March 7, 2006

DEMOCRATS ARE FIGHTING FOR THE REFORM AMERICANS DESERVE

Washington, DC — Continuing the Democratic Party’s leadership on lobbying reform, Senate Democratic Leader Harry Reid will today deliver the following floor remarks, offering a major amendment to reform legislation currently under debate in the Senate.

Democrats answered America’s call for reform in the wake of revelations of widespread corruption and influence peddling in Congress by offering the Honest Leadership Act (HLA), demanding real reform and setting its tough rules as the baseline for any proposed bill. Thanks to those continued efforts, lobbying reform is under debate in the Senate today. Unfortunately, while the proposed bill owes much to the Honest Leadership Act, it is not up to the HLA’s tough standard. That’s why Democrats are offering amendments to improve it, beginning with an amendment to address many of the very ethical abuses that motivated reform in the first place.

Senator Reid’s remarks as prepared for delivery and a breakdown of the Democratic amendment’s provisions— and why they’re needed—follow below.

Remarks of Senator Reid as Prepared for Delivery

March 7, 2006

Mr. President. Democrats returned from the winter recess and acted decisively by introducing S. 2180, the Honest Leadership Act. We put reform to paper and established the baseline for the Senate by getting caucus wide support for a tough and comprehensive reform bill. Much of what we worked for as a caucus has now gained bipartisan support.

Having said that, there are aspects of the reported bills that need to be strengthened, so they are consistent with the legislation Democrats introduced earlier this year. The amendment I have offered attempts to do that.

The amendment would make the following changes to the pending bill.

- Prohibits sitting Members, senior legislative and executive branch employees from negotiating for private sector employment where a conflict or an appearance of a conflict of interest exists.

- Imposes criminal penalties in order to put a stop to the system of corruption that developed under the so called K Street project. The K Street project was a form of institutionalized corruption in which Members of Congress limited access to government offices and influence over public policy, or threatened to do so, as a means of forcing corporations, trade associations, and lobbying firms to hire Republicans and to tilt their political contributions to Republicans. It is a pay to play scheme as blatant and arrogant as anyone has seen in Congress in a long time.

- Increases civil and criminal penalties under the Lobbying Disclosure Act for individuals who knowingly and willfully file false information.

- Puts an end to dead of night legislating and the practice of shutting Members and the public out of conference committee proceedings. It would require that conference committees hold regular, formal, open meetings and that each Member of the conference be afforded an opportunity to vote on the full text of the bill in open session.

- Prohibits all gifts from lobbyists, including meals.

It goes beyond simple disclosure and prohibits outside interests who advocate before the Congress from paying for travel for Members and staff and bans most privately funded travel by companies, groups, business associations and other special interests that lobby the Congress. There would be a limited exception for travel sponsored by 501 (c) (3) tax exempt charitable and educational groups who would be required to certify that lobbyists did not finance, organize or participate in the travel.

We have worked hard to get this bill to the floor and I hope we can attract some bipartisan support to strengthen it.

House Republican leaders have already stated that they prefer the partisan approach – they intend to tack regulation of 527 groups onto their yet-to-be seen lobbying reform bill. They also want to pair regulating 527 groups with measures to weaken the McCain-Feingold law in ways that would principally benefit Republicans. In fact, these are the only clear priorities House Republican leaders appear to have for their bill.

That is where the House Republicans’ narrow interest lies. Theirs is a partisan goal of changing the rules of our campaign finance system to hedge against the possibility of Republican election losses this fall. If you think you might not be able to win under the rules, then change them. That is the House Republican plan. It is anti-reform to this point. Our Senate leaders have rejected this effort and I congratulate them for it.

As Senator Dodd so aptly put it yesterday, campaign finance reform is much larger than the narrow question of 527 groups. House Republican leaders want to shut those down because of the perception that these groups benefit Democrats. But what about trade associations which engage in the same types of activities? We know they engage in these activities because we have seen their handiwork in ads for Republican candidates up this cycle. They were active also in 2004.

Yet the trade associations engaging in these activities are even less regulated than 527 groups. They aren’t required, as 527s are, to disclose their expenditures and their donors. They operate in the shadows. These groups principally benefit Republicans. We also need to crackdown on abuses of foundations and charities which are use by Members for personal gain or for campaign purposes. Curiously, we do not hear Republican calls to regulate any of these activities.

And, as important as they are, these issues are certainly on the periphery of the big campaign finance issue – public financing. Members of our caucus have long-called for public financing of campaigns, the ultimate purging of private money from politics. If we are going to reexamine our campaign finance system, we need to approach that task comprehensively and in a bipartisan way.

Lobbying reform of all things shouldn’t be twisted into a vehicle exploited by one party to gain electoral advantage. If that is the path which is chosen, it will be a poison pill.

I hope this doesn’t happen. We have worked with the Republicans thus far to make sure that this issue does not get entangled with campaign finance issues such as the public funding of campaigns or the regulation of so called 527 groups. I hope we can continue to do that.

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A BREAKDOWN OF THE DEMOCRATIC AMENDMENT

Close the Revolving Door:

Summary of Democratic Amendment:

- Prohibit sitting Members from negotiating for outside employment that could pose a conflict of interest or the appearance of a conflict, period. Require senior staff to disclose outside job negotiations, recuse self from decisions involving conflict or appearance, and provide notice of recusals.

- Require senior Executive Branch officials to disclose outside employment negotiations to independent Office of Government Ethics; require OGE approval for recusal waivers; recusal waivers made public.

Why Needed: Tauzin/Scully Experiences.

Tauzin: Then-Chairman of the House Commerce Committee was actively negotiating with industries his Committee regulated. Just weeks after he shepherded through the Medicare prescription drug bill, which included billions of dollars in benefits for the drug industry, PhRMA made him a $2 million offer. Concern over the clear conflict forced him to relinquish his Chairmanship.

Scully: In May 2003, HHS Secretary Tommy Thompson gave Thomas Scully, chief administrator for the Center for Medicare and Medicaid Services, an ethics waiver allowing him to negotiate employment with firms in the drug industry he regulated. Scully subsequently acted as the White House's head negotiator on the Medicare prescription drug bill, which included billions of dollars in benefits to clients of the very companies with which he was in employment talks. Just weeks after the bill passed, Scully announced he was joining one of these firms.

K Street Project: Stopping Abuse of Public Positions to Aid Partisan Allies

Summary of the Democratic Amendment

- Make clear that it is a type of criminal bribery to take or withhold official action, or threaten to do so, to influence private hiring decisions on the basis of partisan political affiliation.

Why Needed: K Street Project Was Part and Parcel of Culture of Corruption

One of the many nefarious activities Jack Abramoff was involved in was the so-called K Street Project. In the mid-1990s, the Republican Congressional leadership began to try to force companies and industry associations to provide lucrative jobs to their partisan allies and to give donations only to Republicans. They even gave their new form of corruption a name – “the K Street Project.” Private entities who did not “pay” – by hiring key Republican staffers or increasing contributions to Republicans – were forbidden from being a part of the “play” – getting special access to Members and in some cases getting special interest provisions inserted into legislation.

Establish New Civil and Criminal Penalties to Combat Public Corruption

Summary of the Democratic Amendment:

- Increase criminal penalties for false filings under the Lobbying Disclosure Act (LDA).

- Require all lobbyists to file quarterly certification that they did not provide gifts, including travel, in violation of Senate gift rules. Knowing and willful violations subject to steep penalties.

- Require trip sponsors to provide certification that trip complies with new trip rules. Knowing and willful violations subject to steep penalties.

Why Needed: Easier to Prosecute Wrongdoers

The Abramoff and Cunningham scandals have demonstrated that it is very difficult to prove bribery and other public corruption claims without the cooperation of those on the outside that were involved. The Democratic amendment would make it much easier to prove wrongdoing by increasing criminal penalties for “enabling activity” – false certifications and LDA disclosures that allow wrongdoers to shield their criminal behavior from scrutiny.

Prohibit Dead of Night Legislating

Summary of Democratic Amendment:

- The amendment would add a new requirement under Rule XXVIII of the Standing Rules of the Senate to insure that each conference member be afforded an opportunity at an open meeting of the conference to vote on the full text of the conference report.

Why Needed: Leadership Slipping Special Interest Provisions Behind Closed Doors

Last year, after the conferees had finished their business on an important bill, the Republican Leadership added a special interest provision to the bill to shield vaccine makers from liability to people injured or killed by their products. Conferees were not allowed to vote on this provision, and had in fact been assured that it had not been included in the final bill.

Restricting Congressional Travel and Gifts

Summary of Democratic Amendment:

- The amendment would prohibit Members and staff from receiving gifts from registered lobbyists.

- The amendment would allow privately funded travel only if paid for and sponsored by 501(c)(3) charitable and educational organizations which (a) are not affiliated with any organization that lobbied the Congress and (b) certify that there is no lobbyist involvement or participation.

Why Needed: Trips to St. Andrews and to the Super Bowl

While much privately-funded travel is valuable and completely legitimate, it is clear from revelations in the Abramoff case that the current rules have allowed for abuses to take place. Abramoff took DeLay, Ney and others on trips to Scotland that were not legitimate. Abramoff used trips to serve his clients’ special interests rather than the public interest. Abramoff took some House and Senate staffers to the Super Bowl and gave them $500 in gambling chips. The Democratic amendment prohibits lobbyist involvement or participation in privately-funded travel, limiting these trips to the type where the educational and business purpose clearly justify the trip and there is little likelihood of improper influence.

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