Big businesses spend tens of millions of dollars every quarter in Washington trying to influence the legislative process to ensure the law passed is to their advantage. It’s usually a law to help them profit, or avoid restrictive regulation, or gain some advantage over the competition.
But there’s a specific currency lobbyists can sell to corporations that want to have an extra level of influence over lawmakers and the legislative process: Good lobbyists sell their personal relationships with elected officials. Some used to work in a Congressman’s office for decades; others ran a successful campaign. Lobbyists with personal connections to the people writing the laws can call on a personal friend.
It’s an insider game that Trump railed against — explicitly and tacitly — as the basis of his entire campaign. He pitched himself to voters as the gruff guy America should send to grab Washington by its lapels and shake hard.
That hasn’t been the case. In fact, Trump’s marquee legislative offering is the tax “reform” bill up for consideration. It does nothing to advantage middle class taxpayers, it actively disadvantages the poor, and it’s laden with handouts to corporations. How did corporations get their way with the tax bill under an administration that railed so hard against corporate special interests?
Corporations spent millions to hire lobbyists with special connections.
ThinkProgress identified at least 27 lobbyists who previously worked for the bill’s decision-makers — President Donald Trump, Vice President Mike Pence, members of their administration, GOP lawmakers involved in crafting the bill, and the Republican committees overseeing taxes — were also relaying the interests of their wealthy clients to their former employers.
The revolving door allows these lobbyists to use their connections to help draft legislation in secret with little to no public input, said Aaron Scherb, director of legislative affairs for the government watchdog group Common Cause.
“Tax reform legislation is a perfect example of why we need to close the revolving door,” Scherb said. “The tax reform process, which appears to largely be driven by corporations and special interests will likely further empower the rich at the expense of many every day hardworking Americans. And until we reform our lobbying and ethics laws this practice will continue to play out in the legislative process.”
A Senate budget proposal set a Nov. 13 deadline for the GOP to finish drafting the bill.
President Trump ran his campaign on the idea that he could bring a radical, outsider’s perspective to Washington to shake up policy in a way that favored the little guy. Now that he’s in the White House, his administration has taken almost the opposite approach to policy-making: America’s largest corporations have spent hundreds of millions of dollars lobbying on different provisions that were included in the proposed tax reform bill such as lowering the corporate tax rate, providing tax cuts for non-incorporated businesses, allowing low-rate repatriation, and creating a territorial system for future foreign profits. Those companies have also poured money from their PACs into the campaign coffers of the legislators writing the bill.
Bill Smith, AT&T, and the vice president
William “Bill’ Smith Jr.’s ties to the vice president are about as deep as they come in Washington. From the time Mike Pence became a Congressman in 2001 until he left Congress to become governor of Indiana in 2013, Smith served as his chief of staff. Before that, Smith managed Pence’s successful 2000 campaign for U.S. House of Representatives. He managed Pence’s gubernatorial transition team in late 2012. And from 2013 to 2014, he was Pence’s gubernatorial chief of staff.
In 2014, Smith started Sextons Creek, a lobbying firm with offices in both Indianapolis and Washington, D.C. And in February of this year, AT&T added Smith and Sextons Creek to its stable of outside lobbyists.
AT&T has a keen interest in making sure that the tax reform proposal contained a significantly lower corporate tax rate for themselves, and the company is a major member of Reforming America’s Taxes Equitably (RATE Coalition), the industry group leading the charge on that issue. By enlisting the help of Smith, the company was able to ensure incomparable access to a key player in the administration.
The telecom giant, through an intermediary, pays $30,000 each quarter to have Smith lobby just one audience: the Office of the Vice President, Smith’s old boss. In the second quarter of 2017, every penny of that went for him to lobby Team Pence on just one issue: tax reform.
And it apparently has paid off: when Trump announced his outline of the tax plan, AT&T was quick to praise it as a plan that would “spur greater investment and job creation.” With more than $163 billion in sales revenue last year alone and $61 billion in gross income, the company reportedly paid more than $3 billion in domestic taxes — a sum that would be significantly reduced under the current proposal.
McConnell’s many chiefs of staff
After spending five years as chief of staff to the late Sen. Arlen Specter (then a Pennsylvania Republican), David Urban was one of the first political operatives to join the Donald Trump presidential campaign, in April 2016. Urban played key roles in Trump’s victory: First as an adviser for the Pennsylvania and Indiana primaries, then as the campaign’s senior political liaison to the Republican National Convention, and finally as a “senior advisor” for the general election. Now president of the Washington, D.C.-based American Continental Group lobbying firm, Urban boasts in his company biography that he was named “one of the 30 most powerful people in President Trump’s Washington” by Politico.
The National Association of Home Builders (NAHB) paid Urban and one colleague $50,000 in the second quarter of 2017 to lobby on a few issues, with tax reform at the top of the list. With his connections to both Congress and the administration, the duo lobbied the House, Senate, and White House on the trade group’s tax agenda — including preserving tax incentives for homeownership and a business interest deduction for small businesses. Praising the GOP leadership’s framework as “a positive step in the right direction,” the organization boasted that in a “major victory for NAHB and the housing community, the framework explicitly preserves the [Low-Income Housing Tax Credit (LIHTC)] as one of two business tax credits ‘where tax incentives have proven to be effective in promoting policy goals important in the American economy.’”
Three former chiefs of staffs to Senate Majority Leader Mitch McConnell (R-KY) each lobbied for provisions in the tax bill on behalf of numerous large corporations.
Billy Piper, who worked for the Kentucky senator for 20 years, lobbied on the tax bill for Apple, Ford, Oracle, Charter Communications, and the National Retail Federation. Combined, they paid his lobbying firm Fierce Government Relations $390,000 in the second quarter. Piper worked as McConnell’s special assistant and chief of staff from 1991 to 2011 before entering the lobbying trade, work that presumably capitalized on his relationship with his longtime boss.
Piper was among several Fierce lobbyists working for Apple on the bill in the Senate, House, and the Executive Office of the President. Apple — the company that had over $230 billion overseas as of 2016 — has been lobbying to allow multinational corporations like itself to bring such accumulated foreign earnings back to the U.S. at a low one-time rate. Likewise, Oracle had $42.6 billion overseas. Without the tax reform holiday, the bill on that money would be over $71 billion for Apple and over $13 billion for Oracle, according to the non-partisan Institute on Taxation and Economic Policy.
Other companies and organizations Piper has been representing on Capitol Hill, such as Ford and the National Retail Federation through the RATE Coalition, have been pushing for lower corporate tax rates — a provision that was ultimately included in the bill.
Other McConnell chief of staff alums include Kyle Simmons who worked in his office for 15 years and lobbied on this bill for Wal-Mart, American Airlines, Southern Company, Toyota, Anheuser-Busch, ExxonMobil, and Edison Electric Institute; and Hunter Bates, who lobbied on behalf of AT&T and Altria Client Services and was McConnell’s chief of staff from 1992 to 2002 and managed his ’02 Senate campaign.
The three were joined by other ex-McConnell staffers in lobbying for the bill, including his former deputy chief of staff Rohit Kumar for Business Roundtable; his former policy advisor Malloy McDaniel for Comcast, Microsoft, and Prudential Financial; his former staff assistant Amanda Bunning for Google; and former staffers Michael Solon and Jon S. Deuser, who lobbied for ExxonMobil and the Financial Services Roundtable, respectively.
Paul Ryan’s sphere of influence
House Speaker Paul Ryan’s former floor director Anne Bradbury last quarter lobbied the House and Senate on the tax reform bill for the Dow Chemical Company, Business Roundtable, and Honeywell International.
The floor director “is among the most important jobs in the House majority. It requires quick decision-making ability, extensive knowledge of the House rules and deft political judgment under pressure,” according to POLITICO in a 2016 report about Bradbury leaving the post under Ryan, who she worked for in 2015 and 2016.
Bradbury previously served the floor director and deputy floor director role under former Speaker of the House and House Minority Leader John Boehner for about a decade. Today, she is representing companies and business groups that have been pushing for various reforms in the tax bill.
Dow Chemical and Honeywell for instance, joined a coalition called Alliance for Competitive Taxation that pushed for a “territorial” approach of taxation — similar to what was included in the GOP framework — that would not tax U.S.-based companies on profits earned abroad. That approach is intended to discourage companies from holding their foreign profits abroad and would make it cheaper for those companies to earn profits internationally. Business Roundtable has also been pushing for such a system.
Ryan, a key contributor on the tax reform bill, said of Bradbury in a statement to POLITICO: “No matter the situation, you can always look to Anne for a solution… She has made countless contributions to the House with her wisdom, steadiness, and leadership.”
Committee and chair staff use their connections to lobby for corporations
A number of lobbyists have previously worked for the Senate Finance Committee and the House Ways & Means Committee, which have jurisdiction over taxation. That includes three former Ways & Means Committee staffers Ray Beeman, Gregory Nickerson, and Brian Sutter who between the three of them, lobbied for companies and trade organizations including the National Association of Real Estate Investment Trusts, the National Association of Home Builders, ExxonMobil, Comcast, Verizon, General Motors, Pfizer, Hewlett Packard, Johnson and Johnson, Altria Client Services, Oracle, and Novartis.
Likewise, two former Finance Committee staffers, John O’Neill and Ed McClellan, advocated for companies including Northrop Grumman, General Electric, Comcast, Airlines for America, Citigroup, FedEx, Viacom, Prudential Financial, and Shell.
Former staffers of the chairs of those committees — committees that have been busy helping draft the bill — were also busy lobbying on behalf of corporations last quarter.
Marti Thomas — a former Goldman Sachs lobbyist when the company was under White House Economic Advisor Gary Cohn’s leadership — lobbied on tax issues for General Electric in 2017. Evan Liddiard, Sen. Orrin Hatch’s former senior tax advisor, lobbied on behalf of the National Association of Realtors last quarter (Hatch (R-UT) chairs the Senate Finance Committee). And the senator’s ex-staffer Michael J. Bell lobbied for Airbus America. Former staffers to Sen. Rob Portman (R-OH), who chairs the subcommittee on taxation and IRS oversight, also lobbied on the bill — Seth Webb lobbied for Google, Jeff Sadosky, lobbied for United Parcel Service and Anheuser-Busch, and Robert Schellhas lobbied for Citigroup.
Ex-staffers of Senate Majority Whip John Cornyn (R-TX) and House Ways & Means Committee Chairman Kevin Brady (R-TX), who are both actively working on the bill, also lobbied. Former Cornyn staffers Jerr Rosenbaum and Kevin McLaughlin both lobbied for Walmart while Brady ex-staffer Christopher Eyler lobbied for the Chamber of Commerce. Other former Brady staffers also lobbied on the bill including Kimberly Ellis for Shell, Entertainment Software Association, Microsoft, and Novartis and Lori Harju, also for Novartis.
Trump abandons his swamp rhetoric
Since taking office, Trump has dialed back the rhetoric about cleaning up the lobbying environment. In January, the president issued an executive order that placed a five-year ban on lobbying to prevent the revolving door practice among former members of his administration. But the executive order allows officials who worked in his administration to lobby other parts of the government and allowed lobbyists to work for his government as long as they don’t work on anything they lobbied on for two years prior, according to Politico.
That order also revoked an Obama-era executive order that barred registered lobbyists from taking administration jobs for a year. His administration has welcome more than 100 former lobbyists into the administration, in many cases granting ethics waivers to allow them to circumvent Trump’s own executive order against the practice and take administration jobs — inviting corporate lobbyists right into the policy-making process.