ComputerWorld interviewed James Allen, the IT manager at the Federal Election Commission (FEC), a month ago and reposted it yesterday. One line in the interview really stood out to me:

We have a T1 line to the Senate so they can file their reports securely and quickly.

After the data has been cleared by our analysts — and we have a 48-hour turnaround time — we post it on the public Web site.

Emphasis added. The Senate does not require the electronic filing of campaign finance reports and most reports, including ours, show that the lack of electronic filing causes gaps in disclosure. Since every office uses the software necessary to file electronically (the last office to use noncompliant software was that of retired Sen. Paul Sarbanes) and the Senate maintains a T1 line directly connected to the FEC, how many Senate offices actually file electronically?

Voluntary filing is allowed, even encouraged. FEC rules also state that, “Once a committee begins to file its reports electronically, on a voluntary basis, it must continue to file electronically for the remainder of the calendar year unless the Commission determines that extraordinary and unforeseeable circumstances make continued electronic filing impractical.”

You can read the rest of the interview here.

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If ever there was a doubt that campaign contributions effect the votes of lawmakers, look no further than today’s Op-Ed from Amy Showalter in Roll Call. Showalter is the President of the Showalter Group, providing advice to corporations and trade associations on how to leverage grassroots pressure and PAC contributions in their lobbying efforts. Showalter’s Op-Ed attempts to reveal why certain lawmakers changed their votes on the recent bailout legislation. In doing so, Showalter winds up higlighting the seedy behavior of feeding campaign contributions to lawmakers in exhange for votes and the stealth nature of grassroots lobbying. On PAC contributions she writes:

Rep. Joe Knollenberg (R-Mich.), who faced one of the toughest re-election fights in the House, told the Associated Press that he changed his mind after he received telephone calls from General Motors Corp. chief executive officer G. Richard Wagoner Jr. and other auto and corporate executives. “I’ve never talked to as many bank presidents in my life, over my entire life,” he said.

Knollenberg has received $131,500 from GM since he started serving in Congress in 1993, according to Federal Election Commission records, illustrating another “predictor of influence success.” Our survey showed that giving a legislator the maximum allowable political action committee contribution is a predictor of persuasion success.

Lobbyists representing the housing, financial, auto and other business sectors pushed hard for the bailout bill. Several of the lawmakers who changed their minds have received campaign contributions from those industry PACs.

Schmidt has received $70,100 from American Financial Group Inc., a Cincinnati-based insurance holding company, and $16,500 from the American Bankers Association since she was elected to Congress in 1989.

Rep. Judy Biggert (R) was the only Illinois lawmaker to change her mind about the bailout package. Since she began representing her suburban Chicago district in 1989, she has received $45,000 from the National Association of Realtors, $39,500 from the National Automobile Dealers Association and $37,548 from the ABA.

Most lawmakers say they aren’t influenced by campaign contributions, but the recent bailout votes suggest otherwise. We found that the most successful influence attempts typically include campaign contributions. In other words, a PAC contribution represents “exchange” and cements relationships.

While campaign contributions do have to be disclosed to the public, they are only disclosed in quarterly filing reports. This prevents the type of real-time oversight that could be occuring if these “exchanges” were made available to the public as they happened.

Showalter also emphasizes the need for lawmakers to here from “key influentials” in their district. These are often business leaders or small business owners who can be engaged in a grassroots lobbying campaign organized by trade associations. After the initial failure of the bailout bill in Congress, the business community, along with AARP, began a huge grassroots campaign to get business owners to call their congressmen and senators to push for passage of the bill. That grassroots push provided the many examples that Showalter uses in her Op-Ed to show the importance of constituent communications and likely pushed the bill to its ultimate, overwhelming success.

While coalitions that often engage in this type of manufactured grassroots pressure are required to disclose their activities under the Honest Leadership and Open Government Act, the actual effort of grassroots lobbying is still left untouched by disclosure requirements. In the world according to Showalter, a pro at influencing lawmakers, the best ways to get to a lawmaker’s heart are still through means not fully policed by disclosure laws.

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An investigation begins into the Friends of Angelo. Stevens’ conviction prompts reform group push. Some people don’t like transparency. That and more in today’s news:

“Friends of Angelo” beware! The FBI is investigating the “VIP” home loan program for public officials operated by Countrywide. Countrywide chief Angelo Mozilo made sure that public officials who could be influential in matters relating to his business received “VIP” rates on interest rates and loan fees. Sen. Chris Dodd and Sen. Kent Conrad both received “VIP” loans from Mozilo’s Countrywide. They are currently both cooperating with a Senate Ethics Committee investigation. The operator of the “VIP” program Robert Feinberg spoke to federal investigators noting, “he’s not aware of any discounts linked to favors, but he did see e-mails noting the potential value of the relationships to Countrywide’s political and business interests.” Both Conrad and Dodd stated that they did not know that a “VIP” program would provide them with special perks and savings. Feinberg, however, responds, “nine times out of ten, once you mention ‘V.I.P’ the person’s gonna ask you ‘what am i getting for being in this V.I.P department?’ Or ‘what am I getting because I know Angelo?’ Or ‘I talked to Angelo and he said I’m getting this.’”

Sen. Ted Stevens faced a welcome reception among fellow Republicans in Alaska as he denounced the “corrupt prosecutors” who successfully won seven convictions against the seven-term senator. Back in Washington, reform groups are organizing to pressure the Senate to create an independent body, working in conjunction with the Senate Ethics Committee, to oversee ethics complaints. The House approved an independent oversight board this year. The ethics committees in both chambers have taken flack for failing to properly police their members. While the ethics process has, since the eighties, primarily been used as a partisan tool, the system completely shut down after former Majority Leader Tom DeLay was reprimanded multiple times for various abuses of House rules.

Some dare call it transparency. The Aspen Times reports on local political donors who are uneasy about the availability of campaign contribution information online. Most of these individuals did not know that their contributions would be part of the public record and are upset that Google searches for their name turn up their political contributions. Involvement in the activities of public figures, particularly the financing of them, requires disclosure to ensure an open and honest system of governance. There is no reason to fear Big Transparency.

If you’re paying attention to the presidential campaign and checking polls every half-hour you may want to check a decent predictor of the outcome, lobbyist shuffling on K Street. Comcast recently fired their Republican lobbyist Kerry Knott, a former Dick Armey aide, and replaced him with Melissa Maxfield, a former aide to former Sen. Tom Daschle. Daschle is, of course, a top aide to Sen. Barack Obama and noted as a potential White House Chief of Staff or cabinet secretary, in the case that Obama wins the Nov. 4 election. Companies are already girding up for future battles by taking on lobbyists who would have influence in a potential Obama administration.

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Update: Please see Ellen’s comment in the comment thread for a clarification of these numbers.

MAPLight.org’s excellent study on in-state vs. out-of-state contributions to congressional candidates provides so many great points of data. The Blog of the Legal Times (BLT) looks at the zip codes with the highest amount of giving to political candidates. No surprise here:

1. Washington, D.C. 20005, with $28.9 million raised (map)
2. Washington, D.C. 20001, with $27.5 million raised (map)
3. Washington, D.C. 20036, with $27.5 million raised (map)
4. Washington, D.C. 20006, with $21.8 million raised (map)
5. Washington, D.C. 20004, with $17.8 million raised (map)
6. Alexandria, Va. 22314, with $12.2 million raised
7. Washington, D.C. 20007 with $5.8 million raised (map)
8. Chicago, Ill. 60611 with $5.3 million raised
9. McLean, Va. 22102 with $5.2 million raised
10. Arlington, Va. 22209 with $5.2 million raised

All but one of these Washington, D.C. zip codes include parts of K Street, the chief lobbying corridor in the capital city. Arlington and McLean are part of a few of the richest counties in the entire country (McLean is in Fairfax County, the absolute richest county in the U.S.) These two Virginia locales are populated with pundits, lobbyists, defense contractors, lobbyists, and lobbyists.

And just in case there were any illusions left about campaign contributions and influence in Congress, take a look at this post from the blog of the law firm Womble Carlyle:

In the October 1 Political GPS we discussed the brave new world of regulation that has been ushered in by the current economic crisis. And from what we can see, “Joe the Hedge Fund Manager” should have as many concerns as “Joe the Plumber.” In short, the financial services industry will need to shift its government relations and PAC efforts into overdrive in order to outrun the regulatory tsunami headed its way.

Which plays nicely into the Washingtonian’s list of winners and losers in Washington over the collapse of the financial industry. Guess who the number one winners are: lobbyists and law firms!

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Today, NARAL Pro-Choice Oregon filed an ethics complaint against Sen. Gordon Smith for using Senate property to make a political message. That adds NARAL Pro-Choice and their donors to Sen. John Ensign’s enemy list. So far as I can figure it out, these are the groups that Sen. Ensign wants to unconstitutionally force (see: NAACP v. Alabama) to disclose their donors:

NARAL Pro-Choice Oregon
Judicial Watch
Citizens for Responsibility and Ethics in Washington
U.S. Justice Foundation
National Law and Policy Center

Watch out, if you want accountability for your senator Sen. Ensign might add you to his enemies list. (Rumors have it that Sen. Ensign’s list is written on a beverage napkin with crayons.)

For background and action check out Ellen’s post from yesterday and Pass223.com.

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Knowing we had a great opportunity to corner Sen. Ensign, who’s blocking a bill requiring electronic reporting for senators’ campaign contributions, we sent our intrepid staff to the National Press Club today, where he was holding forth on other matters. We asked Sen. Ensign why he continues to hold up S. 223.

As we’ve talked about before, Ensign’s insistence that the Senate vote on a controversial and unrelated amendment has jeopardized this straightforward bill that otherwise has broad, bipartisan support. Without that amendment, S. 223 would sail through the Senate with nearly unanimous backing.

During the Press Club event and after, staff from Sunlight and the Center for Responsive Politics asked Sen. Ensign if he would be willing to lift his objection to the bill if he was promised a hearing on his amendment in the Rules Committee (an offer already made by Rules Committee Chairwoman Dianne Feinstein). Sen. Ensign declined, insisting that he wants one hour of debate on the amendment, and would subject his amendment to, as he put it, a “60 vote requirement.”

(more…)

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Budgeting political risk helped Fannie Mae, Freddie Mac, and financial services companies avoid the kind of scrutiny they needed from Congress for the past several years. Millions of dollars in private travel, campaign contributions, and lobbyists-galore created a border wall that no regulation or reform could climb over. Florida Rep. Tim Mahoney’s hole gets deeper as a 2nd affair is revealed, the FBI opens and investigation, and the Democrats ditch him. There’s more in this round-up of today’s news:

Dave Jamieson at The New Republic looks into the lavish treatment members and staffers of the House Financial Services Committee received from Fannie Mae, Freddie Mac, and financial services companies in the years preceeding the collapse of the industry. Former chairman Mike Oxley, who now works for NASDAQ and as a lobbyist, approved a half-million dollars worth of privately paid travel, much of it offered by financial services companies. Fannie Mae and Freddie Mac had approximately one lobbyist for each member of the 70 person committee. Campaign contributions were spread around like butter on cornbread. Of course, all of this largesse eventually lured numerous staffers and committee members into the private sector and Jamieson names names:

Former Oxley adviser Carter McDowell moved on to the American Bankers Association; Karen Lynch Calton, one-time counsel to the committee, has lobbied for the Consumer Bankers Association; Greg Zerzan, an aide to Oxley, eventually went to the International Swaps and Derivatives Association; Linda Dallas Rich, a committee adviser, headed to the New York Stock Exchange; longtime Oxley aide Clinton Jones hopped to Fannie for a spell, before returning to Congress to serve Bachus on the finance committee; and even though Baker had been a perennial foe to the GSEs, the congressman’s own former chief of staff, Duane Duncan, became a star on Fannie’s lobbying team.

Rep. Tim Mahoney is in a load more trouble after the Associated Press revealed another affair and ABC News, the team that broke this story, reported that the FBI is investigating the allegations of hush money paid to the first reported mistress. It is alleged that Mahoney hired Patricia Allen, the first reported mistress, to both his campaign and congressional staffs. After things went sour (she discovered he was having another affair) Mahoney fired her and allegedly paid her $121,000 to keep her from filing a wrongful termination lawsuit. Speaker Nancy Pelosi called for an ethics committee investigation (although those haven’t really led to anything since, I don’t know, the 1990s) and House Democrats effectively abandoned the freshman Florida congressman to fend for himself in a difficult district.

The defense team in Sen. Ted Stevens’ trial for filing false statements on his personal financial disclosure forms is attempting to show that the home renovations at the center of the charges were done for VECO’s Bill Allen and not for Stevens. Stevens’ daughter, Susan Stevens Covich, testified that when she appeared at her father’s Girdwood, Alaska home to spend time while visiting Allen was present in numerous other people, often taking up all five available bedrooms leaving her to sleep on the couch. Covich said she stopped staying there after Allen’s constant presence became “creepy“. Previously, defense attorneys have shown that Stevens spends most of his time living in Washington, DC and not at the home in Girdwood. The judge presiding over the case stated that the case will likely be handed to the jury next week.

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The complete meltdown in subprime mortgages has caused a total makeover of the investment industry. The effect of the makeover on Wall Street will trickle down to Washington, with diminished campaign contributions, lobbyists out of work, and new bills and regulations to wrangle over.

First came the government takeover of Fannie Mae and Freddie Mac. The home loan giants were two of the biggest names in the Washington influence game over the past decade. The two organizations spent a combined $200 million on lobbying over the last ten years and, since 1990, have contributed $19.5 million to political campaigns. It is no wonder that Fannie and Freddie avoided the crucial scrutiny that they needed over the last ten years. And now, Fannie and Freddie’s lobbying shops are shuttered, their political contributions are cut off, and they will no longer throw extravagant fetes for lawmakers and cabinet secretaries.

Yesterday’s collapse of Lehman Brothers, the Bank of America takeover of Merrill Lynch, and today’s AIG firesale, will cause similar aftershocks in Washington. Since 1989, these companies have contributed millions to federal candidates for election:

Merrill Lynch - $14.7 million

Lehman Brothers - $9.2 million

AIG - $9.7 million

The fall-off in campaign contributions from these companies will likely spread to the entire securities and investment industry. The Wall Street Journal points out that during the 2008 election cycle securities and investment contributions are the 2nd largest source of money for Democratic candidates and the 3rd largest source for Republicans. Already those contributions have slowed over the summer months preceding this crisis.

Lobbying spending is likely to shift, but probably not drop-off. Since 1998, Merrill Lynch spent $39.3 million on lobbying in Washington. That account will likely be wiped out for now, as Bank of America takes over for them. Lehman Brothers, which was denied help during their collapse, is a smaller player in Washington with $6.3 million in lobbying expenses since 1998. The events of the past few days have completely wiped out the lobbying enterprises of two companies that spent over $45 million over the decade.

The securities and investment industry is one of the biggest spenders on lobbying Washington. Since 1998, this industry has pumped $551 million into influencing decision makers in Washington. Over the past two years, 2007-2008, the industry spent over $132 million on lobbying.

With the raft of new legislation and regulations about to break through like storm surge over New Orleans levees, the industry, despite its massive financial problems, can’t afford to cut their lobbying expenses. Some lobbyists may wind up out of a job, but there will always be new ones to take their place.

(All totals calculated from data available at OpenSecrets.org.)

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Like a man sinking in quicksand, Rep. Charles Rangel continues, with every flailing day, to sink further as more discrepancies are revealed in his personal financial disclosures. New revelations show Rangel’s disclosures to be in complete disarray. Some assets and transactions are listed at high values one year and then listed at no value the next. The Associated Press compiled a list of the erratic disclosure listings.

The New York Times called on Rangel to temporarily step down from the chair of the Ways and Means Committee barring an ethics investigation. It looks like too many are having flashbacks to the Democratic scandals of the ’80s and ’90s that felled numerous congressional leaders.

The Washington Post takes a look at how business connections fuel bundled political contributions. One major Bush and McCain bundler, John Vogt, calls it the “favor arbitrage business,” where, “You’ve got to know who to ask, how to ask and more importantly, you have to be prepared to return the favor.”

Rep. John Doolittle has been under investigation for a long time - longer than this presidential election - and it looks like Kevin Ring’s indictment brings that investigation that much closer to his door step. Ring is accused of hiding Doolittle’s attempts to find a job for his wife from federal investigators. As McClatchy Newspapers reports, “[Ring's] apparent desire to protect the Doolittles is now figuring very prominently in his legal troubles.”

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Yesterday, I was thinking about Sen. Jim DeMint’s bill to ban Fannie Mae and Freddie Mac from lobbying Congress and I thought that the legislative fix probably would not be necessary after the government takeover. Looks like that was correct:

With just three sentences, Federal Housing Finance Agency Director James B. Lockhart on Sunday sent an unambiguous signal that one of Washington’s longest-running parties is over — and that some hangovers are on the way.

In the wake of the government takeover of the two beleaguered mortgage giants, Fannie Mae and Freddie Mac, compensation for their newly recruited CEOs “will be significantly lower than the outgoing CEOs,” said Lockhart.

“All political activities — including all lobbying — will be halted immediately. We will review the charitable activities,” he added.

As the Politico explains, this will be a complete shock to the political culture in Washington, where Fannie Mae and Freddie Mac have been two of largest campaign contributors through their PACs and are prolific spenders on lobbying.

• Since the 1990 election cycle, Fannie and Freddie employees and political action committees have given $19.5 million to federal candidates and committees. Freddie ranks among the top 100 industry donors of all time.

• Fannie had already given $1.3 million to candidates for the 2008 election cycle, and Freddie had given nearly $600,000.

• Fannie and Freddie have spent more than $180 million lobbying Capitol Hill in the past 10 years.

• In the first six months of this year, as the housing market collapsed and scrutiny heightened on Capitol Hill and from the Bush administration, Fannie and Freddie spent roughly $8 million combined to advocate for their interests.

• Between 1980 and 2007, the Fannie Mae Foundation donated $608,000 to the Congressional Black Caucus Foundation and $285,000 to the Congressional Hispanic Caucus Institute.

For more on Fannie and Freddie’s giving over the years see this post by Open Secrets’ Lindsay Renick Mayer.

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