Original Jurisdiction Hearing
on
"Lobbying Reform: Accountability Through Transparency"
TRANSCRIPT
DATE:March 2, 2006
TIME: 10:00 AM
LOCATION: H-313 The CapitolCont'd from page 2
STATEMENT OF FRED WERTHEIMER, PRESIDENT, DEMOCRACY 21
Mr. Wertheimer. Thank you, Mr. Chairman, although as I understand it, the first Speaker of the House is dead.
The Chairman. Yes, and you are not. You are long from it.
Mr. Wertheimer. Thank you, Mr. Chairman, Ranking Member Slaughter, members of the committee, for the opportunity to testify.
At the outset, I would like to respond to a question that Mr. Putnam raised. It is true that Members used to be able to convert their campaign funds to personal use when they left Congress, and that was prohibited by statute. However, if any Member has a leadership PAC, when that Member leaves Congress, they can still convert that money to personal use.
We would be very pleased to support anybody on this committee, or the committee, if they are prepared to take on that issue. It is a big loophole in the campaign finance law, and the reality is that we are still in a situation where Members can convert campaign money.
The Chairman. Just again, responding to a question that was posed, let me respond. Have there been any instances of a Member taking resources from a leadership PAC?
Mr. Wertheimer. I am not aware.
The Chairman. I wasn't aware of it until you said it.
Mr. Wertheimer. When Members disappear from Congress, their activities do not draw much attention, so I don't know the answer to that.
The Chairman. I think if that would be the case, it probably would.
Mr. Wertheimer. Mr. Chairman, you and your colleagues have a very serious problem on your hands, and the problem is with the American people. I just want to go over a few polls at the beginning here. CNN/USA/Gallup poll said the following: Corruption ranked among the concerns most often cited by those polled. With 43 percent telling pollsters it would be an extremely important issue in 2006, that was just 2 percent below the 45 percent response for the war in Iraq and terrorism.
Washington Post poll, these are all polls this year, found that 90 percent of the American people, 90 percent, said it should be illegal for a lobbyist to give Members of Congress gifts, travel or anything else of value.
A Los Angeles Times/Bloomberg news poll found that by 72 to 21 percent, the public supports prohibiting the practice of allowing lawmakers to travel on jets provided by corporations and lobbyists for the cost of flying on a commercial airplane. These are overwhelming numbers, and they reflect a deep concern about ‑‑ by the American people about the scandals that they have been reading about in Washington, and particularly in Congress. The only way to address that problem is with real reforms, reforms that change the way lobbyists function in Congress, that change the way business is done here.
In the end, the efforts of Congress are going to be judged precisely by what those reforms are. They are going to be analyzed and looked at in reality terms. As people talked about before, you already start off with a very skeptical and cynical public, and in order to respond to that, we believe you need real reforms.
I will go through a list of proposals in my testimony, and I want to touch on just a couple of them. They have been talked about here before.
If you don't do something to address the ethics enforcement issue, it is not clear that anything else you do is going to matter.
Now, one can get into arguments about who was responsible for what, and those arguments have been made, but the bottom line is that we didn't have an ethics enforcement committee process. We didn't have an Ethics Committee functioning for an entire year last year. Now, in the almost 40‑year history of the Ethics Committee in the House, that has never happened, never.
So you must create some form of publicly credible ethics process to oversee and enforce the rules in the future if rules changes are going to have any context for people in this country or for Members. We support the proposal offered by Representative Shays and Meehan for an Office of Public Integrity. It was offered by Senators Collins and Lieberman in the Senate. It is a bipartisan proposal. It is designed to work with and within the structures of the Ethics Committee and to provide some form of independent, nonpartisan capacity in an office to look at and investigate ethics matters, with the Ethics Committee still making the judgments about whether violations have occurred and what sanctions should be recommended.
There must be some form of independence built into the process for looking at your ethics problems, even as that is done within the context of the Ethics Committee and the Congress. We believe that can be done. We believe these are the best proposals for doing it. We also recognize that Senator Obama has come up with a variation proposal that also could address these problems.
We commend the Senators and Representatives who have taken this step. This is very tough business inside the Congress. We know that. Senators Collins, Lieberman, Obama, Representatives Shays and Meehan in the House have shown real leadership in moving this issue forward.
We believe there are changes that have to occur that cannot be solved by disclosure. We believe that new restrictions are required to deal with travel, to deal with the issue of company planes. No one in America gets to fly on a corporate plane at deep‑discounted costs, with the exception of Members of Congress. Now, people get to fly on company planes. They either don't pay anything, or they pay their way. This just has become a big problem. It has to be solved in both the campaign finance laws and the ethics laws. It has to be solved by restrictions, not by disclosure.
Similarly, there is a gaping loophole in the ethics laws in the gift rules that in effect end up stopping a lobbyist from buying you a dinner, but allowing that same lobbyist to spend 25,000 or $50,000 to pay for a party honoring you at a national convention.
It doesn't add up to say we are restricting the role of lobbyists to give gifts to Members and not allow them to buy dinners or putting limits on it, when the lobbyists can go out and spend $50,000 to throw a party for a Member. I am not talking about the general receptions that are held at national party conventions. I am talking about the parties honoring specific Members that have gotten totally out of hand and that now end up costing in the hundreds of thousands of dollars and are funded almost exclusively by lobbyists and interests trying to influence Congress.
There is talk about a temporary ban on private travel, followed by a review by the Ethics Committees and potentially new rules in the coming year. First of all, we don't believe that preclearance is an approach that works for activities like travel. Even if it did work, you do not have a process, a place where that preclearance could be given in a publicly credible way.
But our biggest concern is the following. If for some reason a temporary ban on private travel is proposed in legislation, the Majority must give a commitment that any changes in the travel restrictions or rules are allowed to be voted on at the beginning of next year. If that does not occur, then we could end up with travel rules in effect for this year that aren't voted on, new travel rules put into an overall package of rules, which is simply an up‑or‑down vote at the beginning of next year, and no capacity for anyone to vote on them or for people to vote on or amend them. So if the thought here is of doing temporary rules followed by new rules next year, we believe that must be accompanied by a commitment to allow new rules to be voted on.
There are certain areas where disclosure, increased disclosure, is required. The disclosure on lobbying reports today is minimal. You basically get a total estimated amount spent in a 6‑month period in which the House was lobbied. That is it. That is the information you get. It is minimal information. If you want to do effective disclosure, one of the things you are going to have to disclose is the various ways that lobbyists provide money to help and benefit Members, because in the end that is one of the most influential things that lobbyists do.
Now, let me just take a second and read a list ‑‑ I don't think this is an exclusive list ‑‑ of the ways that lobbyists can help Members: Make campaign contributions to Members and their leadership PACs, host fundraisers for Members and their leadership PACs, raise and bundle contributions for Members and their leadership PACs, arrange trips for Members paid for by their clients or employers, arrange company planes for Members at greatly subsidized rates, pay for parties for Members such as the parties at the national convention, pay for meals and tickets to sporting events for Members, make contributions to foundations established or controlled by Members, finance retreats and conferences held by Members.
Now, that is a list of numerous ways that lobbyists can help Members. If any of those are going to be allowed to continue, then lobbying disclosure requires that information to be put on the public record. That kind of disclosure is provided for in the legislation that was introduced by Senators McCain and Lieberman, in the legislation introduced in the House by Representative Shays. I believe it is also in the legislation introduced by the House Democrats. That kind of disclosure is essential if we are going to improve transparency here.
One last point I would like to make. There is talk about including 527 reform legislation in lobbying reform legislation. We very much support legislation to close the loophole for 527 groups that was created, once again, by the failure of the Federal Election Commission to properly interpret the laws. Those groups should be living under the campaign finance laws and complying with the laws. We think what they are doing is already illegal, but we support clarifying it in legislation. We are also involved with Members in a lawsuit to try to clarify that.
We do not support putting that legislation into lobbying reform legislation. We believe 527 legislation should be considered as a separate matter in both the House and Senate.
One other point on campaign finance reform. We will work to defeat any legislation that includes provisions to gut existing campaign finance laws, regardless of what else is in that legislation. As an example, I cite to you the provision in the Pence‑Wynn proposal to exempt national parties from the aggregate limit on individual giving. That proposal would allow a single individual in the future to give $150,000 to the Republican national parties, $150,000 to the Democratic national parties, plus an additional $95,000 to State parties, but that individual would now be able to give $300,000 to the national parties, and a number of individuals give to both parties.
That is the same as soft ‑‑ as returning big soft money contributions to the system. The problem with soft money was the size of the contributions, not the name. For us, and I believe a number of other groups who work in this area, any bill that includes that kind of legislation will be turned from a lobbying reform bill to a bill to gut existing campaign finance laws, and we will do everything we can to defeat it.
I appreciate your time, Mr. Chairman.
The Chairman. Thank you very much, Mr. Wertheimer.
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The Chairman. Thanks to all of you for the time and effort that you have put into this very challenging issue. You have all talked about how daunting the task is before us. I remember thinking back to the joint committee, and I have said this time and time again as I have listened to colleagues on both sides of the aisle talk about some of the proposals that I have included there. I have said before I would be dining alone downstairs when we were looking at making changes. As I think all of you have agreed, this is not terribly popular.
Mr. Wertheimer, you were talking about the focal point of this being enforcement and the necessity of this being enforcement. I know we have had a discussion about the notion of outsiders involved. Nine years ago I joined with Lee Hamilton as our colleagues, Bob Livingston and Ben Cardin, were looking at reform here. I talked about the idea of outside involvement, and a number of people have raised constitutional questions. Both Mr. Mann and Mr. Ornstein have talked about the fact that the constitutional questions could be addressed.
As I read Professor Thurber's statement, I interpreted it, and correct me if I am wrong here, as indicating that this need to get the Ethics Committee up and moving and going is very important, and a sense that that would be an important prerequisite before we looked at any outside involvement is a correct interpretation.
Mr. Thurber. Right. If they were up and working, I don't think you would need to have an Office of Public Integrity. I think that they have failed in their job, both in the House and the Senate, and that the Office of Public Integrity could indeed send cases to the Ethics Committee, which would help them immensely in terms of staff and investigation.
So your question is, well, let us see whether that will work or they are not working. I think that there is great pressure on this institution right now to get things working. Therefore, I strongly support the Obama proposal, but also the one that is being marked up right now in the Senate before the Senate Government Affairs and Homeland Security Committee.
Mr. Wertheimer. Could I comment, Mr. Chairman?
The Chairman. Absolutely.
Mr. Wertheimer. I don't think you are going to restore reliabilities to the ethics enforcement process under the current system. I just don't think it is going to happen. We are dealing with a complete collapse at this stage. The Office of Public Integrity idea doesn't have outside commissioners for those who are concerned about it, although that is an alternative that also could work. It is inside the legislative branch, and it has both independence and checks, so that it has ‑‑ it would have the power to conduct inquiries and investigations, but an Ethics Committee, by majority recorded vote, could say, we disagree with that, but they would have to do it in a public way so that you would still have both an independent office and the Ethics Committee with a relationship to that office. But if the Director and the office felt the matter had to be looked at, and the Ethics Committee disagreed, they would have to do it in a way that they took responsibility for it.
Right now we don't have anything of that kind. I don't think you can solve this with an Inspector General's Office, although that is ‑‑ I just think you need some ‑‑ you need an entity that is independent, nonpartisanship and professionalism, who has this job and a number of other functions, by the way.
You should have a centralized place for all the reporting that goes on here. You should have an office that can give advice and counsel. You should centralize these functions. But this office would not be limited to just ethics enforcement. But if you do not deal with this, I don't know how you are going to come up with a credible solution to the problems facing you now.
Mr. Thurber. Mr. Chairman, may I add, that it is not only ethics that this office should deal with, but it is the law, the law. The statute is related to lobbying. It is both ethics internally, but it is also the law. So we are using the term "ethics" and "law" in the same way. They are two different things in terms of what is being said here.
The Chairman. Absolutely.
Let me say, as I did at the end of Ms. Haas' testimony, I know there will be lots of questions. I hope all of you will be willing to take some of the detailed questions that we might have in writing. I have asked unanimous consent that members of the committee have 30 days to provide questions to those witnesses who have been before us today. I very much would like to do that.
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The Chairman. Let me call on Mr. Diaz‑Balart now.
Mr. Diaz‑Balart. I also want to thank the five of you for taking so much of your time and for your effort. I will look forward to reading your testimony. Unfortunately, I wasn't able to be here for your oral testimony.
I just would have one question. I know, Mr. Wertheimer, I was able to hear the end of his testimony that referred to the issue of travel paid for by not‑for‑profit corporations, the 501(c)(3)s. Perhaps you have addressed it, and it might be redundant, I am sorry. But if you haven't ‑‑ or even if you have ‑ I would like to ask your opinion on that. You know, it is an issue that is very much in discussion. Do you support it, or don't you, or what is your position on travel by Members paid for by 501(c)(3)s, to all of you? Jim.
Mr. Bacchus. As I said in my statement and in my remarks, I would ideally ban all privately funded travel. I agree with my friend Lee Hamilton that if there is a public purpose for the travel, then it should be done at public expense. There may be a very limited number of private institutions that might offer legitimate opportunities for travel with a public purpose. You should look at that.
One of the things that concerns me is Members really don't travel abroad enough. I think it can be very useful to Members of Congress to travel abroad, especially nowadays, to better understand what is happening in the world. That view has been reenforced by the past decade, when I have spent so much time working with and for all of the members of the WTO. That has, in itself, broadened my understanding of the world.
I think I would have been a better Member of Congress had I done some foreign travel. I didn't take any foreign trips when I was a Member of Congress. I didn't do that because I was nobler than others or more virtuous than others. I did it because I was a Democrat in a heavily Republican district, as you certainly will recall. I was afraid of the political consequences. I was afraid of the thirty second add.
In 1993, NASA came to me and said, we want you to go over to Russia and kick the tires of the Russian space program, because we are going to be working with them more closely, and you are one of our strong advocates on the Hill, and we would like you to have a better understanding of what they are doing so we could have a better understanding of what we should do. They were right about that, but I didn't go because I was apprehensive about the consequences back home of having gone.
I think these kinds of things need to be factored in. Abuse by a few makes it more difficult for all the many who don't engage in abuses to do the right job for their constituents.
Again, I stressed before, and I would stress once more, Congressmen, that I would urge all of you, whatever you do, to try to find a bipartisan approach, because more than any of the details on what you do on travel or anything else, the fact that you take a bipartisan approach, I think, will do more than anything else to assure Americans.
Mr. Diaz‑Balart. [Presiding.] Mr. Wertheimer.
Mr. Wertheimer. We are also with former Congressman Hamilton, but I would say this. If you ‑‑
Mr. Diaz‑Balart. I don't know where he is.
Mr. Wertheimer. Yes, he is for a ban on private travel. But if you are going to allow exceptions, you have to do it very carefully to prevent abuses. That is the difficulty with exceptions.
Mr. Abramoff's trips that he financed through his clients were paid for by a 501(c) organization that did not lobby, in my knowledge of this. So once you start looking at exemptions for 501(c)s, you have to do it in a very narrow way, or else you are going to open up the kinds of problems that have happened in the past.
The Chairman. Mr. Thurber.
Mr. Thurber. Yes. I take a more moderate position. I think it is very important for Members of Congress to investigate issues. If, for example, they want to go to the Palouse in the State of Washington to see about a problem with the dams there, and a 501(c)(3) organization, Washington State University, wants to pay for it, it is a university, and it is bipartisan, and it is precleared, I say, don't ban it.
I am not for a ban on 501(c)(3) travel. Remember, we have 4,000 universities in the United States. Many of them have aircraft. They fly Members out to their universities to find out about research and other activities.
What I want is a bipartisan approach to the travel at preclearance, make sure that both parties are part of this, and that it is truly an educational event rather than gaming the system to go out and play golf or to ski or something. So I am not for banning it.
Mr. Diaz‑Balart. Mr. Miller.
Mr. Miller. I would personally oppose the ban on travel. I think 99.9 percent of these trips are very valuable to Members and constituents, you know, on these issues. I think the question becomes of transparency. How do you make these travels or these trips more transparent to the general public? Do you make the Member of Congress and/or staff vet them through the Ethics Committee, do you make that mandatory, do you make the person who is offering that trip or the nonprofit who is offering that trip go through the same scrutiny? You submit travel vouchers. How much does it cost? What are you going to be attending? What kind of seminars are you going to be going to, travel and all of that. You submit that to the Ethics and let the ethics committee, again, in a bipartisan way, deem whether that trip is necessary or not.
Mr. Diaz‑Balart. Dr. Ornstein.
Mr. Ornstein. Let me first say that the preclearance issue I have grave doubts about. The Ethics Committee as it is currently constituted, given the staff that it has, the idea that Members get a free pass if they get things precleared, with a small staff that will do a cursory examination of who is paying for the trip ‑‑ and that is what has happened in some of these trips in the past, where money was channeled through, really laundered through, 501(c)s ‑‑ it is just not going to work. It will never work with the staff that is there.
It might work differently if you had an Office of Public Integrity with a very substantial staff, and you could really do a serious vetting. But I am just very skeptical of that. In an ideal world there would be no privately funded travel. Trips that Members take which are of a public purpose should be funded for by taxpayers; that is, whether it is a trip abroad, or a trip to a plant to inspect it, or a trip to a conference, and you should be able to defend it.
Now, I think the practical reality is that for decades, partly because, frankly, we had a press corps that, every time we get the travel disclosure forms out, would write these thumbsucker stories about junkets, didn't matter who was taking the trip or where they were going, it was easy to bash Members of Congress like pinatas because they were traveling abroad. That contributed, I think, to a serious deterioration of public dialogue and of the knowledge of the Members of Congress. Many would not travel because of a fear that would be used against them politically.
Post‑9/11, that is not as big a problem. I think it is not difficult for a Member to defend a trip almost anywhere in the world now, because we are now aware that even small, out‑of‑the‑way places actually can have links to evil people trying to kill us.
But having said that, I think the practical reality is you are going to get a lot less travel if you only have public funding. So I am not averse to having some nonprofit groups. I must say, having spent most of my career in academic, nonetheless, the fact that universities offer travel and have planes, when I see the academic earmarking that is going on around here, I think the lobbying done by universities is as substantial as almost anybody else. I am not sure I want to give them a free pass. But there are trips run through nonprofit organizations that have very legitimate educational purposes.
What you do need to do, it seems to me, preclearance or not, is to make sure that if any 501(c) is used as a conduit for funds, from lobbyists, from corporations, from others, that there are stiff penalties, really stiff penalties, for those who let their organizations be used that way. It has been done. I believe Mr. Abramoff and others have done it. It is too much of a temptation, if you leave open travel by 501(c)s, to have 501(c)s created for purposes of laundering money through or used in that fashion.
Mr. Diaz‑Balart. Thank you very much.
Ms. Slaughter.
Ms. Slaughter. Thank you, Mr. Chairman.
Jim, it is awfully nice to see you again. I am probably the only one who served with you. You were a very distinctive Member, and I miss you.
I know you are not here representing Greenberg Traurig, but, nonetheless, I know you were a founder of the firm, and you have been away for 10 years, but nonetheless I have got to ask these questions of you.
In 2.5 years, Jack Abramoff brought that farm; $33,200,000 in lobbying fees in just 2‑1/2 years. Is that normal? Do all of your lobbyists bring in that kind of fee?
Mr. Bacchus. I was successful with the firm.
Ms. Slaughter. Yes.
Mr. Bacchus. But there were others in the firm.
Ms. Slaughter. Lobbyists that do that well.
Mr. Bacchus. Others, lawyers who lobby and don't lobby, who do as well in terms of bringing in business to the firm. As I mentioned, our law firm at this point has 1,500 lawyers and other professionals. We have 27 offices. We have affiliations throughout the world. On a calendar year, we are a private company, but according to American Lawyer and the National Law Journal, in our overall gross receipts we are among the leaders in the country. So his overall production for us was a small part of our overall firm, and even a small part of our overall Washington office, which is largely an office of lawyers who don't do much or any lobbying.
Ms. Slaughter. Well, that answers my second question. I was curious as to why no other lobbyist ever said to any of the managing partners, what is it you think Jack Abramoff is doing over there getting that kind of money from Indian tribes? But if they are all making the same amount of money, it wouldn't show up.
Obviously ‑‑
Mr. Bacchus. He did very well as a lobbyist. I wouldn't want to minimize that.
Ms. Slaughter. He did very well because he had friends here who helped him.
Mr. Bacchus. I really was not involved in Mr. Abramoff's doings, so I don't know how he did what he did.
Ms. Slaughter. But one of the things I understand he did was he instructed his clients to pay half to you, and half to some kind of a charity or something that Scanlon ran. Is that common?
Mr. Bacchus. No. That is not common.
Ms. Slaughter. Then nobody ever noticed that.
Mr. Bacchus. Mr. Abramoff confessed to certain crimes. If you look at his confession, you will find that among the things he confessed to was defrauding our law firm. I think it is unquestionably so that his greatest victims were a number of our clients. We regret that very much, and we have tried to fulfill our obligations to all of our clients, but our law firm was also a victim of Mr. Abramoff.
Ms. Slaughter. Probably ‑‑ I am sure you didn't do anything about the little place he had down at Rehoboth where he laundered money to people like Mr. Reed, Mr. Ralph Reed and others. You did not know that was going on?
Mr. Bacchus. I don't. I didn't. I don't think I have ever met Ralph Reed. My recollection is he wasn't too fond of my politics.
Ms. Slaughter. I bet.
Well, you know, again, I know you weren't there, and I know you to be a thoroughly ethical man.
But while I ‑‑ in my view, Abramoff is a symptom; the disease is here. I think that there must be far more lobbyists than Abramoff that we just don't know about. But what they do in the Northern Marianas and the Members of Congress who helped him with that I think is a pretty awful thing.
Let me ask Mr. Miller about that. I certainly appreciate your testimony. I think you had some pretty good ideas for us today. But was there anybody in your association or anything who ever thought that this man might be doing things that we consider unethical?
Mr. Miller. He has never been a member of our association, never has been.
Ms. Slaughter. Okay.
Mr. Miller. If I could follow up on one question you just asked about fees, yes, Mr. Abramoff charged some outrageous fees. I think everybody in this town will agree with that. I don't think anybody else is doing that, but I also have to put the onus on the folks who are paying him. They have the responsibility to interview those folks who they want representing them here in Washington.
If they are just going to take one man's word for it, then I don't have a lot of sympathy for them in that regard. Yes, he broke the law so I do have sympathy for them in that regard, but I think they have to do a better job of due diligence when they hire people in Washington to make sure that they meet the standard. And the hundreds of thousands of dollars he charged every month in Washington is not typical.
Ms. Slaughter. What is typical?
Mr. Miller. It ranges depending on size of the client and the issue and the amount of hours you are going to have to put in, but I would say a ballpark is anywhere from $5,000 to $25,000 a month.
Ms. Slaughter. Since the K Street Project, I don't see anybody unless they come down from the District. I am not sure what they are doing.
Let me agree with all of you. There is no reason for lobbyists to give us gifts. A lobbyist is supposed to give us information, as far as I understand. That is it. Frankly, if we ban them, that is fine with me. I don't partake of that anyway.
Which brings me to another thing. Somebody at your firm must have noticed that he was taking Tom DeLay and other people on golfing trips to Scotland without it being really a legal thing to do, but nobody said a thing.
Mr. Bacchus. Well, I don't happen to play golf, Congresswoman.
Ms. Slaughter. Me either, I don't either, don't dare much either, once a year.
Mr. Bacchus. I wasn't on that trip.
Ms. Slaughter. I know. I am sure ‑‑ I don't mean to throw around your neck what I consider extraordinary shortcomings of your firm.
Mr. Bacchus. Our firm discovered the transgressions of Mr. Abramoff, to the best of my knowledge, at the time that everyone else did, by reading about them in the newspaper.
Then I believe the record will reflect that our firm hired outside counsel to conduct an independent investigation. When the leadership of our firm learned that Mr. Abramoff had been lying to our CEO and others about his relationships with Mr. Scanlon after you read about Mr. Scanlon and the allegations in the newspaper, Mr. Abramoff was asked to leave the firm, and he did.
Since that time our law firm has done everything we possibly can to compensate or clients, to cooperate with committees up here and others who are investigating this matter. I believe I am correct when I say that the only reason that everyone has had the opportunity to read all of Mr. Abramoff's e‑mails is because we gave them voluntarily to folks over on the Senate side. I apologize if that is not correct, but that is my understanding.
Our law firm has tried very hard to do the right thing in the aftermath of all of this, but as I said, we are among the victims of his fraud and his deceit. Any one of us can be victimized.
From time to time, Members of Congress violate the law. I recall when I was a Member how embarrassed I was when someone would do that. I would be tarred by guilt by association. There are one or two Members of Congress here recently who have had some problems. That doesn't reflect on you, because I, too, know you to be thoroughly ethical.
Ms. Slaughter. I think it does. My concern is I think the public sees it as all of us.
Mr. Bacchus. It affects your credibility and your legitimacy, not your personal integrity. I know it is painful to you because I know you, just as it is painful to me.
Ms. Slaughter. I regret it for my country.
Mr. Bacchus. It is painful to me after a lifetime of public service, after my integrity has never been impugned, to have to answer questions about Mr. Abramoff, whom I barely know.
But I am here to answer your questions to the extent that I can. Our law firm is comprised of good and honest people who try every day to do their best, to do the right thing in the right way, and we are going to try even harder in the days to come.
Ms. Slaughter. I hope so.
Dr. Ornstein.
Mr. Ornstein. Ms. Slaughter, I think, actually, while some of Mr. Abramoff's clients were victimized, the American people are the victims here. But more than that, some of his clients were not victimized. They paid money, and they got lots of benefits for it. E‑Lottery paid them a good deal of money, and they managed to block a bill that would have banned gambling on the Internet. Firms in the Northern Marianas Islands paid him a lot of money, and that worked for them to be able to send goods here that said "Made in America."
I think what Mr. Abramoff did was to recognize, given the size and scope of the Federal Government now, the size of goods and the amount of money that is sloshing around out there, that instead of the way lawyers traditionally operated, for an hourly fee or a modest retainer with more if you could do more work, they would go to people and basically say, I will get you $100 million in benefits if you give me 10 percent or 15 percent. It is a little bit similar to the personal injury lawyers recognizing that they can do things with class‑action lawsuits, and it has worked.
Now, it worked for Mitchell Wade and the other people who were involved with Duke Cunningham to said, geez, I can get a $150 million defense contract if I give him $2 million. That is a problem that gets back to the nature of earmarking, defined broadly.
As long as individual Members are given the ability to direct hundreds of millions or billions of dollars in funds to different places, lots of people, whether it is universities deciding that they want to get their piece of the research action, or defense contractors deciding that they want to get things channeled in their way, that has led to, I think, a very major distortion of the legislative process. We are not getting decisions made on the basis of costs and benefits of the society or who can do them best in the way that we ought to.
We have seen, with Mr. Abramoff and with Mr. Cunningham, a window opened into a reality that it would be nice ‑‑ many of us would like to see a smaller Federal Government. As long as we have got one that has this power and this money, we are going to have to constantly be on guard to a new reality that you don't ‑‑ you know, you bribe somebody with a couple million dollars, you can get an untold benefit. We can't let that sort of thing happen.
Ms. Slaughter. I think one of the most astonishing things was that Congressman Cunningham had a little piece of paper with a seal of the House of Representatives on it where he told everybody how much it cost to bribe him for whatever it was they were interested in.
But going back to the Pentagon contracts, it is worth it to try to find out where they came from. For most of us in the House, it is very difficult to live with the notion that 80 percent of the Marines that died in Iraq would have lived if they had the proper armor. One small company in Ohio ‑‑ I don't know how they got that contract, but we are trying to find out ‑‑ was unable to perform and got that contract.
This is going on ‑‑ again, what I said, we are going to do the most awful thing next week to benefit the food industry. We are going to take away restaurant inspection, milk ‑‑ not put anything on any labels that anyone might be allergic to, no hearings, no nothing, and everybody loves it.
I think the process is broken here. I am concerned about the lobbyists, and I am certainly concerned about the kind of money that they are paid. But it is what you pointed out, what is happening to the American people who lose every time these other folks win. It is absolutely ‑‑
Mr. Miller. Congresswoman, could I add something to the gift question? I think we are talking about two things, gifts and meals. If Members of Congress want to ban gifts, I think they have to be fair about this. They have to ban all gifts.
Ms. Slaughter. Fine.
Mr. Miller. That includes the 14 current exemptions. If I am a friend of a current Member of Congress, I can give you any gift I want. But if I am a lobbyist, I can't do that. So if you are going to ban gifts, you have to ban them all. That includes the 14 exemptions. But I think what we are also talking about is real gifts, the watches and things that maybe Mr. Cunningham got in return for favors.
Ms. Slaughter. He got $2.5 million worth.
Mr. Miller. Exactly. But what we are talking about ‑‑ but the lunches that we are taking congressional staffers or even a Member of Congress out for, that is not part of the problem in the system. The part of the problem in the system is those gifts that Mr. Cunningham may have gotten. It is not the lunches that is doing any harm.
Ms. Slaughter. But a lobbyist's job is really to impart information. Why do you have to do that over food?
Mr. Miller. That is correct. Because your offices are so busy each and every day, to get a quiet meeting where the phone is not ringing, where there are not six or seven people in your lobby where you have to meet sometimes in the hall.
Ms. Slaughter. You may be right.
Mr. Miller. It is an opportunity for us to go down to the cafeteria or off the Hill to maybe Tortilla Coast or some other restaurant like that.
I am not saying they are all like that. I am saying, yes, some people have abused the system by going to fancy lunches each and every day, but even a $100 limit per year, that is reasonable. To buy somebody a coffee or a cheap breakfast or lunch gets you a lot more time to really get in detail about the issues that are impacting your clients or your constituents perhaps.
Ms. Slaughter. As I said, the lobbyists of the K Street Project don't come to see us anymore, so I am not overwhelmed.
Dr. Thurber.
Mr. Thurber. Yes. I would like to add to the discussion of mine and Members of the Congress that we are not only talking about Members of Congress. Most lobbying in Washington, D.C., is done with the executive branch, and most of it is nontransparent.
Let us take the case of Boeing Aircraft, in the State of Washington, when it attempted to have a sole‑source $18‑ to $23 billion lease agreement with the Air Force for tankers. Most of that activity was an activity related to the executive branch. Every department has really thousands of people advocating policies every day. Much of Abramoff's work, in fact, for the Indian tribes was not even done up here. It was done in the Department of Interior.
Let us broaden this and make sure that you don't bash Congress for having problems here, but get to the issue of lobbying with respect to the executive branch. With respect to earmarks, everyone has been talking about spending earmarks, right, appropriations, but there were over 6,000 earmarks in the transportation bill, 7,000 on the energy bill. There are all kinds of earmarks associated with tax bills and other authorization bills.
If you deal with transparency on earmarks, and you all have the right to have earmarks, because you have the power of the purse here, but if you deal with transparency on earmarks, be sure that you deal with spending as well as tax, as well as authorization, especially at the conference stage, where they have not been considered in the other body, and there should be a special vote on those. It should be transparent, and it should be associated with a Member of Congress and justified, and an amount of time to consider it by everyone before it is slipped into the bill late at night.
Ms. Slaughter. We had that slipping in the defense bill just before Christmas, when they indemnified everybody, and the thing to do with avian flu, which had nothing to do with what we were doing.
Let me ask Mr. Miller again, given so few Members, the lobbying fraternity file, do you not have any oversight or requirement of your Members to file?
Mr. Miller. I disagree with that so few file.
Ms. Slaughter. I have heard 5 percent.
Mr. Miller. File their forms?
Ms. Slaughter. Yes.
Mr. Miller. I would disagree with that. I don't know the actual number, but I can't believe that only 5 percent ‑‑
Ms. Slaughter. But you heard Professor Thurber. He tried to find out how many complaints were filed, and he couldn't.
Mr. Miller. But that is just through the Justice Department. I think the Clerk even said there were some 16‑ to 20,000 reports filed already. I would disagree with the number that only 5 percent file their forms.
Ms. Slaughter. You have no mechanism, though, in your association.
Mr. Miller. No, we don't. That is one of the things, you know, maybe we need to think about. Maybe we need an independent commission here to talk about ethics and auditing the lobbying profession. Maybe what we need is an organization to set up our own ABA‑style type of committee reviews, audits and reports for lobbyists. But again, we represent about 750 members of the entire community, so you would have to require everybody to become a member of our organization for us to be able to police everybody, and that would require resources.
Q Really, 750 out of 35,000.
Mr. Miller. See, I disagree with the number 35,000. If you talk to Debra Mayberry, who puts together a book ‑‑
Ms. Slaughter. And the number registered is what?
Mr. Miller. The number I have been told is 11,500.
Ms. Slaughter. We were told there were 500 when Clinton left, and 34,000 ‑‑
Mr. Miller. That is part of the problem. If you look at the Senate database, they will tell you there is not a good calculation, because you count people who get married and change their name, you count people who are deceased, you count people who are retired, and you count people who may be registered as Paul Miller or Paul A. Miller, II.
Ms. Slaughter. But if we accept that number, it is atrocious.
Mr. Miller. But I have to ask that question, why is it wrong?
Ms. Slaughter. Why is it wrong? I think it is so excessive that it doesn't make any sense, to tell you the truth.
What do you think about writing these bills, lobbyists writing the bills?
Mr. Miller. I don't necessarily see it as big a problem as you see it. I think the experts that you are asking, talking about these issues of Medicare bill ‑‑ I know that is probably not a good one to use because ‑‑
Ms. Slaughter. Oh, it is a great one.
Mr. Miller. It is not.
Ms. Slaughter. It was written by the industry.
Mr. Miller. But it is on both sides. There are experts on every ‑‑
Ms. Slaughter. On what?
Mr. Miller. The Republicans and Democrats ‑‑
Ms. Slaughter. Democrats weren't in the room. Lobbyists in were in the room.
Mr. Miller. But in the past Democrats were in charge, and the Majority too, and they have asked lobbyists to help them write pieces of legislation.
Ms. Slaughter. They were actually in the room writing it?
Mr. Miller. I can't say that.
Ms. Slaughter. As they are now?
Mr. Miller. I would venture a guess yes. If people are being honest with you ‑‑ I don't see it as a bad or negative thing, because you are asking experts to help you write legislation that will help impact ‑‑
Ms. Slaughter. Let me tell you why that is a bad thing. We were elected by our constituents to come down and write those bills to their benefit, not to yours or to anybody that is paying you to come to tell me you think this would be a good thing.
Now, you do have every right under the first amendment to come and tell me how you feel about it, but if I am only hearing your side of the story, that is crazy. If I invite you in to write the thing, I have sold out my responsibility. I am no longer a Member of Congress in good standing, as far as I am concerned. I am simply your lackey and doing what you want me to do, which is precisely what we see happening.
Mr. Miller. I agree with you. I think you should take input from both sides, but don't just discount those folks in our profession who will be able to help you, who are experts in the area from both sides, from supporting an opposing view.
Ms. Slaughter. There is a difference from giving me your opinion and writing the bill. There is a major difference.
Mr. Miller. I don't think you can make this a Republican or Democratic issue. I truly believe, when you talk to Democrats who were in power back then, it happened then, too.
Ms. Slaughter. I have been here 20 years. I have never heard of any Chair of any committee calling the Capitol Police to discharge the Republicans from the library as has happened to Democrats. I have never heard of anything like Charlie Rangel and Marion Berry trying to stand outside the door of the Ways and Means conference trying to get in and couldn't.
Let me tell you, we are out of control here. I tell kids every time when I go talk to them, whatever they teach you here about how a bill is passed, you can just forget it. We don't do that anymore.
I want it back. I want the lobbyists under control. I don't have any reason to believe anybody needs 63 people coming at them to talk to them.
It is so one‑sided. How could you possibly ‑‑ if you have all of those lobbyists, how do you get the voice of the people in? I do it by going home every weekend and talking to them.
But, good grief, I tell you, I am headed up to here with these bills that are going through here, written by special interests, and that are hurting this country badly and are costing every man, woman and child in the country.
Mr. Miller. But all of your constituents can't spend as much time up here as you are back home. For them to come here and actually have their voice heard with you, they would have to quit their jobs and spend a lot of time here. That is the value we serve. We do it for them.
Ms. Slaughter. I still say you only give one point of view.
Mr. Miller. I disagree with you.
Ms. Slaughter. One that you are paid to give.
Mr. Miller. I disagree with you.
Ms. Slaughter. You give me both sides of an issue?
Mr. Miller. If you are doing your job. Most of them do a very good job. The first question out of their mouth is, who opposes this? If you are not going to give them that point of who opposes you and why, you are not doing your job. I would put that onus on us.
If we are not doing that ‑‑ which I don't believe in most cases is happening ‑‑ we are doing that. One of the first things we do is research the opposite side of our issue. We only have success if we are going to do that.
Ms. Slaughter. But then you are only 750 out of 34,000.
Does anybody else want to comment? Dr. Thurber.
Mr. Thurber. One quick thing, because I was at one point referring to the number of firms that do not register. We don't know exactly how many there are. Then I was referring to the number of cases that have been referred to the Department of Justice, and there is no evidence that there has been any prosecutions or anything associated with those.
But what I would like to say is that my estimate is there is over 100,000 people in the lobbying industry in Washington D.C., if you include all forms of lobbying, grassroots, top roots, direct mail, coalition building. Then a little bit of it is meeting you and your staff, as well as PR firms. What are they here for? They are here to change public policy. So you have about 200 people per Member.
Ms. Slaughter. For each one.
Mr. Thurber. In the advocacy business in Washington D.C.
Ms. Slaughter. Mr. Miller is correct.
I have one more thing I want to say, please, and I want to agree with you, all of you, that the ethics idea is broken. We talked in the 1990s about having retired Federal judges or Members, but I don't think that we are going to be able to survive here. As you know, at the beginning of the term, the process was gutted. Even though the public outcry forced that to be reversed, they won't anyway, because we are in our 50th month here, and they are still not running. Thank you.
Mr. Diaz‑Balart. Thank you very much.
I just want to, before turning it over to my good friend Mr. Hastings, say I have been here 14 years. I have been involved in a number of legislative processes ‑‑ is it working now? The button here is different.
Mr. McGovern. It rings Louise's phone.
Mr. Diaz‑Balart. I have been here 14 years, and I have been involved in a number of legislative projects and have been able to draft a number of pieces of legislation that have been passed in the foreign policy area and immigration area and others. Never has there been a lobbyist in the room while I have drafted legislation. So the idea that somehow it is commonplace or common practice for lobbyists to draft legislation or be in the room, I just want to make sure ‑‑ I just want to state for the record that someone who has been here 14 years, that is not common practice nor commonplace.
I think it is important for the facts to be known.
Mr. Miller. May I comment ‑‑
Mr. Diaz‑Balart. You may. Actually I want to yield to Mr. Hastings because I want to make sure everyone has an opportunity.
Mr. Hastings.Cont'd page 4
*all testimony in .pdf format
