How Lobbyists Still Fly Through Loopholes

Shane Goldmacher 

 

Dennis Hastert and Dick Gep­hardt couldn't stand each other when they led Congress a decade ago. But now they've moved to K Street, where the flood of money tends to wash over such personal differences. These days, they work hand in hand as two of Turkey's top lobbyists, with their respective firms pocketing most of a $1.4 million annual lobbying contract.

It was this business that took Hastert and Gephardt to Turkey last April, but more surprising than the odd couple's newfound alliance was their set of travel companions: eight members of Congress on an all-expenses-paid journey overseas.

It's widely believed that the 2007 rewrite of congressional travel rules spurred by the scandal that sent lobbyist Jack Abramoff to prison banned such international dalliances. But that's far, far from true. A National Journal investigation has found that despite efforts to clip the wings of congressional travel planned and paid for by special interests, lawmakers are again taking flight. Indeed, the reality is that lobbyists who can't legally buy a lawmaker a sandwich can still escort members on trips all around the world.

More than six years ago, reformers pledged that tightened travel rules would end an era of globe-trotting tied to special interests and, as incoming Speaker Nancy Pelosi put it, "break the link between lobbyists and legislators."

It hasn't worked. Take it from Abramoff. "I just think they reshuffled the deck," he said, having emerged from prison as a self-styled reformer. "But it's the same deck. They're still playing the game."

Here's how it works.

The 2007 rules prevent a lobbyist for a corporate client from planning or paying for a lawmaker's trip. But the same rules allow such a trip if it's paid for by a foreign government. So while it does remain illegal for, say, a Google lobbyist to plan and accompany a lawmaker on a free trip abroad, if that same lobbyist does so on behalf of Turkey, it's perfectly legal. And if that lobbyist happens to have both corporate and foreign-government clients (as most do), they can still go abroad so long as it's a country and not a company footing the bill.

And that's only one of the loopholes the influence industry has exploited to help lawmakers score free travel. Today, a wide network of nonprofits—many with a clear agenda and some with excruciatingly tight ties to Washington's biggest lobbying operations—are putting together international congressional excursions. Some of these paper nonprofits have no staff or space of their own; they simply share with a sister organization that lobbies. Yet ethics officials in Congress have deemed them to be independent enough. In one instance, a lobbyist literally registered a new nonprofit—in his own office—that went on to pay for congressional travel abroad.

Big corporations bankroll some nonprofits, whose trips, in turn, can feature stops at the businesses of their corporate funders. As a bonus, the growing use of 501(c)(3) nonprofits, which occupy the same charitable rung of the tax code as soup kitchens and the American Red Cross, means that the wealthy and corporate donors underwriting congressional travel can do so in secret and get a tax write-off along the way.

So it's little surprise that members of Congress have busily boarded flights to far-flung destinations around the globe in recent years. They've collectively flown hundreds of thousands of miles to dozens of countries at a cost of millions of dollars. Lawmakers typically have settled into roomy business-class seats, often next to a loved one, for the long hauls ahead. Some headed to Ireland, where dinner at the Guinness headquarters was on the agenda. Many, many more spun through Israel. One openly gay lawmaker landed in Prague just in time to attend the city's gay-pride parade.

The tabs for the nonprofit-backed trips ran as high as $25,000. The lawmakers, however, never had to handle the bill.

Backers of the trips say they are saving U.S. taxpayers' dollars. And, of course, all the private trips are supposed to be strictly educational and fact-finding missions. But many itineraries include ample time to relax, visit museums, tour national parks, and whiz through major tourist attractions. The lawmakers are typically chauffeured from site to site, with all meals paid for and evenings spent at top-notch hotels.

"Some of the stuff we were involved in in the old days can't be done directly," Abramoff said. "But any smart lobbyist can basically, basically, if they want to play the game, they can get around any of these rules."

He paused.

"Legally."

Turkey Exploits the Biggest Loophole

And so there was Dennis Hastert, who presided as speaker in the Abramoff era, on the same flight to Istanbul as members of Congress. Lobbyists had been intimately involved in the months of planning for the trip, with dozens of back-and-forth emails, phone calls, and meetings on Capitol Hill. As the trip neared, one lobbyist at Hastert's firm, Laurie McKay, held conference calls and emailed daily with the schedulers of the eight House members who participated: Republicans Virginia Foxx, George Holding, Adam Kinzinger, Todd Rokita, Lee Terry, and Ed Whitfield, and Democrats Sheila Jackson Lee and Chellie Pingree. McKay even escorted three of them to Washington Dulles International Airport and helped them check in with Turkish Airlines.

Federal records indicate that five lobbyists—Hastert, Gephardt, Robert Mangas, Janice O'Connell, and an undisclosed lobbyist with the Caspian Group—joined the congressional delegation at some point in Turkey. How could this be? Didn't the 2007 rules ban lobbyists from such overseas excursions?

It turns out that the Turkey trip was sanctioned under a 1961 law, the Mutual Educational and Cultural Exchange Act, which allows foreign governments to shuttle members of Congress and their staffs abroad if the State Department has approved the destination nations for "cultural exchange" trips. About 60 countries have such clearances. Despite the 2007 post-Abramoff travel law, lobbyists are still able to plan and attend these MECEA journeys.

Of all the loopholes that allow special interests a role in congressional travel abroad, none is as shrouded in secrecy as this one. The trips fall into a bureaucratic black hole. There is no centralized list of lawmakers who participate. The itineraries and costs stay secret, unlike privately sponsored trips. And lobbyist involvement never has to be disclosed.

Neither Congress nor the State Department claim to keep complete records, each saying the burden falls on the other. "Nope, that's not something that we have to do," State Department spokeswoman Susan Pittman said of collecting itineraries. The House Ethics Committee has said it has "no jurisdiction." The Senate Ethics Committee pointed to the thin record of existing public documents.

Jock Friedly, creator of the website Legi-Storm, which tracks congressional travel and finances, filed a Freedom of Information Act request with the State Department for more detailed information several years ago. "I got bupkes," he said. "I got basically nothing." No reply to a National Journal FOIA request came in time for publication.

It is impossible to say yet how many such lobbyist-backed trips occurred last year. None of the eight lawmakers who went to Turkey have disclosed their trip yet—nor have they needed to. The trips are reported only on annual financial forms, which won't be released until June, at the earliest.

National Journal's investigation uncovered the Turkey trip through a review of foreign-government lobbying records maintained by the Justice Department and filed by Gephardt Government Affairs, Dickstein Shapiro (Hastert's firm), and the Caspian Group.

These foreign-sponsored trips are increasingly popular. NJ's review found that at least 18 lawmakers went abroad this way in 2013, including a 10-member delegation of the Congressional Black Caucus to China. While the final figure will likely be higher, 18 already equals the total number of lawmakers who went abroad on MECEA travel between 2006 and 2009, according to a Washington Post database of this type of travel published last year.

The bonds that Gephardt and Hastert built in Turkey could prove invaluable for all their paying clients, no matter who picked up the tab for the trip. Gephardt's other clients include Google, General Electric, and Goldman Sachs—and that's just the G's. Perhaps that's why federal records show that lobbyists with Gephardt's and Hastert's firms contacted about four dozen congressional offices in the first six months of 2013 alone to dangle a free trip to Turkey.

Gephardt's firm declined comment for this story; Hastert's did not respond to inquiries.

The two former congressional heavies certainly spent enough time with the Turkey delegation to make an impression. "He had a farm, and we talked about farming and [agriculture] issues," Pingree said of Hastert. "We had a chance to bond."

Which, for the lobbyists, is exactly the point. "Whenever you spend a few days with somebody, unless you're not very good at your job, you're going to bond with them, to create some ties with them that will likely last beyond the trip," said Abramoff, whose trading of overseas junkets for congressional favors landed him and former Rep. Bob Ney, R-Ohio, among others, in prison. "That's why people do these."

Pingree said that, at the time, she hadn't thought of her hosts' status as registered lobbyists. "I can picture one of them calling me up and saying, 'Hey, I met you on the trip,' " she said in a recent interview. But, she quickly added, "I don't think, personally, it would make a difference."

No other lawmaker returned calls about the trip.

Israel's Puppet Nonprofits
More than 50 House freshmen boarded free flights to Tel Aviv last August. It was no accident that the greenest lawmakers made up most of the outbound delegations. Supporters of Israel had begun wooing the newly elected to come abroad before they even arrived on Capitol Hill. 

The invitations for the all-expenses-paid trip were extended not just to the lawmakers but to a loved one as well. So the youngest member of Congress, 30-year-old Democratic Rep. Patrick Murphy, brought along his dad. Rep. Dan Kildee, a Michigan Democrat who celebrated his 55th birthday on the trip, invited his college-age son. Most lawmakers were joined by a spouse. South Carolina's Mark Sanford, who returned to the House in 2013 after an extramarital affair led to scandal during his term as governor, received a special ethics waiver to take along his mistress-turned-fiancée.

Israel is, by far, lawmakers' most popular overseas destination, and these freshmen's journeys were orchestrated by the biggest player in privately sponsored international travel: the American Israel Education Foundation. It has spent more than $6 million on congressional trips to Israel in the past five years, more than any other entity, according to records compiled by LegiStorm.

And the foundation hardly lacks an agenda. It shares staff, money, and an address with the American Israel Public Affairs Committee, the powerful pro-Israel group that employs a dozen lobbyists and spends more than $2 million annually on lobbying.

As a lobbying organization, AIPAC itself isn't allowed to plan and pay for congressional excursions abroad. Yet its shadow foundation has received the blessing of congressional ethics enforcers despite the fact that its 2011 tax filings spell out: "The foundation does not have any employees. The foundation utilizes AIPAC employees." AIPAC even pays the $464,000 salary of Richard Fishman, the foundation's executive director—the man who signs the congressional travel forms.

"Everyone understood it to be an AIPAC trip," said a freshman representative who joined last August's excursion and was granted anonymity to speak candidly.

There were two congressional delegations last summer, one for Republicans, led by House Majority Leader Eric Cantor, and another headlined by House Minority Whip Steny Hoyer for Democrats. Business was certainly undertaken: The trips included meetings with Israeli Prime Minister Benjamin Netanyahu and President Shimon Peres. In between, the lawmakers and their family members were well fed, with a daily food budget of $129. One meal was at Decks, a restaurant perched above the Sea of Galilee. It was in that sea, two years earlier, that Republican Rep. Kevin Yoder stripped naked and jumped in, creating a ripple of headlines and headaches back home.

Marshall Wittmann, an AIPAC spokesman, declined to answer specific questions about the trips. He said in an email that they were "among the most substantive, educational, rigorous, and valuable opportunities for members of Congress" and that the foundation complies with all ethics and IRS rules.

The AIPAC foundation is not alone in this practice. It is just the largest of numerous nonprofits with agonizingly close affiliations to lobbying interests. It's a model that has been so successful that the nonprofit arm of J Street, a counterweight in the Jewish lobbying community that advocates for a two-state solution between Israel and Palestine, began putting together trips of its own. They are organized through a similarly connected foundation, the J Street Education Fund, a 501(c)(3) nonprofit, which took four lawmakers to Israel last year.

A third nonprofit that pays for trips to Israel, the U.S. Israel Education Association, was founded by Christian activist Heather Johnston and sponsored congressional delegations in 2011 and 2013. The November 2013 trip that sent seven members of Congress and family members to Israel cost about $175,000. Both times, lawmakers were accompanied by Tony Perkins, the president of the Family Research Council, one of Washington's leading lobbies for conservative religious values.

The Family Research Council is not permitted to sponsor congressional travel because it employs lobbyists. And while Perkins's name and his organization appear nowhere on the travel forms that lawmakers submitted for approval to the House Ethics Committee, he has presented the trips almost as a joint venture.

"You have these relationships with the Israeli leaders," Perkins said to Johnston in a December podcast posted at TonyPerkins.com, "and here at FRC we have relationships with members of Congress and so we kind of put the two together and now we've twice now taken conservative members of Congress over to Israel."

Neither Perkins nor anyone for the U.S. Israel Education Association was available for comment.

Israel is not the only country to benefit from the efforts of advocacy groups. A long list of nonprofits supportive of Turkey have paid for congressional travel there. "We really don't have an agenda in trying to brainwash, or trying to convince people on a certain issue," said Lincoln McCurdy, president of the Turkish Coalition of America, which has sponsored trips. "We feel like we're doing a great service." Besides running the nonprofit, McCurdy dishes out campaign cash to pro-Turkey politicians as treasurer of a political action committee. "I wear two hats," he said.

Another nonprofit intertwined with a lobbying entity is the Human Rights Campaign Foundation, which paid $2,600 to send Democrat David Cicilline to the Czech Republic for Prague Pride week last August.

The foundation contracts staff from, and shares office space with, its sister organization, the Human Rights Campaign, the nation's largest gay-rights group, which spent more than $1 million on lobbying last year. Michael Cole-Schwartz, a spokesman for both, said the groups are "intermingled" but that the trip fell within the foundation's mission and was planned by staff members who work only on foundation projects. Records show that one of Cicilline's companions on the trip, Ty Cobb, had deregistered as an HRC lobbyist only months earlier.

Cicilline is one of a handful of openly gay lawmakers in Congress, and Peter Karafotas, his chief of staff, said the congressman doesn't need to be lobbied on gay-rights issues. But could the foundation's free trip be perceived as a thank-you to Cicilline for his staunch support? "I suppose so," Karafotas said.

In another instance, a federal lobbyist actually incorporated a new nonprofit that then financed congressional travel. Lobbyist William Nixon created the Bahrain American Council in the K Street offices of his lobbying firm, as ProPublica has reported. Nixon and two other officials with Policy Impact Communications made up the group's original board of directors but soon turned over control to others. 

The Bahrain American Council then paid nearly $21,000 to fly Burton and his wife to Bahrain in 2012. The investment paid off almost immediately. Burton returned to Congress to deliver a speech hailing Bahrain as "one of our most important allies" in the Gulf region. And he suggested the antigovernment protesters there, who had been violently squelched, might "have been infiltrated by outside radical elements supported by Iran."

Nixon posted the speech to his Facebook page, calling it "insightful." The Bahrain American Council shared his post and called Burton's speech a "GREAT address on the floor."

Nixon said his lobbying shop has nothing to do with Bahrain and that he created the council as a paperwork-filing favor for a friend. "I helped him incubate it, is probably the best way of putting it," Nixon said. 

With so many private sponsors that have a political agenda funding congressional travel, it is little surprise the number of trips lawmakers are taking has been growing, with nonprofits spending $5.8 million in 2013 to shuttle lawmakers and their staffers on 1,856 trips around the country and across the globe, according to LegiStorm. That's the highest number since 2006, when the Abramoff scandal was in full swing.

"The National Journal," January 10, 2014

(Fragments)