Wednesday, April 6, 2005

One of the surest paths to riches in Washington is to have these five words on a resume: ''Office of Representative Tom DeLay.''

DeLay's Former Aides Building Lobbying Empires in Washington

By MikeForsythe, Kristin Jensen and J.D. Salant, Bloomberg

April 6 (Bloomberg) -- One of the surest paths to riches in Washington is to have these five words on a resume:
''Office of Representative Tom DeLay.''

Eleven lobbyists who once worked for the Texas Republican and House majority leader helped bring in at least $45 million in fees for their firms in the past two years. By comparison, former aides of House Speaker Dennis Hastert lobbying during that period helped bring in about $2.1 million.

Along the way, Delay's former assistants have aided clients such as ChevronTexaco Corp., Wyeth and Reynolds American Inc. in achieving legislative victories. They have also given DeLay the kind of Washington-insider clout he once criticized when Democrats were in power.

Like the Democrats of the late 1980s and early 1990s, DeLay is under fire now. Lobbyists with ties to the House majority leader have sparked investigations by two Senate committees.

''This is very damaging for the political system,'' said Amo Houghton, a Republican who represented a congressional district in upstate New York for 18 years before retiring in January. ''It doesn't help the Republican Party. It doesn't help anybody in politics.''

Many of the more than 200 companies, coalitions and trade groups that have hired former DeLay employees as lobbyists since he became House Republican leader in January 2003 have gained from those ties as he championed their causes. DeLay spokesman Dan Allen said his boss took those positions because of his ideological convictions, which he said are common knowledge among lobbyists.

`Strongly Held Beliefs'

''They all know, as do people around him, that Congressman DeLay's legislative activities are based on strongly held beliefs and the corresponding merits of the legislation,'' Allen said in an interview. ''Everybody knows Congressman DeLay has built a strong record of advocating for lower taxes, open trade and a strong and free market.''

Susan Hirschmann, who served as DeLay's chief of staff until 2002, helped her Washington-based firm, Williams & Jensen PLLC, earn at least $1.4 million in fees from Madison, New Jersey-based drugmaker Wyeth in the past two years. That's the second-highest total among the 216 or so clients of DeLay alumni.

Hirschmann lobbied Congress to add a prescription-drug benefit to Medicare that would prevent the government from negotiating lower prices, according to disclosure records compiled by PoliticalMoneyLine, a nonpartisan group that tracks money in politics. She also worked to curb class-action lawsuits; Wyeth has set aside more than $21 billion to pay claims that its diet drugs caused heart and lung complications in patients.


Both measures, which were strongly backed by DeLay, are now law. Hirschmann declined to comment on her activities on behalf of the company; Wyeth had no immediate comment.

DeLay, 57, an 11-term congressman, also sought over Senate opposition legislation to protect oil companies from being sued for using MTBE, a gasoline additive that was found to contaminate groundwater.

The provision, which has held up passage of a bill setting U.S. energy policy, was backed by the Washington-based American Petroleum Institute, a trade group for companies such as San Ramon, California-based ChevronTexaco.

The institute paid $400,000 and ChevronTexaco paid $60,000 to the Federalist Group, a lobbying firm that employed former DeLay legislative director Drew Maloney to help press for the energy bill. Another DeLay alumnus, former legislative assistant Chris Lynch, also worked at the Federalist Group.

Essential Provision

Edward Murphy, group director for refining and marketing at API, said it's
''absolutely necessary'' that the MTBE provision be in the energy bill. ''We would not support an energy bill that did not include it,'' he said. ChevronTexaco had no immediate comment.

Maloney organized an energy-industry fund-raiser in June 2002 for two DeLay-affiliated political-action committees that featured DeLay and lobbyists from Reliant Energy Inc. and El Paso Corp., both of Houston; Tulsa, Oklahoma-based Williams Cos.; Atlanta-based Mirant Corp.; and Topeka, Kansas-based Westar Energy Inc. Maloney didn't return two phone calls seeking comment.

DeLay's involvement in the fund-raiser drew a rebuke from the House Ethics Committee in October 2004. It
''created the appearance that donors were being provided with special access,'' Chairman Joel Hefley, a Colorado Republican, and ranking Democrat Alan Mollohan of West Virginia said in a statement.

When the Senate voted in 2004 to link a multimillion-dollar buyout of tobacco farmers with a provision allowing the Food and Drug Administration to regulate the industry, DeLay objected, saying it was an attempt to ban tobacco through a
''back-door regulatory process.'' The Senate agreed to drop the FDA provision.

Altria and Reynolds

The Senate bill had the backing of the U.S.'s biggest tobacco company, New York-based Altria Group Inc., which didn't employ DeLay alumni. Winston-Salem, North Carolina-based Reynolds American, the No. 2 company, opposed FDA regulation; it has paid at least $90,000 in lobbying fees since 2003 to the Alexander Strategy Group, whose chairman, Ed Buckham, preceded Hirschmann as DeLay's chief of staff.

Former Deputy Chief of Staff Tony Rudy and Karl Gallant, the former executive director of DeLay's Americans for a Republican Majority political-action committee, also work at the firm. Gallant lobbied for Reynolds on tobacco regulation, according to federal disclosures.

''You try to identify those firms which you think will have the resources and the contacts, the access, to get your point of view across to elected officials,'' Reynolds spokesman John Singleton said. Buckham didn't return two telephone calls and an e-mail seeking comment.

Remaking K Street

The track record of DeLay's alumni underlines the success he and fellow Republicans have had in reshaping the ranks of Washington lobbyists over the last decade with what they call the
''K Street Project,'' after the Washington street that houses many lobbying firms. The campaign encourages businesses and trade groups to hire Republicans.

''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,'' DeLay said in the Washington Post in 1995. ''We're just following the old adage of, `Punish your enemies and reward your friends.'''

In January of that year, the Republicans took control of Congress for the first time in 40 years, pledging to end what their election manifesto, the
''Contract With America,'' called the Democrats' ''cycle of scandal and disgrace.''

$66 Million

Former DeLay press secretary Michael Scanlon's public-relations firm, Capitol Campaign Strategies, has taken in $66 million since 2001, according to the Senate Indian Affairs Committee. And Hirschmann helped bill at least $4.8 million for her lobby firm last year, according to disclosure reports.

Companies employed by former DeLay staffers and their executives gave more than $420,000 to DeLay's fund-raising committees after he became majority leader, according to Federal Election Commission filings.

That doesn't include the money that clients, including Reliant Energy and Reynolds American, contributed to a legal-defense fund set up for DeLay. Each company donated $5,000 in 2003, with Reynolds giving another $5,000 in 2004.

Career Threat

In addition to the 11 DeLay alumni who work at lobby firms, at least six others have worked as Washington lobbyists for companies and trade groups. Among them is former DeLay chief of staff Kenneth Carroll of New Orleans-based Entergy Corp. Carroll declined to comment.

Scanlon and his colleague, Jack Abramoff, are the subject of probes by the Senate Indian Affairs and Finance committees over the fees paid by six Indian tribes from 2001 to 2004.

Buckham has been the focus of media attention since a March report in the Washington Post linked him to the Korea-U.S. Exchange Council. DeLay took a trip to South Korea in August 2001, which was paid for by the council and was set up by Alexander Strategy Group for South Korea's Hanwha Group, according to the report. Justice Department records show the council had registered days before the trip as a foreign agent, and House rules bar members from taking trips paid for by such groups.

DeLay denied allegations he violated ethics rules by accepting two trips funded by interest groups, and said he is ``anxious'' to be cleared by the House ethics committee.

`Baseless' Allegations

''We want to work with the ethics committee to prove how baseless these and other allegations are,'' DeLay told reporters in Washington on March 15.

A Texas grand jury last year indicted three DeLay associates in connection with an investigation into illegal political fund-raising. The charges relate to their work for Texans for a Republican Majority, a group DeLay help start in 2001 that aided Republicans in taking control of the state legislature.

Clients of Alexander Strategy Group and the Federalist Group gave $145,000 to the group for the 2002 elections, according to Texans for Public Justice, an Austin-based watchdog group. DeLay's Americans for a Republican Majority PAC paid Alexander Strategy more than $114,000 during the 2002 election in consulting fees, according to Internal Revenue Service records. DeLay last year called the probe by Travis County District Attorney Ronnie Earle ``vindictive and partisan.''

Close to the Line?

''DeLay has always played it close to the legal and ethical line when he deals with money and politics,'' said Craig McDonald, director of Texans for Public Justice, which has called on the House to appoint a special counsel to consider the ethics complaints. ''DeLay has privatized his former staff members to create an army for special interests.''

DeLay's office said his aides' post-Congress careers just prove that he attracts some of the best people to work for him.
''Over the years, Congressman DeLay has been privileged to have many talented and dedicated staffers,'' said Allen, his spokesman. ''They've gone on to a wide range of careers after departing the office.''