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The Conservative Curmudgeon
February 18, 2009

Change: Easier to Talk About Than Achieve
by Allan C. Brownfeld

[The more things change…]

In his presidential campaign, Barack Obama promised “change” in Washington. In particular, he pledged to limit the role of lobbyists. Hopefully, as time goes by, he will fulfill this pledge. All of us — Republicans and Democrats alike — would benefit from such genuine change.

The early days of his administration, however, give us some reason to wonder whether real change is, indeed, in the works. Among the new ethics rules announced by the White House is a two-year prohibition on employees from participating in decisions related to their former employers — and a more specific section banning individuals from taking jobs in the agencies they recently lobbied. No sooner were the new rules announced, however, than President Obama granted a waiver to William J. Lynn, III.

Lynn, a former aide to Senator Edward M. Kennedy (D-MA), served as an undersecretary of defense and comptroller at the Pentagon under President Clinton and was elected an officer of Raytheon in 2005. Lynn was among a group of Raytheon officials who lobbied the Pentagon and Congress as recently as 2007 and 2008, according to records filed with the Senate. Among those expressing concern about Lynn are Senators John McCain (R-AZ), the ranking Republican on the Senate Armed Services Committee, and Charles R. Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee. Mr. Grassley said that, “Surely a number of Raytheon issues would come across his desk."

The case of Mr. Lynn is hardly an exception. Treasury Secretary Timothy Geithner — who has his own ethical problems with regard to his nonpayment of income taxes — selected Mark Patterson, an ex-lobbyist from Goldman Sachs, to be his chief of staff. Until last April, Patterson, a Goldman vice president for government relations, acted as a lobbyist on a wide range of issues that could come under his purview in his new post. Patterson’s former Wall Street firm has benefited from $l0 billion in government bailouts.

Then there is James H. Steinberg, the university dean picked as one of Secretary of State Hillary Clinton’s top diplomatic deputies. He has earned tens of thousands of dollars as a consulting for a prominent Washington lobbyist with a roster of foreign clients that includes a Dubai-backed company and Colombia’s trade bureau. Deputy Secretary of State Steinberg reported $70,000 in income from the Glover Park Group, whose partners include several former high-ranking Clinton administration officials.

And what of President Obama's choice for health secretary, former Senator Tom Daschle? He was aware as early as June 2008 that he might have to pay back taxes for use of a car and driver provided by a private equity firm, but he did not inform the Obama transition team until weeks after he was nominated. Somehow, Daschle passed through the vetting process despite his failure to pay $l28,000 in taxes. All of this, however, was too much for many in the Senate as well as for The New York Times, which called for Daschle to step down — which he finally did. On the same day that Daschle stepped down, so did Nancy Kellefer, who withdrew as a nominee for White House “performance czar,” because she had not paid payroll taxes for her household help. She was to be chief accountability officer for the administration, a new position created ensure that other agencies were fulfilling required duties.

Or consider the case of “earmarks,” which were widely criticized during the 2008 presidential campaign. Earmarks and “pork” have become rallying cries against the failures of government. The Office of Management and Budget, defining an earmark as spending that Members of Congress insert into legislation in ways that avoid “merit-based”review, says that in 2008 over ll,000 earmarks cost more than $l6.5 billion, a significant increase over recent decades.

Ray LaHood, the former Republican congressman chosen by President Obama to direct billions of dollars in federal highway spending — despite the widespread concern about earmarks expressed during the campaign — has been an unapologetic advocate of earmarks and has used his influence to win funding for projects pushed by some of his largest campaign contributors. The new Secretary of Transportation, according to The Washington Post, “... sponsored $60 million in earmarks last year, steering at least $9 million in federal money to campaign donors.... An opponent of earmark reform efforts in Congress, LaHood ranks roughly among the top 10 percent in the House for sponsoring earmarks in 2008.... LaHood’s record poses an important question... how he would administer part of a $775 billion stimulus package that will be directed to the Transportation department.”

Many of the large American companies have received billions of taxpayer bailout dollars by pleading that they did not have enough money to lend to customers. These companies were, at the same time, spending billions of dollars to send lobbyists to influence the federal government. The Washington Times’ review of lobbying disclosure reports found that l8 of the top 20 recipients of federal bailout money spent a combined $l2.2 million lobbying the White House, the Treasury department, Congress, and federal agencies during the last quarter of 2008. For example, the government bought $3.4 billion in American Express Co. stock January 9 as part of an aid package. In the last quarter of 2008, the company spent more than $l million on federal lobbying. Several taxpayer groups assert that companies receiving federal assistance should not be able to lobby the federal government at all, particularly those benefiting from the Troubled Assets Relief Program (TARP), the formal name of the federal bailout plan.

“It’s a definite conflict,” said Pete Sepp, a spokesman for the National Taxpayers Union. “It’s a disturbing sign that TARP recipients think there is still more loot left to get. If they’re not slowing down their lobbying, taxpayers need to be worried.”

Citigroup and Bank of America have received two rounds of federal assistance thus far. Both have been active lobbyists. Citigroup — which, with $45 billion, is the number one recipient of taxpayer assistance — spent $l.3 million on lobbying in the fourth quarter, nearly as much as the $l.4 million it spent in the third quarter. Bank of America spent $820,000 during the third quarter.

“Taxpayers are now significant shareholders in these companies,” said Steve Ellis, vice president of Taxpayers for Common Sense, a watchdog group. “The last thing taxpayers want is to be paying for somebody to lobby their elected representatives to get more money.”

Robert G. Kaiser, author of the recently published So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government, fears that Mr. Obama’s promise to transform American politics is unlikely to succeed. He writes: “Washington is broken: Lobbyists and special interests have turned our government into a game that only they can afford to play. They write the checks, and the citizenry gets stuck with the bill. Politics is no longer a mission; it's a business...

“Modern Washington takes for granted the exploitation of public service for private gain. Thousands of former government officials have passed through the well-greased revolving door to corporate offices and lobbying firms that hire them for their ability to influence the people and policies they knew about or worked on as public servants. This influence-peddling has often distorted public policy to favor special interests.... Over the past four decades, Washington has become an important venue for the great American pastime: not baseball, but making money.”

At the present time, lobbyists are engaged in attempting to get as much for their clients as possible from the stimulus package. The new Obama administration has pledged to “change” Washington and limit the influence of lobbyists. Thus far, the appointments to the new administration indicate that, sadly, the more things change — the more they remain the same. Republicans and Democrats have together created today’s sordid political environment. How it can genuinely be changed remains to be seen.

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The Conservative Curmudgeon is copyright © 2009 2008 by Allan C. Brownfeld and the Fitzgerald Griffin Foundation. All rights reserved. Editors may use this column if this copyright information is included.

Allan C. Brownfeld is the author of five books, the latest of which is The Revolution Lobby (Council for Inter-American Security). He has been a staff aide to a U.S. Vice President, Members of Congress, and the U.S. Senate Internal Subcommittee.

He is associate editor of The Lincoln Reveiw and a contributing editor to such publications as Human Events, The St. Croix Review, and The Washington Report on Middle East Affairs.

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© 2009 Fitzgerald Griffin Foundation