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The Lobbyists' Scandal: The Secret World of Washington
by Rupert Cornwell
Entered into the database on Saturday, July 02nd, 2005 @ 11:00:03 MST


Untitled Document

It all began in 2000 when the Mississippi band of Choctaw Indians, grown rich on the operations of casinos on their tribal land, decided they needed some allies in Washington to help protect their wealth from competitors. Not unreasonably, they chose to retain the services of Jack Abramoff, the king of Washington lobbyists. What happened next has become an American morality tale of our times.

Over the next two years, the Choctaws paid Mr Abramoff and his colleague Michael Scanlon some $15m (£8.3m). Alas, the esteem was not reciprocated. In a series of e-mails, the pair referred to the Choctaws and other Indian tribal clients as, among other things, "troglodytes" and "monkeys". Of that $15m, it is alleged, Mr Abramoff and Mr Scanlon channeled off up to $7m.

Some of the money went to pay off a debt from Abramoff's days as a B-movie producer in Hollywood. Some went to finance a golfing trip to St Andrews for Tom DeLay, his most influential friend in Congress. Some, it seems, went for the lobbyists' own enrichment, under a system referred to in the e-mails as "Gimme Five". Over the past 12 months, the saga that has unfolded in a series of hearings by the Senate Indian Affairs committee, has transfixed Washington. "Simply and sadly, it is a tale of betrayal," says John McCain, the panel's chairman, distinguished only by the lobbyists' "insatiable greed" and their "utter contempt" for their clients.

Lobbying is Washington's grubby secret. In the city of ceremony and empire, peace and war, it is the unspoken business of the shadows. Some say lobbying is part of the democratic process. Others claim it is legalized bribery, even downright corruption. But love it or loathe it, it is the way Washington works. Usually you hear little about the cajolings and threats, the quiet meetings, the lavish lunches and junkets that lubricate American politics. But every once in a while something comes along to open the system to the thing it hates most: daylight. The case of Jack Abramoff, Michael Scanlon and a clutch of Indian tribes which paid them $82m is one of those somethings.

Mr Abramoff claims he was doing nothing illegal, that the Indians got value for money and his only sin was to have been too good at his job. But now his career, indeed his liberty, are under threat, as the FBI investigates allegations of massive fraud. The affair has cast a dark cloud over Mr DeLay, the former pesticide salesman from Texas who is now House majority leader, known on Capitol Hill as "The Hammer". Some even believe the scandal could mark the beginning of the end of this era of Republican dominance.

Lobbying per se is nothing new. The right to "petition the government for a redress of grievances" is enshrined in the first amendment of the Constitution that guarantees freedom of speech. As long ago as 1913, Woodrow Wilson was complaining that Washington was "swarming with lobbyists ... you can't throw a brick in any direction without hitting one."

But the 28th president cannot have imagined how access-peddling would blossom into a $4bn industry. There are 14,000 registered lobbyists, and at least as many again who are not registered. The money pours in not just from the US but around the world. Between 1998 and 2004, foreign companies spent $620m (£350m) bending ears in Washington.

Lobbying thrives in the US for two reasons, which a comparison with Britain illustrates. Britain has a parliamentary system, where the prime minister controls the legislative agenda and where party discipline ensures it becomes law. Basically, if you want to tilt the playing field, you must get to ministers, best of all the prime minister. But unless you are Rupert Murdoch, that can be tricky.

Forget about the average backbencher. British sleaze has an engaging directness; take the brown envelopes bestowed by Mohammed Fayed on Neil Hamilton in the "cash for questions" case. But the sums involved would not cover the daily expense account of a Jack Abramoff.

Congress is the legislative branch of the constitution. It writes laws and appropriates money for government spending. Most important, it is separate from the executive branch headed by the White House.

Although George Bush's Republican party has majorities in the House and Senate, he has no direct control of the Bills they consider. For a lobbyist this is heaven, a sky studded with dozens of powerful committee chairmen and ranking members, all with their fiefdoms, whose yea or nay is decisive.

The other key ingredient is money, the colossal sums needed to fight election campaigns. In Britain, the curbs on such spending are strict. In America, by contrast, the sky's the limit. Total spending for the 2004 elections, presidential and Congressional, reached $4bn.

The summit of extravagance was the 2004 race in South Dakota, one of the least populous US states, in which Republican challenger Jim Thune defeated the Democratic Senate minority leader Tom Daschle. The combined cost was a staggering $40m, and this money was not raised by each of the 391,000 good citizens who voted, chipping in $100 for the privilege.

In a larger state, the average cost of defending a Senate seat is $20m. This means an incumbent has to raise $9,000 every day of his six-year term. There is only one place to get that kind of money. And so the merry-go-round starts to turn.

The basic trade-off is simple. Corporate and other donors (among them Indian tribes) provide money in a bid to secure the legislation they want, with desired exemptions, loopholes and financial breaks. The intermediaries between the two sides – legislators in constant need of election campaign funds and business interests trying to influence them – are the lobbyists. And the more people a lobbyist knows on Capitol Hill, the more effective he or she is.

Unsurprisingly, ever increasing numbers of them are former legislators. The revolving door is nothing new, but today it spins faster than ever. Congressmen and their aides become lobbyists, cashing in their contacts for seven-figure salaries.

The executive branch too joins in the fun. Take Philip Cooney, the White House official who went to Exxon, days after it was revealed he had been doctoring climate-change reports to diminish the role of fossil fuels in global warming. The Washington-based pressure group Center for Public Integrity, says almost 250 former Congressmen and senior government officials are now active lobbyists.

Attempts to cleanse the system of its addiction to money invariably fail. The 2002 Campaign Reform Act outlawed "soft money" (previously unlimited contributions to the national parties for generic "party-building activities") that in fact went to help specific candidates. This closed one source of money. But the ever-escalating cost of campaigns meant other sources had to be found. Enter the lobbyists.

Jack Abramoff and his ilk are key figures in Washington's power networks that embrace the politicians on Capitol Hill, lobbyists and non-profit interest groups and organizations. And no network was mightier than the one embracing Mr Abramoff, Mr DeLay and Grover Norquist, president of the Americans for Tax Reform interest group.

Mr Abramoff's special good fortune was to be in the right place at the right time. No lobbyist was a better friend of Mr DeLay and Newt Gingrich when the Republican landslide in the 1994 mid-term elections turned these two conservative firebrands from minority mischief-makers into the new masters of Congress.

Suddenly, Mr Abramoff was the man who could open the doors that mattered on Capitol Hill. The money that poured in from clients enabled him to fix anything, from private luxury box-seats at Washington Redskins games to golfing trips for his Congressional pals. Lobbyists are barred by law from paying for such junkets. But that could be got round by having the non-profit group pick up the bill (tax-deductible of course).

Fred Wertheimer, chairman of the Democracy 21 organization has been toiling half a lifetime to reduce the role of money in US politics. "DeLay has made it an art form. You have to 'pay to play', you have to provide campaign finance for his party if you want to have any influence." So how corrupt is the system? Mr Wertheimer says: "It's corrupt with a small 'c'. As a rule, you're not talking about classic quid pro quo bribery corruption. Politicians aren't getting personally rich out of it, unlike other countries where money used to buy influence goes to the personal benefit of the office-holder."

After the 1994 victory, Mr DeLay set up a project aimed at consolidating Republican power. It too boils down to a deal. Lobbyists and trade and industry associations would be allowed virtually to write legislation. In return, the lobbying firms would hire Republicans.

The result has been a semi-purge of former Democrat lawmakers-turned-lobbyists. Today's lobbyists pour their clients' money into Republican ideological projects, and use their contacts to round up more funds for Republican candidates. As successive elections strengthened the Republican grip on Congress, the system has become steadily more entrenched.

Possibly, the Indian tribe's scandal will change matters. In their hubris, the Republicans may have overreached. Public approval of Congress, at just 33 per cent one recent poll shows, has never been lower.

Maybe Mr DeLay, at the Center of other ethics inquiries, will be forced to step down as majority leader. But do not bet on it. Jack Abramoff may end up as the scapegoat, thrown to the wolves to persuade ordinary Americans that the system is able to police itself, while the realities remain. Washington plays by the rules it knows, however disagreeable they may be. As a chastened Mr Abramoff told The New York Times: "Eventually in politics, money wins."