January 29, 2019

January of every odd-numbered year is a special season in Washington. Dozens of members of the House of Representatives and a handful of US Senators enter the private sector job market, after either retiring or losing re-election.

And one by one, they announce their jobs as lobbyists.

It’s perhaps the most blatant case of legalised corruption in Washington: the revolving door through which America’s elected officials and high-level appointees cash out to become millionaire lobbyists or consultants for special interests who are seeking to game the very system those same public officials helped create.

This year has seen the usual cashouts — a handful of members, almost immediately after leaving office, announcing their new jobs at lobbying firms. Former Representative Dave Reichert (Republican), was chairman of the Trade subcommittee on the tax-writing Ways & Means Committee. His term ended on 3 January. Already, he has joined a lobbying firm where he will be “advising the firm’s clients on trade issues”.

Akin Gump, a lobbying giant, announced three days after the 115th Congress ended that it was hiring former Representatives Ileana Ros-Lehtinen and Lamar Smith. The firm bragged that Ros-Lehtinen was the first woman to chair the House Foreign Affairs Committee, and she asserted that she would “absolutely” be lobbying for foreign governments. From shaping America’s foreign policy to lobbying our government on behalf of foreign governments — it’s the American Dream!

Plenty of others will follow their lead. If things proceed as they have in most recent years, then about half of the 100 departing House members and about half of the 10 departing Senators will go into lobbying.

But already 2019 has also witnessed a couple of extraordinary revolving-door moments — extraordinary because the politician didn’t seem to wait to leave office before firing up the lobbying work.

Congresswoman Lynn Jenkins had her lobbying firm already up and running even before she even left Congress. On 20 November — two weeks after Election Day, and six weeks before her term ended, Jenkins posted on Facebook: “I’m pleased to share that I have recently established LJ STRATEGIES, LLC, a consulting firm providing strategic analysis, comprehensive federal and state government relations, political consulting, and association management.”

“Comprehensive federal and state government relations” means lobbying. Of course, Jenkins couldn’t work for LJ Strategies while serving out the end of her term, but the firm bearing her initials was incorporated while she was still voting on and debating spending bills and other measures that could affect her firm’s future clients.

Running the firm while Jenkins was still in Congress was her longtime congressional chief of staff and former campaign manager Pat Leopold. Federal law bars the ex-Congresswoman from lobbying Congress for her first year out of office, but her lobbying partner and former chief of staff has no such restrictions on him. In fact, Leopold is allowed to lobby Jenkins’ successor, Republican Congressman Steve Watkins, whose campaign Leopold managed last year.

Jon Kyl provided the other extraordinary story.

Kyl, a conservative Republican from Arizona, served four terms in the House before winning a Senate seat in 1994. He served three six-year terms in the Senate before retiring after the 2012 election. That’s when he joined the mighty lobbying firm Covington & Burling. After the two-year cooling-off period federal law imposes on ex-Senators, Kyl began lobbying for clients such as weapons giant Raytheon, drugmaker Merck, and brewer Anheuser-Busch.

In September of last year, after the death of Senator. John McCain, Kyl left Covington to return to the Senate, appointed by Arizona Governor Doug Ducey to serve until a 2020 special election. “Mr Ducey’s aides indicated [Kyl] would sever ties to his clients,” the New York Times reported after the appointment.

But Kyl resigned his seat after just a few months, which wasn’t unexpected, and is already back at Covington & Burling. So while Kyl served as a US Senator, his lobbying firm was apparently keeping his lobbying job open for him.

Even in the swampy world of Washington’s revolving door, this was a remarkable conflict of interest: a lobbyist took a leave of absence from lobbying in order to serve briefly as a US Senator.

The defining trait of this year’s big cashout, though, seems to be that there are more retiring Republican politicians than there are lobbying jobs for all of them. “[M]ore than 60 Republicans exited the House this month,” Politico reported mid-January, “and so many of them are considering heading to K Street that not all of them are likely to find work, according to interviews with lobbyists and headhunters.”

Trying to find work is never fun, but former congressmen and Senators having trouble monetising their public service aren’t going to elicit a great deal of sympathy. A vast majority of Americans favour further restrictions on lobbying by ex-members, beyond the current one-year and two-year limits.

A full 86% in a 2017 poll found support for extended no-lobby periods. Pollsters also presented respondents with an argument against such restrictions. They pointed to the risks of the career and said, “If we cut off [the option of lobbying after retirement], it will discourage people from going into government for fear they may end up with highly limited career options.” Only 26% found that argument convincing.

Why is the revolving door corrupting? There are plenty of reasons. For one, consider the incentives it creates. On the simplest level, politicians and their staff have a personal incentive to play nice with industry and with lobbyists.

Jack Abramoff, the notorious convicted lobbyist from last decade, explained how he and his lobbyists would foster relationships with top staffers, taking them to baseball games in their luxury box suites, and other perks. Half of the point was to show off the wealth a lobbyist has. At some point, the lobbyist would say to the staffer: “By the way, if you’re ever looking to leave Congress, give us a call, you’d fit in well at our firm.”

From then on, even though the staffer still officially worked for the Member of Congress — and thus for the people — Abramoff had the staffer doing his bidding.

The knowledge that a lobbying job is waiting for them when they depart alters the behaviour of politicians and their staff—and thus it alters the shape of our laws. The Democrats’ top two legislative accomplishments of the Obama era, for example, were the Affordable Care Act (Obamacare) and the Dodd-Frank financial regulation law. Neither was “socialism”, in that neither took any functions (and thus opportunities for profit) away from private corporations. Instead, both laws entangled the private sector and the government in a more intimate embrace — more regulations, more subsidies, more mandates. Both laws also made things much more complex for industry. Finally, both laws left incredible discretion to the executive branch agencies on how to implement them.

If staffers and politicians had crafted the laws solely to maximize their own value on the lobbying and consulting marketplace, they wouldn’t have done it much differently from this.

After these bills became laws, insurers, hospitals, drugmakers, banks, and hedge funds all relied much more on the clout and insight of former lawmakers and their staff. Sure enough, we got the Great Obamacare Cashout and Great Dodd-Frank Cashout of 2010 through 2013.

Chris Dodd, one of Dodd-Frank’s cosponsors, saw his chief counsel Amy Friend cash out a few months after the bill passed. In the words of the firm that hired her, Promontory Financial, Friend joined a firm to help financial-sector clients navigate “the regulatory implementation of the Dodd-Frank, Wall Street Reform and Consumer Protection Act of 2010, which, at 2,300 pages, is one of the most complex and wide-ranging overhauls of the financial regulatory framework in decades”.

More complexity, more business-government entanglement, more opportunity for that lucrative post-congressional work.

The Great Cashout of 2019 is barely underway. It will continue through the Spring. Don’t be surprised to see the firms who scoop up top staff and lawmakers brag about these public servants’ role in shaping America’s byzantine regulatory and tax structure.

Reform is unlikely. There are currently a few bills before Congress to extend the current 1-year or 2-year lobbying bans to lifetime bans, and to expand which officials are covered. But nobody really expects Congress to curb its own ability to make a good living — a good living they believe they are guaranteed by the First Amendment, and have earned through their “public service”.

So while the capital region grows richer, government grows more complex, and public distrust in Washington skyrockets, the revolving door continues to spin smoothly: perfectly legal, while perfectly corrupt.

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