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Lawmakers & Lobbyists Celebrate Inauguration

Image has not been found. URL: /wp-content/uploads/2009/01/inauguration-washington.jpgEarly morning hours before the inauguration of President Barack Obama. (Zuma Press)

President Barack Obama promised that his inauguration would be different from those of previous presidents, but change doesn’t come easily when it requires shaking influence in Washington.

In November, Obama announced that his presidential inauguration committee would not accept donations from corporations, lobbyists, political action committees, or unions. The move appeared to set Obama apart from President Bush, whose official inaugurations were underwritten almost exclusively by corporations and executives.

Despite Obama’s efforts, inaugural festivities still represent a giant loophole in lobbying rules that have grown progressively stricter in recent years. Whether it’s the high-dollar fundraisers underwriting the official inaugural program, or the corporations and lobbyists throwing lavish parties to woo legislators and government officials, influence appears to come with a price tag.

This week, a plethora of official inaugural events, paid for by a relatively small number of wealthy donors to Obama’s inaugural committee, as well many private parties present opportunities for moneyed interests to curry favor with the incoming president and Congress.

Private Parties

Special interests and lobbying firms lure lawmakers with lavish private parties during inauguration week, which are all off the books. Obama is not expected to attend these events personally, but members of Congress, and even members of his administration, who will be the primary vehicle for his change agenda, are expected to show up in droves.

“These private parties are a chance, particularly for lobbyists, to mingle, with state and federal elected officials,” said Craig Holman, the government affairs lobbyist for Public Citizen, a non-profit consumer advocacy organization. “Members of Congress attend en masse.”

Some gatherings are flashy and well-publicized, but many events are discreet, invitation-only affairs that are never advertised.

“Private parties are entirely unregulated and undisclosed,” said Holman. Constituents have no way of knowing whose hospitality their representatives might be accepting during inauguration week. Typically, the costs of these parties don’t count as money spent on lobbying and therefore hosts don’t have to disclose these expenses as lobbying.

The biggest sponsors of private parties are lobbying firms, corporations, and trade associations. Almost invariably, the sponsors have business pending before the federal government, or represent someone who does.

One of the highest profile private galas is sponsored by the National Association of Manufacturers a powerful trade association that spent $6.5 million last year to lobby more than 30 government bodies from the Executive Office of the President to the Department of Education to the CIA. In recent weeks, the association has been a vocal proponent of a bailout for the Big Three automakers.

The association’s corporate member organizations — many of whom have interests pending before Congress — sponsor the event. Some pay as much as $50,000.

A search of Center for Responsive Politics’ online database OpenSecrets.org revealed that nearly all of the event’s sponsors spent significant sums on federal lobbying or campaign contributions last year: Exxon Mobil spent $17.9 million on lobbying in 2008. Agricultural products giant Archer Daniels Midland, another sponsor, spent $1.78 million on federal lobbying last year and its employees and PACs contributed $317,700 to congressional campaigns during the 2008 election cycle (53 percent to Democrats and 47 percent to Republicans). ADM lobbied the U.S. Department of Agriculture, the House, and the Senate on renewable energy issues, freight rail, and taxation. Arch Chemicals spent $120,000 lobbying the House last year. DRS Technologies, a defense electronics firm, spent $2.65 million on lobbying in 2008.

Asked whether lawmakers are expected to attend the event hosted every inauguration, Hank Cox a spokesman for NAM, said often times they do stop by.

“[Hosting the party] enhances our position and our relationship with lawmakers, but nothing concrete,” Cox said.

Smaller organizations with interests in Washington are also getting in on the action. Guests at the Homeland Security and Information Technology Inaugural Gala — a party hosted by smaller defense and technology firms looking to win lucrative government contracts — will enjoy “sweets and treats” at the International Spy Museum in Washington, as well as an open bar, a live performance by R&B singer Jeffrey Osborne, and even actors dressed up like James Bond and Mata Hari. There’s also free valet parking — a real perk this week.

Like the NAM gala, the Spy Museum party is put on with support from various corporate sponsorships with discrete interests. An enterprising homeland security company can sponsor the buffet’s pasta station for just $7,500, according to the gala website. In return, the firm will receive 6 tickets, a half-page ad in the program and a guaranteed shout-out during the sponsor appreciation segment of the program.

One of the hosts of the Spy Museum gala is Carlos Weaver of CLW Services. Weaver and his business partners are among a handful of companies eager to remind lawmakers that they are certified to supply high-tech identification cards for federal employees.

Weaver is expecting about 300 guests from the IT side of homeland security, some from as far afield as California and Texas.

The fondue will no doubt be delicious, but the networking opportunities are an even bigger draw.

Weaver boasted that he expects guests from Congress, an array of federal agencies and local governments. “[It's] a wide mix of government and industry,” Weaver said.

Weaver is forthright about his goals for the party. He sees the gala as an opportunity for his small firm to shine in an industry dominated by corporate giants.

“You know how politics in the world is,” Weaver said. “Everyone hopes that someone sees them and pays attention to them. Everyone wants exposure.”

Obama’s Bundlers

Despite Obama’s promises to make this an inauguration for the people, a study by Public Citizen reveals that a small coterie of big dollar fundraisers are bringing in most of the money.

As of Thursday, the inaugural committee had raised at least $35.3 million. Holman, of Public Citizen, said that his analysis found that 80 percent of that total budget came from just 211 wealthy donors — mainly from the financial sector. He and his colleagues have scrutinized the data from the official inaugural Website, which identifies bundlers by name and employer and lists the amount each person raised.

Individual donations are capped at $50,000, more than ten times what an individual may give to a presidential campaign. Bundling is a simple way around the “no corporations, no lobbyists, no PAC rule.”

“The big bundlers cajole their colleagues and others to make those $50,000 contributions and put them into one large package,” Holman says.

By definition, bundlers don’t just encourage people to mail in their checks, they gather the checks and put their names on the bundles to get credit for their efforts. Bundling isn’t just about raising money for a cause, it’s about keeping score.

The Public Citizen study found that the top fundraisers tend to work in a small number of industries whose fortunes depend heavily on federal policy.

“The leading sector is Wall Street, [among] the inaugural bundlers,” Holman said. “They work with Lehman Brothers, Citibank, Goldman Sachs, and other Wall Street industries. We’re seeing Wall Street pay for the inauguration — and what do you think they want?”

Other watchdogs raised similar concerns about influence-buying through the inauguration.

“At a bare minimum, if you’re giving forty, sixty, a hundred thousand dollars, you’re going to get someone from the administration who knows what your agenda is and you’ll get phone calls returned,” said Mary Boyle, a spokesperson for the watchdog group, Common Cause.

She explained that, if history is any guide, a CEO who delivers a big bundle might be rewarded with a seat at the table the next time the administration wants feedback from her industry. That’s how high the stakes are.

“Our concern is that interests with business before the government are making large contributions and using that contribution to buy access to the president on his top aides,” Boyle said.

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