Auction House

WASHINGTON, D.C. - Journalists filling the District Court's Room 14 in Washington last month were in a jovial mood while waiting for the arrival of U.S. Rep. Robert Ney (R-Ohio). Two joked about how Ney had denied allegations of influence peddling for a year before breaking down. Now they chuckled, "Oh, yeah, he's disgraced." Ney, despite puffy eyes from a month of treatment for alcoholism, looked like a man untroubled by conscience.

After Ney's swearing-in, Judge Ellen Huvelle read through the details of the offenses. Had he accepted campaign contributions, meals, game tickets, trips, and gambling chips (worth tens of thousands of dollars) in exchange for amending legislation, inserting statements in the Congressional Record, and pushing a multimillion-dollar wireless contract with the House of Representatives, all on behalf of convicted ex-lobbyist Jack Abramoff's clients? Did he then try to cover it up? "Yes, your honor," Ney said calmly after each. How did he plead? "I plead guilty, your honor." He will be sentenced Jan. 19. Prosecutors have asked for a 27-month sentence.

Ney's sentencing is the latest in a series of lobbying scandals that have rocked Washington in the past year. The headline-makers are explicit "quid pro quo" agreements of the type to which Ney confessed, but the Capitol's political environment encourages subtler exchanges of favors and access, money and influence.

Critics call it a "culture of corruption," but David Dean, president of the Dallas-based lobby firm Dean International, Inc., argues that lobbying has a legitimate and necessary role in government. He says that the vast majority of lobbyists are honest, rule-abiding people exercising a constitutional right to petition elected legislators on behalf of themselves or their clients. People like Abramoff, Ney, and Rep. William Jefferson (the Louisiana Democrat videotaped taking $100,000 in bribe money from an FBI informant; authorities later found $90,000 in marked bills hidden in his freezer) are now the exception, he says.

That's true in terms of money obviously changing hands, since few lobbyists now fork over dollar-stuffed envelopes; instead, they "build relationships" with members of Congress and their staffs. That way, according to one lobbyist for a financial services trade association to whom WORLD granted anonymity so that her job would not be jeopardized, "in the clutch you can get your phone calls returned." She insists the job can be done ethically but admits it's like walking an ethical tightrope: "At some point, the Abramoffs of the world started off doing what I'm doing. Where did they cross over?"

"Building relationships," for most lobbyists, means taking staffers or legislators to lunch occasionally (the congressional gift limit for staffers and members, including dining, is $50 per year in any specific relationship) and socializing in the evenings. But don't minimize the importance of money: Even though the most any individual lobbyist can contribute to a single candidate is $5,000 in the primary and another $5,000 in the general election, lobbyists with good connections can generate major dollars by organizing fundraisers and inviting fellow lobbyists. In 2003 and 2004 Ney raised $1.44 million, according to PoliticalMoneyLine, with over $800,000 coming from political action committees (PACs) that lobbying groups often set up to funnel contributions to preferred candidates.

Ney and California congressman Randy "Duke" Cunningham (now serving eight years for helping to steer $70 million in classified federal contracts to favored defense contractors) did much of their payoff work through "earmarks." Those are the provisions members of Congress insert anonymously into federal legislation to direct tax dollars to specific projects or contracts, bypassing scrutiny in the regular legislative or budgetary review process. Many have little to do with the purpose of the legislation in which they appear.

Some lobbyists focus primarily on social issues, and where little money is at stake significant corruption seems unlikely. But the number of big-bucks earmarks has exploded in the last 25 years, generating huge payoffs for lobbyists and their clients. The 1982 Highway Reauthorization Bill, explains Ron Utt of the Heritage Foundation, had 10 earmarks. The 1987 bill had 152; President Ronald Reagan vetoed it and received on Capitol Hill a standing ovation from the lawmakers who sent it to him. The $286 billion transportation bill in 2005, which President George Bush declined to veto, included 6,371 earmarks with a total value of $24 billion.

The total number of federal earmarks almost quadrupled between 1994 and 2005-reaching about 16,000 last year, out of 35,000 submitted by lawmakers-according to the Congressional Research Service. Which earmarks make it into law depends on the political status of the requesting lawmaker, the nature of the earmark, and other political factors. House and Senate leaders consider which members of their own party need a campaign boost back home, and sometimes use earmarks to persuade opponents to support particular bills.

The overall earmark increase is in part because since 2000 the number of registered lobbyists has almost doubled-to 35,000. The lobbying trade magazine Influence reported last spring that the combined lobbying revenues of the 50 highest-grossing firms rose 9 percent in 2005 to $921 million, "just a few earmarks short of a billion." Overall, special-interest groups reported that they spent $2.43 billion on lobbying in 2005, according to the Center for Responsive Politics. The highest-paid Washington lobbyists, typically ex-legislators, now command salaries of over $1 million.

Lobbying firms now brag on their websites about obtaining earmarks and other legislative benefits for their clients. One example: "When the President rescinds funding for a multibillion dollar defense system, the contractor retains Cassidy & Associates [a Washington firm considered the father of the earmarking business] to plan and implement a [national public affairs program] . . . and the decision is reversed." Marlowe & Company exhibits a chart claiming that the value of appropriations it won for clients went from $6.1 million in 1996 to $144.8 million in fiscal year 2006. The Carmen Group claimed that in 2004 it collected $11 million in fees and delivered $1.2 billion in benefits.

Many of these firms' clients are municipal or state governments, and some of these earmarks may indeed benefit the public-but government is not supposed to work like this, Utt says as he decries "the buying and selling of earmarks by private speculators as if they were bushels of wheat on the open market." He notes that earmarks take money from legitimate federal duties, allow incumbents to entrench themselves by buying voters' favor, and, as in Cunningham's case, primarily enrich the insiders. Taxpayers, he adds, deserve an explanation as to how for-profit firms can so confidently promise influence on congressional appropriations.

The greatly expanded size and scope of the federal government, of course, creates an incentive for special interests both to fend off entangling regulations and to grab for honeypots. Congress was supposed to be a center for deliberation, points out Norman Ornstein, a scholar with the American Enterprise Institute, but Congress does very little deliberating. Now, it's all about who you know, and you get to know members of Congress by contributing to their campaigns, their political action committees, and their family-run charities. Lobbyists know that giving a gift or holding a fundraiser "moves them a little bit closer to the front of the line," says Utt, while staffers recognize that if they blow off a generous lobbyist, "that's the last time they get free tickets to a Wizards game." Ornstein bluntly calls the system a "shakedown."

What to do? Congressional watchdogs have for decades advocated tougher lobbying laws, proposing everything from bans on lobbyist-generated campaign contributions to disclosing the sponsors and recipients of earmarks to a presidential line-item veto. Congress routinely ignores such proposals, although the Abramoff scandal did prompt it to pass legislation creating a website listing all federal government contracts and grants. Still, as Influence magazine observed, "lobbyists are hardly sweating things."

This fall's congressional campaigns were full of attacks on lobbying, but the American League of Lobbyists sent letters to the Republican and Democratic campaign committees complaining about anti-lobbyist campaign rhetoric, and league president Paul Miller told The Washington Post that politicians who "think we're the biggest problem in the system [should] return our money." No one has.

-with reporting by Amy Stanford