Mitt Romney Raises Lobbyist Money, Criticizes Opponents For Influence Peddling
WASHINGTON -- In a Jan. 23 debate in Tampa, Fla., former Massachusetts Gov. Mitt Romney directed a pointed attack at former Speaker of the House Newt Gingrich for his post-congressional work in Washington as a consultant for Freddie Mac and an assortment of health care companies. Fresh off a loss in South Carolina, Romney was in attack-mode and decried what Gingrich was doing as "influence peddling," exclaiming, "It is not right. It is not right." The Romney campaign deployed the same "influence-peddler" line of attack against former Sen. Rick Santorum prior to Tuesday night's losses in three states.
Even while decrying both his opponents' work as a consultants or lobbyists, Romney has pulled in more money from Washington lobbyists than any other candidate in the race for the Republican nomination. The Romney campaign received $554,044 from 325 lobbyists and the political action committees of 38 lobbying firms that collectively represent more than 1,400 clients, according to The Huffington Post's analysis of contribution disclosure forms filed with the Secretary of the Senate. These contributions may undermine part of Romney's message that he is, in his own words, "from outside Washington, outside K Street."
Firms represented by these lobbyists range from nationally known companies to small local municipal governments. A sampling of the most notable clients includes Goldman Sachs, General Motors, JPMorgan Chase, The Blackstone Group, Bank of America Merrill Lynch, Atria, Pfizer, the Pharmaceutical Researchers and Manufacturers of America, the U.S. Chamber of Commerce, AT&T, Citigroup, Elliott Management, Comcast, Google, Koch Industries, the Managed Funds Association, Verizon, Visa and Walmart.
The most common industry represented is the prescription drug and health product industry followed by the securities and investment industry, whose employees provide the most campaign contributions of any industry -- more than $6 million -- to the Romney campaign, according to the Center for Responsive Politics.
The good name of lobbyists, never in high standing among an American public wary of influence-peddling, has not recovered since the Jack Abramoff scandal ended in 21 convictions of lobbyists, congressmen, staffers and executive branch officials. In fact, their perception may have worsened.
Politicians from both parties unload on lobbyists regularly. One-time Republican vice presidential candidate Sarah Palin called them "symptomatic of the greater problem that we see right now in Washington." Sen. Rand Paul (R-Ky.) stated that lobbyists' "sole goal was to rip you off." President Barack Obama also routinely derides the influence of lobbyists in Washington and does not accept contributions from them.
Beneath the surface of the Romney campaign's criticism of both Gingrich and Santorum is a discomfort with the way that both former lawmakers slipped out one door on Capitol Hill and came out the other end as consultants who looked a lot like lobbyists. Indeed, the revolving door has come under increasing fire from both parties in recent years.
While the frequency of consultants born of the revolving door comes as little surprise, it does fly in the face of Romney's criticism of Gingrich that nearly 60 percent of the lobbyists giving to the former governor also previously worked in the federal government.
Romney's attacks on Gingrich aren't his first foray into anti-lobbyist rhetoric. In the 2008 Republican primary, Romney lambasted Sen. John McCain for having lobbyists as part of his campaign team. But the rhetoric hasn't stopped Romney from fundraising from Washington lobbyists or letting them raise funds for him. Thus far, sixteen lobbyists have reported bundling $2.17 million for Romney's campaign.
Big Donors, Big Policies
The financial sector accounts for the vast majority of the companies whose employees collectively donate the most money to the Romney campaign. Not only are their employees giving to Romney, but so are their lobbyists. Thirty-five lobbyists donating to Romney work for companies whose employees have combined to donate more than $100,000 to his campaign in 2011.
The financial firms with employees giving more than $100,000 whose lobbyists are also giving to Romney include Goldman Sachs, JPMorgan Chase, Citigroup, Credit Suisse, Morgan Stanley, Bank of America, Barclay's, The Blackstone Group, PriceWaterHouseCoopers, Citadel, Elliott Management, Bain Capital and Wells Fargo.
One policy that is shared by nearly all of these companies is the maintenance of a low rate of taxation on long-term capital gains and the continuation of the carried interest tax loophole. Romney has stated his support for continuing to tax carried interest -- the compensation passed on to hedge funds and equity and venture capital firms from the profits of companies in which they invest -- at the capital gains tax rate of 15 percent. He also supports keeping capital gains taxes at 15 percent and eliminating them entirely for those with adjusted gross income of less than $200,000.
The debate over the carried interest loophole has flared and subsided repeatedly over the past six months. The issue became a major talking point of the Occupy Wall Street protests against income inequality and the policies that favor the wealthy over other Americans. The issue also bubbled up after it was revealed that Romney personally benefits from the low tax rate of carried interest. Romney's tax returns, released in January, showed that, thanks to the carried interest loophole, he paid tax at a rate of 13.9 percent in 2010.
A Feb. 7 report by Bloomberg found that private equity lobbying by the likes of The Blackstone Group and other firms has been crucial in maintaining the carried interest loophole. Blackstone employs four lobbyists who have donated to Romney's campaign: Ogilvy Government Relations' Wayne Berman, Drew Maloney and John O'Neill and Fierce, Isakowitz & Blalaock's Mark Isakowitz.
The carried interest issue is a top concern of the Managed Funds Association, the trade group representing the hedge fund industry in Washington. Ten lobbyists who have contributed to Romney's campaign represent the Managed Funds Association. Many of the trade group's founding members and almost all of the group's strategic partners have provided big contributions to the Romney campaign through their executives and employees.
Fannie Mae, Freddie Mac
A major focus of Romney's attack of Gingrich's "influence peddling" was the former Speaker's work as a consultant for Freddie Mac, a government-sponsored enterprise (GSE) that helps provide mortgages to lower-income home owners. When the housing bubble burst, Freddie Mac and its sister-company Fannie Mae found themselves weighed down by an enormous amount of toxic mortgages. Both companies were fully taken over by the federal government and their continued bailout is expected to cost $124 billion.
In the midst of the housing boom, Fannie and Freddie were two of the biggest lobbying players in town. They didn't just hire figures to blur the lines between consulting and lobbying, but also employed massive staffs of lobbyists both in-house and through hired lobbying firms. Former congressman Jim Leach is quoted in All The Devils Are Here: The Hidden History of the Financial Crisis by Bethany McLean and Joe Nocera saying that Fannie Mae had "the greatest, most sophisticated lobbying operation in the modern history of finance."
Romney's campaign received contributions from 20 lobbyists who worked for Fannie Mae, Freddie Mac or both during the decade leading up to the GSE's 2008 implosion. That 20 includes two powerful Washington lobbyists: Oglivy's Berman, who has raised $177,475 for the Romney campaign, and Prime Policy Group's Charles Black, who was recently added as an informal advisor to the Romney campaign. Two of the lobbyist donors to Romney's campaign previously worked directly for Fannie Mae.
The job of these lobbyists from the late 1990s until the 2008 collapse was to blunt any effort at reform as the two companies began buying more and more subprime mortgages. No serious reform of Fannie and Freddie passed Congress until 2008 -- immediately before to the financial crisis that pushed them into government receivership.
The Romney campaign did not respond to requests for comment from The Huffington Post.
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First Posted: 02/ 8/2012 4:29 pm Updated: 02/ 8/2012 4:44 pm