Barack Obama

Report: Obama Allies Planning Progressive-Friendly Business Group

Elana Schor | March 23, 2009, 2:38PM

Here's an interesting counterpoint to Brian's report on an emerging split in the progressive community over targeting business-friendly centrist Democrats. A group of high-powered Democratic consultants is recruiting corporate members for a new Obama-friendly trade group, to be christened Business Forward. As Roll Call reports (sub. req'd.):

The organization is being billed as the progressives' answer to the National Federation of Independent Business and the U.S. Chamber of Commerce.

Expected to publicly launch as early as this week, Business Forward's main goal is to gin up support among companies and their CEOs to push White House initiatives, according to lobbyists who have been approached about asking clients to join the organization.

The players behind Business Forward are well-connected to the Obama administration.

Read more »

Business Lobby

'Written By CEOs, For CEOs': Dems Pan Biz-Friendly Compromise on Employee Free Choice

Elana Schor | March 23, 2009, 11:54AM

While official Washington remains publicly preoccupied with executive compensation and the bailout, labor and business interests continue jockeying for position on the Employee Free Choice Act (EFCA) ahead of its likely congressional consideration in the summer.

The latest round came this weekend, when the CEOs of Costco, Whole Foods, and Starbucks offered an EFCA compromise that would deny workers the right to arbitration with employers who resist union organizing efforts.

Backers of the EFCA "alternative" have enlisted Lanny Davis, the former Clinton White House adviser turned supporter of Joe Lieberman's 2006 re-election bid, to plead their case on the Hill. And it's not going well so far, to say the least -- senior Democrats are pushing back hard at the compromise offer with a series of talking points that blast the EFCA "alternative" as "written by CEOs, for CEOs."

TPMDC has obtained a copy of the complete memo on the business-friendly deal, which is available after the jump. The takeaway is clear: Senior Democrats aren't buying what Davis is helping Costco, Whole Foods, and Starbucks try to sell.

Read more »

Barack Obama

Obama's Too-Busy Meme, Cont'd

Matthew Cooper | March 11, 2009, 10:37AM

This morning, Matt Lauer continued the meme by asking Council of Economic Advisers Chair Christina Romer whether the president had "bitten off more than he could chew." Romer responds here:

Most of the he's too-busy meme has been absurd. But the always-smart Bill Galston, over at The New Republic, raises a more nuanced proposition here.

Galston notes that, unlike FDR, Obama doesn't have the same clout in a more divided Congress and that FDR really did keep things focused on the economic emergency in his first months. Galston notes:

Roosevelt delayed most of the structural reforms that did not bear directly on the economic emergency. For example, he did not even propose a commission to consider social insurance until June of 1934. Social Security legislation was introduced six months later, in January 1935, and was not signed into law until August of that year, after the provisions relating to health care had been stripped out.

Roosevelt organized his first term around two principles that the Obama administration would do well to ponder. First, he kept his (and the country's) attention firmly fixed on a single task: ending the crisis of confidence and restarting economic activity. While he was more sensitive than previous presidents to the links among seemingly disparate issues, these interconnections in his view did not warrant trying to move on all fronts at once. The people and the Congress had to be brought along with an agenda and a narrative that they could understand.

Fair enough, but I think there's a response to that, too.

First, distraction is a two-way street. Congress is constantly deviating from the economic emergency to deal with other stuff. I watched a fulsome debate on the transportation of chimpanzees and other primates the other day on C-SPAN. The House was taking up a bill in the wake of that chimp attack. It's not reasonable to focus just on one branch of government.

Second, Obama is talking about a lot of things but he's not sending up a torrent of legislation. There was the stimulus bill but everyone agreed there needed to be some kind of stimulus. He's encouraged Congress to come up with a health care plan but he hasn't forced a bill on them to consider. And besides is health care really a distraction? The facts show that you can't get entitlement reform or any control over future red ink without it. Why wait?

Third, Congress is a much bigger institution than it was in 1933 or even 1977, the other example the Galston cites. Staffs are bigger, there's more capacity to deal with more issues. If we have more of a logjam these days, it's owing to the partisan redrawing of districts, the culture of lobbying and so on but not an innate inability of Congress to handle more than a few things at a time.

As I said originally, if Obama suddenly decides to immerse himself in an obscure border dispute or something truly far afield, he ought to be called out on it. But green energy, health care, education, and other things he's pursuing all seem germane to the economy. You can disagree with them individually but it's hard to chide their relevance to the crisis at hand.

Business Lobby

Gephardt and Less than Meets the Eye

Matthew Cooper | March 9, 2009, 4:23PM

There's been interesting buzz about an item from Ken Silverstein of Harper's about Richard Gephardt, the former House Majority Leader and presidential candidate, whose firm is doing lobbying for the Chamber of Commerce.

When the item first appeared online last week, it seemed to suggest that the champion of organized labor might be doing something untoward. Was Gephardt betraying his union brothers and sisters to work for the man?

Lobbying disclosure forms are notoriously vague and so an item from PRWatch.org, Gephardt's firm noted Gephardt's firm, the Gepardt Group, is registered to represent the Chamber on "intellectual property," environmental and manufacturing issues.

So what's the real deal? Gephardt's office told me that it has represented NBC/Universal and U.S. Chamber as part of it work for a group called the Coalition Against Counterfiting and Piracy, dedicated to stamping out intellectual piracy. (Labor is a member of the group too.)

Gephardt's firm's work for NBC/Universal and the Chamber was on an intellectual property bill, the Prioritizing Resources and Orgainzation for Intellectual Property Act of 2008 of PRO IP bill which became law last year. And they're working on other legislation related to intellectual property. So did the Chamber pay Gephardt? Yes. Was it for something anti labor? No.

Bailout

The International Swaps & Derivatives Assocation: A $1.9M Lobbying Team

Elana Schor | March 6, 2009, 2:11PM

Josh observed earlier that the International Swaps & Derivatives Association was one of the major lobby groups helping to ensure that derivatives contracts got special repayment privileges from creditors under the 2005 bankruptcy bill. Which got me wondering ... the ISDA must be shaking in its loafers over the possibility of stronger regulation passing Congress this year. Which D.C. lobbyists are in their corner?

Here's what I found: a healthy $1.9 million in lobbying spending for 2008, more than twice as much as embattled bank UBS and comparable to the lobby bills of Credit Suisse, one bank heavily tied to derivatives trading and other complex financial instruments.

The lobbyist lineup for ISDA looks like a staff alumni list for top GOPers (and a few Dems):

Read more »

Barack Obama

"Not a Harry and Louise Moment, a Thelma and Louise Moment"

Matthew Cooper | March 5, 2009, 4:54PM

One of the many amusing lines from President Obama's wrap up of the health care summit at the White House. Here's something of note: Obama pointed to Rep. Jim Cooper saying we can get health care done. This is something we noted here the other day and it belies easy stereotyping of fiscal conservatives as obstinate. Here are some highlights from the Obama Q & A:

Ted Kennedy looked great and talked about the importance of the issue. Mitch McConnell asked about the Conrad-Gregg proposal on reforming Social Security. The prez kicked it back to Congress saying that Medicare and Medicaid is the 800-pound gorilla. Henry Waxman talked about the importance of trade offs and willingness to negotiate. Rep. Joanne Emerson, the kind of moderate Republican Obama will need on many issues going forward, was very complimentary about the discussions as was Charles Grassley, the ranking Republican on the pivotal Senate Finance Committee.

Most interesting was Dan Danner of the National Federation of Independent Business. The group was a key opponent of the Clinton plan in 1994 and while he didn't pledge to support Obama he wasn't hostile either. For Obama's part he told "bleeding hearts" they needed to take cost control into account just as fiscal conservatives needed to know they couldn't control costs just by "throwing seniors off of Medicare."

No shortage of critics on the left have whacked Obama for being too bipartisan but I don't see how a conference like this can do anything but it's hard to imagine how today's session was anything less than helpful in promoting universal health reform. It's not impossible to imagine meetings like these become a practice that's continued by future presidents.

EFCA

Republicans Tout Anti-Employee Free Choice Study -- Paid For By Big Business

Elana Schor | March 5, 2009, 3:58PM

Conservatives on and off Capitol Hill are pointing to a new study released today in their fight to derail the Employee Free Choice Act (EFCA).

Produced by Dr. Anne Layne-Farrar, an economist with LECG Consulting, the study asserts that EFCA would cause the U.S. to shed 600,000 jobs in the second year after the bill's enactment, as a consequence of increased union membership. Sounds scary -- but what's scarier still is who paid for the study: the Alliance to Save Main Street Jobs, a front for the business lobby's heaviest lobbying hitters.

Its members include the Retail Industry Leaders Association, the HR Policy Association, American Hotel and Lodging Association, the U.S. Chamber of Commerce, and the Real Estate Roundtable. The same group paid for another ostensibly independent take-down of EFCA last month, written by University of Chicago law school professor Richard Epstein.

Barack Obama

Biden on EFCA

Matthew Cooper | March 5, 2009, 3:39PM

Joe Biden addressed the AFL's Executive Committee in Miami this morning. Transcript of the event is finally out. Here are Biden's comments on the Employee Free Choice Act. Does not sound like any backing down:

So, folks, that's why there's no one thing we have to do. This is all going to be difficult, and one of the most difficult things will be to reinstitute that basic bargain. And I think the way to do that is the Employee Free Choice Act. (Applause.)

Folks, let's get it straight -- we're not asking -- we're not asking
for anything we don't deserve. And we're not asking for anything that
wasn't intended when the NLRB said we should be encouraging --
encouraging -- unions. We just want to level this playing field again.

Ladies and gentlemen, I think President Obama said it best when he said
-- I'm quoting -- "I don't buy the argument that providing workers with
collective bargaining rights somehow weakens the economy or worsens the
business environment." If you've got workers who have a decent pay and
benefits, they also are customers for your business. (Applause.)

So let me add to that and say that I have a simple, basic belief, one
that we're going to work hard to put into action: If a union is what
you want, a union you're entitled to have. (Applause.)

Business Lobby

Citigroup Lobbyists: Can't Stop, Won't Stop!

Elana Schor | March 5, 2009, 10:11AM

Over the past few weeks, a lot of questions have been raised about how to stop banks receiving government bailout aid from paying for high-priced lobbying teams with taxpayer money.

The short answer, unfortunately, is that most banks will continue lobbying unless shamed into stopping -- like AIG, which closed its influence shop but kept on hiring pricey PR consultants. Just listen to Roll Call's interview yesterday with Citigroup's chief lobbyist, who formerly served as George W. Bush's legislative affairs chief:

Read more »

Housing/Foreclosures

That Housing Bailout Plan Gets Filled In

Matthew Cooper | March 4, 2009, 1:42PM

The Treasury Department has released more details about that housing bailout plan. Still waiting for some of the Washington lobbies to weigh in on it. My colleague, Elana Schor, has interesting reporting on the fight over "cramdowns"--giving bankruptcy judges the power to rewrite mortgage terms. Would be curious to know if readers are hearing about other fights over the proposal. It feels like the Rick Santelli moment has not yet passed. This Wall Street Journal poll shows a lot of public doubt about the plan.

Health Care

Campaign Against Obama Health Plan Run By Notorious Conservative PR Firm

Elana Schor | March 3, 2009, 5:55PM

A new group called Conservatives for Patients Rights (CPR) is about to launch the opening salvo in the fight to sink President Obama's health care plan.

CPR is running TV, radio, and web ads that attempt to stoke irrational fears of "a central national board" in charge of medical decision-making, asking Americans to envision a world where "bureaucrats decide the treatments you receive, the drugs you take, even the doctors you see." Of course, that vision has nothing to do with the president's health care plan, but the truth shouldn't be an impediment to CPR's dream of killing health care reform.

After all, the group has hired Creative Response Concepts, the same PR firm that represented the Swift Boat Veterans for Truth during the 2004 presidential race. The "media relations" contact number listed on CPR's website, (703) 683-5004, is the same phone number as Creative Response Concepts, as one liberal organization discovered when researching the new health care group.

Creative Response's past clients also include the Christian Coalition, the right-leaning National Taxpayers Union, and USANext, the front group that led George W. Bush's failed push to privatize Social Security. Hilariously, Politico could only bring itself to observe that CPR has hired "veteran Republican consultants" for its new anti-Obama effort.

Business Lobby

Another Ex-Lawmaker Takes a Shortcut Around the Lobbying Ban

Elana Schor | March 3, 2009, 11:31AM

When the new Democratic Congress passed a sweeping ethics bill in 2007, controversy erupted over the proposed new "revolving-door" ban on ex-lawmakers and aides lobbying their former colleagues. Senators wanted to double the ban to two years, while House Democrats pushed for keeping a one-year ban that would allow them to nail down lucrative lobbying gigs after leaving the Hill.

But no matter the length of the revolving-door ban, both Republicans and Democrats have long taken advantage of its enormous loophole. Let's call it the "senior adviser" route -- instead of lobbying current lawmakers directly, defeated members of Congress are flocking in droves to become behind-the-scenes consiglieres to the lobbyists that are allowed to contact sitting members.

The "senior adviser" club got another member just this morning ...

Read more »

EFCA

Card Check's Funniest Home Video

Matthew Cooper | March 3, 2009, 9:49AM

The Service Employees International Union, SEIU, has an amusing new web ad up to make fun of the more hysterical claims from the right about Employee Free Choice Act:

Business Lobby

Banking Industry Asks for Leniency on 'Minor Violations' of Truth in Lending Act

Elana Schor | February 24, 2009, 3:30PM

The House is on the verge of taking up a mortgage aid proposal that would, for the first time, allow judges to modify the terms of primary mortgages for individuals facing bankruptcy -- a reform known as the "cram-down."

The bankruptcy law change is backed by the Obama administration as well as Citigroup (which is increasingly looking like a ward of the Obama administration). But the American Bankers Association, the Mortgage Bankers Association, and other K Street players are no fans of the cram-downs plan.

In a letter sent today to every House member, a group of financial lobbying giants urges Congress to reject the cram-downs bill. Lobbyists are especially concerned about language in the bill "provid[ing] that even minor violations of the Truth-in-Lending Act (TILA) could result in a home equity loan or even a mortgage being disallowed in bankruptcy."

You read that right: K Street is asking Congress to permit lenders to get away with minor violations of the TILA, a 40-year-old law that was passed to protect consumers from banks that hide punitive terms in the fine print of loans.

Read more »

Bailout

EXCLUSIVE: Unions Ask Geithner to Deny Bailout Plea From Lobbying-Mad Financial Firm

Elana Schor | February 24, 2009, 9:26AM

The labor federation Change to Win (CtW) is taking a major step today in the effort to restrict bailed-out bank lobbying. In a letter to Treasury Secretary Tim Geithner, CtW Chair Anna Burger makes a direct request that Principal Financial Group's $2 billion TARP application be denied due to its lobbying bonanza. As Burger puts it:

Read more »

Bailout

Banking Industry's Man in Washington: Let's Define 'Nationalization'

Elana Schor | February 20, 2009, 5:05PM

The stock market's rocky ride today, stoked by senior Democratic senators appearing to foreshadow bank nationalization, prompted White House spokesman Robert Gibbs to re-assert the government's lack of interest in financial takeovers.

"This administration continues to strongly believe that a privately held banking system is the correct way to go," Gibbs told reporters today.

The market proceeded to rebound slightly before closing lower, with the Dow 100 points down. Was Wall Street indicating skepticism about Gibbs' intentions? Not to Scott Talbott, chief lobbyist for the Financial Services Roundtable, which represents the market's biggest players in Washington.

Talbott is strongly opposed to and unconcerned about nationalization -- but he pointed out that the term remains undefined in the public discourse. "There are two ways to do this," he told me.

Read more »

Bailout

The Influence Your Money Can Buy: Post-Bailout Lobbying Numbers

Elana Schor | February 20, 2009, 1:17PM

A series of recent reports, from the Journal to the Center for Responsive Politics (CRP), have offered staggering stats on the lobbying dollars paid out by banks, automakers, and other companies getting bailout money under the Troubled Assets Relief Program.

But all these numbers can be a bit befuddling in the aggregate. Is it really true, as the CRP states, that companies benefiting from the bailout have received a 258,449% return on their lobbying investments? Not really -- because lobbying expenditures are not broken down by topic area, there's no way to determine what portion of companies' K Street spending was dedicated to securing a slice of the bailout pie.

(For true TARP geeks, here's a great rundown of the cavalcade of legislation that sparked the lobbying interest of bailout participants.)

So what can we conclude about lobbying spending by bailed-out banks?

Read more »

Bailout

Hedge Funds Could Get a Pass on New Executive Pay Rules

Elana Schor | February 20, 2009, 11:44AM

We reported earlier this week that K Street's biggest financial players are urging the Treasury Department to assuage their concerns with the executive compensation limits that were added to the new stimulus law by Senate Democrats.

But Bloomberg adds an interesting wrinkle in its story today on the narrow room for Treasury to maneuver around the new compensation caps:

It's unclear whether the rules will apply to Public-Private Investment Fund, the Treasury's effort to remove the toxic assets clogging banks' balance sheets. The fund would offer government financing to help induce private investors such as hedge funds to purchase illiquid securities.

It's understandable that the executive-pay caps' applicability to hedge funds would be uncertain -- after all, their involvement in Treasury chief Tim Geithner's new public-private fund has yet to be fully determined. But Geithner has committed to spending some amount of taxpayer money in an attempt to coax private equity giants into buying devalued, mortgage-backed assets.

Whether or not that public money comes as part of the Troubled Assets Relief Program, it seems that the new executive-compensation limits are intended to apply to hedge funds who participate. Congress even included a sliding scale (read about it here) that would limit the pay caps based on how much each company received in taxpayer-funded benefits. If private equity succeeds in wiggling around the rules, one suspects that banks not participating in the TARP's capital purchase program will be next.

Barack Obama

Chamber of Commerce Touting Stimulus

Matthew Cooper | February 19, 2009, 5:24PM

I'm not sure I agree with my boss's assessment of Washington.

You could argue that the entrenched interests stopped the Reagan and Bush administrations from doing what they would have liked, too.

I tend to think the town is more wired for inertia than anything, an entropy that stymies the ambitious goals of every president from Reagan to Obama. But I'm less despairing about it changing, too because crisis provokes change.

One sign of the crack is the Chamber of Commerce. They supported the stimulus plan and the morning after Obama's address to Congress next week, they'll be holding a panel discussion on how the money will be dispensed. Of course, the Chamber will fight Obama on the Employee Free Choice Act and any number of other issues but it's telling that they're not battling him on this.

On another matter I hear the Hilda Solis vote in the Senate could come as soon as Tuesday or at least an effort to invoke cloture and get it moving. It'd be nice to get the cabinet done by March.

Business Lobby

Dems: Keeping Wall Street Profits High is 'Collateral Benefit'

Elana Schor | February 19, 2009, 3:30PM

In Rolling Stone's new interview with Speaker Nancy Pelosi (D-CA), she embraces the notion of "collateral benefit" for major financial corporations that are benefiting from the $700 billion TARP bailout.

The "collateral benefit" idea was first elucidated by Barney Frank (D-MA), chairman of the House Financial Services Committee. As Frank explained it to PBS last month, the inextricable intertwining of ordinary Americans' livelihood with Wall Street's livelihood makes it impossible not to help big banks while saving the U.S. economy:

[Y]ou can't help the whole system without some incidental benefits to people that want help. It is the reverse of something terrible that we have learned to live with, collateral damage. That's in a war. ... We have the reverse of this. We have something called collateral benefit. That is, you want to get the credit system functioning again, but you can't create a whole new one from scratch. You have to work with what you have got. So one effect of helping the credit system is you are going to provide some collateral benefit, literally to people you would rather yell at.

Frank's "collateral benefit" theory makes no attempt to get at why more and more Americans have entrusted their financial future to the market over the past two decades, thereby making it impossible to save the economy without keeping Wall Street afloat.

But conservatives know the source of this cultural shift -- themselves. Right-wing strategists have long attempted to solidify a long-term Republican majority through promoting stock ownership. Listen to conservative godfather Grover Norquist, telling Frontline in 2005:

Read more »

Bailout

Want to Stop Bailed-Out Banks from Lobbying? It's Simple

Elana Schor | February 19, 2009, 11:25AM

There's been a lot of talk in recent months about bailed-out banks getting help from the taxpayers, then turning around to pour vast sums of money into lobbying Congress.

Bank of America even claimed to the New York Times last month that it was "sensitive" enough to stop lobbying on the Troubled Assets Relief Program (TARP) -- but the bank kept its in-house lobbyists and two private firms active on the issue, according to disclosure forms filed publicly with the Clerk of the House. (We've put a call in to B of A asking for clarification on this point.)

So what can be done to ensure that public money isn't spent by businesses on watering down executive compensation caps and other measures that pose a threat to Wall Street?

Read more »

Business Lobby

Biz Group Takes a Shot at Geithner in Response to Mortgage Plan

Elana Schor | February 18, 2009, 5:19PM

The U.S. Chamber of Commerce, one of Washington's biggest business lobbying groups, just released its response to the Obama administration's $75 billion mortgage aid plan.

As you'd expect, Chamber executive vice president Bruce Josten was skeptical of the aid plan, particularly the White House's support for letting bankruptcy judges modify the mortgage terms on primary residences (the so-called "cramdowns" bill). But Josten's response also included what sounds like a subtle jab at the treasury secretary in his statement, quipping that the mortgage aid proposal "should have undergone a stress test to determine if it's ready to stabilize a major portion of our economy."

A "stress test" to determine banks' solvency was a major component of Treasury chief Tim Geithner's widely panned speech last week, in which he provided vague details about how the administration would refine the enforcement of the $700 billion financial bailout.

Josten's full statement is after the jump.

Read more »

Bailout

Lobbies React to Obama's Mortgage Plan

Matthew Cooper | February 18, 2009, 3:06PM

Now that President Obama has unveiled his long anticipated mortgage relief plan, what does the permanent government of Washington have to say about the plan? The plan got a tentative thumbs up from the American Bankers Association. Diane Casey-Landry, ABA senior executive vice president and chief operating officer said in a statement.

"The American Bankers Association welcomes the Homeowner Affordability and Stability Plan announced today by President Obama. The plan is a constructive, flexible and multifaceted initiative likely to have a positive effect on preventing mortgage foreclosures. The ABA is committed to working closely with the administration as it completes the remaining details of the plan. In particular, the plan is:

*A major commitment of funding sufficient in scope to have a significant impact.

*Aimed at those at-risk homeowners most likely to avoid foreclosure under the planned assistance and incentives.

* Designed to include market incentives, and to complement and reinforce industry initiatives and FHA programs."

I've been trying to reach the National Association of Realtors and the National Home Builders Association for their reaction as well.

Not surprisingly, the reaction from Fannie Mae and Freddie Mac has been positive. They stand to get $200 billion in new funds. Besides, they're under government conservatorship and not really in a position to criticize the big guy.

"The Administration's unprecedented effort to prevent foreclosures and expand refinancing options for more borrowers offers hope to many struggling families across America. This is just the beginning of a sustained effort that will build over time. Fannie Mae is committed to working with the Administration," says Herb Allison, Fannie's CEO.

The biggest obstacle that lies ahead is the administration's plan to give bankruptcy court judges the power to rewrite mortgage terms. Not surprisingly, the banks are not crazy about this and will oppose it but the threat of giving judges such power--something opposed by the Bush administration--gives the banks plenty of incentive to rewrite the terms of loans before the judges do. Benjamin Lockwood in The Atlantic argues against these judicial "cram downs" here.

Will update as we hear more but this fight over bankruptcy judges is the one to watch.

Barack Obama

Obama's F 22 Decision

Matthew Cooper | February 18, 2009, 2:07PM

If you're interested in the question of whether Barack Obama can change the culture of Washington, one of the things worth looking at is the lobbying efforts over the F 22 Raptor. The decision of what to do with this fighter aircraft is one of the more important defense procurement questions the administration will face. And, like all defense issues, it's wrapped up in politics especially in a deep recession when jobs are scarce and good-aying jobs are even scarcer.

Some background: Over decades, weapons systems have taken on a life of their own and proven hard to halt even when the Pentagon is ambivalent about having them. My former TIME colleague, Mark Thompson, a veteran defense correspondent, has, for instance, written at length about the problems bedeviling the V-22 Osprey aircraft and why, despite its woes, billions have been pumped into the project.

When it comes to the F 22 Raptor, the administration is facing a March 1 deadline to decide how many more F22s to order. Lockheed is supposed to deliver the last of the current batch of 181 on order in 2011. The argument against ordering still more F22s is that the Pentagon already has a similar aircraft, the F 35 Joint Strike fighter online and, besides, the more pressing issue for the U.S. is not air superiority in a conventional war but rooting out terrorists in the Khyber Pass. The Air Force has indicated that it would like a total of 381 but several senior Pentagon officials, including Secretary of Defense Robert Gates, have hinted that they'd like far fewer if not to put the kabosh on the program entirely. The Pentagon "has not demonstrated the need or value for making further investments" in the plane, the Government Accountability Office found.

So not surprisingly there's a lot of lobbying going on to keep the F 22 rolling. Northrop and Lockheed Martin are lobbying heavily to keep the plane in production and there's a large press availability this week where reporters can sit in simulators and learn all about the 95,000 jobs the plane's advocates say are at state. Any state where there's work related to the Raptor is lobbying for it. "With rising unemployment, we need to make sure that we're not making a knee-jerk reaction and we keep this program going strong," Keith Scott, president of the Baltimore County Chamber of Commerce told the Baltimore Sun. Our point is, No. 1, this preserves jobs, and No. 2, it is immediate. You don't have to develop anything," Lawson said. "This is 'shovel ready.' "

According to the Los Angeles Times, the F-22 program is directly responsible for 25,000 jobs at Bethesda, Md.-based Lockheed Martin and its major suppliers. But Lockheed officials say when jobs from sub-suppliers are added in, the F-22 program maintains 95,000 jobs in 44 states. Among the firms helping Lockheed in Washington is Public Strategies, home to George W. Bush media adviser Mark McKinnon. In Congress, prominent senators from Ted Kennedy to Judd Gregg to Dianne Feinstein signed a letter back in January urging then President Elect Obama to keep the F22 going. Not surprisingly there's a website, www.preserveraptorjobs.com that's just part of the lobbying campaign being waged by the Lockheed, Boeing and other suppliers of the jet fighter. We'll know soon whether their efforts have been successful.

Business Lobby

Mr. Stanford Goes to Washington, Part Two

Elana Schor | February 18, 2009, 1:46PM

Accused $8 billion fraudster Allen Stanford is making headlines today, but he's no stranger to D.C. politics. After government officials caught wind of Stanford's cozy relationship with the government of Antigua, where he maintained his offshore banking operations, the flamboyant Texas financier worked hard to make friends in Congress.

Between July 2000 and July 2001, Stanford was the single largest contributor to the unregulated "527" fundraising groups run by then-Senate Democratic leader Tom Daschle (SD) and then-House Democratic Caucus Chairman Martin Frost (TX), according to the watchdog group Public Citizen.

Stanford's company "gave soft money to Daschle, Frost, and the party committees at a time when it had only one lobbying objective," Steve Weissman, who was Public Citizen's legislative representative during that period, told me. "The people who received the money basically did nothing to advance the money laundering bill that was from the Clinton administration. Even if they were Democrats and it was the Democratic Clinton administration that wanted to push the bill, they complied with what the donor wanted."

Frost, now a lobbyist in D.C. and president of America Votes, recalls meeting with Stanford as well as taking no action on his fellow Texan's concerns. Their interaction was wholly routine, as the former lawmaker described it.

Read more »

Business Lobby

Mr. Stanford Goes to Washington, Part One

Elana Schor | February 18, 2009, 12:58PM

We know that Allen Stanford, the Texas financier accused of a multi-billion-dollar fraud yesterday, helped send several amenable members of Congress to soak up the sun in Antigua. But Stanford first got involved with Washington policy-making long before 2003, when the first reported congressional trips took place.

Our tale begins in the Clinton administration, when the 1998 bombings of U.S. embassies in Africa helped jump-start a legislative push to crack down on international tax havens. At that time, Jonathan Winer, a senior State Department official under Clinton, was well aware of Stanford's offshore activities.

"In the late '90s, Stanford came to my attention ... because he was reaching out to people in our government to say he was a good guy and we should be comfortable with him," Winer, now a senior vice president at APCO Worldwide in Washington, told me.

"He hired people to reform Antigua's banking system, which was overwhelmed by offshore banks and shell banks [but] he was also regulated by the entity governing the sector that he was spending money to organize in what was characterized as a clean-up. We thought that was a conflict and inappropriate."

Meanwhile, as Time reported three years later, the attempt to tighten money laundering rules got pushback from ... guess who? (emphasis mine)

Read more »

Bailout

Can't Forget: The Exec Pay Limits Were Not Last-Minute Additions

Elana Schor | February 17, 2009, 3:14PM

If you read the major news media's reporting this week on the executive compensation limits that were included in today's newly-signed stimulus law, you'd think the pay caps were one of those sneaky, dark-of-night maneuvers on the part of Senate Democrats.

The Chicago Tribune says the compensation rules were "inserted at the last minute" into the stimulus. USA Today goes with "thrown in at the last minute," while CBS News makes the dramatic claim that Sen. Chris Dodd (D-CT) "slipped in [the] little-noticed provision."

Incredible! If only it were true. Dodd's CEO pay limits were added to the Senate's stimulus plan by voice vote, with no objection from either party, more than 10 days ago.

It was only the fact that the pay caps survived an attempt to slice them from the bill that was at all unexpected. Two other strong proposals to limit compensation at bailed-out banks were yanked from the stimulus at the last minute -- not added.

In fact, Rep. Brad Sherman (D-CA), the House Financial Services Committee member who first blew the whistle on the attempts to scrap the pay caps, reminded Fox Business Channel of the truth during a weekend interview. We've got the video for you after the jump.

Read more »

Business Lobby

Treasury's Empty Corridors

Matthew Cooper | February 17, 2009, 1:05PM

More stories this week about the delay in Treasury appointments, most notably someone to run the Troubled Assets Relief Program or TARP.

As I noted a couple of weeks ago, a prominent Wall Street executive was approached about the job--I'm now told a number of times--because he was that rare fit. He'd been at a big firm but he left to start his own boutique investment house before the s**t hit the fan financial troubles last fall and thus wasn't tainted by the most recent problems on Wall Street. He turned Geithner down and so Neel Kashkari, the Bush holdover, continues to hang on.

At this point, something will have to give. Either the administration and Congress and the public will have to accept people coming straight from the tainted financial firms or give the jobs to the Christina Romers of the world, academics who don't have the Wall Street taint and don't consider making less than $200K to be a dramatic lifestyle change.

Academics are fine but it would help to have some financial types in there who know the firms and where the bodies are buried. Lee Sachs, a Clinton veteran remains over there at Treasury, but more ex-Wall Streeters are going to have to come in at some point. Obama bent his lobbying rules to allow Mark Patterson, the former Goldman Sachs lobbyist, to become Geithner's chief of staff. More rule bending is on its way.

Barack Obama

K Street Seeking Treasury Help 'This Week' on New Exec Pay Rules

Elana Schor | February 17, 2009, 12:52PM

The stimulus bill is about to be signed into law, but debate continues to rage over the executive-pay limits that were inserted into the measure by Senate Democrats.

As we reported yesterday (and Politico follows on today), the Obama administration has several options to slow down or revise the new compensation caps. Issuing a signing statement to invalidate enforcement of the limits are the most unlikely outcome -- purely due to the political blowback that would result if Obama borrowed such a famous Bush-era tactic.

Which leaves the year-long window for the Treasury Department to release rules implementing the new pay caps. That certainly sounds like a long enough time to devise a way around the limits, but the financial industry is calling for Treasury to step in much more quickly ... in fact, before the week is out.

"The next step is to go to Treasury, so that's where we're going to focus on," Scott Talbott, senior vice president of government affairs at the Financial Services Roundtable, told me. "They have a year to write the regulations, [but] we need guidance now ... ideally by the end of the week."

Read more »

Business Lobby

The Freshman and the Hedge Funds

Matthew Cooper | February 16, 2009, 2:07PM

In the coming weeks, hopefully we'll be able to provide some insight into the various banking lobbies and how they operate and what we can expect as a bank bailout package goes from blueprint to practice. As I tried to explain on Thursday, the banking lobby is hardly a monolith. While the banking lobby merits interest on its own, it's also a useful prism for asking the larger questions about how much Washington is or is not changing in the Obama era.

On Thursday, before Congress left town for its Presidents Day recess, I had the chance to speak with Jim Himes, the Democratic Congressman from Connecticut who defeated Christopher Shays in last fall's election. The 43-year-old Harvard grad sits on the House Financial Services Committee and he's also co chairing the New Democratic Coalition task force on financial reform along with Rep. Melissa Bean of Illinois. His story offers some insight into why its hard to use simple metrics to explain the story that's unfolding in Washington.

Himes's district includes Stamford and the prosperous New York City suburbs that have come to be known as Hedgefundistan for all of the wealth financiers who built megamansions in his district along side the oldline prosperous homes. If you were trying to identify who among Congressional Democrats might be an advocate for the hedge fund industry it would make sense to examine Himes. After all, so many of them live in his district. Besides he's taken a lot of money from various banking interests.

According to the Center for Repsonsive Politics, he received more money from recipients of the Troubled Assets Relief Program or TARP than any other member of the House Financial Services Committee in the 2008 campaign cycle--over $195,000 which is significantly more than the next highest recipient, the ranking member, Spencer Bauchus, the Alabama Republican. Himes earned more than $144,000 from Goldman Sachs employees alone. Oh, and the Rhodes Scholar also used to work for Goldman Sachs

Still, it would be wrong to assume from contributions or a financial services background alone dictates what a Congressman might or might not do. I asked Himes where he stood on the question of compelling hedge funds to disclose their investments, something that is being promoted indirectly in Congress by Senators Carl Levin, the Michigan Democrat, and Charles Grassley, the Iowa Republican. Their bill would give the Securities and Exchange Commission clear regulatory authority over hedge funds. (Right now the SEC's jurisdiction is ambiguous and has been taken up by the courts.) While Himes would have every incentive, given his district and where much of his money comes from, to protect the industry he said to me that "the highest priority is transparency." He didn't take a definitive position on the Levin-Grassley when I spoke to him but he was emphasizing transparency above all else which cannot be comforting to his neighbors in Hedgefundistan.

On the larger question of financial restructuring, Himes emphasized that "I want to make sure that risk resides with the people who take it."

Himes is one person to watch as we go forward. If winds up voting for a tough oversight of financial services, I think you'll have a good sense that Washington really is changing. The Fourth Congressional District of Connecticut has been in Republican hands since 1969. That it's now represented by a Democrat and one claiming, despite his pedigree, to take on financial services shows that this are changing here.

Bailout

The Banking Lobby and Its Discontents

Matthew Cooper | February 12, 2009, 3:24PM

It's a truism of Washington that the more your industry is regulated and influenced by the actions of the federal government, the more you're going to want to make your case in the halls of Congress and in the federal agencies that influence your business's fate. So at this important moment, when the federal government is preparing to overhaul the financial services industry, in all it's many parts, and when the largest bank bailout ever conceived is being rolled out, and the public is up in arms, it's worth stepping back and taking a look at how the affected industries will make their case and who they will make it to

First, it's worth keeping in mind that financial services are a diverse lot. The American Bankers Association represents the mainstream banks while the Credit Union National Association representes the nations credit unions. There's the Financial Services Forum that represents the largest financial institutions and others. The Independent Community Bankers of America have different interests, too. It opposes the merger of multiple banking regulators that's favored by larger banks. Then there are the divergent needs of semi-banks, represented by the Financial Services Roundtable which includes the likes of General Electric.

Private Equity has the Private Equity Council and the hedge funds industry as the Managed Funds Association, headed by Richard Baker, a former Republican Congressman from Louisiana which is most determined to stop a bill that would require them to disclose their holdings.

Not surprisingly, members of comittees that regulate the financial services tend to do quite well in terms of campaign contributions from the industry. Look at Rep. Jim Himes of Connecticut. The Democrat represents a lot of constituents who work in the financial services industry and according to the Center for Responsive Politics collected more from those companies that have received TARP monies than any other member. The center's full listing of members of the committee and what they got from TARP recipients is here. In the Senate, Chuck Schumer has long been seen as a defender of the financial services industry, a point articulated at length in this New York Times story in December. As financial services reform makes its way through Congress keep an eye on Schumer and what happens to proposals that come out of Barney Frank's Financial Service Committee when they hit Chris Dodd's Banking Committee. Today, for instance, the Senate Banking Committee is holding a hearing on proposed credit card regulations. which is a very big deal to bankers and of no real consequence to hedge funds. In the coming days, we'll keep an eye on those fights that have a real impact on policy but that also illustrate larger points about Washington has and hasn't changed under Barack Obama.

Business Lobby

Stimulus Bill Sparks Lobbying Mini-Bonanza

Elana Schor | February 5, 2009, 10:50AM

USA Today is reporting that more than two dozen groups have registered to lobby for their share of the stimulus pie since the economic recovery bill first came before Congress last month.

That rush to secure spending for favored projects isn't necessarily surprising, but there's a new wrinkle for lobbyists this time around: the Obama administration's insistence on keeping earmarks out of the stimulus. As noble as that sounds, USA Today explains, it may have the unintended effect of driving lobbyists underground to chase stimulus money that will be distributed through federal grants:

Read more »

Business Lobby

JP Morgan Lobbies For Its Debit Cards to Speed Food Aid to the Poor

Elana Schor | February 4, 2009, 11:51AM

The stimulus bill currently being debated in Congress includes more than $350 million for the WIC (Women, Infants, and Children) program, which distributes food aid to low-income families.

And JP Morgan, which famously declined to reveal how it would use its $25 billion in TARP bailout funds, has taken the opportunity to tout its debit cards as a good option for families getting WIC benefits. The bank is releasing a new paper today on "the funding, legislative and regulatory considerations" that switching to an all-debit food aid system would entail.

As this local report from Michigan illustrates, an all-electronic WIC program makes sense in terms of decreasing the stigma and increasing the convenience for families receiving aid. But I can't help but smile at the timing of JP Morgan's entreaty on a day when the president announces executive-pay limits that make its CEO publicly pouty.

Stimulus

Senate Defeats Effort to Add Corporate Tax Break to Stimulus

Elana Schor | February 4, 2009, 9:34AM

A glimmer of hope for something other than business-as-usual legislating emerged in the Senate last night. The proposed "repatriation" tax break, a major gift for multinational corporations with questionable stimulative value, was defeated on a 42-55 vote.

Seven Republicans, including some of the most conservative senators, joined the majority of Democrats to beat back the repatriation proposal -- which would have largely benefited a handful of corporations that are among the biggest job-outsourcers in the nation. A tip of the cap to those 55 senators.

Democrats

Letting Congress Be Congress: Obama's Same Old Strategy

Elana Schor | February 3, 2009, 11:22AM

President Obama will take to the airwaves tonight to pitch the economic recovery bill to the people -- and he'll have his work cut out for him.

What becomes more apparent with each passing day in Washington is that the change in administrations has changed little about Congress' standard operating procedure, the wheeling and dealing that inspired Otto von Bismarck's famous quote about lawmaking and sausage-making.

Exhibit A: the business tax breaks in the Senate version of the stimulus bill.

Read more »

Stimulus

Dem Senators Split Over Corporate Tax Break Proposed for Stimulus Bill

Elana Schor | February 2, 2009, 5:16PM

Looks like a split is developing in the Senate Democratic ranks over the contentious question of using the stimulus bill to give "repatriation" tax benefits to corporations.

The idea is a simple one, though likely to alarm progressives: multinational companies with U.S. headquarters would be given a one-time discounted tax rate of 5.25% -- down from a normal rate of 35% -- if they declare their offshore earnings in this country.

Sens. Barbara Boxer (D-CA) and John Ensign (R-NV) are amassing support to add repatriation to the stimulus bill, and they've got at least a partial vote of confidence from the Senate Democratic No. 3 leader, Chuck Schumer (NY). But two fellow senior Dems, Carl Levin (MI) and Byron Dorgan (ND), are decrying what they call a business "lobbying blitz" to secure repatriation benefits.

Read more »

Stimulus

Shocker: Business Lobby Wants Another Tax Cut in the Stimulus

Elana Schor | January 21, 2009, 10:44AM

The U.S. Chamber of Commerce is about to begin its push for a new addition to the economic stimulus bill, debate on which will begin today in the House.

And anyone who thought K Street would stop seeking its share of the stimulus pie after convincing Democrats to add the mysteriously named "net operating loss carryback" to the stimulus ... well, you'd be wrong. K Street wants more tax breaks for businesses -- and the latest one is called the "cancellation of indebtedness (COI) waiver."

Read more »