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July 2, 2006

Hiring Federal Lobbyists, Towns Learn Money Talks


By Jodi Rudoren and Aron Pilhofer

The New York Times


TREASURE ISLAND, Fla. — Rebuffed on several requests for state and federal financing to help rebuild its crumbling bridge, this small resort town was all but resigned to raising the money by doubling the 50-cent bridge toll, increasing property taxes and issuing bonds.

But in a last-ditch gambit, city officials hired a federal lobbyist who had known the local congressman for four decades. Within weeks, the congressman, Representative C. W. Bill Young, called the mayor to say he had slipped a special $50 million appropriation, known as an earmark, into an omnibus bill.

The city had originally sought $15 million. But Mr. Young — a Republican who was then the all-powerful chairman of the Appropriations Committee and, as his lobbyist friend knew, believes public roads should be free — raised it to eliminate the toll.

Since that windfall three years ago, Treasure Island has continued to pay $5,000 a month to the lobbying firm, Alcalde & Fay, and has continued to reap earmarks: $500,000 to fix a sewer plant, $625,000 to repair wooden walkways over the dunes, $450,000 for pedestrian crosswalks.

"They're worth every penny they get," said Mayor Mary Maloof, who led a parade of antique cars to open the new bridge on June 10. "When we started talking about it, there were plenty of eyebrows raised that we would be doing such a thing. But it's turned out to be a valuable tool for helping us cover costs."

Cities and towns — and school districts and transit authorities and utility agencies — across the country are increasingly reaching for that same toolbox, putting lobbyists on retainer to leverage their local tax dollars into federal tax dollars.

Since 1998, the number of public entities hiring private firms to represent them in Washington has nearly doubled to 1,421 from 763, as places like Treasure Island, population 7,514, have jumped onboard with behemoths like Miami that have long had lobbyists.

Most of these new clients had never sought earmarks — some had never even heard of them — before someone knocked on their door, essentially offering big pots for a pittance. Others had read in the newspaper about neighbors with lobbyists building bridges or beach walks and felt pressure to keep up with the municipal Joneses.

"We're all in competition for the same dollars, and you want all the advantages you can have," said John Litton, city manager in Lake Mary, Fla., about 20 miles north of Orlando.

The collective bill over eight years has topped $640 million.

Enlisted almost exclusively to land earmarks, lobbyists for local governments have boomed alongside a broader explosion in such appropriations, to 12,852 items worth $64 billion last year from 4,219 pet projects totaling $27.7 billion in 1998. The prolific earmarking does not change the overall budget's bottom line, but how the pie is cut: dollars are doled out, often in secret, at the whim of a lone legislator — often under the influence of a lobbyist — rather than through a competitive process.

It is against the law to use federal money to hire lobbyists. Yet local officials' near-unanimous justification is that the lobbyists pay for themselves many times over through the infusion of federal funds.

Ronald D. Utt, a senior fellow at the Heritage Foundation and a frequent critic of earmarks, said he was most troubled at seeing firms solicit public clients with virtual guarantees that they could deliver "dollars for pennies" (or billions for millions).

"The mystery to me is the way they are able to promise returns," Mr. Utt said, pointing to the revolving door between Congressional appropriators'
payrolls and lobby shops, as well as to lobbyists' generous campaign contributions. "It goes beyond mere influence peddling to just outright, classic third-world corruption."

The most vivid case of earmark-related corruption came with the conviction this year of Jack Abramoff for trading huge fees from Indian tribes for influence with lawmakers. Public entities have also played a prominent role in the current federal investigation of the links between Representative Jerry Lewis, the current Appropriations Committee chairman, and the lobbying firm Copeland Lowery Jacquez Denton & White, leading to subpoenas of several of the firm's government clients in Mr. Lewis's Southern California district.

Lobbyists say there is nothing improper in their political activity. In fact, they use it as a selling point. In a 2002 proposal to the City of Pembroke Pines, an Alcalde lobbyist pointed to monthly fund-raisers the firm held at its offices in Arlington, Va., and said attending events "very frequently" for Republicans and Democrats alike "does allow us to better our local government clients."

Although local officials are rarely active in the campaign-contribution race that accompanies the earmarks derby, the firm's employees have given upward of $200,000 to more than 100 politicians since 1997, nearly half in Florida and in other states where it has clusters of public clients.

"Because we enjoy a considerable clientele from the private sector," the Alcalde proposal read, "we are able to significantly participate in the political and fund-raising process that might at times better enable us to access public policy makers on behalf of all the firm's clients."

Beyond any question of quid pro quo, however, some critics say the new ubiquity of private lobbyists paid with public money perverts basic democratic tenets. Of the 250 top-grossing firms in Washington, 48 have state, local and tribal governments as their leading source of revenue, far more than any other sector, according to the Center for Public Integrity, which monitors lobbying.

Tim Phillips, president of Americans for Prosperity, one of several Washington watchdog groups critical of earmarks, said it was local politicians' mandate to make their needs known — and the job of members of Congress to look out for them.

"If you're a mayor or a city councilman and you have to hire a lobbyist, what a gross admission of failure on your part," Mr. Phillips said. "I would think they have a fiduciary responsibility to not put taxpayer dollars into lobbyists when they're elected to be, really, the lobbyist for the people."

The mayors and city council members, though, point to the special appropriations as proof of their fiscal prudence.

Alcalde & Fay is one of three firms — along with Patton Boggs and the Ferguson Group — that collected $25 million from public clients in the past eight years, much more than any other lobbyists. A close look at Alcalde & Fay's 44 public clients in Florida alone shows that, since 2001, $9.8 million in lobbying fees translated into $173 million in earmarks, or a return of $18.41 on every dollar spent.

In Treasure Island, each dollar to Alcalde & Fay yielded $285.83 in federal money.

A Game Changed

To understand how the game has changed, consider the visit of West Virginia University leaders to Senator Robert C. Byrd's office one day in 1989.

They went to see Mr. Byrd — a Democrat long known as the "prince of pork" for pumping money into hometown projects, and then the chairman of the Appropriations Committee — about a research center. When the senator learned the delegation included several lobbyists, he directed them to wait in the lobby.

Mr. Byrd asked for an $18 million earmark, then withdrew the request after an article in The Washington Post revealed that the lobbying firm, Cassidy & Associates, was the origin of the university's idea for where to seek the money.

"I'm on the Appropriations Committee — if I can't do it, nobody can," The Post quoted Mr. Byrd as saying. "Why do you waste your money on a lobbyist when I'm being paid to be your senator?"

These days, such comments seem quaint.

Some lawmakers still insist that lobbyists are unnecessary for local governments, but far from being kicked out of meetings on Capitol Hill, the lobbyists typically arrange them.

When Ms. Maloof, the Treasure Island mayor, makes her annual pilgrimage to Washington to press her case, her lobbyist, L. A. Bafalis — a former Republican Congressman from Florida — picks her up at the airport and escorts her through the day's meetings, paying for lunch in the Capitol's members-only dining room.

A typical monthly retainer is $5,000, with raises over time — and success.

For that, according to interviews with more than a dozen Alcalde & Fay clients, the firm sends weekly e-mail messages detailing available federal grants and arranges once-a-year visits to Washington. In between, some clients speak to their lobbyists weekly, while others go a month or more without a phone call.

The Municipalities Practice Group at Alcalde, which accounts for about half the firm's client roster and a third of its $12 million annual revenue, was born with the firm, in 1973. Hector Alcalde had been chief of staff to a congressman from Tampa for a dozen years, and his first client was the Tampa Port Authority, which still pays the firm about $80,000 a year, according to Senate reports.

The City of Tampa eventually signed on, too. And the surrounding county, Hillsborough. Then the neighboring county, Pinellas. The City of Clearwater, 23 miles west of Tampa, became a client in the 1990's, and it was Alcalde & Fay's success in getting Clearwater $22 million in 2000 to replace its own bridge that got Treasure Island's attention.

And so on.

In the 2002 pitch to Pembroke Pines, Alcalde & Fay boasted of having 35 public clients on its roster, including many of the town's neighbors. Now it has 85.

"All of them say, 'We're paying taxes, this is a way for us to get back our fair share of what we're paying into,' " said Andy Wahlquist, a partner who handles several of the firm's public clients in Florida.

Noting the proliferation of earmarks, Kevin Fay, the firm's president, said, "They're compelled to try to get some of that money if the programs are out there."

A snapshot analysis shows that hiring a lobbyist seems to help.

Looking at the 10 Florida cities with populations closest to Treasure Island's, none have lobbyists registered with the Senate; the only earmark among them was $25,000 last year for a veterans' memorial at Alachua City Hall.

North Miami Beach and Homestead, Alcalde & Fay clients with about 40,000 residents each, got a combined $13 million in earmarks in the past five years, while six cities of similar size got none. (Dunedin, population 35,691, lacked a lobbyist but got three earmarks totaling $2.7 million while its congressman, Mr. Young, ran the Appropriations Committee.)

Local leaders say they lack both the knowledge of bureaucratic procedures and the political contacts to navigate the complex world of federal appropriations. Besides, they are thousands of miles from Washington, picking up garbage and running recreation programs and putting police officers on beats.

Cyndie Goudeau, the Clearwater city clerk, said she could comfortably approach her own congressman, Mr. Young, "but if I walk into a representative or a senator's office that's not from this area, they don't know me from a man on the moon."

"But they know Danielle, they know Hector Alcalde, they know that firm," Ms. Goudeau said, referring to Danielle McBeth, the Alcalde partner who handles Clearwater's account. "If we didn't have one, we wouldn't be getting the funding we're getting."

In the past five years, Clearwater has collected 37 earmarks totaling some $30 million, or $26.25 for each dollar paid to Alcalde & Fay. Besides the sleek, curvaceous bridge leading from downtown to the city's island beaches, the city collected $4 million to transform the streetscape along the water, $1.5 million for a homeless shelter, $1 million for police technology and more.

"In a perfect world, you wouldn't need them," Ms. Goudeau said as she showed off the bridge one recent morning. "But the world's not perfect."

Flying to Washington in February, Joe A. Martinez, chairman of the Miami-Dade County Commission, studied biographies of members of the transportation committee he hoped to persuade to finance a new commuter rail line. He noticed one, Representative Corinne Brown, from Florida, but she is a Democrat — he is not — and from Jacksonville, the other end of the state.

So he called Mr. Alcalde. It turns out that Ms. Brown's daughter, Shantrel Brown Fields, is an associate at the firm.

"I had a meeting with her the next day," Mr. Martinez said of Representative Brown. "I got results."

Last year, Miami-Dade spent more than any other government entity on lobbying, $1.36 million. Totaling fees for the past eight years, it ranks sixth, with $6.7 million; topping the charts are the Metropolitan Water District of Southern California and the Gila River Indian Community, which each spent more than $10 million.

Spreading the Wealth

In general, the largest states had the most public entities with lobbyists — and the biggest fees — but there are notable exceptions: Louisiana ranks fifth, for example, with its government agencies spending nearly $24 million from 1998 to 2005, and Puerto Rico ranks ninth, with $19 million, about the same as Michigan, Illinois and Pennsylvania, which have two or three times Puerto Rico's 3.8 million people.

Mr. Martinez said that after taking over as Miami-Dade chairman last year, he decided to slash the lobbying budget in half, fire 8 of the 11 firms on contract and send his own employee to open a Washington office. But that employee does not have the contacts, Mr. Martinez said: "He doesn't have access to all these people."

Large governments like Miami-Dade — along with ports, airports and public utilities — have long had people in Washington looking out for their interests. What has changed in the past few years is the number of smaller entities looking to get in on the action.

The number of cities with lobbyists, for example, has grown to 511 from 234 in 1998, and the number of counties has also doubled, to 186 from 85. Fifty-nine public school districts had lobbyists last year, up from 19 in 1998, while the number of police and fire departments with their own paid representatives jumped to 16, from just 2.

In Florida, Lake Mary, population 13,922, signed up for $5,000 a month in 2002, joining the two nearby county governments, the local airport, the wastewater authority and the nearby towns of Sanford (population 49,252) and Oviedo (population 30,800) on Alcalde & Fay's client list. But after three years, $220,000 and half a dozen requests for money, all Lake Mary got was a $100,000 clock tower that plays Christmas and wedding music. So the City Council terminated the contract last year, then promptly hired another lobbyist, based in Orlando.

"We felt that if we were going to invest that kind of money, we wanted to attempt to try to get more return on our investment," Mr. Litton said. "Sometimes in the bigger firms you kind of envision yourself as just a number."

Of Alcalde's 44 Florida government clients, half a dozen got no earmarks in the past five years; five more got less than a dollar back in earmarks for every dollar spent on lobbying. The City of Tampa and Orange County also recently fired Alcalde & Fay upon changes in their elected leadership.

"If there's a long list of clients that have something in common with Orange County, i.e., being a local government in central Florida or the state of Florida, then it would occur to me that there's the potential, at least, to dilute your effectiveness," said the county's new mayor, Richard T. Crotty. "There's only so much money to go around, and if you cut the pie 40 ways instead of two ways, that's not as good a deal."

If Alcalde & Fay has cornered the Florida market, Bradley Arant Rose & White dominates Alabama, its home state. Robertson, Monagle & Eastaugh, an Anchorage firm, represents nearly half the public entities in Alaska with lobbyists. Then there are firms like Marlowe & Company, in Washington, which sells itself as an expert in getting money to prevent beach erosion.

Rather than creating a conflict of interest, partners of Alcalde & Fay said that having a geographic cluster of clients allowed them to concentrate on a certain Congressional delegation. They said they were careful to present each client's priorities and, as Mr. Wahlquist put it, never "go to the Hill with more than one client in mind."

A Need for Professionals

The four-lane, 1.4-mile bridge connecting this spit of land with St. Petersburg was built in 1939, when Treasure Island was unincorporated and had just a handful of homes. By 2003, it rated 3.3 out of 100 on a standard bridge rating. "At zero, you're in the water," said Don Hambidge, the public works director.

Chuck Coward, the former city manager, said the city planned to issue $25 million in bonds backed by toll revenue, and to seek $15 million from the federal government and $10 million from the state. But, he said: "Treasure Island's a very small city. It's not savvy in federal politics."

"We thought we had a worthy project, we thought there were a lot of attributes to it, but we were not skilled in presenting those," Mr. Coward said, recalling several years of requests without results. "After talking with Clearwater, we thought very certainly some professional assistance would be appropriate."

Mr. Bafalis, the lobbyist assigned to Treasure Island, had served in the State Legislature and in Congress with Mr. Young before a failed bid for the governor's nomination in 1982. He mentioned Mr. Young's aversion to tolls when he first met with Mr. Coward on Sept. 23, the day before Mr. Coward met with Mr. Young about the bridge.

Like Mr. Bafalis, Mr. Young declined to be interviewed for this article. But his chief of staff, Harry Glenn, said the removal of the toll had been key to obtaining the earmark, not hiring the congressman's old friend.

"When asked the question whether a city or county needs to hire a lobbyist, he has always told them they don't need to hire a lobbyist to work with their own congressman," Mr. Glenn said. "That's his job. Those are the people he was elected to represent. He doesn't need to work through somebody else to schedule a meeting with a mayor or a city council member."

At the bridge ceremony, where residents nibbled "no toll house cookies," it was Mr. Young who got thanked, not Mr. Bafalis. A 1927 fire engine was the first vehicle to roll across, followed by a forest green Ford Tudor Deluxe as old as the original bridge and two dozen more classics, like a 1959 turquoise Impala and a 1967 cherry Camaro convertible, both complete with fuzzy dice.

Though only one lane flowed in each direction — the two other lanes should be done by next summer — residents were relieved to have their evacuation route reopened in time for hurricane season, and to be able to cut as much as 40 minutes from their commute into town.

The City Council, meanwhile, may yet consider raising property taxes this summer. Without the toll, they would otherwise have no money for maintenance of the new bridge. Unless Alcalde & Fay helps find another earmark.

Jodi Rudoren reported from Treasure Island, Fla., and Washington for this article, and Aron Pilhofer from New York.