Street Talk: Some Lobbyists Get Earmarks Without Giving

Posted June 12, 2009 at 4:55pm

Say what you want about Rep. Jeff Flake (R-Ariz.), but on earmarking, he’s got a point.

[IMGCAP(1)]And it goes well beyond the ballyhoo surrounding Speaker Nancy Pelosi (D-Calif.) and House Appropriations Chairman David Obey’s (D-Wis.) March announcement that they were “furthering— earmark reform by requiring competitive selection of earmarks for profit-making companies.

Flake and a handful of other Members are trying to snag a moving target — the changing mores of Congress — and imprint some real earmark reforms before Members become hopelessly behind the ethical curve and voters summarily throw them out of office.

The 110th Congress took a significant step toward reform by requiring Members to list their earmark requests on their Web sites. That’s a huge change from the past, when it was often impossible to trace an earmark back to its original requester.

To weed out the most blatant examples of earmark abuse, Members must also certify that neither they nor their spouses have a “financial interest— in the earmark request.

And although that sounds good, it’s really window dressing — few Members are dumb enough or cavalier enough to submit an earmark request for a company they own or in which their spouse has a financial stake.

The real “financial interest— is knowing whether any officer of the company seeking the earmark made a campaign contribution to that Member. Now there’s a piece of news that would be useful and could at least get at the iron triangle of the most typical earmark abuse: Company pays lobbyists to seek an earmark from a Member; Member receives cash from officers of the client and the client’s lobbyist; client receives an earmark.

The House ethics committee has already nixed the idea of requiring this data to be posted. “A contribution to a member’s principal campaign committee or leadership [political action committee] generally would not constitute the type of financial interest’ referred to in the rule,— according to the House Ethics Manual.

This is the same committee that two years ago determined that Rep. Ken Calvert (R-Calif.) had no financial interest in a $5.6 million earmark he submitted for an express bus hub, despite the fact that Calvert had an ownership interest in seven properties “in the vicinity— of the Corona Transit Center. Why? Because the committee, according to a letter it delivered to Calvert, ruled that the transit center did not constitute a “direct and foreseeable effect— on the Congressman’s pecuniary interest.

Flake and a handful of other Members want to change that. Flake outlined the idea in a June 3 letter to the ethics committee.

A bill introduced on April 22 by Rep. Paul Hodes, the second-term Democrat from New Hampshire now running for Senate, would also require campaign contributions to be noted on earmark requests. So far, it has nine co-sponsors, including three Republicans; two Members just signed on last week.

The biggest impediment to change, of course, is that it’s not illegal to provide an earmark to a campaign contributor. In most Members’ eyes, it’s not even unethical.

But Congress may be undergoing one of its periodic ethical ground shifts, spurred by what appears to be an ever-tightening noose around the now-defunct PMA Group and its patrons in Congress, Reps. John Murtha (D-Pa.) — elected in 1974 — and Peter Visclosky (D-Ind.) — elected in 1984.

Most Members — and most lobbyists, for that matter — aren’t noticing. Or they’re incapable of noticing.

“You rationalize a pattern of behavior,— noted one lobbyist who worked on the Hill in the 1970s and 1980s. “If you stood back and analyzed it, you’d see it’s not the right thing to do — even if it’s not criminal.

“Look at Danny Rostenkowski,— he continued, referring to the former Illinois Democrat and Ways and Means chairman brought down because, among other things, he traded in his officially purchased stamps for cash at the House post office.

At the time, that wasn’t the must unusual practice. “That’s money already allocated to me anyway,’ they’d say,— the lobbyist said.

But in the same way, it’s now hard to imagine keeping ghost employees on the payroll — another Rosty practice. In a few years, it might be equally implausible to imagine not making transparent the campaign contributions that a Member receives from officers of a company seeking an earmark.

That’s not because the legal standard of bribery — a knowing quid pro quo — may be relaxed, but because the acceptable ethical standard may become the smell of smoke, and not just the fire.

If there’s a recognizable “stream of value— between a Member and a constituent, a pattern of receiving in exchange for giving, that could get dicey, especially if a prosecutor is already nosing around nearby, noted former Department of Justice Public Integrity lawyer Peter Zeidenberg, now a partner at DLA Piper. “It’s very difficult to say how many drops constitute a stream, that if there’s just one earmark, would a case be brought?—

The lesson, Zeidenberg said, is that you can’t be too cautious. “Some people take offense, and understandably so, at the suggestion that they could get in trouble since they are not violating any law. But prosecutors are a suspicious sort, and even if you’re not guilty you could get caught up in a big investigation.—

One lobbyist who now refuses to give contributions to Members seeking earmarks for his clients explained his decision this way:

“Say you’re not guilty. But the [Federal Election Commission] filing deadline is March 31 for the first quarter, and appropriations requests for the committee are due on April 4.

“Members raise a ton of money the last week of the quarter — that’s when you want to scare away potential challengers, and it’s right before the approps submissions,— the lobbyist continued. “The untrained eye will say, You submitted a request right after receiving a contribution. Aha! That’s why you did it.’ To disprove that, you have to prove a negative.—

Assuming Zeidenberg is not crying wolf, why do so few Members — and so few lobbyists — take this advice to heart?

Perhaps because they can’t afford to. Even the lobbyist who no longer gives to earmarking Members conceded that it’s possible for him to take that stance now because he already has strong ties with those offices.

“I have forged a relationship through money, so I can do my earmarking [requests] without giving money,— the lobbyist said. “If I hadn’t raised as much as I had [in the past], true, I wouldn’t have had the relationships.—

And the pressure on Members to raise money now is so intense that few must think it worthwhile to turn down legal money, even if there’s the scent of smoke.

“Just look at the [campaign] budgets,— said the lobbyist who worked on the Hill two decades ago. “You can’t get elected to any House seat without raising at least $1 million, and in some cases up to $5 million. Think about that.—

Said the lobbyist who no longer gives to certain Members: At the height of fundraising season, “I get a fundraising announcement via e-mail at least every 10 minutes. They just keep popping in. And they want money for their re-elect, for their leadership [PAC], for their RNC, their DCCC allocations.—