Bundling Key to Reform Bill

Lobby Measure Turns on Issue

Posted May 11, 2007 at 6:43pm

As House Democrats finally return their attention this week to making good on their lobbying reform promises, the fate of a make-or-break provision remains uncertain.

The measure — requiring lobbyists to disclose the campaign checks that they solicit — is not expected to be included in a lobbying rules overhaul Democrats will introduce today.

Backers of the proposal hope they can add it during floor debate, but it could simply be set aside as a stand-alone measure for consideration at a later date, several aides said.

Democratic leaders have struggled for months over how to address the issue, and it is largely responsible for derailing progress on the party’s campaign pledge to clean up lobbying and ethics rules in the wake of several high-profile scandals.

“The bundling issue is the defining issue for the lobbying reform bill,” said Fred Wertheimer, president of Democracy 21.

At press time on Friday, Democratic leaders were planning to present the bill to their Caucus on Tuesday morning. A Judiciary Committee markup is tentatively scheduled for Tuesday afternoon, though that could slip to Wednesday, aides said. Lawmakers would vote on final passage next week.

After passing sweeping rules changes in early January, House lawmakers set the reform debate aside. Senators later that month approved a bill that tightened both chamber rules and lobbying laws. The package included a requirement that lobbyists disclose every three months any campaign checks they arrange for candidates.

But many top Democratic lobbyists and senior House Democrats raised strong, if quiet, objections to matching the proposal, arguing it would chill the party’s fundraising efforts just as newfound majority status was starting to pay off. They said vulnerable freshman Democrats could get hit the hardest.

With the issue continuing to stump House Democratic leaders in recent weeks, outside reform advocates have recently started to focus intently on the subject.

Since the overall reform measure does nothing to restrict lobbyists’ ability to trade their fundraising prowess for influence, reformers argue that it at least needs to force complete disclosure of those activities. Leaving bundling in the dark would obscure a major money link between lobbyists and lawmakers, reformers said.

The watchdogs said they have not lost hope and won’t judge House Democrats’ performance until they see the bill in its final form. “However they decide to move the pieces forward, at the end of the day, the puzzle needs to fit together,” said Gary Kalman of U.S. PIRG.

Nadeam Elshami, a spokesman for Speaker Nancy Pelosi (D-Calif.), declined to address the bundling issue directly. “Congress will soon have another opportunity to build on the Democratic promise to clean up government and break the link between lobbyist and legislation and Speaker Pelosi supports the strongest lobbying reform bill we can pass,” he said.

House Democratic leaders consistently have pushed back their timetable for action on the bill but set the Memorial Day recess as a final backstop. With the clock ticking down, there is little room to maneuver.

The bundling issue has proved tricky in part because it is aimed at a practice — soliciting money from others — that relies heavily on casual suggestions. “The intention of the bill is to capture a wink and a nod,” a House aide said.

The Senate addressed the challenge by drawing a wide circle around the behavior. Under that language, lobbyists would have to disclose any checks they help arrange for a candidate even if the lobbyist had only an informal agreement with the donor to give the donation in the first place, and then, only an informal understanding with the candidate that they had helped facilitate it.

That means if a lobbyist calls a friend and convinces them to give a contribution to a candidate, and then tells the candidate the check is in the mail, he would have to list the contribution on his quarterly report or face criminal penalties, ethics lawyers said.

Current election law already requires people not working for a campaign to register with the Federal Election Commission if they want to gather checks for the candidate.

But volunteer fundraisers can, and usually do, sidestep the requirement by getting a letter from the campaign designating them as a fundraiser. With the designation no public disclosure of the relationship is required. And the obligation applies only to checks outsiders physically put together and hand to the campaign.

House aides said most modern bundlers never actually see the checks they arrange for candidates, so only applying a physical standard would miss most of the action.

For example, an elite group of Republican lobbyists has raised millions of dollars for high-profile Senate candidates in recent years through a “team” fundraising approach based on bundled checks. But the lobbyists rarely handle the contributions themselves, according a GOP lobbyist familiar with the operation.

Instead, lobbyists mail fundraising solicitations to their networks along with coded forms. Respondents fill out the forms and send them, with their checks, directly to the campaign. The campaign banks the check, and using the coded form it assigns credit in a tracking database to the lobbyist who mailed the solicitation. “There’s no value to having the checks come to some intermediary,” the lobbyist said.

Rep. Chris Van Hollen (Md.), chairman of the Democratic Congressional Campaign Committee, has taken the lead trying to craft a workable solution to the bundling issue in the House. Earlier this year, he and Rep. Marty Meehan (D-Mass.) introduced the disclosure language from the Senate reform package as a stand-alone measure.

Since then, his office has worked to refine that language so it more clearly defines what activity qualifies as bundling. If Van Hollen is allowed, he is expected to offer the amendment during floor debate on the bill.