How special interests cater to Congress

How special interests cater to Congress

Peter Overby

Former Rep. Victor Veysey left Capitol Hill in defeat 17 years ago, but his luck improved at the 1991 annual gathering of the U.S. Association of Former Members of Congress. Veysey won a door prize — a new Mercedes-Benz.

How did Congress’s alumni club get a $33,000 car?

It came free for the asking.

“Mercedes-Benz donated the car to support the continuation of seminars and other exchanges between members of the Congress and the Bundestag,” a corporate official reported. It was solicited, she said, by the Congressional Study Group on Germany, an organization of 82 representatives and 19 senators connected to the former members’ association.

In other words, sitting members — who couldn’t accept such a gift themselves — suggested that Mercedes give the car to their retired colleagues.

While luxury cars may be off limits for lawmakers, plenty of other benefits aren’t. Congress, never shy about asking for money, prods special interests to make life pleasant on Capitol Hill.

Privatized perks can turn up almost anywhere. An eye-care center back home gives free glasses and contact lenses to Sen. Strom Thurmond (R-S.C.) and family. And there’s the Senate’s traditional “candy desk” — although tradition doesn’t include actually buying any candy. The stuff comes from the National Confectioners Association.

More significant, corporate money pays for congressional research through an array of privately supported, tax-exempt foundations and institutes. Congress created these organizations despite a budget of $705 million per year for some 300 committees and subcommittees, the Congressional Budget Office, Congressional Research Service, General Accounting Office and Office of Technology Assessment.

Private donations support the former members’ association ($350,000 a year) and a nationwide youth awards program controlled by Congress ($296,000 raised last year).

Even the Senate and House childcare centers count on lobbyists to finance scholarships: about $36,000 awarded annually on the House side, about $15,000 on the Senate side.

This gifting of Congress may not be as egregious as better-known sources of money — campaign contributions, free travel and, until recently, honoraria. But the informal system is yet another way special interest money is woven into the fabric of congressional life. Lobbyists are encouraged to buy access by picking up the tab, creating a cocoon of comfort for lawmakers. And the process sometimes has the unpleasant sense of a shakedown, as members and aides peddle their pet projects to interest groups that have matters pending before Congress.

These practices are legal under House and Senate rules. Defenders of the tradition even argue that it shifts a bit of spending from taxpayers to contributors. Ultimately, however, the taxpayers do pay. The activities are usually tax-exempt and the corporate donations often tax-deductible.

Kenneth Murphy, a 14-year Hill veteran who heads the nonprofit Environmental and Energy Study Institute, says, “My guess is there’s not a member of Congress who’s not been involved in setting up a nonprofit.”

Another Hill observer with ties to a nonprofit says that “it’s not a huge amount of money,” and lobbyists with major legislation in the pipeline “feel you can’t afford to say no.”

The pols and business people “need things from each other, so they do deals,” he says, adding, “I’ve been told, ‘You’re making a big mistake. You’re not asking your friends in Congress to make calls on your behalf.'”

STALKING THE LEGAL LOOPHOLE

Sports Afield is Hearst Magazines’ mass-circulation monthly on hunting and fishing, with articles like “Hunting the Red-Eyed Bird” and “What’s New In Longjohns” — an unlikely place to find a photo of seven congressmen in business suits. But there they were in the October issue, with the Capitol dome behind them, compliments of the Congressional Sportsmen’s Caucus Foundation.

The foundation bought a 30-page advertising section in Sports Afield to publicize the Congressional Sportsmen’s Caucus, a two-year-old organization that fights for hunting and fishing enthusiasts on such issues as gun control and animal rights. Jointly produced by Hearst and the foundation, and packed with ads from Smith & Wesson, Anheuser-Busch, Colt, Winchester and Remington, the magazine section featured articles by and about the caucus. Rep. Don Young (R-Alaska) linked outdoor sports and national oil policy to explain “Why Alaskan Sportsmen Support Opening the Arctic National Wildlife Refuge.” Rep. Ron Marlenee (R-Mont.) wrote that “America’s Hunting Tradition Must Be PROTECTED FROM FANATICS.”

The sportsmen’s caucus and foundation represent a mutual boosterism that is encouraged by a loophole in House rules.

The caucus is one of nearly 30 “legislative service organizations,” or LSOs, that deal with issues ranging from human rights to tourism. LSOs are organized by members and registered with the House, making them eligible for congressional office space, equipment and staff.

Under a 1981 attempt at reform, LSOs cannot take private contributions. But the reform allows LSOs to set up nonprofit foundations, which can accept private funds to do related work. Tax-exempt organizations, with yearly budgets that can reach $2 million or more, were spun off from congressional groups such as the Environmental and Energy Study Conference, Democratic Study Group, Northeast-Midwest Coalition, Congressional Clearinghouse on the Future, Competitiveness Caucus, Human Rights Caucus and others.

Some of the nonprofits gradually drifted away from their parent LSOs, but others retain ties. Ten of the 26 members of the Congressional Black Caucus sit on the board of the Congressional Black Caucus Foundation, with a $1 million annual budget. The Women’s Research and Education Institute, with a budget of about $450,000, is no longer connected to the Congressional Caucus on Women’s Issues, but “we do try to cooperate with the caucus,” says Alison Dineen of the institute.

Institutes, not surprisingly, get money from those most interested in their activities.

When the Environmental and Energy Study Institute held a fundraising dinner last spring, the invitation listed 89 representatives and senators as the Honorary Congressional Dinner Committee; below that was listed an 11-member Finance Committee that included ARCO Chemical Co., Pennsylvania Power and Light, Consolidated Natural Gas, FMC Corp., Manville Corp., Oryx Energy, Sony, Sun Co. and Waste Management Inc.

Lobbyists for several contributors cite the institute’s reputation for objective, thorough seminars and reports.

Institute Director Kenneth Murphy notes that corporate money pays 15 percent of the institute’s $1.5 million annual budget. “If we were perceived as being bought, we just wouldn’t get people to show up at the educational things we do,” Murphy says. “It probably irritates the hell out of some contributors. [But] they know what they’re getting, and they’re not getting any special deals.”

Minority and women’s groups have been especially dependent on special interest money, critics say. Coca-Cola, Philip Morris and McDonald’s finance Capitol Hill internships through the Congressional Hispanic Caucus Institute; in exchange, the institute names each set of internships for the sponsor. RJR Nabisco pays stipends for the institute’s Capitol Hill graduate fellowships. The Women’s Research and Education Institute has fellowships underwritten by RJR Nabisco and Philip Morris. The Black Caucus Foundation has been criticized for accepting large donations from beer and tobacco companies, including Anheuser-Busch, Miller Brewing and Philip Morris.

As for the Sportsmen’s Caucus, it has 98 House members and 10 senators, and operates out of the office of Rep. Richard Schulze (R-Pa.), its chair. The Sportsmen’s Caucus Foundation has an employee working out of the Washington office of the Olin Corp., which makes small-arms ammunition among other products.

The advertising section in Sports Afield ended with a predictable plea to America’s hunters and fishers: “The foundation has held fundraising dinners in Washington. . . .Although this is helpful, it is far short from what is needed. . . . If you believe that hunting and fishing rights are worth fighting for and protecting, you can make a difference by making a tax-deductible contribution to the Congressional Sportsmen’s Caucus Foundation. . . .”

The Joe Sixpack appeal was a little disingenuous. Half of the foundation’s 1990 income — $65,500 out of $129,250 total — came from just 13 big donors, including Hearst, Colt, the National Rifle Association, the Tobacco Institute and firearms manufacturer Storm, Ruger and Co. Smaller donors included gun groups, conservation organizations, the American Fishing Tackle Manufacturers Association, Dow, Du Pont and others, according to a caucus staff person who did not want to be identified.

The foundation reported spending $61,035. All but $352 was plowed back into fundraising activities, including annual banquets to honor the Sportsmen’s Caucus. The caucus aide says the foundation will soon start spending to educate “non-hunting and -fishing Americans” and will be hiring a consultant on an undisclosed issue.

Coincidentally, the same month that the foundation’s special section ran in Sports Afield, Hearst Magazines gave the Interior Department $10,000 in prize money for the First Annual Congressional Fishing Tournament. The lawmaker landing the biggest largemouth bass would give the money to a conservation or recreation project back home.

Fourteen House members and four senators cast off in boats with Interior Department officials and Hearst executives. The winner, with a 1.95-pound catch: caucus chair Dick Schulze.

ESCAPE FROM GUCCI GULCH

In the affluent ’80s, the House Democratic and Republican caucuses started holding annual weekend retreats, at which academicians and other outside experts would brainstorm with House members on upcoming issues. These operations, too, exist on corporate money.

For Democrats, the mechanism is the National Legislative Education Foundation, headed by John McEvoy, a former Senate staffer and now director of the National Council of State Housing Agencies. The foundation’s other directors are lobbyist E. Wayne Thevenot, previously an aide to former Senate Finance Chair Russell Long (D-La.); Edward Maeder, a partner in the politically connected law firm Winston and Strawn; Howard Paster, executive vice president of the lobbying firm Timmons and Co.; and Debbie Dingell, a director in the Washington office of General Motors and wife of House Energy and Commerce Committee Chair John Dingell (D-Mich.).

The foundation stopped fundraising several years ago, has $270,000 in the bank and hasn’t decided whether to continue after this year, says McEvoy.

“The source of the money then and later was people who have an interest in government, and [whom] you might call a lobbyist,” says McEvoy. “We’ll make the existing money last as long as we can without collecting any more.”

The Republican counterpart is the Congressional Institute, a more formal organization with full-time staff. Its directors are all lobbyists, including former Reagan aide M.B. Oglesby Jr., former Reagan chief of staff Kenneth Duberstein, former key House Republican staffer Edward Hamberger and Michael Johnson, one-time chief of staff for House Minority Leader Robert Michel (R-Ill.).

The institute’s 1991 “Congress of Tomorrow” retreat for House Republicans, at a Princeton, N.J., conference center, listed 65 major sponsors, ranging from the Tobacco Institute, National Rifle Association and American Petroleum Institute to Capital Cities/ ABC, CBS, General Motors, General Electric, General Dynamics and IBM. Also counted among the faithful were influence-peddling firms such as Akin, Gump, Strauss, Hauer & Feld, and Black, Manafort, Stone & Kelly.

Among other things, donors’ money paid for “focus groups” of voters in five states. Among the questions: “Just suppose a Martian landed in your backyard and asked you to describe the American people — but he didn’t understand sentences. What four or five words would you use?”

Donors can send their lobbyists along on the retreats, says institute president Jerome Climer. As for non-contributors, he says, “we invite those folks to audit it through C-SPAN.”

A MAGIC NAME

Some members have more personal connections to institutes and foundations.

There’s a golden triangle linking Rep. Les Aspin (D-Wis.), the Aspin Procurement Institute and the Department of Defense. As chair of the House Armed Services Committee, Aspin oversees DOD. He’s also founder and honorary chair of the five-year-old institute, which helps Wisconsin firms seeking government contracts. The institute president is Aspin’s former campaign manager.

Finally, the Pentagon’s Defense Logistics Agency in 1990 paid more than half of the institute’s $355,700 budget. The DLA also supports some 90 similar “procurement technical assistance centers,” intended to spread small-business defense contracts around the country. But no other center is so closely linked to a member of Congress, let alone the chair of a committee that oversees military procurement.

Other thousands of dollars for the Aspin institute come from military contractors, according to the Wisconsin State Journal.

The Pentagon prefers to regard the Aspin Institute as totally separate from Aspin himself. Says DLA spokesperson Pat Miller: “It just happens to have his name.”

But Aspin attends the institute’s trade shows and brags about its accomplishments in his campaign literature. Last summer he told Andy Hall of the Journal: “They thought if it was named after me, the Pentagon would pay more attention. And I think that’s true.”

CHILD’S PLAY

The House and Senate in the early ’80s created their own child-care centers–nonprofit organizations using congressional office space. The Senate Employees’ Child Care Center usually has about 60 children, with twice that many on a waiting list. The House of Representatives Child Care Center has about 70 children enrolled.

Both chambers enthusiastically support the centers, giving them free space and utilities. The Senate launched its center with a $20,000 government loan, but the center is otherwise self-sufficient. The House gave its center a $100,000 startup loan, which was later forgiven. This fall, the House put its child-care workers on the government payroll.

Lobbyists pay for the centers’ scholarships, which go to eligible children whose parents can’t afford tuition.

In the past four years the Senate center’s scholarship fund has received money from, among others, Mobil, Texaco, Shell, Sun, Chevron, RJR Nabisco, The Tobacco Institute, Smokeless Tobacco Council, Merck, Abbott, Hoffman-LaRoche, National Association of Life Underwriters, American Council of Life Insurance, Association of Trial Lawyers of America, Ford Motor, Public Securities Association, Dun & Bradstreet, Patton, Boggs & Blow (powerhouse lobbyist Tommy Boggs’s firm), McDonnell Douglas, General Electric, Rockwell Industries, GTE, AFSCME, Direct Mail Marketing Association, Archer Daniels Midland and MCI.

Congressional day-care parents raise money at various events, including high-priced receptions. The most recent reception, for the Senate center, in September 1990, was a $500-per-person (tax-deductible) affair hosted by 32 Senate wives. None of the women had children at the center, but they did have husbands with clout: the chairs or ranking Republicans of eight full committees and 11 subcommittees, plus the minority whip, secretary of the Senate Democratic Conference and co-chair of the Democratic Policy Committee.

Why would a corporation want to subsidize day care for Senate staff members’ children?

“I suspect a lot of folks would look at it as just another way of these big corporations to provide more funding for the senators,” admits day-care parent Philip Shimer, a lobbyist who manages fundraising for the center. But he says: “I would tend to look at it as just [civic spirit in] the Capitol Hill community.”

Indeed, RJR Nabisco has a foundation that supports educational activities. But for congressional child care, says RJR Vice President Tracy Riese, the checks come from the corporation, not its foundation, and the government relations office made additional tax-deductible contributions.

One lobbyist whose firm contributed to the Senate center was outraged that the motives could be questioned. “There’s nothing nefarious,” he says, speaking on condition of anonymity. “I don’t see how you could leverage that. If you wrote a check to a child care center, is your name on a board?”

Yes, if you’re generous. The Senate center, for example, has plaques to commemorate donors in its Silver Circle ($500 each) and Golden Circle ($500 annually for at least three years). So far, 19 corporations and lobbying groups have attained Circle status.

Congress also has its own Congressional Award Foundation to honor America’s youth. Launched in 1979, the foundation gives bronze, silver and gold medals to young people who undertake community service and self-improvement activities, including “an interaction with the wilderness or . . . immersing yourself in an unfamiliar culture.” It also is authorized to dispense scholarships, but has never had enough money.

The lawmakers provided for Congressional Award Councils in every House district and state that wanted one, installing themselves as honorary council chairs. Members of Congress would hand out the awards. There would be gold award ceremonies every year in Washington.

The beauty part: Private funds would pay for everything.

It didn’t work out that way. By 1987 the foundation had run up $322,000 in debts. Congress quietly approved a $189,000 bailout. A 1988 report by the General Accounting Office slammed the foundation for shoddy financial practices.

In 1990, midway through an overhaul, the foundation asked for another $124,000. “This is the Congress’s program” the House Education and Labor Committee reported; “it must have the Congress’s commitment.” But Congress said no.

The foundation saw it needed more backing from Congress, so it replaced several out-of-town directors with D.C. lobbyists (including Tommy Boggs) and hired a new national director: Kendall Hartman, formerly on the staff of Sen. Malcolm Wallop (R-Wyo.), an original sponsor of the program. Hartman has begun recruiting a “Committee of 100” at $10,000 each. Among the first members: Chevron, RJR Nabisco and Seagram.

“We have a long way to go,” Hartman said, but added: “We all feel much, much more confident than we did two-and-a-half years ago.”

THE SPORTING LIFE

When was the last time someone took you skiing? For a dozen or more senators, the chance comes this winter in Utah, at the annual Senators’ Ski Cup. The senators get free travel, lodging, lift tickets and bags of goodies. In 1990 those bags had high-tech sunglasses and other items worth $438.

They’ll be schussing with lobbyists and business executives who each paid $2,500 or so for the privilege. “There are many presidents, CEOs,” says Mary Thiriot, the charity’s director. “They’ll call us” to participate, she adds.

There are several such competitions — golf, tennis, basketball and other sports — all billed as tax-exempt charity events. Their schmoozing value is well established.

“It’s easier [as a lawmaker] to vote with them if you understand their perspective, and it’s easier to understand their perspective if you spent four or five hours with them playing golf than if they got just 20 minutes in your office,” says one Hill observer. “Not every [lobbyist] has that access.”

But do these events work as charity fundraisers?

The National Charities Information Bureau says at least 60 percent of spending should actually reach the intended charity.

The ski cup, organized six years ago by Sen. Jake Garn (R-Utah), raised about $450,000 in 1991, according to Thiriot, who also works on Garn’s Senate staff. About half went to the designated charity, the Primary Children’s Medical Center in Salt Lake City; about half went to overhead. The 1992 event will put total donations over $1 million, she says.

The Danny Thompson Memorial Golf Tournament in Idaho, created by former Rep. Ralph Harding (D-Idaho), expects to raise $230,000 or more for leukemia research this year. Harding figures that half of each $1,000 admission fee goes to overhead.

Closer to Washington itself, the Grocery Manufacturers Association (GMA) created the Congressional Charity Tennis, Golf and Basketball Tournaments. Each event gives annually — usually $5,000 or $10,000 — to such causes as the National Foundation for Ileits and Colitis, and the Mildred (as in Mrs. “Tip”) O’Neill Scholarship Fund. Until last year, the tournament organizations were run out of GMA offices by GMA staff.

Compared with overhead costs, the GMA events sent relatively little money to the needy.

The 1990 golf tourney (the latest for which figures are available) raised $52,500; spent $33,500 on travel, meetings, a reception and other overhead; and gave $10,000 to the Capital Area Community Food Bank. In 1988 the tennis tournament took in $81,250, spent $45,000 and donated $10,000 to the ileitis and colitis foundation.

Controlling the GMA tournaments are boards of directors made up of lobbyists, including Washington representatives for Sears Roebuck, Kraft General Foods, Coca-Cola, the Chemical Manufacturers Association and, of course, GMA.

George Koch, former GMA head and still chair of the tournaments, won’t talk about the events or their charitable work. “We have the tournaments and that’s it,” Koch said politely. “I see no redeeming value in discussing it with you — the press — or anyone else.”

A backlash may be developing against these charity sports events. Harding, at the Danny Thompson tournament, says that bad publicity has scared off many of his congressional duffers. That will hurt leukemia research funding, he says, but adds, “I realize that some of those golf tournaments have been set up just to get corporate executives together with congressmen.”

PLAYING BALL

Congress likes its summertime fun old-fashioned and all-American. Unlike small-town America, it lets lobbyists foot the bill.

The Congressional Baseball Game began in 1909 as a casual matchup between Democratic and Republican congressmen. Eighty-two years later, it has grown into a corporate-sponsored extravaganza.

Game night last summer had surreal overtones. Around dinnertime on a muggy July evening, more than a thousand boisterous Hill staffers arrived at the ballfield, in one of the poorest neighborhoods of suburban Alexandria, Va. Some of the 67 game sponsors hung out their corporate banners, Miller Brewing pumped beer from a truck made to look like a hugh six-pack, and NYNEX (one of the Baby Bell telephone companies) gave away neon-frame sunglasses. The Democrats won 13-9.

The event raised $25,000 for Children’s Hospital in the District.

Seven neighborhood kids quietly watched the game from the far corner of the far grandstand. They had bought tickets, but said they had been warned by a man at the gate: “If we made a lot of noise, he was going to put us out.”

COPYRIGHT 1992 Common Cause Magazine

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