Multinational Monitor

VOL 27 No. 3


Combating the Culture of Corruption. Or Not.
by Charlie Cray

Corruption Roll Call: The Most Corrupt Members of Congreess
by Citizens for Responsibility and Ethics in Washington

Caught in Jack's Web: The Abramoff Associates' File
by Citizens for Responsibility and Ethics in Washington

Oil and Violence in Sudan: Drilling, Poverty and Death in Upper Nile State
by Egbert Wesselink and Evelien Weller


Hostile Takeover: The Corruption of Politics in the United States
An Interview with David Sirota

Exporting Corruption: How Rich Country Export Credit Agencies Facilitate Corruption in the Global South
An Interview with The Corner House

Searching for Transparency: Corruption and the Global Economy
An Interview with David Nussbaum


Behind the Lines

Structural Corruption and Reform

The Front
Human Trafficking in Jordan -- Third World Brain Drain

The Lawrence Summers Memorial Award

Book Notes
The rise and Fall of the Republican Machine -- The Life of Chinese Peasants -- Labor, Environment, and the Global Electronics Industry

Names In the News


Combatting the Culture of Corruption. Or Not.

by Charlie Cray

Tom DeLay finally resigned, Jack Abramoff will soon be doing time, and more indictments are being filed against an ever-growing list of K Street fixers, Members of Congress and corrupt executive branch employees, fueling public perception that Washington’s “culture of corruption” is out of control. Yet all the skeletons and scandals have failed to galvanize enough public outrage to force Congress to pass even modest ethics and lobby reform legislation.

Perhaps it’s no surprise that Congress dragged its feet until it was too late. Both parties have been accused by ethics watchdogs and reformers of endlessly dickering over the details of key legislation, while using the relatively obscure drafting process to quietly strip out the toughest provisions. Almost from the start, few expected a law would pass that had real teeth. But if the fall of Abramoff, DeLay, Cunningham and others is not enough to cause real change, the question is, what will it take?

“The opportunities to enact basic government integrity reforms are cyclical in nature,” says Fred Wertheimer of Democracy 21, one of a handful of public interest groups that have closely monitored the lobby reform debate. “They come when problems and scandals arise, as they have now.”

Basic reform, however, appears nowhere on the horizon.

Almost everyone working to clean up Congressional corruption — in both legal and illegal manifestations — agrees that the key reform is public financing of elections. However, with that proposal deemed unrealistic in the current Congress, government reform groups have coalesced around a reform agenda that seems modest in light of current scandals. And even that set of proposals is going nowhere.

A Modest Reform Agenda

The persistent public interest watchdogs joined together in proposing a six-point plan for lobbying reform back in January. The original proposals included:

  • Cutting lawmaker-lobbyist financial ties;
  • Banning corporate-funded air travel;
  • Banning gifts to members of Congress and their staff;
  • Slowing the revolving door by which individuals shuttle between government and corporate/lobbyist positions;
  • Strengthening lobby disclosure requirements; and
  • Establishing an independent agency to oversee and enforce ethics rules and lobbying laws.

None of these proposals would survive the legislative chopping blocks, though their supporters believed they were able to amass overwhelming evidence to back each of them.

The proposal to cut ties between Members of Congress and lobbyists seemed among the most likely to gain traction. The public interest groups proposed capping election contributions to candidates from lobbyists and lobby firm PACs (political action committees); prohibiting lobbyists from soliciting, arranging for or delivering contributions to or serving in an official capacity on candidate committees and leadership PACs; prohibiting lobbyists from arranging contributions to foundations and other entities established or controlled by members of Congress; and banning lobbyists and their organizations from underwriting events to “honor” members of Congress and political parties.

There are now 35,000 lobbyists in Washington — 68 for every member of Congress. Business is plowing ever more money into lobbying. According to the Center for Responsive Politics, the top 10 lobbying firms reported a combined lobbying income of less than $2 million in 1989, a figure that exploded to $200 million for the top 10 lobbying firms in 2002. No one thinks that corporate lobbyists’ effectiveness rests primarily on their ability to make good arguments; rather, key to their power and access is the money they donate directly to Members of Congress, and the money they are able to raise on their behalf.

Jack Abramoff may have played the influence-peddling game to an extreme by engaging in outright bribery, but most of what he did — arranging for and hosting fundraisers, underwriting foreign travel junkets, picking up the tab at his restaurant and extending invitations to his skybox, offering lobbying jobs to Congressional staff, laundering money through a charity to pay lobbyists, setting up Astroturf lobbying operations and employing politicians’ spouses — are routine tools of the trade in Washington. Abramoff just used a lot more of them, more aggressively and carelessly, than most lobbyists do.

The public interest groups proposed a variety of provisions that directly addressed many of these abusive techniques. Many were contained in the reform bills introduced soon after Abramoff took his perp walk. Some were introduced before, including the Lobbying and Ethics Reform Act, introduced by Senator Russell Feingold, D-Wisconsin, in July 2005. None are on track to be enacted into law.

One example is a proposal to ban corporate-funded air travel, perhaps the easiest and mildest reform proposed. Public Citizen’s Congress Watch reports that lawmakers received $17.6 million in free travel from private companies and lobbying groups between 2000 and mid-2005. Although Jack Abramoff’s famous trips to the Marianas and Scotland receive the most media attention, other lobbyists spent even more, including Richard Kessler, who controlled private companies and organizations that provided Members of Congress with more than $1 million in free travel during the period. By funneling travel money through the Ripon Society and other groups, Kessler apparently made it possible for lawmakers to take free trips to Europe and various resorts without technically being in violation of ethics rules.

As the Abramoff scandal broke open, House Speaker Dennis Hastert said he would push for a ban on all outside support for Congressional travel (a proposal public interest groups said was too broad, because it would block legitimate educational travel for Members of Congress). Hastert’s announcement sent House and Senate Democrats scrambling to draft their own proposal — until Hastert kick-started the issue, no Democrat was willing to discuss a ban on privately sponsored travel. The Democratic bills would have allowed only non-profit groups with no ties to lobbyists to pay for privately-sponsored travel — and only if lobbyists were not allowed to climb on board and extensive records were kept. But Hastert’s tough January talk gave way to spring and summer silence. The House ethics bill that passed in March only proposed to cut off privately financed travel for lawmakers for the rest of the year, after which the issue was supposed to be sorted out by the House Ethics Committee, which did virtually nothing in 2005, and is virtually moribund.

Among the practices denounced as sleaziest by public interest groups is the rapid spinning of the revolving door between the public and private sectors. If Members of Congress and key government officials are planning to leave public life to work for companies they regulate or oversee, they have a strong incentive to skew decisions in favor of those companies while in government. Members of Congress as well as most senior executive branch officials are currently prohibited from making lobbying contacts or conducting lobbying activities for compensation for one year after leaving their positions. The public interest groups proposed extending the prohibition for two years.

According to Public Citizen, of the 198 Members who left Congress since 1998 and were eligible to lobby, 43 percent have since become lobbyists, including half of eligible ex-Senators and 42 percent of ex-Representatives.

Examples include ex-Speaker Bob Livingston, R-Louisiana, who built his business into one of the dozen largest non-law lobby firms in Washington.

Another is former Representative Billy Tauzin, R-Louisiana, who left his position as chair of the House Energy and Commerce Committee to take over a $2 million-a-year position as head of the pharmaceutical industry’s lobby shop (PhRMA, the Pharmaceutical Research and Manufacturers of America). Shortly before leaving office, Tauzin helped shepherd through Congress the Medicare prescription drug bill, which was crafted with a host of industry-friendly provisions, including a prohibition on the government negotiating the prices of drugs it buys under the program.

“Congress has become a way station to wealth,” says Joan Claybrook, president of Public Citizen. “Members use it for job training and networking so they can leave office and cash in on the connections they forged as elected officials. Lobbying has become the top career choice for departing Members.”

Concerns about the revolving door were taken up by the Democrats, whose Honest Leadership and Open Government Act proposed to extend the existing lobbying ban for Members of Congress, as well as former senior executive personnel, from one to two years after they leave government. Their proposal also sought to eliminate floor privileges for any former Senator or Senator-elect who is a registered lobbyist and to require Members and their staff to report any ongoing employment negotiations. The Republican leadership blocked these proposals from going anywhere.

At the top of the groups’ list of demands was creation of an independent Office of Public Integrity (OPI) to oversee and enforce ethics rules and lobbying laws, along with tougher penalties for violations. Currently, there is little to no independent monitoring or prosecution of fraudulent disclosure reports. The Congress’ willingness to strengthen enforcement of the existing rules was considered by most observers to be the acid test of how serious it is about ethics and lobby reform.

This proposal too appeared in the Democrats’ bill, but went nowhere. Craig Holman of Public Citizen’s Congress Watch says the Senate Homeland Security Committee was most aggressive in attacking the Office of Public Integrity. Leading the attack was Senator George Voinovich, R-Ohio, who suggested that the Senate Ethics Committee was already doing its job. When Senators John McCain, R-Arizona, Russell Feingold, D-Wisconsin, and Barack Obama, D-Illinois, brought it up again for consideration from the floor, it was it was defeated by a 2-to-1 margin.

The Republican Gauntlet

The Democrats did end up putting forward a strong reform package in the Honest Leadership and Open Government Act of 2006. In addition to the revolving door and Office of Public Integrity provisions, it would have strengthened lobbyist disclosure requirements, banned gifts from lobbyists and prohibited them from funding Congressional travel, and cleaned up the contracting process by mandating competitive bidding and suspending unethical contractors. Forty senators — all but a handful of Senate Democrats — and 162 Members of the House of Representatives sponsored the bill.

In the Senate, the bill never made it out of the Homeland Security and Government Affairs Committee. “I don’t believe lobbying reform’s the problem,” Senator Tom Coburn, R-Oklahoma, explained. “I believe Congress is. The problem is us. And transparency and reporting solves all that; not more rules, not more pads, not more things to mark down.”

Some of the key provisions of the Democratic package were brought up as amendments on the Senate floor, where they were also defeated.

In the House, where Republicans routinely refuse to permit votes on Democratic proposals, the bill fared even worse, never coming up for a vote.

House Republicans consistently opposed provisions that could have a “chilling effect on lobbying,” as House Rules Chair David Dreier, R-California, explained after jettisoning a requirement that lobbyists list contacts with lawmakers, thereby watering down a bill requiring expanded disclosure, the last major reform to survive the House Republican gauntlet.

Instead, the Republican leadership in both houses pushed through bills they hoped would immunize them from electoral charges of doing nothing on corruption — but which reform advocates denounced as near-meaningless.

In the House, the leadership pressed Republican Members hard to secure passage of the Lobbying Accountability and Transparency Act of 2006, which won approval by a narrow 217-213 vote. The bill focuses on earmarks — appropriations for narrow and specific purposes, usually inserted by a single Member of Congress outside of the normal committee process — an issue that critics say is at best peripheral to the lobbying scandals. The bill’s modest reform would require Members to attach their names to specific earmarks.

The bill “is an illusion designed to try to sell the idea that you’re doing reform while holding on to all the perks and benefits that lobbyists provide to Members,” says Fred Wertheimer, president of Democracy 21. “It’s not going to sell to the public.”

Moreover, the so-called earmark “reform” is riddled with weaknesses and loopholes, according to Scott Lilley, a former staffer to the House Appropriations Committee. He points out that a great many things that are now considered earmarks are not included in the disclosure requirement, including “plus ups” for specific budget accounts where the intended recipient is known to the agency but not mentioned by name in the Committee or Conference Report. “This is exactly the kind of earmark that Duke Cunningham won on behalf of Automated Data Conversion Systems and the MZM Corporation in return for the bribes the executives of those two companies paid him,” Lilley explains.

On the Senate side, the results were similarly disheartening for reform advocates: by a 90-to-8 vote, a weak lobby reform bill passed that ignores the worst abuses, instead focusing on weak proposals, including enhanced disclosure.

Neither party had clean hands, however. Leaders from both parties in the House agreed to remove provisions from the lobbying bill that would have curbed 527 groups — which are able to make unlimited electoral expenditures, so long as they do not coordinate with candidates. Although initially anticipated to favor Republicans dramatically, Democrats proved more adept at using 527s in the 2004 elections.

Political Consequences?

Without any major reforms in the cards, most observers see the scandals themselves as pieces in a larger political game: the fall elections.

Public opinion polls have suggested that the lobby scandals could damage the Republicans the most, but the Republicans are counting on their own ability to exploit bribery allegations surrounding Representative William Jefferson, D-Louisiana, to muddy the waters should the topic of corruption in Congress become a major concern. But the fact that the Republicans are tied to Abramoff and control the Congress suggests that they have more to lose from an anti-incumbent backlash, and therefore more to gain by changing the topic.

Democratic activists especially hope that the Abramoff investigation will continue to expand, eventually reaching deep into the White House, while unraveling the shadowy network of K Street operatives thought to wield considerable power in the Republican Party.

The latter wish was given a little boost when Senator John McCain’s Indian Affairs subcommittee released a report this spring, along with a series of emails implicating top K Street operatives Grover Norquist and Ralph Reed in the construction of an extensive network of non-profit groups that conspired to launder Indian tribal money for Abramoff.

“The Indian Affairs Committee has unearthed a story of excess and abuse,” McCain explained. “Yet much of what we uncovered in the investigation was, unfortunately, the ordinary way of doing business in this town.”

Norquist responded by suggesting that McCain was trying to get him back for siding with Bush during the 2000 primary campaign.

The Democrats at least must be relishing the fact that the Abramoff scandal has ignited this kind of partisan infighting on the other side, after years of exceptional Republican Party discipline and unity. Nevertheless, it’s still unclear if the scandals can grow into something significant enough to cause a voter backlash that works to their benefit this fall. When Reed lost his primary bid for lieutenant governor of Georgia in July, party strategists on both sides suggested the scandals still have the potential to tip some key races, especially if new indictments are made between now and then.

Looking to the States

“We’ve seen the whole lobbying drive disintegrate before our eyes,” says Craig Holman of Congress Watch. “It started out very slowly, then suddenly with the Jack Abramoff plea bargain it quickly picked up momentum and looked like we might be headed toward some fundamental reforms by March. But as the months rolled on you sensed the urgency fading away, and Congress getting more comfortable and secure in their positions. As time went on, the lobby reform proposals were whittled down to nothing. Which is what they are now — essentially, just moderate increases in disclosure, but no restrictions on the real problem areas of lobbying activity.”

“It amazes me, but I think most Members of Congress believe it’s not an issue the American public will rebel over, that it’s largely contrived by the press and that there isn’t that much corruption on the Hill or in lobbying activities,” Holman suggests.

For some advocates, the key is mobilizing popular support behind public financing of elections. They envision the march to reform as a long haul, which goes through the states before arriving in Washington.

The first steps, they say, have already been taken in states like Maine, Arizona and Connecticut, which have adopted clean elections laws mandating public financing. Another big step might come this fall in California, where a proposal for public financing of state elections will be put directly to the voters in a statewide initiative.

Charlie Cray, a Multinational Monitor contributing editor, is director of the Center for Corporate Policy.

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