Lobbyists for major banks, insurers, pharmaceutical firms, energy companies and at least one foreign government have been helping organize lavish gatherings of staffers and members of Congress since early 2009, funneling K Street money through an officially chartered staff organization called the Congressional Cigar Association.
The CCA, founded by Republican staffers and sponsored by Rep. Brian Bilbray (R-Calif.), is chartered by the House Administration Committee to encourage networking among congressional staff. Its most recent gathering was held Tuesday at a townhouse just steps from the Capitol, where staffers were feted by Miami Cigar & Company.
As evening fell, guests lounged in the garden out back, sipping cold drinks and puffing away on what smelled like high-end cigars. Gary Pesh, owner of Old Virginia Tobacco and a member of the Congressional Cigar Association, said the event is just an excuse to "get together and have fun." When asked about the conflict of interest inherent in allowing lobbyists to fund a congressional staff organization, dozens of attendees just continued wordlessly on up the red brick steps. "This is approved by the House, so we're good," one staffer said. (Another staffer told HuffPost that filming wasn't allowed, though she was standing under a sign warning passersby that the area was under video surveillance.)
At least half a dozen lobbyists have been closely involved in the operation of the ostensibly staff-driven organization, a review of emails, documents and lobbyist disclosure reports finds. By helping to fund and organize the group's activities, K Street lobby shops are given privileged access to senior-level staffers and members of Congress in intimate settings where they lobby on behalf of their clients. The association is overwhelmingly Republican, as is the cigar-smoking habit it is organized around.
The cigar group is run by a six-member board. In the wake of the Abramoff scandal, congressional ethics rules were implemented to require that "all officers must be employees of the House or Senate" and that the ethics committee approve all gifts of monetary value offered to the association. Meanwhile, federal law forbids staffers from soliciting gifts to it. Yet three of the board members running the cigar group are lobbyists, including the lead organizer of several exclusive events. Trade associations subsidize the group's events.
"On the face of it, while its not the great train robbery, it clearly implicates House rules that prohibit taking gifts from lobbyists," said Stan Brand, a congressional ethics attorney, when told of the group's activities. "The prohibition is a flat prohibition. The staff can get together and do whatever they want. But when it's underwritten by lobbyists it's gonna fly in the teeth of the rules."
Spokespersons for the House and Senate ethics committees, as well as the House Administration Committee, said they were unable to speak on the record. A spokesman to Bilbray said that the congressman has had little interaction with the group since its 2009 founding and that it is the organization's responsibility to make sure it behaves within House and Senate rules.
The board members who are lobbyists are not technically officers, said CCA spokeswoman and board member Stephanie Valle, meaning that they are legally allowed to work with the Hill staffers to organize the events. (Valle is the communications director for Rep. Phil Gingrey (R-Ga.).)
Valle told HuffPost that the trade associations that help fund the events clear their involvement with the relevant ethics committees. Meanwhile, a trade association representative said that it was the staffers who were responsible for clearing the K Street involvement.
The lobbyists in the group's leadership include Jeff Choudhry, Steven Pfrang and Thomas Kim. Choudhry, a former longtime staffer for Rep. Trent Franks (R-Ariz.), is now director of legislative affairs at the Nickels Group, which represents pharmaceutical and oil companies. He didn't return a call requesting comment. Pfrang was top staffer to former Staten Island GOP Rep. Vito Fossella, who resigned in 2008 when it surfaced that he had two families. Pfrang lobbies for Massachusetts Mutual Life Insurance. Kim, meanwhile, is a registered foreign agent who lobbies on behalf of the South Korean government and the Korea International Trade Association.
Kim formerly worked on Capitol Hill on a fellowship, followed by a stint as a Special Assistant in the Office of the U.S. Trade Representative. In 2009, Kim was working for Scribe Strategies & Advisors, a lobby shop that, according to its advertising material, "has been helping domestic and international clients achieve specific legislative, regulatory, communications, business development and technology goals for over a decade."
According to Kim's filing with the Justice Department, he has specifically lobbied Franks on behalf of his foreign clients; Franks staffers were instrumental to founding the cigar group and remain heavily involved. He also lobbied Bilbray, whose staffer Gary Kline is on the board. He lobbied Rep. John McHugh (R-N.Y.), Valle's former boss, as well as her current boss, Gingrey. He lobbied Reps. Jesse Jackson (D-Ill.) and John Kline (R-Minn.), who were honored at cigar events. This year, he left Scribe to form his own firm, Thomas Capitol Partners, and took his foreign clients with him while maintaining his role as lead organizer of the cigar events. As Thomas Capitol, he was paid a $45,000 per month retainer to lobby for South Korea and another $10,000 per month to shill for the KITA, which promotes Korean businesses.
The staff association has thrown lavish parties; perhaps the grandest was on an exclusive rooftop across the street from the Capitol in June, where drinks and food were served and guests enjoyed cigars and live music from a jazz band, complete with stand-up base, all for the cost of a $10 entrance fee plus membership in the association. Members of Congress attended the event, billed as a one-year anniversary celebration the organization's official designation. Kim, sporting a white blazer, spoke at length to the captive rooftop audience, which included scores of staffers and lobbyists. (Kim did not reply to e-mails requesting comment.)
Kim's former K Street employer, Scribe, boasts that it has "an acute understanding of the intersections among the institutions of government, business, media and technology. Our unique combination of talent, resources, partners and experience allows us to deliver the results that our clients have come to expect."
One of those intersections is the patio of Morton's the Steakhouse on Connecticut Ave. NW. CCA's "Fall Smoke" was held on October 20, 2009 on the patio and the invite was sent from Kim's email address at Scribe.
Along with Kim, the invite for the event is signed by Doyle Bartlett, a lobbyist with Eris Group, which represents Morgan Stanley, the Mortgage Bankers Association, the Chamber of Commerce and a host of other financial services heavy hitters, as well as the National Beer Wholesalers Association.
Bartlett is the former chief of staff to Bill McCollum, a Republican member of Congress from Florida, who retired to become a lobbyist and is now running for Florida governor. Bartlett also worked for the House banking committee, which McCollum served on.
Bartlett also hung out his own shingle, forming Bartlett & Bendall, which is now Bartlett, Bendall & Kadesh, which lobbies for many of the same clients as Eris Group.
The invitation was signed by Doug Davenport, as well, a former lobbyist with the CGI Group, who resigned from the McCain presidential campaign when it surfaced that he had lobbied on behalf of the military junta in Myanmar.
The lobbyists' clients in finance and pharmaceuticals have little interest in the plight facing the cigar industry, but helping organize the event is entré into the confidence of Hill staffers and members of Congress. "CCA was founded by a group of friends to offer Congressional staff of both parties and our membership the opportunity to foster long-lasting relationships and camaraderie over cigars," said Valle. More than half of the membership is comprised of staffers, said Valle, both Democrat and Republican. Many members are lobbyists.
Joining the cigar lovers on the patio, the e-mail informed attendees, would be Republican Rep. John Kline of Minnesota and Rocky Patel, president of Rocky Patel Premium Cigars. W. Curtis Draper Tobacconist, a high-end cigar dealer, would be on hand. John Anderson, a co-owner of Draper, is on the board of the International Premium Cigar & Pipe Retailers Association, a leading tobacco lobbying organization, which paid an unspecified sum to sponsor the event, Anderson said.
Bilbray agreed to sponsor the staff organization and sent a letter on its behalf in February 2009 to the House Administration Committee. The letter, which was provided by Bilbray's spokesman, lists Jeff Choudhry and Bobby Cornett, then-Franks staffers, as the only two officers of the group.
Two months later, the group was approved, but the committee raised questions about its funding, saying that "approval of this CSO does not constitute approval of a proposed fee structure. We recommend you contact the Committee on Standards of Official Conduct with regard to the proposed fee structure."
The letter added that if "the roster of officers or key staff contact change during the 111th Congress, please notify the Committee in as timely a manner as possible." The committee, however, did not have additional paperwork from the staff organization and referred HuffPost to Bilbray.
Pfrang declined to comment, referring a reporter to Valle. "I have cc'd Stephanie Valle on this note as she handles our media inquires. Also, I have included my personal email address as my volunteer activities for the CCA are separate and unrelated to my work for MassMutual," he wrote.
Staffers and members of Congress who attended the lobbyist-funded events may well have been unaware that the events were funded by trade associations. An invitation to staffers to join the association makes no mention of the K Street backing that the organization's events enjoy. "The Congressional Cigar Association expects to host two large events per year, with several small events in between," reads an invite to join the organizatin, signed by two staffers then working for Rep. Franks -- Jeff Choudry, his former legislative director, and Bobby Cornett, a legislative assistant. "Annual membership dues are $40, with a small cover charge of no more than $10 for large events. Dues and cover charges will be used to procure premium cigars, purchase food and beverages, and rent space for our events."
A January 2010 invite sent out by Kim did specify some of the largesse that would be doled out on Morton's patio for the "Welcome Back Congress" Winter Smoke. "At the event, CCA will recognize several special guests to include The Honorable Jesse Jackson, Jr., The Honorable Tom Cole, Litto Gomez (President of La Flor Dominicana Cigars) and Gary Pesh (President of Old Virginia Tobac[c]o). A tasting of several spirits will accompany the event provided by the Distilled Spirits Council of the United States and Litto Gomez will provide his own label cigars to mark the occasion. We also expect several Members of the House and Senate to be in attendance," reads Kim's email.
"Additionally, full capacity for the even was reached two business days after we sent the invitation out," he added. The letter is signed by Kim; Mark Alagna, a lobbyist for UPS; Chuck Cunningham, a lobbyist for the National Rifle Association; Steve Irizarry, a lobbyist who largely represents pharmaceutical companies; and John Simmons, a senior lobbyist with the powerhouse firm Akin Gump, who also shills for pharma companies. The latter four lobbyists did not respond to emails requesting comment.
As the spirits were flowing, representatives of the tobacco industry made their pitch to the sated staffers. Anderson, who sits on the tobacco lobby board, said that his organization invites top tobacco representatives to make their case. "We coordinate with the manufacturers who are being honored at that event and they'll talk about the process of making cigars, the plight that cigars are facing with FDA tobacco regulation. And so we've acted more as a conduit there," he said. Anderson's group, the IPCPRA, sponsored the cigar associations' first anniversary party, the one held on the roof the building at 101 Constitution NW that house's Charlie Palmer on the first floor and Politico's congressional bureau in the basement. Anderson dubbed it a "big, congratulatory event."
The rooftop isn't cheap. An invoice provided by a source who rented it out for a separate occasion shows that it runs $10,000 simply for the space and the overhead tent. Drinks, food and the jazz band would have cost thousands more. At roughly 200 attendees at $10 each, the event would have pulled in a mere $2,000. Valle, the board member who would agree to speak with HuffPost, said that the organization has "more than 150 members." Dues, at $40 per member, would amount to $6,000 for the year at 150 members and $8,000 per year at 200 members - not enough for one event, let alone several over the course of the year. That's where the K Street cash come in.
"We sometimes have outside sponsors who've been approved by House and Senate ethics committees to make sure it qualifies as a reception," said Valle, who doubles as the CCA's vice finance chairman.
If the CCA is soliciting sponsorship of events, however, that would not only be a violation of ethics rules, it would also be breaking the law. Staffers, through the "reception exemption," are allowed to attend events and knock back a few drinks - but not if the event is organized and controlled by the staffers but paid for by outside lobbyists. That could amount to soliciting gifts.
CCA board members -- both lobbyist and staffer -- are clearly in control of the organization of the events and invite trade associations as guests, not the other way around, as ethics rules require. The guests then pick up the tab and, in exchange, get precious downtime with powerful staffers. "We certainly welcome our sponsors to attend," said Valle.
Johnson, the tobacco lobby board member, said that the staffers cleared the events with the respective ethics committees.
"They worked with the ethics committee. The Congressional Cigar Association did all of that work," he said.
Valle, meanwhile, said that the trade associations were responsible for clearing their involvement. "If someone's wishing to sponsor an event for us, our sponsors approach--as congressional staff we don't approach House ethics--anyone wishing to sponsor an event for us would [approach House ethics], and then make the request about whether it's" within the rules, Valle said.
"The beer wholesalers, wine and spirits wholesalers, they--along with the invite inviting members of our association to the event, they would get that approved by House and Senate ethics to make sure everything falls under their rules," she said. (A spokeswoman for the beer wholesalers said her trade association has never been involved with the Cigar Association, though a lobbyist for the group, Bartlett, helped organize an event.)
Valle repeated that the trade associations cleared the events with the ethics committee in a follow-up email. "We are officially recognized by the House Administration Committee, as we discussed, and given that Congressional staff attend our events, all of our events comply with House and Senate Ethics rules (as they would have to even if we weren't recognized as a CSO)," she wrote. "As I mentioned, any given sponsor of an event has gotten this guidance from the Ethics Committees, as is the case for any entity that wishes to sponsor any event attended by staffers."
For the premium cigar association, sponsoring the rooftop was part of a lobbying campaign, according to a press release put out by the lobby itself. The IPCPRA was clear that sponsoring the rooftop event led to access, noting that "virtually all members of the Board of Directors of the International Premium Cigar & Pipe Retailers Association (IPCPR) and several of its Associate Members flew into Washington D.C. for an evening of fellowship and camaraderie with some 200 members of the CCA on June 23," the company said. "The CCA presented its 'Spirit Award' to David Berkebile, past president of IPCPR and owner of Georgetown Tobacco, for his efforts to help establish the group and link it with the IPCPR for its quarterly cigar events, educational staff briefings and informal cigar socials, all of which enable both the CCA and the IPCPR to build relationships with one another. IPCPR's Washington lobbyists, K&L Gates, were instrumental in organizing the IPCPR teams and their visits with Congressional members and their staffs on the day after the CCA reception."
Indeed, they roamed the Hill the next day. "On the following day, all 24 of the IPCPR representatives broke into four teams, with each team visiting between nine and 11 congressional members or their staffs," reads the release. "The two days of intensive meetings and all the work that went into their planning, organizing, execution and follow-up were part of the IPCPR's ongoing efforts to generate increased understanding of the premium cigar industry among federal legislators, regulators and their staffs."
IPCPR advocate Ken Neumann, owner of Cigars and More of Libertyville, Illinois, explained the importance of the alliance with the staff association. "It's important for us to be communicating with these key influencers on an ongoing basis so that when a piece of legislation comes along that could impact our industry, they are better informed about our industry and the kinds of people and industries that depend on and enjoy premium cigars and pipes," said Neumann.
The IPCPR press release shows how proud the group is to be associated with an officially sanctioned congressional organization. "The CCA is an official 'Congressional Staff Organization' and is officially recognized by Congress. The group is comprised of Congressional staff members who share a passion for premium cigars," reads the release. The appearance of such access helps the trade association raise money from member companies who are assured it is doing a fine job promoting the industry's interests.
Less than two months before the rooftop gathering, the CCA pulled strings to get the IPCPR awarded with the privilege of briefing congressional staffers inside the U.S. Capitol Visitors Center. "More than 65 staffers showed up to learn how premium cigars are made, about the countries that produce them and the economic impact of the cigar industry in these countries, and about IPCPR retailers, which are largely mom-and-pop small businesses. In addition, open forum discussions were held, focusing on the effects of legislation on premium cigar retailers, especially tax-based Congressional and regulatory actions," the trade association declared. The briefing was led by Rocky Patel, of Rocky Patel Premium Cigars, who also led the briefing on the rooftop.
Johnson, the cigar lobby board member, raved about the events. "It's a really fantastic opportunity for Hill staffers to get together and, you know, smoke cigars, relax and network and take a moment out of their hectic schedule and kind of unwind and get to know each other. It really helps, in my belief, it helps expedite matters on the Hill between different offices and strengthens the relationships there," he said.
Lucia Graves contributed reporting