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March 22, 2007

Earmark Rules Sow Confusion for Lobbyists

By Kate Ackley

Roll Call

For lobbyists, this is the season of earmarks. But amid heightened scrutiny over the pots of funding and confusion over Members’ new mandate to certify that they have no financial interest in the earmarks they request, appropriations lobbyists say this year is filled with uncertainty and chaos.

Interviews with more than a dozen lobbyists who specialize in navigating the appropriations process for clients, most of whom would speak only on condition of anonymity, paint a picture of client confusion, increased paperwork, potentially missed deadlines and Members who no longer can champion the earmarks of certain clients.

For the lobbyists, it has turned this appropriations season into a sometimes unwieldy effort.

“Chaos reigns supreme,” said one former Congressional staffer who is now an appropriations lobbyist.

Some Members have delayed submitting their requests until they get approval by the ethics committees on how to interpret the new “financial interest” mandate, and the Appropriations subcommittees, which wanted requests mostly by last Friday, will have to decide whether to still accept them or not, said lobbyists knowledgeable of the process. The House ethics committee was to release new guidelines by Tuesday, but those were not available by deadline.

“Even the smartest, most well-seasoned appropriations professionals are learning that hindsight is 20/20,” said one veteran appropriations lobbyist who would not be quoted by name.

When it comes to the question over Members certifying that they have no personal financial interest in an earmark they are requesting, this lobbyist said he knows of Congressional “offices that have submitted their entire batch of projects to the ethics committee” for review.

Another lobbyist said that as a result of the new provision some Members have declined to ask for earmarks for clients even if it’s not clear whether they might have a financial stake.

“Absolutely we are losing champions,” this lobbyist said. “The Members’ offices that are really taking this uncertain environment to the extreme are saying we can’t champion a project because there may be some kind of financial interest violations, and everyone is walking on eggshells.”

But other lobbyists said the matter, which has confounded some clients, is likely to be resolved in the coming weeks.

Some of lobbyist Gerry Warburg’s clients have received e-mails from committees and Members’ offices saying that they’re suspending all earmarks until the “financial interest” matter is sufficiently resolved.

He’s telling clients that “I think it’s just a little hiccup,” said Warburg, executive vice president at Cassidy & Associates. “It seems very prudent for Members to be getting these questions about earmarks resolved before the markups in May. We expect to have a resolution before the end of the Easter recess, and we’re not overly concerned that this might lead to excessive delay.”

Another appropriations lobbyist said the “exhaustion factor” this year cannot be overstated with dozens of papers to fill out. “I’ve had colleagues who have done over five dozen forms,” this lobbyist said.

Jeff Taylor, a lobbyist at Barnes & Thornburg who has clients with pending appropriations requests, said this year it was more crucial than in the past to bring clients to meet face-to-face with Members.

“This year, we did everything we possibly could to get as many of our clients in before March 16,” he said.

He added that Members also are asking for lobbyists to rank priorities if a client submits more than one request.

In one case, Taylor represents Vanderburgh County, Ind. “There are four projects they would like assistance with, but all the county commissioners know that the really important project is the University Parkways Project,” Taylor said. “So if a Congressman’s office says, ‘Can you prioritize this’” among an individual client’s request, “you will prioritize.” Taylor pointed out that he does not prioritize among different clients’ projects.

Another longtime appropriations lobbyist said that colleagues were fretting over whether campaign contributions from lobbyists seeking earmarks possibly could be construed as a “financial interest.”

“It’s chaotic and people are scared,” this lobbyist said.

But it looks as if such fears are probably unfounded.

Several ethics experts said that any prosecutor would be hard pressed to make a case that contributions to a Member’s coffers from a lobbyist requesting an earmark constitute a financial interest.

“I understand the paranoia in this age, and I think it’s well placed for some of these lobbyists to be thinking about it, but it is a bit of an overreaction,” said lawyer Stanley Brand of the Brand Law Group.

Ken Gross, an ethics lawyer at Skadden, Arps, Slate, Meagher & Flom, agreed. “It’s inconceivable to me,” he said. “As many times as I’ve seen the term ‘financial interests’ appear at the state level, I can’t think of any that would include within that definition some kind of interest by virtue of a political contribution.”

Corey Rubin, another ethics and campaign finance lawyer, said that while there’s no legal or ethical concern, “I think it’s an optics-appearance concern.”

Michael Fulton, an appropriations lobbyist at GolinHarris International, said he wasn’t worried about campaign contributions getting caught up in the “financial interests” brouhaha.

“That’d be a pretty strict interpretation of ‘benefit’ from the project,” he said. “I think they’re looking at the bigger fish.”

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