Not Indebted to Lobbyists

Posted October 31, 2003 at 5:04pm

Normally when a corporation gets in trouble with the government, it reaches into its wallet and hires some big-name lobbyists to help it out in Washington.

Not so with AmeriDebt. When the leading debt management firm found itself under increased federal scrutiny recently, it fired its only lobbying firm.

According to sources close to the situation, AmeriDebt ended its six-month relationship with the Westin Rinhart Group after the debt management firm shook up its management team.

Meanwhile, AmeriDebt’s in-house lobbyist left the firm. The move comes at a time when a handful of states have brought lawsuits against the company alleging that the firm overcharges customers. The Internal Revenue Service and the Federal Trade Commission also are scrutinizing debt management companies, while Rep. Julia Carson (D-Ind.) introduced a bill that would crack down on the industry.

At the same time, a set of smaller, nonprofit credit counseling organizations have shuttled their chief executives to Washington to brief Members of Congress about the growing problem.

[IMGCAP(1)] “Part of the reason that there are some abuses is because there are no federal guidelines to enforce standards” in the marketplace, said Lydia Sermons-Ward of the National Foundation for Credit Counseling.

The National Foundation for Credit Counseling and the American Association of Debt Management Organizations support Carson’s bill as a good first step toward removing bad actors from the industry.

Carson’s bill would establish federal standards for AmeriDebt and other companies in the credit counseling industry and would impose civil penalties on violators.

Jet Set Campaigning. An analysis of campaign disclosure forms by PoliticalMoneyLine.com reveals that Democratic presidential hopefuls are flying across the country on jets owned by law firms, unions and other key interests.

Of course, the campaigns must give proper compensation, which is based on market-rate first-class airfare.

North Carolina Sen. John Edwards’ campaign has paid $140,000 to the Dallas law firm Baron and Budd for use of its company jet.

Edwards’ campaign has also used flight services from the Decatur, Ill.-based agri-business giant Archer Daniels Midland costing nearly $20,000.

Rep. Richard Gephardt (Mo.) has also used ADM for flights on the presidential campaign trail.

The former House Minority Leader has been flying on planes owned by two unions that have publicly supported him — the International Union of Bricklayers and Allied Craftworkers, and the International Association of Machinists and Aerospace Workers.

According to the report, Sen. John Kerry (Mass.) has reimbursed Flying Squirrel charter airline to the tune of $70,000. His wife, Teresa Heinz, owns the service.

MCI hires Rudman. Former Sen. Warren Rudman (R-N.H.) has become the latest former Member to sign on with MCI as the company works its way out of bankruptcy.

Rudman joined the embattled telecommunications firm to advise on ethical and corporate governance issues. He will not be a lobbyist for the embattled company.

Rudman joins former lawmakers such as ex-Reps. Thomas Bliley (R-Va.) and Bob Walker (R-Pa.) and former Sen. Jake Garn (R-Utah) on MCI’s team of advisers.