NY Times Story Outlines McCain's Ties to Indian Gaming Industry

An article by Jo Becker and Don Van Natta Jr. of the New York Times went largely unnoticed on Sunday due to the nation’s focus on the ongoing financial crisis. The story was a lengthy examination of the relationships cultivated between lobbyists representing the Indian gaming industry and Senator John McCain over his 22 years in the U.S. Senate. Both presidential candidates have pledged to change the way Washington works, emphasizing their Senate records as champions of lobbying and ethics reform.

In a move that is emblematic of the rapid-response mindset in modern campaign advertising, the Democratic National Committee wasted no time in producing an eerie web video, portraying McCain as a “betting man” who stacked the deck in his favor during the explosive growth of a now $26 billion Indian gambling industry.

While on the stump, the candidates have downplayed their own ties to lobbyists while publicly ignoring the fundraising role policy advocates and their firms play in presidential campaigns. This has not prevented Senators McCain and Obama (and their surrogates) from ramping up the attacks against each other, however.

The junior senator from Illinois has attempted at times to portray McCain and his campaign as hypocritical: “This is somebody who has been in Congress for 26 years, who put seven of the most powerful Washington lobbyists in charge of his campaign,” Obama quipped at a recent campaign rally. “And now he tells us that he's the one who is going to take on the old boy's network. The old boy's network, in the McCain campaign, that's called a staff meeting.” Senator McCain, for his part, has not been reluctant to send barbs in Obama’s direction: “The crisis on Wall Street, my friends, started in the Washington culture of lobbying and influence-peddling, and [Senator Obama] was right square in the middle of it.”

In spite of these zingers flying back and forth between the candidates in what is a very competitive race, the Times article raises some interesting questions for McCain, who, as chair of the Senate Indian Affairs Committee, presided over the congressional investigation into the lobbying activities of Jack Abramoff. While both Senators McCain and Obama have been at pains to distance themselves from any close association with Washington lobbyists and “special interests,” it is clear that both candidates could be more forthright on this issue.

Questions from tonight's debate

Early in the debate, McCain said that the amount spent on earmarks has increased greatly in recent years, that earmark spending has gotten out of control. We have done some research on this at CCPS, and have found that it is not necessarily true that earmarked spending has gotten so much worse. Although it is hard to count "earmarks" (in part because they are defined differently by different committees and agencies) and even harder to count the actual dollar amounts attached to them, we pieced together an aggregate dollar amount for each year from 1994-2006 and found that although the number of earmarks increased, the value of the earmarks as a total percentage of the discretionary budget did not change.


Senator McCain keeps referring to General Petraeus (who I love and have followed his story, in part because he has a PhD and has surrounded himself with a staff full of PhDs, something I am hoping to have soon). Does McCain know that Petraeus is actually no longer in Iraq, that he left on September 16? Here's the "Change of Command" video from Pentagon TV.

The First Debate

Watching Obama and McCain debate tonight reminds of the first time they were in a public debate, during the effort to pass lobbying reform legislation way back in 2006 (when not very many people thought either Senator had a chance of ever being president). In February 2006,they got into a disagreement over some of the details of the legislation. They exchanged tersely written letters - McCain would later say they had become "pen pals" - and when they were scheduled to testify together before the Senate Rules Committee meeting on February 8, 2006, lots of cameras were there to document their "make-up" handshake. Professor Thurber had been working closely with Senator Obama and his staff on the legislation, and he was also at the hearing that day to testify. A New York Times photographer caught the Obama-McCain handshake, and managed to get Prof. Thurber in the shot too.


Here is the story from the New York Times where this photo ran.

And here are copies of the letters that Obama and McCain exhanged on the lobbying reform bill.

February 2, 2006

The Honorable John McCain
United States Senate
241 Russell Senate Office Building
Washington, DC 20510

Dear John:

Thank you for inviting me to participate in the meeting yesterday to discuss lobbying and ethics reform proposals currently before the Senate. I appreciate your willingness to reach out to me and several other Senate Democrats to discuss what should be done to restore public confidence in the way that Congress conducts its business. The discussion clearly underscored the difficult challenge facing Congress.

You and many in the Democratic Caucus have played a major role in reform efforts in the Senate. In fact, the Indian Affairs Committee hearings you led were instrumental in promoting public awareness of the culture of corruption that has permeated the nation's capital.

As you know, Senator Harry Reid and others in the Democratic Caucus have taken an important step by introducing S. 2180, the Honest Leadership Act, which imposes many of the same disclosure requirements for lobbyists that you have proposed, while also strengthening enforcement, eliminating "pay to play" schemes, and imposing more restrictive rules on meals, gifts, and travel that Members and their staff can receive from special interests that advocate before Congress. This bill, which now has the support of 40 members of the Democratic Caucus, represents a significant step in addressing many of the worst aspects of corruption that have come to light as a result of the Justice Department investigation of Jack Abramoff.

I know you have expressed an interest in creating a task force to further study and discuss these matters, but I and others in the Democratic Caucus believe the more effective and timely course is to allow the committees of jurisdiction to roll up their sleeves and get to work on writing ethics and lobbying reform legislation that a majority of the Senate can support. Committee consideration of these matters through the normal course will ensure that these issues are discussed in a public forum and that those within Congress, as well as those on the outside, can express their views, ensuring a thorough review of this matter.

Given the state of affairs in Washington, we have a historic opportunity to make fundamental changes in the way our government operates so that the actions we take as public officials are responsive and transparent to the American people. Thank you again for your interest in this important matter.

Sincerely,

Barack Obama
United States Senator

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February 6, 2006

The Honorable Barack Obama
United States Senate
SH-713
Washington, DC 20510

Dear Senator Obama:

I would like to apologize to you for assuming that your private assurances to me regarding your desire to cooperate in our efforts to negotiate bipartisan lobbying reform legislation were sincere. When you approached me and insisted that despite your leadership's preference to use the issue to gain a political advantage in the 2006 elections, you were personally committed to achieving a result that would reflect credit on the entire Senate and offer the country a better example of political leadership, I concluded your professed concern for the institution and the public interest was genuine and admirable. Thank you for disabusing me of such notions with your letter to me dated February 2, 2006, which explained your decision to withdraw from our bipartisan discussions. I'm embarrassed to admit that after all these years in politics I failed to interpret your previous assurances as typical rhetorical gloss routinely used in politics to make self-interested partisan posturing appear more noble. Again, sorry for the confusion, but please be assured I won't make the same mistake again.

As you know, the Majority Leader has asked Chairman Collins to hold hearings and mark up a bill for floor consideration in early March. I fully support such timely action and I am confident that, together with Senator Lieberman, the Committee on Governmental Affairs will report out a meaningful, bipartisan bill.

You commented in your letter about my "interest in creating a task force to further study" this issue, as if to suggest I support delaying the consideration of much-needed reforms rather than allowing the committees of jurisdiction to hold hearings on the matter. Nothing could be further from the truth. The timely findings of a bipartisan working group could be very helpful to the committee in formulating legislation that will be reported to the full Senate. Since you are new to the Senate, you may not be aware of the fact that I have always supported fully the regular committee and legislative process in the Senate, and routinely urge Committee Chairmen to hold hearings on important issues. In fact, I urged Senator Collins to schedule a hearing upon the Senate's return in January.

Furthermore, I have consistently maintained that any lobbying reform proposal be bipartisan. The bill Senators Joe Lieberman and Bill Nelson and I have introduced is evidence of that commitment as is my insistence that members of both parties be included in meetings to develop the legislation that will ultimately be considered on the Senate floor. As I explained in a recent letter to Senator Reid, and have publicly said many times, the American people do not see this as just a Republican problem or just a Democratic problem. They see it as yet another run-of-the-mill Washington scandal, and they expect it will generate just another round of partisan gamesmanship and posturing. Senator Lieberman and I, and many other members of this body, hope to exceed the public's low expectations. We view this as an opportunity to bring transparency and accountability to the Congress, and, most importantly, to show the public that both parties will work together to address our failings.

As I noted, I initially believed you shared that goal. But I understand how important the opportunity to lead your party's effort to exploit this issue must seem to a freshman Senator, and I hold no hard feelings over your earlier disingenuousness. Again, I have been around long enough to appreciate that in politics the public interest isn't always a priority for every one of us. Good luck to you, Senator.

Sincerely,

John McCain
United States Senate

---

February 6, 2006

The Honorable John McCain
United States Senate
241 Russell Senate Office Building
Washington, DC 20510

Dear John:

During my short time in the U.S. Senate, one of the aspects about this institution that I have come to value most is the collegiality and the willingness to put aside partisan differences to work on issues that help the American people. It was in this spirit that I approached you to work on ethics reform, and it was in this spirit that I agreed to attend your bipartisan meeting last week. I appreciated then - and still do appreciate - your willingness to reach out to me and several other Democrats.

For this reason, I am puzzled by your response to my recent letter. Last Wednesday morning, you called to invite me to your meeting that afternoon. I changed my schedule so I could attend the meeting. Afterwards, you thanked me several times for attending the meeting, and we left pledging to work together.

As you will recall, I told everyone present at the meeting that my caucus insisted that the consideration of any ethics reform proposal go through the regular committee process. You didn't indicate any opposition to this position at the time, and I wrote the letter to reiterate this point, as well as the fact that I thought S. 2180 should be the basis for a bipartisan solution.

I confess that I have no idea what has prompted your response. But let me assure you that I am not interested in typical partisan rhetoric or posturing. The fact that you have now questioned my sincerity and my desire to put aside politics for the public interest is regrettable but does not in any way diminish my deep respect for you nor my willingness to find a bipartisan solution to this problem.


Sincerely,

Barack Obama
United States Senator

Shades of Gray: When Campaign Consultants are also Lobbyists

In Professor Thurber's chapter in the book, Shades of Gray: Perspectives on Campaign Ethics (2002, editors Candice Nelson, David Dulio and Stephen Medvic), he writes about the ethical dilemma surrounding political consultants who are both campaign advisors and lobbyists. The simplest case is of a campaign staffer who helps a candidate get elected, then goes on to lobby the now-elected official on behalf of some private interest. The former campaign staffer has unique access to the elected official, especially if he helped get them elected.

The case we are seeing play out in the McCain campaign is more complicated, since Rick Davis (McCain's campaign manager who is accused of being paid as a lobbyist for Freddie Mac until just before the bailout of Fannie and Freddie) is said to have "recused" himself from his firm's dealings with Fannie and Freddie. The ethical question here is whether Davis, as the top staff person on the McCain campaign, should have been involved with Fannie and Freddie (*especially* during the worst housing crisis and the bailout of these firms) and if he was, did he tell his boss the extent of his involvement.

Thurber's chapter, "From Campaigning to Lobbying," reviews the American League of Lobbyists Code of Ethics, and it seems pretty clear that Davis violated Article IV - "Conflicts of Interest" (since on Sunday night in a CNBC interview McCain said that Davis was no longer involved with the mortgage giants). But the funny thing is that Fannie and Freddie probably kept Davis' firm as its lobbyist BECAUSE of his connection to McCain, so the "conflict of interest" is apparently a one-way street.

This happened to a Dem consultant during the primaries: Mark Penn, Hillary Clinton's top strategist, who was doing work for the government of Columbia at the same time that he was working on Clinton's campaign. This was such a conflict of interest, that he was actually helping the Columbian government advocate for something that his candidate opposed.

Is this what we should come to expect of our country's top political consultants? They can't pay their bills working just for presidential candidates, can they - since presidential campaigns only happen every 4 years? (Even though the campaigns never really stop, do they?) So we have to expect that they will have other clients besides candidates and campaigns. It seems to me that the burden here lies with the candidates as much as it does with the consultants. Candidates should expect their high-paid consultants to work only for them, not their private-interest clients, when a campaign is underway. Candidates should know about the Lobbyist Code of Ethics, and consultants should be expected to adhere to them.

What do you think?

40 Days Left

With just 40 days left until Election Day, today seems like a great day to resurrect the CCPS blog. Even though Senator McCain is suspending his campaign at the same time we're restarting our blog, we bet that there will be great campaign stories just about every day until November 4.

I can't promise that we'll have the same kind of original analysis of polls and trends that Brian Schaffner offered when he was the chief blogger here, but we here's what we will do:

- Keep you updated on CCPS events and activities.

- Post research and reports written by CCPS fellows and board members.

- Share with you some of the interesting political analysis that we're reading.

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Today the CCPS phones were ringing with reporters calling to ask Professor Thurber about the McCain campaign's ties to lobbyists for Freddie Mac. Here's the story, which became more interesting this weekend when Senator McCain denied to reporter John Harwood in a CNBC interview that his campaign manager, Rick Davis, was involved as a lobbyist for Fannie or Freddie. Here is a transcript of the exchange:

HARWOOD: You mentioned cronyism and corruption on Wall Street and in Washington, and you've criticized Obama for self dealing here. How do you square that with the fact that your campaign manager, Rick Davis, was involved in some lobbying activities on behalf of Fannie Mae? And secondly, what specifically would you prevent, would you outlaw--what activity would you outlaw in Wall Street to make sure this doesn't happen again?

Sen. McCAIN: Now, on Wall Street, I'd--obviously we need to stop--we need to more--have more transparency. We need to take the regulatory agencies and merge them together in one effective agency. These regulatory agencies, this alphabet soup, was really designed for a different era. We're now in global transactions. We need more transparency. We need to combine the regulatory agencies, and we need to give them some more authority, if necessary, to do so. You know, Secretary Paulson had a package of recommendations sometime ago that basically did not really go anywhere. Maybe we can look at those and other recommendations in the future.

In Washington, I still think that it was the special interest money that went--and Fannie and Freddie money that went, and everybody was involved in this--not everybody, but certainly Senator Obama got next amount of money, except for the two Democratic chairman. His vice presidential search team was headed by Mr. Johnson, and...

HARWOOD: And your campaign manager?

Sen. McCAIN: And my campaign manager has stopped that, has had nothing to do with it since, and I'll be glad to have his record examined by anybody who wants to look at it.

(The entire transcript of the interview is available here.)

So after examining Rick Davis' record, it looks like his lobbying firm was getting about $15,000 a month from Freddie Mac until just before the bailout.