Mr. Speaker, this bill is the fox adjusting the lock on the hen house door. I intend to submit for the record before the end of the day an article from 1995 when the then Speaker of the House set up the K Street Project. K stands for…
Mr. Speaker, this bill is the fox adjusting the lock on the hen house door. I intend to submit for the record before the end of the day an article from 1995 when the then Speaker of the House set up the K Street Project. K stands for kleptomania or kleptocracy. I'm not sure exactly what the K stands for, but this project was set up in 1995; and what is going on today is an absolutely predictable result of what was done in 1995 when the
lobbyists were told, Don't hire any Democrats. You only hire Republicans. You only give to Republicans. You don't give to Democrats.
For us to come out here today and put a bill up here as though it were going to do anything, when it is proposed by the people who put the K Street Project together in the first place, is absolutely unbelievable. This House is in a delusional state that anything is changing on behalf of the people.
The fact is that this is what you get when you have a K Street Project in place. And they are not fixing it this way, and they want to wrap us all around it and say, well, you'll help us fix it this way by keeping some old Member out of the gym from playing basketball with me. Come on, they have all got my phone number. They have got everybody's phone number in this whole building. And for you to think that this silly little piece of legislation is going to do one thing about cleaning up this town is simply nonsense.
We ought to be talking about public funding of elections. Then we would be talking about reform. But you are not going to reform it by keeping a couple of guys off the floor or a couple of guys out of the gym or whatever. That is simply not going to work, and it is foolish. Everyone should vote ``no'' on this rule.
[From the Washington Post, Nov. 27, 1995]
Speaker and His Directors Make the Cash Flow Right
(By David Maraniss and Michael Weisskopf)
In the annals of the House Republican revolution, a pivotal
moment came last April when an unsuspecting corporate
lobbyist entered the inner chamber of Majority Whip Tom
DeLay, whose aggressive style has earned him the nickname
``the Hammer.'' The Texas congressman was standing at his
desk that afternoon, examining a document that listed the
amounts and percentages of money that the 400 largest
political action committees had contributed to Republicans
and Democrats over the last two years. Those who gave heavily
to the GOP were labeled ``Friendly,'' the others
``Unfriendly.''
``See, you're in the book,'' DeLay said to his visitor,
leafing through the list. At first the lobbyist was not sure
where his group stood, but DeLay helped clear up his
confusion. By the time the lobbyist left the congressman's
office, he knew that to be a friend of the Republican
leadership his group would have to give the party a lot more
money.
It didn't take long for the word to spread around town
about the Hammer and his book. By some accounts--apocryphal
as it turns out--DeLay even made lobbyists turn to their
contribution totals and initial them, like a report card.
Such stories actually make DeLay's job easier. When an aide
once asked whether efforts should be made to quell the
legend, DeLay leaned back in his chair and said, ``No, let it
get bigger.''
Inside the House Republican leadership, the former pest
exterminator from Houston is the enforcer. His mission is to
ensure that money flows along the same stream as policy, that
the probusiness deregulatory agenda of the House Republicans
receives the undivided financial support of the corporate
interests that benefit from it. His motto is an unabashedly
blunt interpretation of the dictums of Speaker Newt Gingrich:
``If you want to play in our revolution, you have to live by
our rules.''
The role of money in the revolution has been obscured by
the titanic clash with President Clinton and the Democrats
over balanced budgets and the reshaping of the federal
government, but it is part of that larger struggle. Money is
at the center of Gingrich's transformation of the House. With
the new alignment of ideological allies in the business and
political worlds, there are unparalleled opportunities for
both the people who give the money and the people who receive
it.
It is such an obvious quid pro quo that it goes almost
unnoticed. From House Republicans come measures that gratify
industry: weakening environmental standards, loosening
workplace safety rules, limiting the legal liability of
corporations, defunding nonprofit groups that present an
opposing view. From the beneficiaries of that legislation
come millions of dollars in campaign contributions.
``The Republicans have a wonderful situation,'' said one
trade association president, a longtime Democrat. ``They
don't have to prostitute themselves. They are ideologically
in sync'' with the corporate PACs. ``Every politician dreams
of being able to meet your conscience and raise money at the
same time.''
Yet money is also the source of increasing tension among
House Republicans that could ultimately weaken them, if not
tear them apart. The conflict, in essence, is between
ideology and populist reform. One wing wants to collect as
much corporate money as possible to sustain and expand the
revolution. Another wing fears that this will disillusion
voters who brought the Republicans to power to change the
traditional ways of doing business in Washington. Gingrich
stands in the middle aware, people around him say, that his
tenure could depend in part on his ability to resolve the
conflict.
Gingrich, DeLay and their comrades have set in motion a
historic shift in campaign giving. As recently as 1993 the
National Republican Congressional Committee, the main vehicle
for fundraising for House GOP candidates, was millions of
dollars in debt. But by soliciting contributions from the
corporate world through a combination of tenacity,
cheerleading and intimidation--``playing offense'' all the
time, as DeLay describes it--the revolution has established a
formidable money machine. The turnaround has been dramatic.
House Republicans received 58 percent of the money from the
top 400 PACs during the first six months this year and their
numbers are rising every month. Last year two of every three
PAC dollars went to the ruling Democrats. The trend is
evident in all industries, including those with traditional
Democratic ties.
The Transportation Political Education League, for example,
gave only 3 percent to the Republicans last year but 42
percent this year. The No. 1 corporate contributor to the GOP
in 1995, United Parcel Service, which worked closely with
DeLay and the leadership in fighting federal workplace safety
regulations, also made a decisive partisan transformation,
its contributions going from 53 percent Democratic to 71
percent Republican in one year.
The once-threadbare NRCC raised a record $18.7 million from
January through June, four times as much as its Democratic
counterpart. Its two elite organizations, which offer private
sessions with House leaders at the Capitol Hill Club, are
suddenly fat and happy: 225 corporations and political action
committees have joined the House Council at $5,000 apiece,
and 150 are enrolled in the Congressional Forum for $15,000
to $20,000 each. Rep. Bill Paxon of New York, the NRCC's
chairman, estimates that he has met privately with ``200 to
300'' chief executive officers of Fortune 500 companies to
make his pitch.
``If you believe in the revolution and what's happening,
then it's time to follow common sense,'' Paxon tells them.
``Why do you support the enemy? Why do you give money to
people who are out there consciously every day trying to
undermine what's good for you?'' He often leaves, Paxon says,
with a financial pledge.
Another $20 million, double the Democratic number, has come
to the party in unrestricted contributions known as soft
money, used for party rebuilding efforts, voter drives and
policy initiatives. Leading the way in the soft money realm
this year have been tobacco companies that, concerned about
regulation by the Food and Drug Administration, gave a record
$1.5 million to the Republicans during the first six months,
tenfold what they gave two years ago.
Gingrich, DeLay, Majority Leader Dick Armey of Texas and
Republican Conference Chairman John Boehner of Ohio all have
established separate PACs this year with goals of raising
millions of dollars more. Gingrich's new PAC, dubbed ``Monday
Morning'' in honor of a refrain from his swearing-in speech,
has already raised more than $330,000, with pledges of an
additional $60,000 since its inception a few months ago.
Advised by kitchen cabinets of industry lobbyists, these
leadership fund-raising operations will distribute money to
Republican congressional candidates, strengthening the bond
between the revolution and industry while reinforcing the
loyalty of House colleagues to Gingrich and his lieutenants.
The freshman class, 73 Republican newcomers who consider
themselves the vanguard of the revolution, has proved as
ambitious in the fund-raising realm as elsewhere. They have
bumped up the average price of a fund-raising ticket fourfold
from the previous term to $1,000, hired professional
consultants to run their events and solicit contributions,
and formed steering committees of lobbyists to advise them.
Almost all have liquidated their campaign debts in the first
10 months of their first term, and more than half belong to
the NRCC's $100,000 Club, having at least that much cash
ready for next year. The average Republican freshman raised
$123,000 in the first six months, nearly double the amount of
their Democratic colleagues.
Even reform-minded freshmen who oppose PACs have pursued
them aggressively. Sam Brownback of Kansas solicited
Washington lobbyists to contribute to a fund-raising event
for him soon after he had returned from Ross Perot's United
We Stand convention in August. There he had given a speech
denouncing the Washington lobbying scene as ``a domestication
process where you bring in new, fresh legislators and then
you start to try to tame them and assist them with gifts and
meals and trips almost like you would a horse with a sugar
cube.'' Several lobbyists who received Brownback's fund-
raising invitation angrily turned him down.
A few days after the House Republicans took power last
January, DeLay turned to one of his most trusted allies in
the lobbying community, David Rehr of the National Beer
Wholesalers Association, and said, ``I want you to do
something with the freshmen just to get them on the right
course.'' Rehr was a member of a small group of Washington
lobbyists who had remained loyal to the Republicans
throughout the long period of Democratic control. His
informal duties now included serving as a PAC adviser to both
DeLay and the NRCC.
Rehr set up a seminar at NRCC headquarters entitled ``Seven
Steps in Liquidating Your Debt and Building for the Future,''
and more than a quarter of the freshman class attended. Rehr
instructed them to set up steering committees of PAC
supporters to be their ``eyes and ears'' in the Washington
community. He suggested that they contact the NRCC and House
committee chairmen for a list of PACs relevant to their
committee assignments.
Make contacts personally, Rehr, whose own PAC contributed
$144,492 to the House Republicans in the first six months
this year, advised the freshmen. If a PAC opposed them during
the campaign, they should not take it personally. Those PACs,
he said, should now be considered ``additional prospects.''
Rehr is among a new breed of Capitol Hill operators on the
rise, fortyish, ideological and fervently committed to the
House revolution and its two primary bankers, DeLay and
Paxon. The lobbyists span the corporate world, commanding
networks of business allies along with large PACs of their
own organizations. Dan Mattoon of BellSouth, another lecturer
at the NRCC seminar, is the leadership's main link to local
telephone companies. Bob Rusbuldt, a top insurance lobbyist,
taps the financial resources of the related fields of
mortgage banking and real estate. Jim Boland of Philip Morris
draws from the tobacco industry and its food subsidiaries.
Freelance lobbyists such as former Bush White House aide
Gary Andres bring lists of diverse clients and the ability
to penetrate new fund-raising channels.
The Republican takeover has been a time for ``cashing in,''
as a PAC director close to Gingrich put it, and also a time
for ``getting right.'' Lobbyists whose PACs or clients once
gave heavily to Democrats have been eager to show they found
religion, leading to such scenes as the one late one recent
night at one of the steak and cigar restaurants fashionable
along Pennsylvania Avenue.
``Man,'' said a lobbyist approaching a GOP leadership aide
and pleading to be restored to good graces, ``just want to
tell you, we've given like 70 percent to you guys now.''
DeLay, for his part, has launched what has come to be known
as the ``K Street Strategy,'' named for the downtown
Washington avenue lined with lobbying headquarters, law firms
and trade associations. The strategy is to pressure those
firms to remove Democrats from top jobs and replace them with
Republicans.
Headhunters now call DeLay's office in search of
recommendations. When one corporation lobbyist sought a
meeting with the whip, DeLay telephoned the firm's CEO and
complained that his agent in Washington was ``a hard-core
libera1.'' If the company wanted to get in to see him, DeLay
added, ``you need to hire a Republican.'' The hard-core
liberal lobbyist was soon transferred to London.
One drug company hired a Democrat to head its office, but
after he was unmasked at a DeLay fund-raiser, he called the
whip's office the next day to plead that his firm not be
scorned by the House Republicans. His position was only
temporary, he said, and he would soon be replaced by someone
more aligned with the revolution.
``There are just a lot of people down on K Street who
gained their prominence by being Democrat and supporting the
Democrat cause, and they can't regain their prominence unless
they get us out of here,'' said DeLay. ``We're just following
the old adage of punish your enemies and reward your friends.
We don't like to deal with people who are trying to kill the
revolution. We know who they are. The word is out.''
At times, Republican leaders have had to choose between
friends, and money may have been a factor. When the Commerce
Committee voted on a sweeping telecommunications deregulation
bill in May, for example, its legislation appeared to favor
AT&T and other long-distance firms over the regional Bell
companies. A last-minute amendment by Chairman Thomas Bliley
would have complicated entry of the seven regional Bells into
the long-distance market. AT&T has a plant in Bliley's
Richmond district and a new PAC profile: reversing a past
preference for Democrats, it has given 58 percent to GOP
lawmakers this year.
But the baby Bells, with combined PAC donations double
those of AT&T and with influential lobbyists such as Mattoon,
appealed the decision. Help came from Paxon and deputy whip
Denny Hastert of Illinois, both Commerce Committee members
who had voted for the Bliley provision as part of the May
bill. But after hearing from Bell lobbyists, they argued for
change at a Speaker's Advisory Group meeting in early July,
contending that the Bells would be prevented from competing,
a participant said. Gingrich directed Bliley to ``rescrub''
the bill, and by mid-July the Bliley provision was deleted.
Two weeks before the new bill passed the House, Pacific
Telesis Group's chief executive hosted a fund-raiser for
Gingrich at his San Francisco home, raising $20,000.
Paxon said he was guided by his ``driving passion'' for
deregulation, not fund-raising calculations, in siding with
the Bells. ``I haven't sat down with a legislative
calendar,'' he said, ``and said this is the time to go after
this industry group.''
But some fund-raising efforts have been less than subtle.
Ways and Means Committee Chairman Bill Archer lectured
corporate leaders not to give to Democrats. In an Oct. 23
letter, signed by the Oklahoma GOP delegation, corporate
lobbyists were told that they were expected to support
freshman Tom Coburn in his tough reelection race.
``As you are courted by others to get involved in this
race, we want to make our position clear,'' the letter read.
``We strongly support our good friend and colleague, Tom
Coburn, and we will be unified as we work on his behalf. We
trust you will join us in our effort and certainly not oppose
us.''
That letter was mild compared with a similar dispatch
earlier in the year from DeLay, a no-nonsense missive that
helped establish his reputation as ``the Hammer.'' Days
before freshman Randy Tate of Washington state was to hold a
fund-raiser in Washington, DeLay sent out a letter listing
the exact sum each PAC had given to the losing cause of
Tate's Democratic opponent in 1994, Mike Kreidler.
While he was ``surprised to see you opposed Randy Tate,''
DeLay wrote, ``you now have the opportunity to work toward a
positive future relationship.'' The note got more demanding--
``your immediate support for Randy Tate is personally
important to me and the House Republican leadership team''--
before closing with an offer of redemption: ``I hope I can
count on you being on the winning team. ``
The aftermath of that letter captures DeLay's unapologetic
mode of operation. A reporter received a copy of it and
called DeLay's PAC director, Karl Gallant. Gallant asked
the reporter how he obtained the letter. When he was told
it came from a lobbyist, Gallant responded, ``That tells
me it's effective. They want you to write a negative story
so we'll back off. You just made my day.''
DeLay agreed, distributing the article to his colleagues.
``It had great impact,'' DeLay said later. ``It raised him
(Tate) a bunch of money. We know who we sent the letters to
and who we got checks from.''
One other result: Kreidler recently decided not to
challenge Tate in 1996, citing as one factor his difficulty
in raising PAC money.
For Gingrich, learning the value of fund-raising has been a
gradual process. Staffers at the NRCC in the 1970s and early
1980s would roll their eyes when the small-college history
professor with mutton-chop sideburns strolled through the
door, knowing they were in for a long day of lectures on the
Ming dynasty and a barrage of expensive ideas for promoting
his conservative opportunity society. ``In those early days
Newt was very naive about money,'' said Steve Stockmeyer,
then the executive director of the NRCC. ``He was always
coming up with ideas on how to spend it, not raise it.''
But despite his early naivete about the ways of money,
Gingrich, more than DeLay or any other figure, was most
responsible for turning the revolution into a money machine.
Two years ago the financial situation for the Republicans
seemed bleak. They were ``walking in the valley of the shadow
of death,'' as Paxon, installed by Gingrich as chairman of
the NRCC, put it.
They were the minority party in the House and Senate and
without the White House. Their fund-raising relied largely on
a direct-mail list that had become utterly obsolete. Of the
more than 1 million names on it, only one in 10 had given to
the party in recent years. Many were in nursing homes or
dead. But by April 1994 Gingrich had become convinced that
the Republicans would seize control of the House that year.
He went over to the NRCC and wrote personal appeals for funds
claiming that the Republicans would soon be in the majority.
``Gingrich was for my purposes the whole ballgame when we
wanted to raise money,'' said Grace Wiegers, then director of
fund-raising for the NRCC and now the head of Gingrich's
leadership PAC, Monday Morning.
In August and September he met individually with more than
150 Republican members, assigning fund-raising tasks and
goals to each. Incumbents from safe seats were asked to raise
$50,000 for Republican challengers or vulnerable colleagues.
Ranking minority members of House committees made pledges to
Gingrich to raise even larger amounts traveling for other
candidates on the road.
When the revolution arrived, Gingrich had a system already
in place for maintaining and expanding the money operation.
DeLay would be his hammer. Paxon would serve as cheerleader.
Majority Leader Armey would position himself as ideological
arbiter, attacking corporations for funding nonprofit
agencies that opposed the revolution. Conference Chairman
Boehner would nourish business coalitions, bringing them in
for regular Thursday sessions to plan how the corporate world
could advance conservative policy. Committee chairmen Bliley
of Commerce, Archer of Ways and Means and Bud Shuster of
Transportation would cultivate industries in their turfs.
The lines between elected revolutionaries and their
business cohorts occasionally blurred. Lobbyists helped DeLay
write his regulatory moratorium bill. Shuster raised money
for the revolution with the assistance of his former
political aide, Ann Eppard, a lobbyist whose clients included
Amtrak, Conrail, Federal Express and the Pennsylvania
Turnpike Authority, all of whom had issues pending before
Shuster's committee.
Eppard maintains a close relationship with her old boss. At
the same time that she was soliciting money from industry for
the ``Bud Shuster Portrait Committee'' which commissioned a
painting of the chairman in his committee room, she was also
sending out fundraising letters for Republican candidates.
One to industry colleagues on behalf of a Virginia candidate
ended with the boldfaced assertion: ``This dinner is of
personal importance to Chairman Shuster.''
Given the place Gingrich assigned to fund-raising, his
handshake agreement with President Clinton in June to form a
bipartisan commission on campaign finance reform took his
allies by surprise. More than any other act, it revealed the
tensions within his revolution.
At the next meeting of the House leadership, the tone, said
one participant, was, ``Why the hell did you go and do
that?''
Armey, responsible for scheduling the revolution's
legislative agenda, worried about how he would be able to fit
the issue into an already packed calendar. DeLay, and to a
lesser degree Paxon, questioned whether the timing was right
and whether the Republicans should cede anything to Clinton
and the Democrats now that the revolution's money machine was
operating so effectively. Gingrich's response was that the
handshake ``buys us time.'' He needed to think the issue
through, he said.
Another wing of Gingrich's House, represented by populist
freshmen Brownback and Linda Smith of Washington, along with
veteran moderate Christopher Shays of Connecticut, was
pushing Gingrich from the other side. If the Republicans did
not clean up Washington and prove that they were not
continuing business as usual, they said, the revolution would
collapse from a fatal flaw of political hubris. If reform did
not happen on the Republican watch, said Shays, it would
become ``our Achilles'' heel'' While Shays and Brownback took
Gingrich's handshake with Clinton as a sign that he supported
reform, Smith was skeptical. She said she thought he was just
stalling.
Gingrich found himself in a familiar position: on both
sides of a debate and looking for another way entirely. He
understood the call for reform and had a lingering resentment
toward PACs for funding the Democrats when they controlled
Congress. But he also, he and his aides say, felt equally
strongly that the revolutionaries should not unilaterally
disarm themselves while they were engaged in a more profound
struggle of what he called the ``Information Age.''
The real fight, Gingrich told his aides, was not over money
but information and how it is disseminated. Money was one
weapon in that struggle and important to the movement as a
way to counter the American mass media, which the speaker
considered largely hostile to the revolution.
Gingrich said as little as possible about the issue after
the handshake, promising that at some point he would deliver
a white paper on the subject. As months went by, the
reformers grew increasingly agitated. At Shays's request,
Gingrich met with the reformers in his office late on the
afternoon of Sept. 29 just before the Columbus Day break.
While Shays hoped to discuss another reform issue involving a
gift ban, the meeting devolved into a tense confrontation
over campaign finance reform between Gingrich and Smith, who
had just planted a story with conservative columnist Robert
Novak in which she said that the leadership was not telling
the truth about their intentions on reform.
``He got so mad. He kicked the staff out and yelled at
them, he was so unhappy,'' Smith recalled. The session was
``testy and pointed,'' according to Brownback. Gingrich was
overwhelmed by other concerns that day, including Medicare
and Bosnia. He was late for a meeting at the White House, and
freshman Smith kept jabbing at him.
Noting that Smith was working with Common Cause and United
We Stand in pushing campaign reform, Gingrich told her that
she had to decide whether she wanted to be an outsider or
work with the House leadership. ``Whatever you decide is okay
with me,'' he said. ``We just have to know.''
Smith wanted to know why Gingrich needed a time-consuming
commission, why he could not just support legislation
eliminating PACs, as he had when he was in the minority. She
told the speaker that he tried to carry too much of the
burden himself and that he should let others take the load on
this issue.
Then, according to Smith's recollection of the scene,
corroborated by others in the room, ``Newt looked at me and
said, Nobody can do it but me! I have the most experience.
I'm the only one who can do this. I'll just have to take some
time this week and write a paper on it.' ``
Shortly after that meeting the leadership announced that
the Oversight Committee would hold hearings on campaign
finance reform starting Nov. 2 and that Gingrich would be the
first to testify. One aide took memos from a group of
informal advisers, including Stockmeyer, the former NRCC
director who now ran the National Association of Business
PACs. PACs were invented as a reform in the 1970s, he noted,
and another round of reforms doing away with them would
probably create a system that was worse.
Sen. Mitch McConnell of Kentucky sent a letter over to the
House noting that the Republicans had killed campaign finance
reform before the 1994 elections--``proof positive that this
issue is not a hindrance to us at the polls.'' In a
handwritten P.S., McConnell added: ``We'd be foolish to
throwaway our ability to compete.''
Another Gingrich aide began piecing together his speech. He
plunged into a long assigned reading list and followed up on
the speaker's request to compare the amount of money spent in
political campaigns with what is spent in advertising
products. Companies spent $100 million selling two stomach
acid pills recently, he discovered, one-sixth of the total
amount spent on all congressional campaigns last year. One of
the great myths of American politics, Gingrich concluded, was
that campaigns are too expensive. He believed that most of
the criticism of the campaign system came from ``nonsensical
socialist analysis based on hatred of the free enterprise
system.''
Smith was sitting one row behind Gingrich and off to his
right when he delivered those conclusions at the hearing. She
wanted to watch his eyes and his facial expressions as a
means of gauging his earnestness, she said, but as he
continued to attack the reformers, including some of the
groups she had been working with, she became increasingly
distraught.
``His anger at the media drove what he said,'' she
concluded. She retreated to her office, where she reached a
final decision on Gingrich's earlier ultimatum to her. She
would work from the outside.
Gingrich's lieutenants expressed satisfaction with his
speech. If reform is inevitable, they say, it will not
involve the elimination of PACs and it will not diminish the
role of money in the revolution. DeLay said he would work the
system until PACs gave an appropriate amount to the
Republicans. ``Ninety percent would be about right,'' he
declared. DeLay has a running competition with Gingrich over
who can raise more money. There are scores of revolutionaries
doing the same thing, but he is not worried that they might
trip over each other.
``It's a big country,'' said the Hammer.
Parliamentary Inquiry