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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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In Broad Daylight: Down the Tubes
Ted Stevens is toast; Hawaii is the Big Kahuna; and K Street says hello and goodbye. Today’s news round-up below:
Down the tubes. Sen. Ted Stevens did not become the first convicted felon to win election to the Senate, as was previously thought. After counting all the votes (that’s always a good idea), Anchorage Mayor Mark Begich became the first Democrat to win election to the United States Senate in 30 years (the previous Democrat being Mike Gravel). Stevens was the longest serving Republican in Senate history and not only shaped modern Alaska, but helped it to win statehood when he worked in the Eisenhower administration. The Alaska Daily News has an article on “The rise and fall of Sen. Ted Stevens.” I suggest you read it.
With Stevens out and Sen. Robert Byrd stepping down as Chairman of the Appropriations Committee, Hawaii is poised to become the Big Kahuna in Washington. Chief among the reasons that Hawaii is set to high-jump over the competition is that the frail 90 year old Byrd is being replaced as Appropriations Chair by the spry 84 year old Hawaii Sen. Daniel Inouye. Hawaii already gets its fair share of federal money, including huge sums from earmarks.
With Democrats ascendent in Washington, K Street is kicking their GOP lobbyists to the curb or leaving them lonely in their offices with little to do. Meanwhile, frosh Democratic lawmakers are being introduced to business lobbyists in process not too different from an arranged marriage. Two young calves for a vote on the farm bill. “‘Introductions are being made to the business community of key moderates coming into Congress, so we can get an early start building relationships,’ one Democratic lobbyist said.”
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K Street Sees Mixed Opportunities
The 2008 presidential campaign featured blistering attacks, particularly from the eventual victor Sen. Barack Obama, on Washington’s chief money-making industry. Lobbyists are now trying to assess where they stand in Washington with a reformer in the White House and an economic downturn that is now actually stretching onto K Street.
Most of the change that will occur on K Street relates to the partisan makeup of firms. With Republicans falling further into the minority, lobby firms will need fewer GOP lobbyists and more Democratic ones. Some changes are already underway with Comcast replacing a Republican as chief lobbyist with a former staffer of prominent Obama supporter Tom Daschle.
Despite the Politico’s suggestion that, “The repositioning highlights how little Washington is likely to change, despite all the anti-lobbyist rhetoric tossed around in the campaign,” lobby firms certainly fear what kind of access and what new reforms they could face under President Obama’s administration. If we had the sense of smell of a lion, we could smell the fear emanating from the monitor when reading this Congressional Quarterly article from today. This article is ridden with quotes from lobbyists not only attempting to sell themselves and their business to a new administration, but also trying to prebut the coming reforms and changes.
I sincerely hope that the promises of reform do not end at the ballot box as so many on K Street seem to be projecting. Further transparency requirements are needed to reel in the influence industry. A good place to start would be to enact the reforms contained in the Transparency in Government Act, available at PublicMarkup.org.
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D.C., VA Top Campaign Contributors
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 raisedAll 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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Bailout Bill Lobbying Frenzy
The consideration of the $700 billion bailout bill — now lovingly known as the Authorization for Use of Financial Force — has turned into a thriller as the clock winds down on the session of Congress (set to end on Friday) and the stability of markets and financial institutions. Lobbyists for large business trade groups are racing down tips and attempting to defuse unpalatable proposals, limits on executive compensation and bankruptcy relief for homeowners, like Jack Bauer would a nuclear device. According to The Hill, the Chamber of Commerce’s lobbyist Bruce Josten says, “If we don’t move quickly, we could be in the soup.”
One lobbyist is using a flow chart to track proposals, others are reading reports at 4 am. Red Bull sales are probably through the roof. One thing that’s for sure, these lobbyists, the one’s who have worked hard to prevent any kind of oversight of the financial system and the mortgage market leading up to this crisis, are now working to prevent anything punitive or helpful to those who’ve lost their homes in this mess.
Francis Creighton, vice president and chief lobbyist with the Mortgage Bankers Association: “Bankruptcy is such a divisive issue in this debate, and resurrecting bankruptcy right now is completely unproductive … This bill we are talking about is not a mortgage bill, not a housing bill. It’s supposed to address the threats to the entire economy.”
Steve Verdier, a lobbyist for the Independent Community Bankers Association (ICBA), on bankruptcy relief: “We are vigorously opposing that … If that happens, then the mortgage rates for other consumers are going to go up.”
American Banking Association in a letter to Congress: “Authorizing write-downs of mortgages by bankruptcy judges will increase the risks of mortgage lending at a time when the market is already struggling”
During the 2008 cycle the three trade groups represented by these individual lobbyists have spent $3.1 million on PAC contributions to congressional lawmakers. Over the same time period they’ve spent $8.9 million dollars on lobbying Congress. (Data from OpenSecrets.org) That amount of money gives them the access they need to get their message to Congress.
During this lobbying feeding frenzy, Congress should be asking themselves one simple question, “Should I be listening to the very people who helped cause this mess? Shouldn’t I try to listen to someone else?”
If lawmakers wanted to they could go to PublicMarkup.org and see what people are saying about each section of both the Dodd proposal and the Paulson proposal. It could be a useful way to have a discussion directly with people concerned about the bill, rather than the money merchants of K Street. Already, 81 comments have been left on the Dodd bill and 41 on the Paulson proposal.
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Government Takeover to Roil K Street
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’ .
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You Spin Me Right Round
Congress doesn’t spin records, they spin in revolving doors. And those doors are spinning faster than ever, according to a study from Public Citizen. The Politico reports on the study, which shows that between 1998 and 2004 a whopping 43 percent of retired lawmakers became lobbyists:
A study done in the post-Watergate era estimated that only 3 percent to 10 percent of retiring members of Congress became lobbyists.
But, from 1998 to 2004, 283 retired lawmakers became lobbyists — a whopping 43 percent of all retiring members, according to a study done by Public Citizen, a nonpartisan watchdog group.
In 2005, eight members joined lobbing firms, although only four ultimately registered to advocate on Capitol Hill. A year later, another nine members followed.
With another seat-cleansing November election apparently in the making, the lobbyist ranks are likely to swell again later this year.
While reforms passed in the Honest Leadership and Open Government Act were meant to stop the flow of lawmakers and staffers down the block to K Street, the cases of Al Wynn, Dennis Hastert, Trent Lott, and Richard Baker all show that the desire to cash in on connections on the Hill is not abating.
Unlike the video below, the revolving door in Washington doesn’t appear to be ready to break anytime soon:
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K Street Stalls
While many major K Street firms are still increasing their profits, the total improvement of profits over last year was 2.8% in the first half of the year, a significantly smaller increase than recorded over previous years. Doing best these days are firms tilted heavily towards the majority Democrats or those with a strong bipartisan staff. The biggest growth rate was seen by the Podesta Group, a Democratic firm, pulling in 47.4% more than the 2007 first half.
The presidential election year and the slow economy have a lot to do with the K Street slowdown. (Of course, by slowdown, I mean smaller increases in profits; not exactly a slowdown, except in terms of the previous exponential growth rates posted over recent years.) Top ten earners were:
Patton Boggs – $20.5 million (+5.7%)
Akin Gump Strauss Hauer & Feld – $17.8 million (+17.1%)
Van Scoyoc Associates – $14.5 million (+16%)
Cassidy & Associates – $12.1 million (-1.6%)
Dutko Worldwide – $10.4 million (-4.1%)
Hogan & Hartson – $10.2 million (+8.5%)
BGR Holdings – $10.2 million (-11.4%)
Ogilvy Government Relations – $9 million (-27.2%)
Williams & Jensen – $8.6 million (+6.0%)
K&L Gates – $8.0 million (+23.5%)
Both Roll Call and The Hill filed reports on this.
