Lobbyists Lobby – Taxpayers Pay

Rich Tehrani : Communications and Technology Blog - Tehrani.com
Rich Tehrani
| Communications and Technology Blog - Latest news in IP communications, telecom, VoIP, call center & CRM space

Lobbyists Lobby – Taxpayers Pay

How does the world of lobbyists work and how can these people influence politicians? The USA Today has a story on the topic which explains how non profit groups set up directly by lobbyists are able to sidestep the rules to show members of congress the world.

Here is an excerpt of the article:

In late April, the group paid for four members of Congress - three of them accompanied by spouses - to hop aboard a corporate jet, bound for the Napa Valley town of St. Helena. The weekend for the two Republicans and two Democrats included luxury accommodations at the Meadowood resort and a series of presentations on issues facing the wine industry. Meals on the three-day trip totaled $458 for each person. The total bill: $46,000.

Congressional rules allow lawmakers and their aides to take trips paid for by private interests, with a few caveats: The travel must relate to their official duties in Washington; it must not be primarily recreational; and it must not be paid for by lobbyists or representatives of a foreign interest. When lawmakers do travel, they must disclose the trip, its purpose and who paid for it.

Lobbyists also are required to report who pays them, how much they are paid and the issues they lobby on, under a 1995 disclosure law. But tax-exempt groups have minimal disclosure requirements. Paying for trips through a tax-exempt organization exploits a seam between tax law and the ethics rules, says Frances Hill of the University of Miami School of Law.

“The ethics rules invite you to set up conduits” for undisclosed money, she says. And the IRS, which oversees tax-exempt groups, “has been remarkably lacking in curiosity about cases like this.” The agency is too understaffed to thoroughly review all of the country's 1.5 million tax-exempt organizations, she adds.
Since 2000, members of Congress have taken more than 5,900 privately financed trips at a cost of $17.6 million, according to the non-partisan PoliticalMoneyLine, which analyzes data on money in politics. More than half of the spending has come from tax-exempt groups such as America's Trust.
Here is more:

It isn't hard to find examples of lobbyists connected to non-profit groups sponsoring congressional trips:

•The Islamic Free Market Institute Foundation has paid for at least 23 trips by lawmakers since 2000, at a cost of $235,839. Most of the travel was to an annual conference in the Persian Gulf country of Qatar. The group raised $456,777 in 2003, according to its latest federal tax return, but declined to disclose its financial backers. Among the organization's founders in 1998 was Grover Norquist, a Republican activist and anti-tax lobbyist. He no longer is on the institute's board, but the organization shares an office with Norquist's group, Americans for Tax Reform. The Islamic Institute also has worked with another lobbyist, Asim Ghafoor, who represented an association of Islamic banks.

•Two groups, the Korea-U.S. Exchange Council and the Malaysia Exchange Association, set up to promote trade with Asia in part by organizing trips for lawmakers, have ties to the Alexander Strategy Group, a lobbying firm founded by Rep. Tom DeLay's former chief of staff, Ed Buckham. The groups financed $224,000 in travel for a dozen House members since 2001.

The lobbying firm set up the Korea group in 2001 with the goal of making Korean businessman Seung Youn Kim, chairman of one of Korea's largest conglomerates, the Hanwha Group, “the leading business statesman in U.S.-Korean relations,” according to a strategy memo. But because the group registered as an agent of a foreign interest, it could not legally sponsor congressional travel.

The Malaysia organization, which did not register as a foreign agent, sent three House members - Roger Wicker, R-Miss., Earl Pomeroy, D-N.D. and John Doolittle, R-Calif. - to Kuala Lumpur in February “to strengthen the bilateral relationship between the U.S. and Malaysia,” according to Pomeroy's trip disclosure.

•The International Management and Development Institute has paid $534,000 during the past five years for 60
congressional trips, most of them to Germany and other Western European destinations. The institute is run by Don Bonker, a former Democratic House member from Washington state and now a lobbyist for APCO Worldwide.

Nausea keeps me from providing further insight into this topic so I invite you to form your own opinions and post your comments below.

Featured Events