Law Doesn’t End Revolving Door on Capitol Hill
By ERIC LIPTON and BEN PROTESS
A top aide to a Republican congressman from
Arizona helped promote a legislative plan to overhaul the nation’s home
mortgage finance system. Weeks after leaving his government job, he
reappeared on Capitol Hill, now as a lobbyist for a company poised to
capitalize on the plan.
A former counsel to Democrats on the House
Financial Services Committee left Capitol Hill a year ago. He, too,
returned to the Hill just months later, lobbying committee aides on
behalf of Wall Street giants like JPMorgan Chase and Bloomberg L.P.
And the chief of staff for the Republican
chairman of the House Financial Services Committee left his government
salary behind in January 2012. Yet for months afterward, he continued to
manage his boss’s re-election campaign, even while serving as a
lobbyist for financial industry clients.
The experiences of the three Capitol Hill
aides-turned-lobbyists — traced through interviews with political
operatives and a review of public records — illustrate in new detail the
gaping holes in rules governing Washington’s revolving door.
Federal ethics rules are intended to limit
lobbying by former senior officials within one year after they leave the
government. Yet even after the ethics rules were revised in 2007
following a lobbying scandal, more than 1,650 congressional aides have
registered to lobby within a year of leaving Capitol Hill, according to
an analysis by The New York Times of data from LegiStorm, an online
database that tracks congressional staff members and lobbying. At least
half of those departing aides, the analysis shows, faced no restrictions
at all.
The rules are particularly loose in the House
of Representatives, where aides and lawmakers enjoy significant leeway
in hopping from job to job — and from government pay to six- and
seven-figure private sector salaries.
In the three cases identified by The Times,
the interviews and records suggest, the former House staff members did
not violate the rules but rather seized on loopholes to lobby within one
year.
Those examples, and the data analyzed by The
Times, offer a playbook of the many ways that former officials can
legally circumvent the purpose of the law. While the law’s limitations
were known, the data highlight for the first time the extent to which
lobbyists routinely capitalize on an array of loopholes.
Some aides resist pay raises, to keep their
salaries just below the cutoff that would prompt lobbying restrictions.
More highly paid House aides, simply because their paycheck came from an
individual lawmaker or leadership office rather than a committee they
worked closely with, are immediately allowed to lobby former committee
colleagues. This maneuver would be prohibited in the Senate, where
senior aides cannot contact anyone in the Senate for a year.
In other cases, former House aides can
continue socializing with lawmakers, working on campaigns and attending
committee hearings while representing private clients as a lobbyist.
That loophole exists even though a lobbyist’s presence on campaigns and
at committee hearings could serve as a reminder of pending requests by
clients.
The effortless way former staff members avoid
the one-year ban raises new concerns about the revolving door. Some
critics say it fosters a clubby culture in Washington, where lawmakers
and their aides might seek to protect Wall Street and other industries
like health care from new rules and legislation.
When Congress updated the ethics rules in 2007 in the wake of the Jack Abramoff lobbying scandal, which included illegal influence peddling between a lawmaker and a former aide,
it initially drafted tighter restrictions on the revolving door,
arguing that a broader ban lasting two years might curb conflicts of
interest in Washington. But with protests from some lawmakers —
including Representative John Conyers, Democrat of Michigan, and
Representative Lamar Smith, Republican of Texas, then the top two
members of the House Judiciary Committee — the proposal was watered down to remove the two-year “cooling off” period for the House and other restrictions.
The resulting widespread use of loopholes is
disheartening to former lawmakers who tried, but failed, to enact more
radical changes.
“Is it any wonder that the public holds such a low esteem for Congress?” said Joel M. Hefley,
a Republican who served as chairman of the House Ethics Committee
before he retired in 2007. “You can dance around these rules in so many
ways it really does not accomplish much of anything.”
The continued surge of former congressional
staffers to K Street helps explain the fundamental change that is taking
place in the lobbying profession in Washington, as former government
employees accounted for 44 percent of all registered, active firm
lobbyists in 2012, up from 18 percent in 1998, according to a recent study by the Sunlight Foundation.
On some occasions, former congressional aides crossed a legal line and paid a price. Doug Hampton
— a onetime aide to the former senator John Ensign, Republican of
Nevada — pleaded guilty in 2012 to violating the one-year ban.
But such prosecutions are rare. The Justice
Department, which is responsible for enforcing the ban, does not
actively police compliance with the rules, ethics lawyers who handle
such cases said.
“Unless the violation is brought to our attention, it is hard to enforce,” said Michael P. Kortan, the chief spokesman for the F.B.I.
And in interviews, aides-turned-lobbyists
emphasized that there was no need to run afoul of the law, given the
broad number of exemptions.
The salary loophole is perhaps the most
popular. House aides can avoid the one-year “cooling-off” period as long
as their salaries are below a certain cap, totaling $130,500 last year.
Erik Olson’s salary fell below that cap when
he stepped down in September from his job as chief of staff to
Representative Ron Kind, Democrat of Wisconsin. Soon after, he started
to lobby Congress on behalf of corporate clients like Leprino Foods of Denver, which wanted to shape the so-called Farm Bill, a topic that Mr. Kind was involved in.
Mr. Olson, when asked if he had contacted his
former boss in the months since he left, said his firm’s policy was “to
not publicize who we are meeting with on the Hill or administration,”
and a spokesman for Mr. Kind simply said, “No comment.”
Matthew Tully, the Congressional aide who
helped pitch a plan to revamp the nation’s home mortgage finance system,
earned an annual salary of $128,000 while serving as chief of staff to
Representative David Schweikert, Republican of Arizona. Mr. Tully’s job
title, like Mr. Olson’s, would seem to have qualified him as a senior
staff member, a role the ethics law is supposed to cover. But again, the
paycheck amount exempted him from the one-year ban.
During Mr. Tully’s tenure in the House, Mr.
Schweikert was one of the leading House advocates for legislation that
would change the way most Americans obtain home mortgages, limiting the
federal government’s role as the primary insurer of these loans. While
on Capitol Hill, Mr. Tully became a sought-after expert on the debate,
speaking in 2012 at a major mortgage industry conference in Miami to highlight legislation his boss was preparing.
But in 2013, Mr. Tully spun that expertise
into a job as the only internal lobbyist for a Pennsylvania-based
private mortgage insurer, a job he started one day after leaving the
House. The company, Essent Guaranty, stands to benefit from Mr.
Schweikert’s positions.
And yet Mr. Tully, in his new role as a
lobbyist, was free to communicate with the staff in his former boss’s
office. At one point, while attending a House hearing on housing
legislation, he emailed one of Mr. Schweikert’s staff members, according
to a Congressional aide with direct knowledge of the matter.
Mr. Tully and Essent declined requests for
comment, so it is unclear whether he intentionally kept his salary below
the $130,500 threshold.
But a former Senate staff
member-turned-lobbyist, whose salary was just a few thousand dollars
below the cap, acknowledged that she had knowingly kept down her pay.
That way, she was free to immediately lobby at least some members of the
Senate upon her departure for a mortgage company.
“I was very lucky I was underneath the cap,”
she said, asking that she not be named because her new employer would
not allow her to speak on the subject. “The rules are very arbitrary.
Honestly, they don’t make sense to me.”
Dee Buchanan, a Republican who earned more
than $170,000 during his last year as a senior aide to Representative
Jeb Hensarling, Republican of Texas, benefited from a different
exemption.
After departing Capitol Hill in fall 2012,
Mr. Buchanan started a job with Ogilvy Government Relations. The firm’s
website boasts that Mr. Buchanan — who quickly registered to lobby for
the American Bankers Association and the CME Group,
one of the world’s largest futures exchanges — was “the ‘go-to guy’ for
the new House Financial Services Committee chairman,” Mr. Hensarling.
Despite the close ties, Mr. Buchanan was free
to immediately lobby most members of Mr. Hensarling’s committee. Mr.
Buchanan’s one-year ban did not apply to the committee at large because
his government paycheck had come from the House Republican Conference, a
leadership arm of the party that Mr. Hensarling led in 2011 and 2012.
As such, Mr. Buchanan was restricted from lobbying only Mr. Hensarling
and a few other committee members who also belonged to leadership.
Democratic aides have made similar moves.
John Hughes, the lobbyist now representing
JPMorgan Chase and Bloomberg L.P., last held a job on Capitol Hill as a
senior adviser to Representative Steny Hoyer of Maryland, the No. 2
Democrat in the House. As an aide to Mr. Hoyer, Mr. Hughes’s job in part
was to be the contact person with the House Financial Services
Committee, where he worked as the top lawyer during the 2008 financial
crisis.
Because his most recent government paycheck
came from House Democratic leadership, Mr. Hughes was prohibited only
from lobbying top House leaders. Mr. Hughes, who declined to comment for
this article, was soon able to begin contacting his former associates
on the House committee.
“It is almost a meaningless ban,” said Craig
Holman, who helped write the 2007 ethics law as a government ethics
expert at the nonprofit group Public Citizen.
The one-year ban also allows former aides to “interact socially“
with former bosses or Capitol Hill colleagues. Although there can be no
“intent to influence” a lawmaker’s “official actions or decisions” at
dinner parties and golf games, the lobbyists can work behind the scenes,
using their expertise to advise clients about the inner workings of
Congress. And when it comes to working on a political campaign, there
are few restrictions, since such activity is considered a form of free
speech.
The result is a blurring of lines that allows
former aides like Larry Lavender to legally spin through the revolving
door. Mr. Lavender spent five years as chief of staff to the top
Republican on the House Financial Services Committee at the time,
Representative Spencer Bachus, a longtime friend from Alabama.
When a law firm representing JPMorgan
recruited Mr. Lavender for a job in early 2012, he left the committee
behind. But he stayed close to Mr. Bachus, becoming an unpaid campaign
manager for the congressman’s re-election bid.
Mr. Lavender, who earned $172,500 in his
final full year on the Hill, fit squarely into the one-year ban’s
allowances for campaigning and socializing. While Mr. Lavender
occasionally lunched with former colleagues, and even made an appearance
at the committee’s holiday party, he said he did not seek out any
official favors or actions. And although he represented JPMorgan, he
said he had never contacted the committee on the bank’s behalf.
“I took great care to confer with the House
ethics committee to make sure I understood the rules, and then I was
scrupulous in complying,” Mr. Lavender said in an interview.
The rules allowed Mr. Lavender to join a
behind-the-scenes effort to help JPMorgan avoid having to testify at a
House hearing in 2012. The hearing focused on the collapse of MF Global, a major New York brokerage firm that was one of JPMorgan’s clients.
On a conference call with fellow lobbyists,
one person briefed on the call recalled, Mr. Lavender took aim at the
former colleagues who wanted to force JPMorgan executives to testify.
The person briefed on the call, who spoke on the condition of anonymity,
said that Mr. Lavender remarked about his former colleagues: “I should
have fired them when I had the chance.”
A version of this article appears in print on 02/02/2014, on page A1 of the NewYork edition with the headline: Law Doesn’t End Revolving Door on Capitol Hill.
http://dealbook.nytimes.com/2014/02/01/law-doesnt-end-revolving-door-on-capitol-hill/
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