Class News

Stuck in the Revolving Door

by Bob Kaiser
The Washington Post
January 30, 2009

Of all the grand ambitions laid out by President Obama, the nerviest might be his promise to transform American politics. What if U.S. government officials really accepted his definition of public service as "a privilege" that is "not about advantaging yourself," your friends or their clients? Could it actually happen?

Not easily. Washington is broken: Lobbyists and special interests have turned our government into a game that only they can afford to play. They write the checks, and the citizenry gets stuck with the bill. Politics is no longer a mission; it's a business.

Says who? The same Barack Obama. These grim judgments were all uttered by Obama during his 21-month campaign for the presidency. Though he arrived in Washington only four years ago, Obama quickly figured us out. Like a good anthropologist, he has mastered the corrupted culture of political Washington. Whether he can conquer it is another question.

Modern Washington takes for granted the exploitation of public service for private gain. Thousands of former government officials have passed through the well-greased revolving door to corporate offices and lobbying firms that hire them for their ability to influence the people and policies they knew about or worked on as public servants. This influence-peddling has often distorted public policy to favor special interests and the wealthy. Over the past four decades, Washington has become an important venue for the great American pastime: not baseball but making money.

No, it hasn't always been this way. Forty years ago, lobbying was the work of a small group of lawyers and fixers; today, it is a multibillion-dollar industry involving thousands of people, including nearly 200 ex-senators and former House members from both parties. The new lobbyists' customer base has burgeoned since the 1970s as the reach of the federal government has extended into nearly every corner of American life, convincing individuals, companies and institutions across the country that they could benefit from hiring an influence-peddler in Washington.

When asked to explain why lobbying had grown so dramatically during the four decades in which he has thrived in the business, Robert Strauss, the former chairman of the Democratic National Committee, had a simple explanation: "There's just so damn much money in it."

The money doesn't all go into the pockets of lobbyists. Much of it is recycled to politicians, something that has transformed the nature of electoral politics. Even as Obama was marching toward his decisive victory on a "reform" platform last November, the cost of Senate races broke records. The contests in even medium-sized states such as North Carolina, Colorado, Minnesota and Oregon consumed nearly $40 million each. Compare that with 1974, when the total spent by every candidate for the House and the Senate ― the contestants for 435 House seats and the 34 Senate seats ― was just $230 million, in today's dollars. In that quaint era, before television commercials dominated political contests, the average winning campaign for the Senate cost $1.3 million, again in today's dollars. Obama himself set a record for spending on a presidential campaign ― nearly $800 million.

Our politicians' reliance on lobbyists and special interests for campaign contributions has practical consequences. On the campaign trail, Obama spoke of "the pharmaceutical companies that get to write our drug bills, while the price of prescriptions skyrocket for the rest of us."

That's no exaggeration. Lobbyists for the pharmaceutical firms really did write the 2003 bill that created a drug benefit for all Medicare recipients, according to Rep. Walter B. Jones (R-N.C.), a participant in the process. The bill was generous to the drug companies. For one, it did not allow the government to negotiate with drug makers over the prices to be charged under the plan, something the Veterans Health Administration routinely does when acquiring drugs. Drug companies' employees and their political action committees (PACs) gave tens of millions to members of Congress for their campaigns; two-thirds of the money from 2000 through 2006 went to Republicans, according to the Center for Responsive Politics.

Money talks in other ways, as Rep. Charles B. Rangel (D-N.Y.), the new Democratic chairman of the House Ways and Means Committee, discovered in 2007. Rangel proposed closing a loophole that had allowed executives of hedge funds and private equity funds to treat their income as "capital gains," so it would be taxed at 15 percent ― far less than most Americans pay in income tax.

The affected interests fought back. Spending on Washington lobbying by hedge funds, private equity firms, investment banks and their industry trade associations jumped from $3.8 million in 2006 to more than $21.4 million in 2007, according to the Center for Responsive Politics. The executives and their allies increased their campaign contributions to congressional campaigns fourfold, to nearly $11 million. Much of this money was directed to the Democratic Senatorial Campaign Committee, chaired by another New Yorker, Sen. Charles E. Schumer. Rangel's proposal never came to a vote. (Rangel has his own ethical challenges; the House ethics committee is currently investigating his personal finances and fundraising.)

The methods the hedge fund managers used to fight off Rangel's proposal have been standard operating procedure in Washington for years. They are legal if unsavory. Jack Abramoff ― the central figure in the biggest lobbying scandal of modern times and now a resident of the Federal Correctional Institution in Cumberland, Md. ― described them concisely. "I participated in a system of legalized bribery," Abramoff told acquaintances after he got into trouble in 2004. "All of it is bribery, every bit of it."

Raising and spending large quantities of money for campaigns not only distinguishes the modern era from all previous periods of American history, it also gets in the way of governing. "It's now basically all money," said Sen. Christopher J. Dodd (D-Conn.) told me. He had just come from the weekly luncheon meeting of the Senate Democratic caucus. "Almost the entire luncheon was devoted to money" and how to raise it, he told me. "When I first came [to the Senate in 1981], these lunches were a place for great debates and discussions. . . . They were wonderful moments. I don't want to sound melodramatic, but the republic's at risk ― truly at risk because of this."

Obama obviously understands the tenacity of the political culture he has inherited. This was evident in his early executive order on lobbying, which includes a serious attempt to slow the "revolving door" that has carried so many former government officials into the ranks of the registered lobbyists. His appointees, Obama said, will have to sign an agreement that precludes them from later becoming lobbyists who try to influence his administration for as long as it is in office.

But slowing the revolving door will not be nearly enough to dismantle the Washington culture of money, lobbying and self-dealing that has metastasized over four decades. This culture has created multimillionaires and provided a grand style of life to thousands. It has helped moneyed interests protect their status and privileges, undermined government regulation of business and turned our elected officials into chronic money-chasers. Real reform will require more than presidential fiat.