Jeff Flake (R-Ariz.) plans on going back to the floor of the House to challenge more earmarks, this time inserted into the Science-State-Justice-Commerce Appropriations bill.
- The New York Times tallies the amount of fraud in relief spending after Hurricane Katrina and determine that 6 percent of the total money "obligated" was wasted.
