Delusional Democracy

WASHINGTON — The quiet, tree-lined 400 block of New Jersey Avenue, with its expanse of Victorian houses in the shadow of the U.S. Capitol, resembles many residential streets in this part of Washington.

Look closer during the cocktail hour while Congress is in session. Well-coiffed men and women mill about behind the grand windows, glasses in hand. Stand on the sidewalk, and you’re bound to bump into a lawmaker.

Real estate records explain. One newly renovated house is owned by UPS, the global shipping company. Another belongs to Patton Boggs, the city’s top-grossing lobbying firm. There’s former Texas congressman-turned-lobbyist Jack Fields’ place. Down the way is lobbyist Tim Rupli, who moved in about a year ago.

Most of the thousands of lobbyists work across the city, in and around K Street. In the past decade, 18 lobbying firms, corporations and labor unions have purchased town houses or leased office space near the Capitol, joining more than a dozen others that had operated there for years, according to real estate records.

Despite a strict new ban on gifts to lawmakers, lobbyists routinely use these prime locations to legally wine and dine members of Congress while helping them to raise money, campaign records show. The lawmakers get a venue that is often free or low-cost, a short jaunt from the Capitol. The lobbyists get precious uninterrupted moments with lawmakers — the sort of money-fueled proximity the new lobbying law was designed to curtail. The public seldom learns what happens there because the law doesn’t always require fundraising details to be reported.

“It’s a nice added bonus to say, ‘Hey, we’re going to host it at our house,'” said Jeffrey Shoaf, chief lobbyist of the Associated General Contractors of America, which opened its doors for nine fundraisers — and others that he says went undisclosed — last year at its redbrick town house two blocks from the Capitol.

The receptions, which can range from small breakfast meetings of five to large catered parties of 100 or so, are only a sliver of the fundraising universe.

Even so, they illustrate that lawmakers still are allowed to accept valuable favors from special interests willing to pay for access, despite promises by House Speaker Nancy Pelosi and other lawmakers that the restrictions on gifts and trips would “break the link between lobbyists and legislators.”

The role of lobbyists in fundraisers wasn’t addressed in the lobbying law signed last September. As long as they don’t exceed the federal cap on campaign donations — $10,000 per two-year election cycle for political action committees — lobbyists can underwrite an event for a favored senator or representative at a resort, on a golf trip or at their town house.

USA TODAY counted more than 400 congressional fundraisers at lobbyist-, corporate- or labor-owned Capitol Hill facilities last year through November, benefiting 214 lawmakers — 40% of Congress. Those numbers, based on invitations, interviews and Federal Election Commission records, capture only part of the total because many events go undisclosed. The figures don’t include fundraisers hosted by lobbyists at their K Street offices, which are subject to the same rules but don’t offer similarly convenient geography. USA TODAY also found examples of lawmakers helping the interests of the lobbyists who hosted them.

“This is business as usual,” said Malcolm Berkley, a spokesman for UPS, which opened its doors for lawmakers 57 times during the first 11 months of last year. “We are participating in the system that is established, and we do it by the rules and guidelines.”

‘A quality opportunity’

Lobbyists have long sponsored fundraisers for Congress members at Capitol Hill restaurants and clubs. When Congress is in session and venues on the Hill book up, those with a well-located private facility have a distinct advantage.

“It’s location, location, location,” said former Pennsylvania congressman Bob Edgar, a Democrat who heads Common Cause, a citizen watchdog group.

Congress members prefer a fundraiser on the Hill because it affords “more time with their donors and less time in transit,” said health care lobbyist Frederick Graefe, who launched a solo practice last year from his million-dollar town house.

He estimates he hosted two dozen events there last year, but only two of them were reported.

The lobbyists offer lawmakers access to a larger donor network, fundraising consultant Tom Hammond said. “Sometimes if you do an event at, say, the UPS town house, other folks in the transportation industry will attend,” he said. “Or if it’s a Patton Boggs town house event, sometimes some of their clients will show up.”

Kate Smith, who hosted at least 29 fundraisers last year near the Capitol as the PAC director for the American Council of Life Insurers, said the gatherings present “a quality opportunity to be able to discuss your issues.”

Convenient access doesn’t come cheap. The general contractors association, whose headquarters is in suburban Arlington, Va., spent $3 million in 2001 to buy and outfit a town house on D Street near the House office buildings, including $23,000 for artwork, according to its federal tax filings.

“These houses are tangible proof of how big a business the pay-to-play system has become,” said Meredith McGehee of the non-partisan Campaign Legal Center. When lawmakers pay to rent the houses for fundraisers, records show, they often get cut-rate deals, despite FEC rules that say campaigns must pay fair-market value for goods and services.

Brett Kappel, a campaign-finance lawyer who advises trade associations, said he tells would-be fundraising hosts to compare what nearby hotels charge to rent a room of similar square footage. The Hyatt Regency Washington, two blocks from the Capitol, charges $500 to rent a room for 25 people for two hours, said Steve Baughan, senior catering manager.

A small event at the Sewall-Belmont House, a historic Capitol Hill town house, costs $800 for a room, according to its website. Records show UPS charges $200.

The Associated General Contractors recently raised its fee from $75 to $100. Shoaf and Berkley said hotels are not an apt comparison. “We’ve looked at other similarly situated properties in the Capitol Hill area, and we’ve made the determination with outside counsel” that the company is charging “a fair cost,” Berkley said. Shoaf said the contractors open their facilities to non-political groups, and therefore come under an FEC exemption that allows “community rooms” to be used for fundraisers for a nominal fee.

‘More transparency’ needed

On a recent chilly autumn night on New Jersey Avenue, Rep. Bill Sali sat in on the drums with a band at Rupli’s house.

The party was to raise money to retire some of the Idaho Republican’s campaign debt, and among the attendees were lobbyists from the Carmen Group, whose slogan is “proven results.”

A few weeks later, House Majority Leader Steny Hoyer’s driver double-parked his black SUV in front of the town house owned by partners in the lobbying firm Williams & Jensen while the Maryland Democrat stopped into a fundraiser for Rep. Nydia Velázquez, D-N.Y. That was two months after the enactment of a bill designed to curb the influence of lobbyists.

Congress passed the law largely in response to the crimes of convicted former lobbyist Jack Abramoff, who pleaded guilty to corrupting then-representative Bob Ney, R-Ohio, and other government officials with gifts. Under the new rules, members of Congress no longer are allowed to accept even small gifts or meals from lobbyists or their clients. They no longer may take subsidized trips in private jets. Lobbyist-funded travel has been curtailed to no more than two nights.

Some things haven’t changed. Some lawmakers have advocated freeing Washington from the grip of lobbyists by day while continuing to take their campaign money by night. Last year through October, Democratic lawmakers outraised Republicans among business interests by $324 million to $253 million, and among registered lobbyists by $6.9 million to $5.3 million, according to the non-partisan Center for Responsive Politics.

Asked about lobbyist fundraising last spring, Hoyer said, “If you look at all the convictions and the people who are serving in jail, it’s not about campaign money. It’s about taking money directly from special interests for travel, meals, in your pocket. The beauty of campaign finance is there is disclosure. People can see.”

Not always.

Under federal election rules, groups can provide lawmakers free food, drink and a fundraising venue if they disclose that spending as contributions, usually through their political action committees. Those count against the limits of $10,000 per two-year election cycle for PACs and $4,600 for individuals.

Or they can charge the lawmaker, in which case the expense should show up in election records if it exceeds $200.

In theory, this should mean nearly all events are disclosed, allowing the public to learn which special interests have hosted fundraisers for which legislators. In practice, a list of exemptions prevents that.

The FEC allows lobbyists to give their space to federal candidates, or charge a nominal fee, if they also make it available at little or no cost to charities and civic groups.

FedEx provides its town house free to members of Congress and charities, spokesman Maury Lane said, so there is no public record of the fundraisers. Lane said he didn’t know how many events were held.

Another exemption allows an individual to spend up to $1,000 hosting a fundraiser in his home without reporting it or having it count against contribution limits, a provision Graefe said allows most of his events to go undisclosed.

Because some lobbyists charge less than $200 for rent, campaigns don’t have to itemize those payments — leaving no record connecting the lawmaker to the lobbyist-hosted event. Hoyer declined to answer questions for this story. His spokeswoman, Stacey Bernards, said, “This may be an area where there could be more transparency.”

A little more sunlight is coming. The new law requires disclosure of “bundling” of contributions by lobbyists — long a hidden fixture of fundraising.

The measure, which awaits FEC enforcement rules, requires lawmakers to list the name of any lobbyist who raises at least $15,000 for them in a six-month period, along with the amount raised. Some lobbyists are confident their fundraisers will not be covered.

“Most of our events are under that threshold,” said Doyle Bartlett, a former congressional staffer whose firm, Bartlett Bendall, hosted at least 18 Hill fundraisers last year, campaign records show.

Donations, then earmarks

Some observers say the new gift and trip restrictions have put more emphasis on helping Congress members raise money as a way of gaining access to lawmakers.

“A very unfortunate effect of the gift rule changes is that it has definitely forced more of the substantive interaction between members and constituents into a fundraising context,” said Stewart Van Scoyoc of Van Scoyoc Associates, the fourth-highest grossing lobbying firm in the first half of last year.

Van Scoyoc’s firm maintains a PAC that spent $70,000 during the first 11 months of last year to underwrite 47 fundraisers.

The firm resides in one of the city’s most desirable locations for lobbyists, at 101 Constitution Ave. NW, a sleek building that opened in 2002 with a boast on its website of “unparalleled access to leaders.”

Hors d’oeuvres served by Van Scoyoc’s caterer, Ridgewells of Bethesda, Md., include Peking duck pancake wraps and mini-crab cakes with key lime tartar sauce. Individually, Van Scoyoc and his employees gave $429,500 to federal candidates last year through October, and $812,000 in 2005 and 2006, according to a USA TODAY analysis of FEC records compiled by CQ MoneyLine.

After working with a member of Congress to help a client, Van Scoyoc said, “you’re almost ungracious” if you turn down a request for fundraising help.

Trading contributions for official action is illegal, and lobbyists say they don’t give with the expectation of achieving a specific policy result. “It’s frankly insulting for these so-called consumer groups to say that a member can be bought for $1,000, or that I expect something in return,” Graefe said.

Even so, correlations between lobbyist-hosted fundraisers and official actions that please the lobbyists are not hard to find:

• UPS hosted a breakfast fundraiser at its town house for Rep. Jim Oberstar, D-Minn., head of the House transportation committee, on June 28. Later that day, Oberstar won committee adoption of an amendment he authored, with UPS’ support, that would make it easier for workers at rival FedEx to unionize. Many UPS workers are unionized.

Besides the $728 cost of the breakfast and room, UPS’ political action committee contributed $4,772 to Oberstar’s campaign this campaign cycle. UPS hosted another town house fundraiser for Oberstar’s leadership PAC on Jan. 15. “It just happened that the (committee vote) was the same day,” Oberstar said. “It wouldn’t have made any difference if we’d had (the fundraiser) the month before or the month afterward. I wasn’t thinking about it at all.”

He said his amendment would fix a disparity in the law he’s long wanted to change. UPS spokesman Berkley also said the timing was a coincidence and UPS was not the driving force behind the FedEx-related proposal.

• On Dec. 19, Rep. Nancy Boyda, a freshman Democrat from Kansas, issued a news release taking credit for a $485,000 grant for a wastewater treatment project in Iola, a town in her district. On Oct. 15, the Van Scoyoc firm had registered to lobby for Iola. On Nov. 1, the firm hosted a fundraiser for Boyda at its offices. The cost for catering, beverages, room rental and incidentals: $1,203, paid for by the firm’s PAC.

On the day the House of Representatives passed the lobbying law in July, Boyda said that the ban on gifts and meals was important to her constituents because “they want to know that I’m not sitting someplace in Washington, D.C., with somebody that gets my attention for two solid hours.”

On Jan. 18, Boyda said, “If the good people of Kansas want to ask if this passes the smell test, I think that it does,” because benefits flowed to her district.