The Money Culture

excerpted from the book

The Corruption of American Politics

by Elizabeth Drew

The Overlook Press, 1999

Indisputably, the greatest change in Washington over the last twenty-five years-in its culture, in the way it does business, and the ever-burgeoning amount of business transactions that go on here-has been in the preoccupation with money.

Striving for and obtaining money has become the predominant activity-and not just in electoral politics-and its effects are pernicious. The culture of money dominates Washington as never before; money now rivals or even exceeds power as the preeminent goal. It affects the issues raised and their outcome, it has changed employment patterns in Washington; it has transformed politics; and it has subverted values. It has led good people to do things that are morally questionable, if not reprehensible. It has cut a deep gash, if not inflicted a mortal wound, in the concept of public service.

Private interests have tried to influence legislative and administrative outcomes through the use of money for a long time. The great Daniel Webster was on retainer from the Bank of the United States and at the same time was one of its greatest defenders in the Congress. But never before in the modern age has political money played the pervasive role that it does now By comparison. the Watergate period seems almost quaint.

There was a time when people came to Washington out of a spirit of public service and idealism. Engendering this spirit was one of John F. Kennedy's most important contributions. Then Richard Nixon, picking up from George Wallace, and then Ronald Reagan, in particular, derided "federal bureaucrats." The spirit of public service was stepped on, but not entirely extinguished.

But more than ever, Washington has become a place where people come or remain in order to benefit financially from their government service...

In 1998, according to the requirements of the Lobbying Disclosure Act of 1995, there were close to 11,500 lobbyists wandering the halls of Congress. (Until the act went into effect, there were no real figures on how many lobbyists populated Washington.) However, this number isn't inclusive. A lot of people say they don't lobby-but they do something that seems a lot like it. Megafixer Clark Clifford solemnly maintained that he didn't lobby. Superlawyer Robert Strauss made the same claim. Perhaps these eminences were above betaking themselves to Capitol Hill to navigate the marble floors or to wait outside the Senate or House chamber, or a committee room, with the riffraff, hoping to nab a target, but they knew the power of their names and their phone calls and their social connections. And they could always send minions to do their bidding with the lawmakers or important staff members, who knew who sent them.

In the past, law firms didn't engage in lobbying to the extent they do now, and sometimes the firms hired nonlawyers to do their influencing. And now there are small firms established for the purpose of lobbying just one member, or one Congressional committee; they're usually staffed by people who had been close to the member, in one case by a powerful congressman's reputed mistress.

More than ever, corporations or other interests that want to influence the Congress hire former Members of Congress or their aides as lobbyists, in order to ingratiate themselves with the current members. The former members have distinct advantages: they can go on the floor of the House or Senate and use their chambers' official dining rooms; even better, former House members can use the House gym, where a lot of business gets done. (A study by the New York Times found that in the 1970s only three percent of members who left Congress for one reason or another went to K Street-the downtown corridor that has come to symbolize the lawyer-lobbyist complex-and in the nineties twenty-three percent did so.)

The Buying of the Congress, a book by Charles Lewis of the Center for Public Integrity, published in 1998, said that from 1991 to 1996 at least fifteen percent of former Senate aides and at least fourteen percent of former senior House aides became registered lobbyists. The main sources of this pool of access-sharks were the "money committees," such as the House and Senate Commerce Committees, which handle such issues as banking and telecommunications. Sometimes the former aides so draw on their expertise and are so drawn into the legislative considerations that they in effect still act as staff members, writing legislation, except for a lot more money.

Sometimes a geographic region is spotted as an opportunity. In recent years, Latin America-with a growing economy increased privatization, need for expensive "infrastructure" projects, and increased demand for U.S. goods (the second-largest market after Canada)-has become more and more attractive to Washington's lawyers and lobbyists. According to the National Journal, in the spring of 1998 former Clinton National Security Advisor Anthony Lake, who had supposedly returned to an academic life, and a former Commerce Department official, David Rothkopf, who had specialized in "emerging markets," formed their own consulting firm, which charged clients at least $250,000 a year for "strategic and political advice about investments in Latin America."

According to the same article, a Washington law firm, Verner, Liipfert, Bernhard, McPherson, and Hand, has fielded three of its former political stars-Bob Dole, Lloyd Bentsen, and Ann Richards-to drum up business in Latin America. So a former presidential candidate, a former vice-presidential candidate, and a former governor became, without apparent embarrassment, hustlers exploiting a new target of opportunity.

Ann Wexler, one of Washington's premier lobbyists, knows a lot about how Washington has changed in the past twenty-five years. One day in the fall of 1997 she talked to me over lunch about how the new role of money has transformed Washington. Wexler, sixtyish, has short-cropped dark hair, brown eyes, and more energy than most people, in part because she enjoys life as well as the game. She has prospered as the head of her own firm, which she started the day after she left the Carter White House in January 1981. In 1983 she was astute enough to acquire as her partner Nancy Reynolds, who had worked for Ronald Reagan for ten years.

When she left the White House, Wexler, who had been in charge of "outreach"-working with outside groups in support of Carter's objectives-took with her what was believed to be the biggest Rolodex in town. She now has twenty-five lobbyists working with her, and in 1997 recruited as president former Representative Bob Walker, who had just retired from Congress and was one of Newt Gingrich's closest associates.

"This whole thing blew apart in the eighties, when congressmen could raise all this money," Wexler told me. "Before, they'd attend twenty-five-dollar barbecues.

"It was the development of PACs in the eighties-when people figured out that if they gave money through the PACs they could get access, they could get their phone calls returned. Just as the unions used dues for political activity, businesses began to use salary deductions for PACs. [Wexler's firm, like similar lobbying and law firms around town, has its own PAC.] The Hill figured it out. If you're a committee chairman, you could raise fifty thousand even one hundred thousand dollars. Then they started leadership PACs-that's another extortion. Then the leader uses the money to try to gain higher office."

Under this last innovation, congressional leaders and would-be leaders and powerful committee chairmen created their own PACs, which they used to dole out money to win gratitude and advancement within their chamber-and to maintain power. Recent examples are former Senate Majority Leader George Mitchell and House Majority Whip Tom DeLay. DeLay's bestowing of campaign funds-especially on the class of 1994-helped him win his leadership post in 1995, and to maintain it.

One of the first things then-House Appropriations Committee chairman Bob Livingston, of Louisiana, did when he decided in the spring of 1998 that he would like to succeed Gingrich as Speaker was to establish his own PAC (B.O.B.S.PAC, for "building our bases"). As Appropriations chairman, Livingston was in a position to raise a great deal of money, and he did. Livingston contributed to over ninety Republican House candidates: $5,000 from his PAC, $1,000 from his own campaign funds (he usually ran for Congress virtually unopposed), and served as a conduit for earmarked checks from business PACs to Republican candidates.

Rivals within the same party for a higher leadership post compete to be the more beneficent. In 1998, Republican leaders raised a great deal more money than their Democratic counterparts did; they were the ones in power. Over the two-year election cycle Republican leaders raised more than nineteen million dollars for fifty leadership PACs, while Democratic leaders raised a mere $328,000.

Wexler said, "We're dealing with a system where the members don't feel they can raise the money where they live. There's a panic among members. I get calls for money from people I've never heard of. The system's out of control."

The issue before the Senate in the spring of 1998 was a freighted one, a matter of historical importance. The question was whether to expand NATO, the North Atlantic Treaty Organization, founded after the Second World War to provide stability in Europe, which it had done successfully. The proposition was to include Poland Hungary, and the Czech Republic, with other countries in Centrai Europe and the Baltics to follow in 2010.

There were strong reasons not to do so. Russia, whose cooperation the United States needed in all sorts of spheres (Bosnia, Kosovo, Iraq, and arms control, among others), and whose own stability was very much in the interest of the U.S., was vehemently against it. Russia saw a threat on its borders, and an insult. Moreover, by expanding NATO the original members became committed to the defense of countries or areas whose defense might lack public support. A successful alliance was in danger of being destabilized.

"We'll be back on a hair-trigger," said Senator Daniel Patrick Moynihan, who usually saw further than most of his colleagues. New York limes foreign affairs columnist Thomas L. Friedman in 1997 called the expansion "the Whitewater of the Clinton foreign policy.

By the time the matter reached the Senate floor in late April 1998, the Clinton Administration had so committed the United States to the new policy that to turn back would have been an embarrassing retreat-in the eyes of the country and our allies. The three countries had already been formally invited to join NATO. The administration had rushed into the policy without thinking it through-in large part to head off certain ethnic-American voting blocs from going to the Republicans, in particular to Bob Dole, who was espousing the expansion.

In turn, the administration used these groups to drum up support in the Senate for the expansion.

But there was another force behind the approval of NATO expansion: defense contractors. The enlarging of NATO promised a lucrative new market, a welcome boon after business had fallen off with the end of the cold war. Even the Contract with America, the Republican agenda presented by Newt Gingrich and others after they took over the House in the 1994 election, called for NATO expansion and encouraged greater "inter-operability of military equipment." Translated, that meant that the new NATO members would have to buy sophisticated weapons from American defense companies. But since these countries couldn't afford them, according to Lars-Erik Nelson in the New York Daily News, the Pentagon had established a $15 billion fund to guarantee loans to these countries to buy the weapons.

According to a March 30, 1998, article in the New York Times, by Katharine Q. Seelye, a study done for the Times found that the six largest military contractors had spent $51 million on lobbying fees-which included not only the salaries of in-house lobbyists but also fees for others from outside the firms-from 1996 to the end of 1997. In that period, the six companies also expanded their contributions to congressional campaign committees. The defense industry was in fact the most generous contributor to the congressional campaigns, the Times said, having lavished $32.3 million on them since the collapse of communism in 1991.

Not all of the lobbying was for NATO expansion, of course, but that was the industry's main concern in those years, because of the lucrative new markets. If donations by computer and technology firms that do military work were added, the Times said, the total would "dwarf the lobbyist effort of any other industry."

The chief lobbying group on behalf of NATO expansion was the U.S. Committee to Expand NATO, whose president, Bruce L. Jackson, was also director of strategic planning for Lockheed Martin. The Times also said that arms manufacturers gave support to the ethnic groups who backed NATO membership for their native countries.

The Senate approved the expansion on April 30 overwhelmingly-by a vote of 80-19-after a few hours of debate spread over four days...

Lately, indirect ways of using money to influence a Member of Congress have come into vogue. A lobbyist for very big interests told me, "What does a savvy lobbyist do? He remembers that the most important thing for a Member of Congress is to get reelected." So the lobbyist would point out the "back-home reason" for a member to vote a certain way. To reinforce the "back-home" argument, lobbyists have created grass-roots support, or the appearance of it, for the corporation's or industry's position.

This approach, pioneered by the lobbyist Ann Wexler, has spawned another new industry in Washington: whole companies whose sole reason for being is to stir up grass-roots support for their client's position. Professional political operatives are hired to mobilize the local citizenry around an issue-economic, environmental-that affects, directly or indirectly, the client's business. Such groups are often organized to counter environmentalists who are objecting to a new plant or supporting a certain regulation.

The people, organized from outside, are encouraged to call on their representative in Washington or in his home district; to write letters, send faxes, make phone calls, organize town meetings, get someone in the area to write a letter to the editor, or even an op-ed piece-all to create the illusion of "grass-roots support." Even the National Association of Broadcasters, which ostensibly represents local stations but is dominated by the networks and their owned-and-operated stations, has retained a Washington company specializing in "grass roots."

But despite the importance of this relatively new form of influence/pressure, another lobbyist told me, it has to be paired with money. Pat Griffin said, "You can do money alone, but it helps to have grass-roots support. You can have money without grass roots, but not the other way around."

Of course, organizing and executing such a campaign is expensive in itself. So these "grass roots" efforts, sown and nurtured from Washington, are another, indirect, and sometimes deceptive, way for interests to spend money to further their agenda.

As the "grass roots" method became widely used, a still newer approach was added, as was a new term in the lobbyists' liturgy, "grass tops."

"Grass tops" are the opinion-makers in a town or an area who are called on to help the cause of a lobbyist or local company. A lobbyist said, "Sometimes they have to be induced, and sometimes they're paid-that's not uncommon." These "grass roots" and "grass tops" efforts, in which Washington pros stir up, and even pay, people who might not be motivated to take action on their own are sometimes referred to by the more honest-or cynical-lobbyists as "Astroturf."

A lobbyist explained, "New techniques get invented as old ones get discounted."

Given its combined money and power and ability to create ostensible grass-roots activity, the broadcast industry has become, in the words of Senator John McCain, "the most powerful industry in Washington." The broadcasters have been able to resist McCain's efforts to get them to provide free airtime for political campaigns or to pay anything at all for their ultra-valuable use of the traditional broadcast spectrum, making the United States one of the few countries that gives away the broadcast spectrum-a public asset-for nothing. (Parts of the spectrum for more specialized uses, such as cell phones and paging systems, are now auctioned off in order to bring in government revenue.) The broadcasters have also been able to fend off any serious impositions on the money they make off political advertising-even though they are required to offer such advertising at a reduced fee.

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