Obama to Lobbyists: Use the Back Door Please

He’s at it again. More lies and more deception and it’s amazing how many people buy into Obama’s deceit.

Barack Obama has moved swiftly to put his stamp on the Democratic party, announcing on day two of his status as presidential nominee that the central party will abide by the same rules on accepting money from lobbyists as his own campaign.

The move signalled that Obama intends to impose a new approach to politics, and that he wants to be seen to be doing so. A central theme running through his bid for the Democratic nomination is that he will sweep aside the chummy relationship between politicians and lobbyists and free himself from the grip of special interests.

Under the new rules, the Democratic National Committee, which raises central funds for the presidential campaign, will take on board Obama’s existing ban on donations from lobbyists who do business with the government as well as from political action committees - private interest groups set up to raise money in order to influence the outcome of elections.

That’s the UK Guardian reporting but I could have used any number of American or foreign media outlets who just can’t seem to figure out how the new back door policy works.

Obama is a grand deception when it comes to lobbyists. He claims that he doesn’t take money from lobbyists. That’s simply duplicitous parsing of the facts because his fundraising team includes 38 members of law firms that were paid $138 million last year to lobby the federal government. Of those 38 lawyers, 10 are former federal lobbyists. And those 38 lawyers have pledged to raise at least $3.5 million for the Obama campaign. Employees of their firms have given Obama’s campaign $2.26 million according to USA TODAY.

Thirty-one of the 38 are law firm partners, who receive a share of their firm’s lobbying fees since law firms pool compensation. And according to The Washington Post, at least six of them have some managerial authority over lobbyists at their firm.

Take Sidley-Austin LLP, his wife’s former law firm. It is the sixth largest law firm with over a billion dollars in revenues and more than 1800 lawyers many of whom are registered lobbyists. In their health care practice alone they have over two dozen registered lobbyists:

Sidley-Austin Government Affairs

And they have 40 different practices.

And they bundle money for Obama. Tom Cole in the Illinois office has raised over $50,000; John Levi also in Chicago over $200,000; Kathryn Thompson in the DC office over $50,000 And these figures are for YE 2007. The figures are likely near 50% more now.

Here is what Obama does: He gets money from the lawyers at Sidley-Austin that are not registered lobbyists, many of them former lobbyists taking a hiatus. Law firms are partnerships were compensation is pooled so the work of one attorney benefits the rest. So while Obama does not directly take money from the registered lobbyists at Sidley-Austin it is all just a game, a wink and a nod.

And so who are Sidley-Austin’s clients? For starters, hedge funds like another of Obama’s bundlers, Citadel Investment Trust of Chicago. In fact in 2007, Institutional Investor named Sidley Austin the “best overall law firm” serving the hedge fund industry for the second consecutive year and was also recognized as the number one law firm in the subcategory of “regulatory and compliance expertise.” Read their press release: Sidley-Austin named Best Overall Law Firm serving Hedge Funds by Institutional Investor Magazine

But primarily Sidley Austin’s clients are the global elite Fortune 500 companies that dominate the global economy. Plus ça change. Vive la difference!

And like Sidley-Austin, he has at least 16 other law firms with registered lobbyists doing the same thing. In April 2007, the Los Angeles Times reported that Obama “raised more than $1 million in the first three months of his presidential campaign from law firms and companies that have major lobbying operations in the nation’s capital.” Again the same duplicitous ruse: get money from the lawyers who are not registered lobbyists.

Here’s how the St. Petersburg Times describes it:

But Obama has left a few loopholes that allow him to fund his campaign much the way other candidates do — with contributions from wealthy special interests. While railing against the “stranglehold that lobbyists and special interests have on our democracy,” his campaign coffers are filled with money from people who work for corporations and law firms that lobby the federal government.

Some power players are not registered lobbyists, but advise their clients on how to talk to federal officials about policy issues.

For example, Tom Daschle, the former Senate Majority Leader, who endorsed Obama and contributed to his campaign, is a consultant — not a registered lobbyist — working with Alston & Bird, a business firm that earned nearly $7.1 million from lobbying in 2006. Obama has received tens of thousands of dollars from other partners in the same firm.

Obama?s ?disdain? for lobbyists hasn?t stopped him from having ? you guessed it ? state lobbyists play prominent roles in his campaign. For example, former SC governor Jim Hodges is Obama?s national co-chair. Jim Hodges is also the founder of Hodges Consulting Group, a state-based lobbying firm, and is a registered federal lobbyist.

And it doesn’t end there. Obama?s co-chair in New Hampshire, Jim Demers, is a state based lobbyist for the pharmaceutical and financial services industries amongst others. Michael Bauer, a member of Obama?s LGBT steering committee, is a state based lobbyist in Chicago. And in Nevada, Obama?s campaign also has three state based lobbyists who played senior advising roles in August last year. Lobbyist everywhere you look but just use the back door please.

Here is a list of bundlers for Presidential candidates.

And Obama is careful to use the words “Washington” lobbyists because he takes money from Springfield lobbyists. For example, Obama took $2000 from two Springfield, Illinois lobbyists for Exelon, which spent $500,000 to influence policy in Washington in 2006 and gave $160,000 directly to Obama in 2007. Talk about duplicitous parsing. And in August 2007, Obama travelled to Sacramento, California to raise money from California-registered lobbyists. According to the Los Angeles Times, Obama held a fund-raising lunch for Sacramento lobbyists. The cost was $1,000 for the lunch and $2,300 for admittance for a private reception thereafter. Asked if this wasn’t somehow a contradiction, Obama told the NBC affliate in Sacramento:

“Because I have no power in this state, so I?m not influenced in any way by somebody who?s lobbying at the state level, the main thing that we?re trying to avoid is any perception that somehow those who are doing business in Washington have an influence on my agenda.”

Right. A President has no influence on the states. And state lobbyist never become federal lobbyist nor do they ever work for firms that do both state and federal lobbyist nor have clients that have needs at both the state and federal level.

Now let’s look at Hogan & Hartson, one of the world’s top 30 law firms in terms of revenues. In 2007, approximately $17 million of those revenues came from lobbyists. Their client list includes several Indian Tribes involved in gaming, the Argentine Beef Promotion Institute, Berkshire-Hathaway (Warren Buffet’s group), several pharmaceutical companies (Bristol Myers Squibb, Glaxo Smith Kline, Nabi Biopharmaceuticals, Sanofi Aventis and TAP Pharmaceutical Products), energy companies (Cinergy Corporation, H2Diesel, Michigan Consolidated Gas, Petroleos de Venezuela SA, and Xcel Energy), healthcare companies (Provena Health, Rocky Mountain Health Plans, Vanguard Health Systems and Well Care Health Plans) and other major corporations like Clorox, Sun Microsystems, Nestle USA, Koch Industries and Level 3 Communications.

For me personally the fact that Hogan & Hartson represents the Venezuelan state-owned Petroleos de Venezuela SA is disconcerting. It makes me rather suspicous of as to why Obama wants to talk to Hugo Chávez, who in my mind is a state sponsor of terrorism. This aside, the real worry for all is simply that Obama’s revolving door practice with lobbyist is so back door. What is he hiding? And why does his policy position so often reflect not core Democratic positions but industry positions? Energy is a perfect example. He supported the Bush-Cheney Energy Plan, that Clinton did not, and that plan was industry sponsored. And Obama has received more from energy companies that all other candidates combined.

The lobbyist practice is a revolving door practice, now a back door revolving door for Obama. Lobbyists generally come industry or from government itself. They switch jobs every so often refreshing their network of connections. Here’s how Open Secrets describes the practice:

Revolving Door: Top Lobbying Firms
When American voters discard elected officials?and their staffs?lobbying firms and interest groups are quick to snap up the unemployed. Lobbying firms?which often charge steep fees from their deep-pocketed clients?can offer former government employees salaries far greater than those proffered by Uncle Sam, as well as continued influence on Capitol Hill. In return, firms get lobbyists who already have established connections in the federal government and whose résumés can act as a powerful draw for potential clients. The lobbying firms shown here have the greatest track record of hiring former government employees.

The table below names just some of the law firms that are bundling for Obama that also have a lobbyist practice. The second column is the number of registered lobbyist profiles at Open Secrets for that firm. It is not the actual number of registered lobbyists. That number is much higher but difficult to track. The third column are the names of Obama’s bundlers with the fourth column being the amount raised as of December 2007.

Sources: White House For Sale, USA Today, Washington Post, Open Secrets

Covington & Burling is particularly interesting of a connection because they are the largest health care practice lobbying firm with an estimated over $50 million a year in revenues from that practice alone.

Here’s how bundlers work since I have been bundled in my days as a Wall Street Equity Analyst. You will get an email from your CEO or department boss inviting you to an event for a candidate. There you are “urged” to make a contribution on behalf of the candidate. You’ll hear a pitch from the candidate on how I am good for the country and one from your boss on how the candidate will be good for the firm. Geez, when you put it that way. It is akin to guns don’t kill people, people kill people. Corporations don’t finance Presidential candidates, corporate hotshots finance Presidential candidates. Is there any difference?

And the relationship with bundlers is a tight one and tighter than at other campaigns. Here is what the Washington Post wrote back in April 2008:

Obama’s bundlers help make up a more loosely defined “national finance committee,” whose members are made to feel part of the campaign’s inner workings through weekly conference calls and quarterly meetings at which they quiz the candidate or his strategists. At one meeting, bundlers urged the campaign to link Iraq war costs with the faltering economy. And they got an advance copy of Obama’s Philadelphia speech in which he addressed the incendiary remarks of his longtime pastor.

It is true that the McCain campaign takes money from lobbyists but they are not going around telling they are not and then doing it through the back door. It’s the back door that gets my ire. And didn’t you just love his line about how Washington lobbyists won’t fund his party? Well, it certainly ain’t mine no longer.

Open Secrets Lobbying Database

Charles Lemos
San Francisco, CA
bythefault.com