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.
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Document: Slipping Through Congress's Revolving Door
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.”
Original Article
Source: dealbook.nytimes.com/
Author: ERIC LIPTON and BEN PROTESS
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