Now Husband's Tax Issues Are Fair Game

Hilda Solis's confirmation in the Senate HELP Committee was abruptly cancelled today after a report surfaced about her husband paying $6,400 to remove a tax lien on his business.

The report, by USA Today, came just before the Senate's Health Education Labor and Pensions Committee was slated to meet to consider Solis's nomination, which had been delayed by questions over her role on the board of the pro-labor organization American Rights at Work. A source said that committee members did not learn about the tax issue until today.

"Today's executive session was postponed to allow members additional time to review the documentation submitted in support of Representative Solis's nomination to serve in the important position of Labor Secretary," read a joint statement issued by Sen. Edward M. Kennedy (D-Mass.), the panel's chairman, and Mike Enzi (Wyoming), the committee's ranking Republican. "There are no holds on her nomination and members on both sides of the aisle remain committed to giving her nomination the fair and thorough consideration that she deserves. We will continue to work together to move this nomination forward as soon as possible."

No new date has been set for the hearing. The disclosure about Solis's husband comes after tax problems caused trouble for three of Obama's top appointees, leading two of them -- HHS-nominee Tom Daschle and Nancy Killefer, who was to be chief performance officer -- to withdraw.

Senate Republicans have been slow-walking this nomination for weeks, and this revelation gave them another reason to do so. To be clear, we're talking about her husband's business. Given that she's in Congress and is in Washington most of the time, I doubt very highly that she has anything to do with it. In addition, by paying the taxes, Solis and her entire family are adhering to Obama's ethical standards, not subverting them.

So this is the latest in a months-long obstructionism. The LA Times reported today that some GOP members were trying to put a gag order on Solis:

Underscoring the bitter debate over a proposal to make it easier for workers to form unions, Republican senators are suggesting that President Obama's pick for Labor secretary must recuse herself from lobbying for the bill's passage.

In a written exchange with Solis, Republican senators indicated they are wary of her ties to a tax-exempt group dedicated to helping workers unionize [...]

Solis' Cabinet nomination is in the crossfire. She was a co-sponsor of the bill in 2007 and has served for the last four years on the board of American Rights at Work. Solis receives no salary as a board member or treasurer [...]

In their questionnaire, the senators noted that American Rights at Work has lobbied for passage of the bill. They asked Solis whether she would seek a waiver from the Obama administration or avoid any role in passing the legislation.

Solis replied that she does not need a waiver and has no intention of stepping back. She said she was only a member of Congress exercising her powers.

"I am not a registered lobbyist, nor do I in any way meet the statutory requirements for registration as a lobbyist," she wrote.

The American Rights at Work thing is a complete red herring. She was a representative figure for those who supported Employee Free Choice in Congress. She is not a lobbyist. She supported a bill. And so denying her free-speech rights seems ridiculous to the extreme.

I don't know if a family member's tax issue is enough to sink this nomination (like the last Labor Secretary's spouse, one Mitch McConnell, has no ethical issues to speak of), but I for one think Solis should be confirmed. And as for the Employee Free Choice Act, the battle for a fair workplace goes on. Thousands of people are marching in the streets of Los Angeles today in support of free choice.

Daschle Post-Mortem

There's a pretty amusing old Tom Daschle ad going around, with him driving to work at the Capitol in his old Pontiac instead of "BMWs and limos," with the final line:

"It's too bad that the rest of Washington doesn't understand that a penny saved is a penny earned."

What's that old adage about power corrupting and absolute power corrupting absolutely?

Eventually, no matter the rhetoric to win votes in South Dakota, Tom Daschle became a DC insider. And because President Obama relied on DC insiders to implement an agenda of change, he got burned. The case is a textbook example of how Beltway privilege - which is also class privilege - is inevitably corrupting and ethically corrosive.

A classic rule of Washington's political culture -- that public service can lead to personal riches -- seemed to collide yesterday with the presidential promise that the time has come for a break with the past.

Former senator Thomas A. Daschle, whom President Obama once called "the original no-drama guy," suddenly was forced to step aside as the president's nominee for secretary of health and human services because of problematic ties to wealthy private interests.

It was a jarring twist to Daschle's 30-year career in Washington, one built on a reputation of integrity and decency. After losing his Senate seat while serving as that body's most powerful Democrat in 2004, he swiftly signed on as a special policy adviser to a 900-member law firm and pulled in a multimillion-dollar salary. It is a well-worn path, trod by dozens of ex-lawmakers in the past decade.

But some observing the debacle wondered if the capital's ways were changing. The story of how he fell in with the monied elite and out with the popular mood involves a longtime Democratic financier, Leo Hindery Jr., and his keen interest in currying influence with powerful politicians. The outcome caught many in Washington off guard.

"I think it's possible this is some sort of bridge between an old Washington and the new Washington," David Arkush of Congress Watch said of the initial backing of Daschle and the sudden reversal.

Somehow this is being spun as a consequence of Obama holding Daschle to too high of a standard with all this talk of ethics during the campaign, and not the fact that Daschle really is ethically compromised, as is his business partner Bob Dole. Not that Daschle's the worst offender, but he's just a symbol of a failed status quo that has pushed this country to the point of ruin:

Dole said the Democrat would be a valuable asset to the firm even though Congress is run by the GOP these days. "He's got a lot of friends in the Senate, and I've got a lot of friends in the Senate, and, combined, who knows -- we might have 51," Dole joked. "It's going to work fine. You need some flexibility and diversity. I don't think any successful firm is all Democrat or all Republican."

That about covers how Washington works: driven by sleazy, bipartisan influence-peddling. And it is, in particular, how the Senate works: members do nice favors for their "friends," who are lavishly paid for asking for those favors (and who ensure that their "friends" still in the Senate are rewarded for granting those favors), and the outcome is our set of laws.

In a way, Obama picked Daschle not in spite of this sleaze, but BECAUSE of it. The thinking was that health care reform could only be accomplished with someone of stature coordinating White House maneuvering, someone who can go get the votes. He wanted someone from the Washington favor factory that would do whatever necessary to get health care reform passed. It would be a turd of a bill, filled with giveaways, but Daschle could do it, and Obama could put a pretty bow on it, and everyone would shout "huzzah."

The buzzsaw that Daschle ran into was a public increasingly given to agree with the populism expressed on the campaign trail, something Washington never saw coming.

So what happened? My guess is that official Washington underestimated the public's pique at what appeared to be the old ways of Washington. Hill staffers tell me that many offices have been inundated with telephone calls, emails, letters and faxes expressing concern (to put it mildly) about Daschle -- not only his failure to pay back taxes but his relationships with major players in the health care industry and rich consulting contracts with the private sector since leaving the Senate, and even the fact that he was given a car and driver by one of them [...]

Typical Americans are hurting very badly right now. They resent people who appear to be living high off a system dominated by insiders with the right connections. They've become increasingly suspicious of the conflicts of interest, cozy relationships, and payoffs that seem to pervade not only official Washington but our biggest banks and corporations. In short, many Americans who have worked hard, saved as much as they can, bought a home, obeyed the law, and paid every cent of taxes that were due are beginning to feel like chumps. Their jobs are disappearing, their savings are disappearing, their homes are worth far less than they thought they were, their tax bills are as high as ever if not higher.

Meanwhile, people at the top seem to be living far different lives in a different universe. They're the executives and traders on Wall Street who have lived like kings for years off a bubble of their own making while ripping off small investors, the financial louts who are now taking hundreds of billions of taxpayer bailout money while awarding themselves huge bonuses and throwing lavish parties, the corporate CEOs who are earning seven figures while laying off thousands of workers, the billionaire hedge-fund and private-equity managers who are paying a marginal tax rate of 15 percent on what they say are capital gains while people who earn a fraction of that are paying a higher rate, and, not the least, the Washington insiders who have served on the Hill or in an administration and then gone on to pocket millions as lobbyists for the same companies they once regulated or subsidized. To the American who's outside the power centers -- the places of entitlement and I'll-scratch-your-back-while-you-scratch-mine deal making -- the entire system seems rotten.

I'm sorry Tom Daschle won't be in the Obama administration. He would have served the public well and with distinction. But the public wants change, real change, big change. There's no tolerance any longer for the way things used to be done.

There is a hope in all of this, in the fact that Obama acknowledged the mistake, and more important the disconnect between one set of rules for public officials and another for the man on the street. That's a big step early in an Administration, to take blame and admit it. Now the action has to follow the words.

Ezra Klein has more.

Beltway Ethics and Tom Daschle

Tom Daschle is awfully sorry about overlooking his tax burden and wants to get his high-level cabinet post, please.

Fighting to salvage his Cabinet nomination, Tom Daschle pleaded his case Monday evening in a closed meeting with former Senate colleagues after publicly apologizing for failing to pay more than $120,000 in taxes. President Barack Obama said he was "absolutely" sticking with his nominee for health secretary, and a key senator added an important endorsement [...]

Nobody was predicting defeat for Daschle's nomination as secretary of health and human services, but it was proving an unsavory pill to swallow for senators who only last week confirmed Timothy Geithner as treasury secretary despite his separate tax-payment problems. It's an issue that strikes a nerve among lawmakers' constituents who are struggling with their own serious money problems.

Daschle's tax problem is nothing more than an example of the Washington favor factory used by every out-of-work lawmaker. Trent Lott and Bob Dole and J.D. Hayworth and John Breaux and Richard Pombo and about 20 kajillion other lawmaker-turned-lobbyists aren't up for a cabinet position, but if they were you'd hear the same thing.

Beyond the ramifications for Mr. Daschle’s ascent to the cabinet, the disclosures about Mr. Hindery and the many clients Mr. Daschle advised on public policy offers a new window into how Washington works. It shows how in just four years an influential former senator was able to make $5 million and live a lavish lifestyle by dint of his name, connections and knowledge of the town’s inner workings.

There is no evidence that Mr. Daschle pulled strings for Mr. Hindery. Indeed, Mr. Hindery’s firm appears to have had few interests before the government. But interviews and a review of public documents show that in his work for a Washington law firm, Mr. Daschle did take on an array of clients seeking influence with the government, including concerns involved in Indian gambling, ethanol, health care, telecommunications and federal contracting.

Worse, he accepted multiple speaking fees from health care industry groups, the same ones who he would presumably be trying to derail in reforming the system:

Over the past two years, Daschle has made more than $220,000 giving speeches to health care stakeholders. This includes $40,000 for two speeches to America's Health Insurance Plans, $30,000 for a speech to CSL Behring, $16,000 to the National Association of Boards of Pharmacy, $15,000 from a talk at the Principal Life Insurance Co. given policy advice to United Health, and much more. These are payments from the parties with a direct interest in the eventual shape of health reform.

I trust that the guy who spends his weekends reading Health Affairs isn't in this for speaking fees. But Daschle can't rely on every American reading his book and picking through his testimony. He needs prima facie credibility. And Daschle is less credible today than he was a week ago.

It will be harder for him to tell single payer advocates that he neutrally considered their views on the worth of the private insurance industry given that AHIP put $40,000 in his pocket. So too with those concerned by the medical device industry. Indeed, the Washington Post reports that "the Health Industry Distributors Association, a trade association representing medical product distributors, wrote to Daschle last week to express concerns about proposed Medicare changes and reminded him of the $14,000 speech he delivered at its conference last year." It may not be the case that these groups actually succeeded in buying sympathy when they paid Daschle to speak. But it was certainly their intent.

This isn't about Daschle conniving to defraud the government of $100K, it's about a culture of Beltway backscratching that treats life the same way as the horse-trading inside the Capitol. It's why he'll be swiftly confirmed, because his former colleagues in the Senate want the SAME kind of treatment when they are cast out into the "real world". Tom Daschle and his wife epitomize Beltway ethics, which thinks nothing of perks and speaking fees and other corrupting activities. Simply put, there is a premium paid to former lawmakers by those who want to influence the system, to buy their knowledge and expertise. Matt Taibbi has much more on all of this.

In Washington there are whores and there are whores, and then there is Tom Daschle. Tom Daschle would suck off a corpse for a cheeseburger. True, he is probably only the second-biggest whore for the health care industry in American politics — the biggest being doctor/cat-torturer Bill Frist, whose visit to South Dakota on behalf of John Thune in 2004 was one of the factors in ending Daschle's tenure in the Senate [...]

Regarding Daschle, remember, we're talking about a guy who not only was a consultant for one of the top health-care law firms in the country, but a board member of the Mayo Clinic (a major recipient of NIH grants) and the husband of one of America's biggest defense lobbyists — wife Linda Hall lobbies for Lockheed-Martin and Boeing. Does anyone really think that this person is going to come up with a health care proposal that in any way cuts into the profits of the major health care companies?

Daschle is just a symptom of an accountability-free system in Washington and throughout the country among the upper echelons of the elite. They evade taxes like it's their job. They pass favors back and forth to any fellow member of the club. And the working class pays for it. This story is from the UK, but it could just as easily be from the US.

British taxpayers are being left to plug a multibillion-pound hole in the public finances as hundreds of the country's biggest companies increasingly employ complex and secretive tax arrangements to limit the amount they hand over to the exchequer.

An extensive Guardian investigation has examined the accounts of the UK's biggest companies - many of them household names - and discovered a series of sophisticated tax strategies which, critics say, amount to an almost unstoppable tide of perfectly legal corporate tax avoidance.

The veil of confidentiality that covers these tax avoidance schemes is so difficult to penetrate that nobody knows exactly how much tax goes missing each year. But HM Revenue & Customs estimated that the size of the tax gap could be anything between £3.7bn and £13bn. The Commons public accounts committee put it at a possible £8.5bn and the TUC said £12bn.

This is all legally accomplished, through corporate tax laws written by corporate lobbyists, through handshake agreements between those former lawmakers on one side of the revolving door and the others on the insude, and through a general sense of permissiveness and leniency. Practically everyone in Congress is a future recipient of such beneficence, so there's not a lot of effort put into caring. There are hundreds of billions of dollars in unpaid taxes floating around out there, maybe enough to put aside this "grand bargain" of fiscal reform and pay for virtually the entire current deficit. This is the poison that keeps the country from progress on significant issues.

First Up: Ethics, Transparency

I guess it makes sense that these orders come early, as soon as his staff shows up for work on the first business day, and ethics reform has been an Obama strong point since he came to Washington. So this was the big news made today, which is fine, although it's entirely internally directed.

With the national celebration over and the hard work beginning, President Barack Obama on Wednesday signed executive orders and announced new ethics limiting lobbyists' influence in his administration.

He suggested he'd release more public information than former President George W. Bush under the Freedom of Information Act. He also imposed a pay freeze on senior staff earning more than $100,000 a year, saying that given the economic crisis, "It's what's required of you at this moment." Obama made those announcements at a swearing-in ceremony for White House staff at the Old Executive Office Building.

"Public service is a privilege," he said in explaining the thinking behind the new ethics rules, on which he said he was briefed last week before his swearing in.

"It's not about advantaging yourself. It's not about advancing your friends or your corporate clients. It's not about advancing an ideological agenda or the special interests of any organization. Public service is simply and absolutely about advancing the interests of Americans."

The memorandum outlining in particular the new transparency policy is here. Openness in government is an important principle, and I appreciate this amount of care that has gone into it. Freezing senior staff money is not going to save the government a lot, and it may discourage high-priced lawyers from public service, but I suppose there's a symbolic benefit. I like the prohibition of executive branch personnel from accepting gifts from lobbyists, and the closing of the revolving door between K Street and the White House. Pam from Pandagon has the full report.

This won't save lives, but if it reduces the power and influence of special interests and brings the office of the Presidency out into the open a little more (it could hardly be more secret than the Cheney Administration) it's a positive.

Memories of the Keating Five

As "Cut The Bullshit" McCain strides into Washington to get down to business on a plan that is pretty much already done and will be detailed almost entirely without his input, reporters who actually get to ask him a question are starting to make mention of the last time banks had to be massively bailed out in this country, and McCain's role in it:

McCain’s involvement in the “last great financial scandal in our country” has largely been ignored by the media. But local Ohio reporter Tom Beres finally forced McCain to comment on the Keating Five scandal in an interview yesterday. “Talk of greedy bankers, lax regulation brings back memories of the Keating Five,” Beres reported:

BERES: Is there some relevance of that chapter, which I think you have acknowledged was maybe not your proudest moment?

MCCAIN: It was a very unhappy period in my life. But the fact is that I moved forward and I have been the greatest voice for reform and against corruption in Washington than anybody.

Given the eleventy billion lobbyists affiliated with his campaign now, I'll leave it to know to make what you will of that last sentence. Of course, this lament from McCain is his typical M.O., apologizing for things that he should have not embarked upon on the first place. But for more of a background on the Keating 5, here's a solid visual history:



Send it to everyone you know.

That's Not A Taxpayer Ripoff You Can Believe In

I think this one's going to cause a stir. A1 of the Washington Post:

Alaska Gov. Sarah Palin has billed taxpayers for 312 nights spent in her own home during her first 19 months in office, charging a "per diem" allowance intended to cover meals and incidental expenses while traveling on state business.

The governor also has charged the state for travel expenses to take her children on official out-of-town missions. And her husband, Todd, has billed the state for expenses and a daily allowance for trips he makes on official business for his wife.

Palin, who earns $125,000 a year, claimed and received $16,951 as her allowance, which officials say was permitted because her official "duty station" is Juneau, according to an analysis of her travel documents by The Washington Post.

The governor's daughters and husband charged the state $43,490 to travel and many of the trips were to and from their house in Wasilla and Juneau, the capital city 600 miles away, the documents show.

This comes from the lady who put the luxury plane on eBay (and then sold it at a loss). The one who is jes folks, the reg'lar ol' hockey mom from moose country. Who makes six figures and sticks the taxpayers with her travel bills. Not just for events around the state, but for trips to her house.

That's a serious shock to the narrative system.

I love this spin:

Gubernatorial spokeswoman Sharon Leighow said Monday that Palin's expenses are not unusual and that, under state policy, the first family could have claimed per diem expenses for each child taken on official business but has not done so.

Yeah, aren't you happy she didn't charge more? What's the matter with you people?

I think Josh Marshall is right: the only response to this message of Sarah Palin as a reformer is derision.



...in her defense, Palin did generously allocate a hundred dollars to educate doctors about traumatic brain injuries.

Those Pesky Hundreds Of Lobbyists

John W. McCain thought his little lobbyist problem was over when he solemnly announced new standards of conduct for his staff, asked for and received the resignations of a few employees, and jutted out his jaw so that everyone in his media base could see how forthright and scrupulous he was. Surely his barbecue buddies would decide that this was no longer an issue, and any further talk of lobbyists would be off-limits from this point forward.

Except it's not going away. For as I said at the time, for McCain to truly wash his hands of lobbyists he'd have to fire his entire campaign staff, not a few aides on the margins. If he didn't, the ties would remain, like his employment of 7 lobbyists for Airbus, which looks bad in the light of his intervening to get Airbus a lucrative Pentagon contract. One of them, Susan Nelson, is McCain's national finance director, and apparently a lobbying shop was still paying her while she was affiliated with the campaign.

Then there's his chief economic advisor Carly Fiorina, who while the CEO of Hewlett-Packard traded with Iran in violation of an international boycott.

Then there's the big one involving Rick Davis, his campaign manager:

John McCain's presidential campaign is blasting a New York Times report that his campaign manager once worked for a Kremlin-backed politician, and that McCain likely knew of his efforts.

The McCain campaign is strongly denying the paper's reporting that in 2005, a White House National Security Council staffer called John McCain's Senate office to complain that Rick Davis, at the time a GOP lobbyist, was "undercutting American policy on Ukraine" by lobbying for a Kremlin-backed politician, Viktor Yanukovich, the paper reported.

The Bush White House -- and McCain  opposed Yanukovich, whom the United States and others had accused of election fraud, and benefiting from violence and intimidation towards journalists [...]

The story also raises the possibility that Davis may have violated the Foreign Agents Registration Act, a 1938 anti-espionage law requiring all agents of foreign powers to register with the U.S. government and disclose their activities. Davis never filed -- though according to the campaign, of course, he had no reason to do so.

The Times report is a doozy, alleging that Davis worked for Yanukovich without registering as a lobbyist, and that McCain knew about this since 2005. This is leading some reform-minded Democrats to propose a law requiring fuller disclosure of lobbyists who argue for foreign clients. It's a great way to wedge McCain, and Sen. Obama has already signed on to close the loophole that keeps such activities in the dark.

Under current law, Washington lobbyists can hide their dealings with foreign businesses and governments. This bill will close that loophole and establish a new standard for disclosure.

Barack is taking this important stand against powerful interests, but he can't change Washington without our help.

Sign our petition to stand with Barack on Lobbying reform:

http://my.barackobama.com/lobbyistloophole1

While Barack Obama is working to change the culture in Washington, John McCain has turned a blind eye to the lobbyist loophole.

He has to -- his Senior staff includes lobbyists who have used the loophole to hide their foreign clients, and McCain's fundraising strategy relies on huge checks from Washington Lobbyists and special interest PACs.

Barack's campaign is different. He has never accepted contributions from Washington lobbyists or special interest PACs, so Barack is only accountable to ordinary people like me and you.

I don't know about all that, but clearly McCain is accountable to a much higher power. Lobbyists have managed his policy on issues like FISA and more, and they're completely entangled in his camapign apparatus. He deserves to be slammed for this.

McCain To Fire Entire Staff

If he's really going to look into the backgrounds of everyone working for him and fire those who have, er, unsavory lobbying associations, the whole staff has got to go.

One of the questions asks: "Have you ever been a registered lobbyist at either the Federal or State level?" Another asks: "Have you ever been a registered foreign agent? A third asks staff members to list all of their previous lobbying or foreign government clients.

All staff members are required to submit the form to McCain's campaign counsel, Trevor Potter and his staff, for their review.

Employees who lie about their affiliations will be fired. The new conflicts policy prohibits campaign staffers from being "registered lobbyist or foreign agent, or receive compensation for any such activity."

I mean, if this were legitimate, Charlie Black would have to go. I doubt he will. His campaign manager Rick Davis would have to go. That's not going to happen. What's more likely is that a few functionaries, like this guy whose lobbying firm worked for Qatar and Serbia, will be let go, and McCain will go back and boast to the media about how he upholds the strictest ethical standards (even though Obama had these rules in place from Day One), and nobody will bother to bring up the lobbyists still inside the campaign, or that these fired ones were involved with him in the first place.

All McCain has is that independent perception. Once, not if but once, that goes away, he'll be left with nothing. His trying to pre-empt it now means he knows it's a big problem.

...also, the stories that keep coming out detailing the favors he did for wealthy contributors can't be helping, either.

Sen. John McCain secured millions in federal funds for a land acquisition program that provided a windfall for an Arizona developer whose executives were major campaign donors, public records show.

McCain, who has made fighting special-interest projects a centerpiece of his presidential campaign, inserted $14.3 million in a 2003 defense bill to buy land around Luke Air Force Base in a provision sought by SunCor Development, the largest of about 50 landowners near the base. SunCor representatives, upset with a state law that restricted development around Luke, met with McCain's staff to lobby for funding, according to John Ogden, SunCor's president at the time.

The maverick thing is a double-edged sword, because if you envision yourself above politics, yet are the same old politician, these stories are more damaging.

UPDATE: Doesn't this also mean that McCain will have to fire his wife for making all those investments in the Sudanese government?

In Praise of Pelosi

This new House ethics panel was a long and tough fight, and it needs more teeth like subpoena power, but it's notable that finally, an independent board will be investigating and passing judgment on members of Congress, rather than the members themselves. This was a big issue for Nancy Pelosi, and she spent a year trying to get this through, with a lot of resistance from both sides of the aisle. Pelosi has actually been effective; lots of legislation has run aground in the Senate, but in general she's been able to get her agenda passed. Of course, the House is a majoritarian institution, making it easier. But Pelosi's achievement should not be discounted.

And anyone that can cause this response:

"If you have a single ounce of self-preservation, you'll vote no," implored Rep. Todd Tiahrt (R-Kan.) last night.

...is OK in my book.

UPDATE: Looks like John Boehner is going to cry and whine his way to the finish line on this one.

House Minority Leader John A. Boehner made clear Wednesday that he sees little likelihood of joining Speaker Nancy Pelosi anytime soon to name members of a new outside ethics board the House has reluctantly agreed to create.

“I can’t imagine anyone in their right mind would want to serve on this outside panel because of the fighting that’s going to occur, not by members but by partisan groups on both sides who are going to want to file frivolous complaints,’’ Boehner said Tuesday during floor debate over the proposal to create the Office of Congressional Ethics.

Boehner aides said they didn’t know how the leader would proceed in trying to work with Pelosi on a joint list of six appointees for a panel whose creation he bitterly opposed. Minority Whip Roy Blunt , R-Mo., said the decision on how to proceed belongs solely to Boehner, R-Ohio. “The leader is the person who has to make that decision. I’m going to let him make it,’’ Blunt said.

Nice profile in courage from Blunt there.

Howard Dean HAMMERS McCain on honesty and ethics

Right now we have two candidates in the middle of campaigning. They can't pay attention to the Republican opponent just yet. Someone needs to step in and fill the breach in the light of this brewing John McCain story. Unfortunately, the traditional media filled its rostrum with the usual wingnut welfare recipients and conservative standard bearers. No Democrat was brought on to discuss or describe the Iseman and Maverick scandal at all.

In case that ever changes, Howard Dean today, on the National Journal's radio show On the Air, offered the definitive template on how to handle this.

Q: So there is big news about John McCain -- the story that is in the New York Times, raising questions about his relationship with a lobbyist. This is a story the McCain people are saying is unfair and untrue. What do you think?

Dean: I have no idea whether the affair story is true or not, and I don't care. What I do care about is John McCain -- and this has been well-documented -- is talking all the time about being a reformer and a maverick, and in fact, he has taken thousands of dollars from corporations, ridden on their corporate jets, and then turned around and tried to do favors for them and get projects approved. He has tons of lobbyists on his staff. This is a guy who is very close to the lobbyist community, a guy who has been documented again and again by taking contributions and then doing favors for it. This is not a guy who is a reformer. This is a guy who has been in Washington for 25 years and wants to give us four more years of the same, and I don't think we need that.

First off, decouple the sex story (which is unsourced, lacking in merit and at this point a cheap shot) from the larger story. This is a scandal about a candidate who goes around with the patina of a reformer and a straight-talker, yet has spent 24 years inside Washington engaged in the same corrupt activities that have defined the Republican Party for a generation. Do that immediately. In the first sentence.

Second, connect the dots. The lobbyists on the staff (like his campaign manager), the lobbyists raising money for him, the corporate donations, the quid pro quo relationships, all of it needs to come out. Note that Dean doesn't get too far into the weeds, doesn't overwhelm with details, but he is extremely direct and clear and he never says "alleged." He says that the story on McCain is well-documented and it's sleazy.

Third, hit your opponent right at his strength. The Rove team attacked John Kerry on his national service. McCain uses his "straight talk express" image more than anything else. Go after that. Take him down. Because it's not like he has command of policy details to fall back on. He has 100 years in Iraq and that's it.

Let's look at some more of this interview:

Q: So are you saying that McCain, by virtue of what is spelled out in this story, has somehow suffered a hit in terms of his own legitimacy on the campaign finance and ethics issue?

Dean: Yes, he certainly has. This goes all the way back to the Keating Five Scandal and the S & L scandals, where he took a hundred thousand donations, rode on corporate jets and then intervened on Charles Keating's behalf -- and again and again we see this. We even saw -- it's so hypocritical -- we even saw that he is trying to harass Barack Obama about whether he's going to take public financing in the campaign, and he forewent his own public financing in the primaries after getting a loan, based on the idea that he might take public financing.

This is not a guy who is a reformer. He talks about change, and he makes a big deal about not being like Bush when in fact he is Bush. He voted for Bush's tax cuts after saying he didn't, and has been responsible for a $6 trillion national debt that our children are going to have to pay. He thinks we ought to stay in Iraq for 100 years. He thought it was great that the president vetoed health care for our kids under 18. This is four more years of George Bush, and I don't think the American people are going to buy it.

Now he's folding other elements of McCain's story - the Keating 5 scandal, the public financing double-dealing, the Iraq/100 years comment, the Bush tax cuts, S-CHIP - into this central critique of him being a phony, being more of the same we've seen from Republicans that has made us retch. This is so disciplined and on-message I can hardly even believe it. Dean managed to pack about 6 really good points into one or two paragraphs, and he wasn't overly detailed, he explained them succinctly and truthfully but never lost sight of the main point.

Q: Do you think that running against John McCain -- the Democratic Party -- that ethics is going to be an issue for him in this campaign?

Dean: Yes, because ethics is a huge issue anyway. People are tired of the incredible lack of ethics in the Bush Administration -- what we call the culture of corruption. I think they want somebody who is not going to do that any more, who is not going to mislead the American people -- whether it is on Iraq, or on lobbying or on taking public financing of campaigns, and who is not going to say one thing and do another.

Q: This whole matter, actually though, seems in a funny way to be helping Senator McCain, because the conservatives who were so skeptical about him now are rallying around him and saying he is a victim of the liberal New York Times. Isn't this a development that could actually wind up helping John McCain?

Dean: The conservatives are part of this culture of corruption that the Republicans have brought to Washington. Think of the Scooter Libby problem, the Alberto Gonzales problem, the Doug Feith problem. Think of all of the people in the Bush Administration that have had to leave office under a cloud -- Randy Cunningham, the Republican congressman.

Well, now it looks like John McCain is part of the corruption problem in Washington. He has done things that are legally questionable -- the Keating Five business back in the '90s -- but he doesn't seem to really have an ethical compass. He doesn't seem to have an instinct about what is the right thing to do and what isn't the right thing to do. He talks a good game, but he's just like all those Republicans in Washington have been for all these years, and I don't think the American people want a president like that.

Bush=McCain. That's what a lot of this was leading up to. McCain is running like somebody different, but he's really more of the same. And he's anything but a reformer; in fact he's caught up in the same culture of corruption that Abu Gonzales and the Duke-Stir and Doug Feith and Scooter Libby were caught up in.

"He doesn't really seem to have an ethical compass." That's the take-away.

This is maybe the best five-minute interview I've ever seen in my entire life. I think it's reasonably certain that... well, that no traditional media outlet is going to be booking Howard Dean to talk about this anytime soon. Because he's got McCain nailed. Dead to rights.
UPDATE: And the traditional media borrows the Dean narrative. A1 of the WaPo tomorrow.

Anti-Lobbyist Candidate Is Advised by Lobbyists

For years, Sen. John McCain (R-Ariz.) has railed against lobbyists and the influence of "special interests" in Washington, touting on his campaign Web site his fight against "the 'revolving door' by which lawmakers and other influential officials leave their posts and become lobbyists for the special interests they have aided."

But when McCain huddled with his closest advisers at his rustic Arizona cabin last weekend to map out his presidential campaign, virtually every one was part of the Washington lobbying culture he has long decried. His campaign manager, Rick Davis, co-founded a lobbying firm whose clients have included Verizon and SBC Telecommunications. His chief political adviser, Charles R. Black Jr., is chairman of one of Washington's lobbying powerhouses, BKSH and Associates, which has represented AT&T, Alcoa, JP Morgan and U.S. Airways.

Senior advisers Steve Schmidt and Mark McKinnon work for firms that have lobbied for Land O Lakes, the UST Public Affairs, Dell and Fannie Mae.

That's like a kick to the throat. McCain is getting defined before our eyes.

Touchy, Touchy

John McCain, who has delusions of Kerry-dom dancing in his head (not entirely delusional with this sorry Republican field, though somebody oughta tell him that John Keery lost), is pushing back dramatically against a rumor of a New York Times story promoted by Drudge. If this doesn't show how Matt Drudge rules the world of the political class, I don't know what does. Drudge, whose 15 minutes of fame actually ended in 1998 but nobody told the media, who artificially inflates his own Web stats to deceive his advertisers, has a pathetic amount of reach into the general population. But because his reach into the desks of the Russert-ites is large, and because McCain is essentially running a media campaign based on getting free coverage, any chink in his armor among that class would torpedo him. So he has to push back vigorously against an Internet rumor.

"It is unfortunate that rumor and gossip enter into political campaigns. John McCain has a 24-year record of serving this country with honor and integrity. He has never violated the public trust, never done favors for special interests or lobbyists, and he will not allow a smear campaign to distract from the important issues facing our country.

"Americans are sick and tired of this kind of gutter politics. John McCain is the most experienced and prepared to lead as commander and chief, and he will continue to run a positive campaign on the issues."

Somebody protesting too much? Well how about the fact that he's not only lobbying the editor of the NYT to deep-six the story, but he's hired Bill Clinton's old lawyer:

The Arizona Republican has hired a prominent Washington criminal attorney, Robert Bennett, to deal with the matter. "What is being done to John McCain is an outrage," Bennett said in an interview.

This doesn't pass the smell test. You don't hire a lawyer to rebut a rumor. You hire a lawyer because you're in legal trouble. So this story must not only be damaging, but reveal some criminal liability that would spark an FBI investigation. There's no other way to read it.

You actually don't need a new article to portray John McCain as a complete hypocrite on federal spending. His views on war, not just supporting the Iraq war but all war, provides billions of dollars to his buddies in the defense industry in Arizona. War is good for business in his home state. So his supporters benefit from the bloated defense budget more than practically any other state. So spare me the talk of St. McCain the king of porkbusting.

The Problem Is What's Legal

The latest Fabian Nuñez story concerns charities:

Assembly Speaker Fabian Nuñez used a small charity as a conduit to funnel almost $300,000 from companies and organizations with business in the Capitol to events that helped him politically.

By giving to the charity, the donors whom Nuñez solicited earned tax deductions for which they would not have qualified had they given directly to Nuñez's campaign accounts. They were also able to donate more than the $7,200 maximum allowed under California's campaign fundraising rules.

Those donors include Zenith Insurance Co., AT&T, Verizon Communications Inc., the California Hospital Assn., the state prison guards union, Pacific Gas & Electric Co. and Blue Cross of California -- all groups with high stakes in legislation.

The money was used for events including "Assembly Speaker Fabian Nuñez's Toy Drive," "Assembly Speaker Fabian Nuñez's Soccerfest 2006," "Assembly Speaker Fabian Nuñez's Inaugural Legislative Youth Conference" and airplane flights for 50 children from Nuñez's district for "Assembly Speaker Fabian Nuñez's Sacramento Student Summit," according to state documents.

It's murky whether or not this constitutes a violation of federal tax laws or state ethics laws. If he's soliciting the donation and then directing how it's used, maybe. And apparently the charity itself was shut down for failing to file tax returns a couple years ago.

I would submit that the legality question is completely irrelevant.

Here's the problem. Power is almost entirely centralized in the leadership in the California Legislature. If you are a business in the health care industry, and you want to impact policy, there's only one member of the legislature that means anything to you - Fabian Nuñez. And so you will use a variety of techniques to try to gain access and influence over the process. If they can be so specifically directed, it's inevitable that stories like this will permeate. The problem is what's LEGAL. It's a structural problem that invites corruption or the appearance of corruption.

The Founders decentralized power so there would be competition between the various branches. Spreading out the number of powerful actors lessens the chance of access-buying. The Founders foresaw political parties and factions and were violently opposed to them, and I would guess that this kind of artificial centralization was precisely the reason. This has been a longtime problem in both national and California politics, made worse here by all the bottlenecks created in the legislature, which make certain parts of the calendar completely confusing and ripe for control by individual actors.

I'm not sure what the answer is to weaken the power of the legislative leadership, but unless you do, you're going to keep seeing stories like this. The target for special interests is so inviting and so focused. They're obviously accountable to their membership, with leadership elections every two years

Nunez-gate: Skelton Weighs In

The grand poohbah of the Sacto press corps, taking his whacks.

Memo to editor:

Water is a huge issue right now in the California Legislature. So to broaden my perspective, I propose traveling to Italy to study the ancient Roman aqueduct.

It's even older than the state water project. Both are outdated, and I could put this all into context for our readers.

There's a convenient hotel in Rome at the top of the Spanish Steps where I can stay for $730 a night.

Best, Your stir-crazy Sacramento columnist.

He goes on like that for a while. If money is the mother's milk of politics, money scandals are the mother's milk of political columnists.

Skelton also makes the point that none of this would happen with public financing, but he dismisses is as an unrealizable goal, at least for now, because anything that reduces the amount of spending on political activities will be met with fear and loathing by the political establishment. He invokes the golden rule: "If you can't explain it, don't do it." And then, at the end of the column, in comes Fabian to explain:

After my deadline -- after I'd written this column -- Nuñez called to explain.

He "became a hit around the world" after his global warming bill passed last year, the speaker said, and received many foreign invitations. "The dollar is pretty darn weak in Europe these days" and that runs up expenses, he added. He also buys lots of gifts for dignitaries, staffers and other legislators.

Nuñez defended paying for all this with political money rather than tax dollars. "My conscience wouldn't allow me to do that, so I use my campaign funds. That's between me and the people who contribute."

But what about the wine trip? The French organized it.

"I know this stuff doesn't look good. But it's legitimate. I did not do anything wrong."

He didn't say he was pretty much middle class in this one, so the explanations are getting better. But just because you "became a hit" doesn't mean you actually have to show up around the world. In some ways, this explanation is far worse, actually. It's almost an admission that these activities had nothing to do with California government business.

Note also the plea to his own conscience, that he had to protect the taxpayers from paying for these trips and instead hit up corporate donors who will in turn impact legislation that will bankrupt the taxpayers many times over.

We Need Better Democrats

The saddest thing about this giveaway on FISA and crossing out of the Fourth Amendment is that the Congress was just starting to get its sea legs. They passed 9/11 Commission recommendations that will ensure all containers will be checked at the ports. They passed S-CHIP expansion in both Houses under threat of a Presidential veto. They passed a clean energy standard in the House that would raise the mandate for renewable sources of electricity to 15% by 2020 for the first time EVER. They passed the most sweeping ethics and lobbying reform in a generation. They pushed the Republicans on Iraq and set the stage for a long month of them listening to their constituents.

But despite these successes, all anyone will remember (myself included) is that they got trash-talked into sanctioning unaccountable data mining on Americans.

More Congressional Progress

The House passed bills supporting divestiture of the governments of Iran and Sudan, which is a unique way of using dollar diplomacy to pressure these regimes to stop their support of actions like genocide (in the case of Sudan) or support for terrorism (Iran).

The House also passed The Fair Pay Act to end wage discrimination in the workplace. This is in reference to a Supreme Court decision whereby a pay discrimination case had to be filed within 180 days to be actionable. This bill would reverse that. But it's likely to be vetoed.

Also the Democrats passed ethics reform legislation through the House despite GOP obstructionism. They refused a conference and so the Democratic leadership simply reconciled the bill on their own and stopped the amendment process. GOP whiners could have allowed a conference if they wanted a place at the table.

This has been a good few months for the Democratic Congress. Whether or not the public will recognize this remains to be seen.

UPDATE: Yes, it is kind of hilarious that Ted Stevens, the guy who had his house raided by the FBI and the IRS yesterday, might block passage of the LOBBYING REFORM bill. It sure makes sense, though. Why would he want lobbying reform?

The Sausage Factory

There seems to be a lot of legislation being spitballed in Congress right now, let's do a rundown:

• The House voted to ban all permanent bases in Iraq. There's enough funding, of course, to already build these installations, but it's somewhat significant to the next Administration coming in that the House is on record for this, and that talk of Iraq being the new Korea is being fully rejected. Hopefully the Senate will join them.

• After a farm bill that retained multibillion dollar subsidies to farmers, but lowered the ceiling for payment eligibility and also tried to tighten offshore tax haven loopholes, suddenly faces a veto threat from the President and Republicans who don't want anything bad to happen to those persecuted rich people.

Democrats said the tax proposal would merely close a loophole that the Bush administration itself has decried in the past. "Who is surprised that the administration takes the side of CEOs who hold beachside board meetings at the expense of programs to feed the least fortunate here at home?" asked Rep. Lloyd Doggett (D-Tex.), a senior member of the Ways and Means Committee [...]

House Speaker Nancy Pelosi (D-Calif.) has defended the legislation as an important step toward reform. In addition to paying for traditional farm programs, the bill would provide billions of dollars over the next decade for conservation, biofuel research and nutrition programs such as food stamps. There is new money for organic farmers, rural development and fruit-and-vegetable snacks for schoolchildren.

The farm bill is one of those pieces of Congressional sausage that doesn't get a lot of attention, but really sets the priorities for who we are as a society. The Republicans have set theirs, certainly. But this is always a compromise bill where the interests of farm-state lawmakers are foregrounded and a lot of pork is maintained. Democrats probably did the best they could do on this one, and still Republicans can't allow rich people to have to pay their taxes.

• After the report from a Presidential panel on veteran's care, reforms to the system are being recommended. Maybe we won't see the kind of shocking situation that leads Iraq veterans to sue the VA. What's so depressing is that this plan is cheap:

The commission said fully carrying out its recommendations would cost $500 million a year for the time being, and $1 billion annually years from now as the current crop of fresh veterans and active military members ages and new personnel is in place.

Many of the recommendations of the commission were included in a bill that passed the Senate yesterday.

• Looks like the homeland security bill is finally moving forward.

House and Senate negotiators reached accord yesterday on legislation to implement most of the recommendations of the bipartisan commission that studied the Sept. 11, 2001, attacks. The deal could be enacted as early as this week. Agreement on a package of lobbying and ethics rules changes should be done by early next week. And congressional leaders hope to pass a significant expansion of the 10-year-old program to provide health insurance for children of the working poor.

They're finally starting to break the deadlocks on some of this stuff, as Republicans may have understood that low disapproval ratings for Congress means EVERY incumbent is threatened, not just Democrats. And with far more Republicans up in the Senate, I'm sure they are getting nervous. And the Democrats are starting to put moderates in a vice in a smart way. To wit:

But against such philosophical stands, there is a stark political problem: How many Republicans are really going to oppose legislation expanding insurance coverage for children, tightening ethics rules and bolstering homeland security?

"They've had a pretty strong quarter," said Rep. Ray LaHood (R-Ill.), who praised the insurance bill as "creative" and suggested the homeland security bill would pass overwhelmingly. "The first quarter was not so good, and that's why they're not looking so good in the polls, but this quarter is looking very good for them. They can send their members home crowing about their accomplishments, and they've done it in a bipartisan way, which is exactly what they promised to do," LaHood said.

I don't know if people are paying enough attention; really only Iraq matters in the big picture. But Democrats are starting to expose the obstructionists and break through the media filter.

On The Legislative Front

There is more evidence that the answer to the question of "Is our Congress learning?" is yes. Frustrated by procedural obstructionism, the Democratic leadership plans to do some dirty work of their own to get important legislation passed:

Nancy Pelosi and Harry Reid are hoping to ram through ethics legislation that has become an albatross for the new Congress. Instead of waiting for the traditional conference committee to create a compromise version of the bill, the Democrat leadership is expected to use parliamentary tactics to both block amendments and speed the bill to the Senate, where Reid is hoping that popular sentiment will sway enough lawmakers to ensure a filibuster-proof majority.

The Republicans will bitch and moan, but at some point you have to fight fire with fire, and this ethics reform has languished for too long. They've passed it through both houses of Congress and now the Republicans are BLOCKING THE CONFERENCE REPORT, so they really have left no choice.

Meanwhile, the pulled defense authorization bill has given way to an education bill, which seeks to markedly increase Pell grants and fix the ailing student loan program. The President has vowed to work with Congress on the bill (even though the first line says he'll veto it), and while we may not get the same numbers talked about here, it's possible that there will be some compromise worked out.

Meanwhile the Democrats are not backing down from the President's heartless and totally ideological resistance to re-authorizing and increasing funding for the State Children's Health Insurance Program (S-CHIP). Republicans who have worked on this bill know that they will be destroyed electorally by voting against children's health, and they're signaling their opposition to the President (which for them is a win-win).

The chief Republican architects of a deal to expand a children’s health insurance program are defending the proposal against criticism by President Bush, who has threatened to “resist” it.

This week, members of the Senate Finance Committee tentatively agreed on a renewal and expansion of the State Children’s Health Insurance Program (SCHIP), which covers about 6 million children from families that are low-income but not poor enough to qualify for Medicaid.

Bush sees the legislation as a backdoor move toward government-run health care, but committee Republicans Charles E. Grassley of Iowa, Orrin G. Hatch of Utah and Pat Roberts of Kansas said in a July 11 letter to Bush that the issue that most concerns him — the use of SCHIP to cover adults — is partly his fault. Under Bush’s watch, the department of Health and Human Services has approved 12 waivers to states allowing SCHIP coverage of adults, records show, including a waiver issued May 24 allowing Wisconsin to cover parents earning up to twice the poverty level.

There may be enough votes to override this veto, and if not, the Democrats are playing hardball:

About 3.3 million additional children would be covered under the proposal developed by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Republican Sens. Charles E. Grassley (Iowa) and Orrin G. Hatch (Utah), among others. It would provide the program $60 billion over five years, compared with $30 billion under Bush's proposal. And it would rely on a 61-cent increase in the federal excise tax on cigarettes, to $1 a pack, which Bush opposes.

Grassley and Hatch, in a joint statement this week, implored the president to rescind his veto threat. They warned that Democrats might seek an expansion of $50 billion or more if there is no compromise.

Damn straight. Make these Republicans vote over and over again to protect their President and deny children health insurance. I can't think of a better bill on which to take a stand.

UPDATE: Much more on the education bill here.

The Problem Is Obstruction

What the Broderellas of the world (and apparently, the Mario Cuomos as well) don't seem to understand is that the critical issues facing the country, the ones that practically the whole country wants the Congress to solve, are simply being held up by Republicans. They have every right by virtue of their place in the Senate to hold up those bills, but it's clear to me that they're doing it, not out of principle or considered belief, but because this whole "Congress doesn't do anything" theme is a political winner. Republicans in the Senate have already this week blocked lobbying reform, implementing the 9-11 Commission recommendations and the Employee Free Choice Act. The energy bill got through but not with everything that people wanted, because conservatives blocked major portions of the bill.

All of these "post-partisans" are interested in doing the work of the American people, yet the Democrats are clearly trying to do that as well, even on Iraq, and they're being blocked by the minority. These high Broderists seem to want to forget that there's such a thing as minority rights in the legislative arena. They act like, if Michael Bloomberg or one of their other deities were President, suddenly all conservatives would stop being conservative and start voting for major changes against all of their stated positions. This is old-fashioned Congressional gridlock, and I'm not saying it's good for the system. But there's no magic quick fix to it either. The answer is to put electoral pressure on the folks that are vulnerable, which the Democrats are doing by continuing to hold votes. If we get more and better Democrats in place, suddenly all of these things Broderites want to see will be implemented, but that won't be good for them either because the dirty fucking hippies will be in charge.

P.S. I like what Reid said about Lugar and friends making noise about Iraq. Less noise, more action was essentially his message.

Look on the Bright Side

Well, at least the House got some lobbying and ethics legislation passed.

The House voted Thursday to drag into public view the role that registered lobbyists play in soliciting and collecting contributions for political campaigns, exposing for the first time one of the most effective ways that influence-seekers ingratiate themselves with lawmakers and presidents.

The measure goes to the heart of how Washington does business by uncovering a hidden practice that sprang up as an unintended consequence of restrictions imposed by campaign finance laws. Because those laws cap individual contributions — now $2,300 per campaign — candidates have been turning to well-connected lobbyists to bundle stacks of checks to make up the millions they need to run their campaigns.

Washington lobbyists hoping for access to lawmakers have the greatest incentive to shoulder such fund-raising burdens. But previous election rules required campaigns to disclose only their individual contributors, not the intermediaries who may have bundled them.

This "bundling" practice looked like it was going to be saved in the final legislation, but they did ban it. The rest of the bill would "penalize lawmakers that receive a wide amount of favors from special interests."

So, see? We just delivered billions of taxpayer dollars to Iraq, but lobbyists won't be able to give $100,000 to legislators anymore! They'll just have to collect the money individually!

The Ship of State Travels Slowly

Oh dear. I knew Nancy Pelosi was heroically pushing strong lobbying and ethics reform bills (modeled after the Honest and Open Government Acts from last year) and meeting some resistance. Well, when the bill got marked up today, one of the key items was stripped out of it.

The House Judiciary Committee has stripped from a lobbying overhaul bill a provision that would have extended the current ban on “revolving door” practices from one year to two.

During a Thursday markup of the bill (HR 2316), the panel also changed the measure to allow members to negotiate for an outside job in secret while still representing their constituents.

Both moves are sure to draw strong opposition, including from some Democrats, when the measure reaches the floor next week, but both had the support of Chairman John Conyers Jr., D-Mich., and ranking member Lamar Smith, R-Texas.

The more things change, the more they stay the same. It's hard to tell someone like John Conyers, who's been in the Congress since, I don't know, Lincoln, that what he's been doing all of these years needs to change. But it does, because the public has lost confidence in the Congress' ability to cleanly deal with the nation's issues and not make themselves personally wealthy in the process. The House also rejected a proposal to stop lobbyists from throwing parties at the nominating conventions.

Ultimately, it's going to take a lot more hard work before these sensible ethics standards are adopted. Nobody wants to eliminate lobbying, a fundamental right enshrined in the Constitution. It needs to be regulated and disclosed, and split from the money that it trafficks in.