Money-go-round

"I believe there will be more scandals, there will be more indictments, and more people going to jail," said Arizona Republican John McCain, speaking about government corruption outside the Capitol one bright afternoon. "There are probably scandals happening while we speak. The system is badly broken."

Sen. McCain could have spoken those words last week. But he didn't: The career reformer said that to Washington journalist Elizabeth Drew in early 1998 just after then-Republican Senate Majority Leader Trent Lott used parliamentary poison to kill McCain-Feingold, a campaign-finance reform bill introduced in the wake of Chinagate.

In that 1996 scandal, foreign donors poured millions into Democratic campaign coffers in 40 U.S. states and the District of Columbia. Except for the name of the offending party, little has changed a decade later: Mr. McCain is still agitating for reform and government officials still appear to be trading influence for money.

As the tentacles of the Republican-dominated Jack Abramoff lobbying scandal slither across Capitol Hill, the public is becoming increasingly aware of an entrenched pay-to-play system: Well-heeled lobbyists pamper lawmakers with illicit perks like five-star golf vacations, posh meals, and private-jet travel with in-flight champagne; meanwhile, other legislators ride a money-go-round on which they repay campaign donors with political favors and "earmarks," special-interest handouts that beget more donations which, in turn, beget still more favors and handouts.

Congress returned from its six-week recess last week with new awareness that all this begetting is begetting voter attention. After 60 congressional conservatives met with former House Speaker Newt Gingrich in Baltimore to discuss the future of party leadership, GOP members caucused, listened to speeches of leadership candidates, and then made a surprising choice: Instead of giving temporary House Majority Leader Roy Blunt (R-Mo.) the job permanently, they turned the reins over to Rep. John Boehner of Ohio, hoping he can clean up the party's image before they face voters in November.

While questionable Capitol Hill dealings cross party lines, it is the GOP now generating guilty pleas and indictments, including those of Mr. Abramoff and his associate, Michael Scanlon; Rep. Duke Cunningham (R-Calif.); and former House Majority Leader Tom DeLay of Texas, a recipient of Abramoff largess, on charges unrelated to the über-lobbyist.

Similar handwriting may be on the wall for Rep. Bob Ney, whom Mr. Scanlon referred to in a plea agreement as "Representative #1." Mr. Scanlon alleged that he and Mr. Abramoff showered the Ohio Republican with baubles like lavish trips and exclusive event tickets in return for "official acts and influence."

With midterm elections just nine months away, the prospect of voter backlash is prompting the GOP to listen more closely to reformers like Mr. McCain, his fellow Arizona Republicans, Reps. Jeff Flake and John Shadegg, and others. But what kinds of reforms can substantially inoculate lawmakers from the Beltway temptations that have led so many public servants to ruin?

Candidates in last week's majority-leader vote offered ideas amid a race that embodied a broader storyline: reform vs. the status quo. The contest gave "the perception that Republicans are worried about getting reelected and they want both to send a message and set the agenda for more reform," said Club for Growth executive director David Keating.

Rep. Blunt stepped temporarily into the House's top leadership billet after Mr. DeLay resigned in the wake of his indictment last year. But Mr. Blunt is an earmark lover who recently managed to insert into the 2006 defense appropriations bill $27.1 million in special projects for his southwest Missouri district. As GOP whip, he also racked up an impressive record of 50 consecutive vote-counting victories and zero defeats, earning a DeLay-like reputation for hand-over-fist fundraising and close ties to K Street lobbyists.

That led some Republicans, desperate to distance the party from any pay-to-play taint, to back Rep. Boehner. Mr. Boehner (pronounced "bay-ner") cut his teeth in Congress as a member of the so-called "Gang of Seven" that clamped down on congressional perks in the wake of the House Banking and Post Office scandals that took down Democratic icon Dan Rostenkowski and others in the early 1990s. When Mr. Boehner on Jan. 9 threw his hat into the majority-leader ring, he positioned himself as the bold reformer, the opposite number to establishment candidate Blunt.

But for some House Republicans, Mr. Boehner's ties to K Street were still too close. With reform (and the possibility of more GOP indictments) in the air, Mr. Shadegg entered the race as a dark horse. A member of the conservative Republican Study Committee, Mr. Shadegg has been an outspoken critic of profligate GOP spending, and he gained 40 votes on the leadership race's first ballot. That was only good enough for third, though, and following Mr. Shadegg's withdrawal most of his supporters turned to Mr. Boehner. The Ohio Republican won on the second ballot, 122-109.

With the leadership question now settled, Republicans must come through on promised reforms-or face near-certain congressional losses in November. A loss of only 15 seats in the House would flip control to Democrats.

Mr. McCain already has teamed with Mr. Flake to sponsor the Obligation of Funds Transparency Act. The legislation would make earmarks more visible, subject each project to an amendment process, and require each earmark to be included in the text of spending bills.

An earmark designates spending for a specific project. Some earmarks are debated in and appear in a bill's text. But the vast majority are neither vetted nor voted upon, but are appended during conference committee sessions after bills pass House and Senate chambers. Simply put, these earmarks pay for legislators' pork-barrel projects-or repay lobbyists and their clients for their generosity.

Between fiscal years 1995 and 2005, total federal spending ballooned from $1.5 trillion to $2.5 trillion, an increase of 67 percent. During that time the number of pork-barrel earmarks zoomed from 1,400 to 14,000, according to watchdog group Citizens Against Government Waste (CAGW).

The McCain-Flake reform bill would enable members of Congress to challenge individual earmarks during floor debates and force lawmakers to justify pet expenditures. That alone might cut back on such porcine projects as the $500,000 "Arctic Winter Games" on the Kenai Peninsula that Sen. Ted Stevens (R-Alaska) tucked into a military supply bill.

Among the lawmakers calling for fewer earmarks and more fiscal responsibility is Sen. Tom Coburn, who forced a showdown over pork last October. With the Senate searching for relief dollars after Hurricane Katrina, Mr. Coburn, a square-shouldered Oklahoma Republican, proposed killing a $223 million project that would connect an Alaskan town of 8,000 with a virtually uninhabited island.

Mr. Coburn argued that the money would be better spent on rebuilding the storm-ravaged Twin Span bridge, a critical eastward link that carries Interstate 10 traffic from New Orleans to Slidell, La. Pork-lovers weren't listening: Only 13 senators, including Mr. McCain, voted to kill the now-infamous "Bridge to Nowhere."

While Mssrs. Coburn, McCain, and others have focused on earmark reform, Senate Majority Leader Bill Frist in early January instructed Pennsylvania Republican Rick Santorum to draft a bill that would rein in lobbying abuses. Mr. Abramoff has for the moment given the entire lobbying industry a black eye. But CAGW president Tom Schatz points out that lobbying is a legitimate enterprise, protected by the Constitution as Americans' right to "petition the government for a redress of grievances." Still, reform is definitely in order, he said.

The number of lobbyists on Capitol Hill has doubled to 35,000 over the past decade. "One of the functions of lobbying and lobbyists is to get earmarks," said Mr. Keating of the Club for Growth. "Duke Cunningham is going to jail in part because he was trying to earmark funding for a particular contract in exchange for lining his own pockets."

Legislative and procedural efforts at lobby reform have already begun. In a lopsided 379-50 vote on Feb. 1, the House voted to ban congressmen-turned-lobbyists from using the members-only House gym in the Capitol catacombs. That means no more lobbying in the locker room. The vote also bans former members of Congress from the House floor. On Dec. 16, Sen. McCain introduced a lobby-reform proposal that, among other things, would make it more difficult for former lawmakers to become lobbyists and prohibit lobbyists from paying for trips for lawmakers and congressional staff.

Democrats, eager to capitalize on public dissatisfaction with recent GOP malfeasance, are offering reform proposals that include banning all gifts from lobbyists. But while efforts to rein in lobbyists are important-"as can be deduced from the fact that the lobbying industry is already lobbying against them," The Economist noted in January-neither lobbying nor earmark reform touches on the third rail of reform: campaign finance.

Political campaign donors have historically-and legally-contributed to candidates who they thought could deliver legislative benefits. Still, such links of late have increasingly taken on a quid-pro-quo aspect. For example, at least 33 lawmakers who received donations from Mr. Abramoff's clients also wielded pro-Abramoff influence on a project aimed at blocking the development of a casino that would have competed with one owned by the Coushatta Tribe.

Among those legislators was Senate Minority Leader Harry Reid (D-Nev.), who received $66,000 between 2001 and 2004. On March 5, 2002, Mr. Reid sent a letter to Interior Secretary Gale Norton opposing the new casino, a position his office now says was consistent with Mr. Reid's general opposition to Indian casinos-and not related in any way to the $5,000 donation he received from the Coushattas the following day.

In another example, Ted Townsend, heir to an Iowa meat-packing fortune, had for several years pushed to build an "indoor rainforest" in his home state, an attraction he thought would draw tourists and tourist dollars. But other Iowans didn't share his enthusiasm for the project, and Mr. Townsend couldn't get any traction. Then, in 2003 he donated $3,000 to Iowa Sen. Charles Grassley, a Republican. The following year, Mr. Grassley secured a $50 million earmark for the construction of Mr. Townsend's rainforest.

Both the Reid and Grassley situations may have the appearance of quid pro quo, as may Rep. Boehner's votes related to government-backed college loan programs such as those offered by Sallie Mae, a Boehner benefactor. But the legal facts are that donors are entitled to donate and lawmakers are entitled to vote their consciences. Mr. Reid may indeed oppose tribal gambling, and Mssrs. Boehner and Grassley may genuinely believe in the public benefits of federal loan guarantees and rainforests in corn country. But the Justice Department now scrutinizes such scenarios more closely, searching for signs of bribery.

The corruption problem in Congress has long percolated above a toxic concentration of money and power-"too much power," Mr. Flake told USA Today in January. "We Republicans have abused that power badly over the past several years." Mr. Flake's candor rattled through the liberal blogosphere, shoring up charges that it is the GOP that has ushered in the "culture of corruption."

If that were true over the long term, simply eliminating the offending party might fix the problem. Watergate led to a 1974 revision of the Federal Election Campaign Act of 1971, followed by further tweaks in 1976 and 1979. Chinagate-with fresh indictments as recently as 2003-sparked McCain-Feingold, an overhaul that banned soft money and doubled hard-money donation limits to $2,000, and finally passed in 2002.

So why do we still have corruption? "Thirty-five thousand lobbyists and 535 members of Congress," quipped CAGW president Schatz. A fiscal conservative and 20-year watchdog veteran, Mr. Schatz has worked both sides, serving six years as legislative director for former Rep. Hamilton Fish (R-N.Y.), then as a lawyer and lobbyist. Mr. Schatz predicts that lobbying reform will be an easy sell in Congress but earmark reform will be tougher. "Members will be unwilling to give up the opportunity to steer money toward their districts. They like being able to talk to the folks back home about the great things they're doing," he said. To be effective, earmark reform must encompass bills of all types and not only appropriations bills. Meanwhile, he said, the root of the current corruption "isn't how many trips are taken or who buys lunch . . . it's the size of government."

Rep. Shadegg and other reformers have been sharply critical of the GOP's recent big-government habit, one that breeds corruption, Mr. Schatz observed, due to "the sheer number of people looking for a way to get something into legislation in a way that's not open and public."

GOP deficit spending is at odds with the party's "Contract with America," the package of promised reforms former Rep. Newt Gingrich (R-Ga.) used to engineer the Republican takeover of Congress in 1994. Among those promises: that the laws applying to ordinary citizens would also apply to Congress, and that Republicans would usher in a new era of fiscal responsibility.

Though the Gingrich Congress in some ways delivered, many Republican voters now feel cuckolded. Bill Clinton left George W. Bush with a $236 billion budget surplus. The 42nd president also left the 43rd with a year-old bear market, a problem compounded by 9/11.

Mr. Bush and the GOP-led Congress responded to those problems with tax cuts that have helped the economy rebound. But they also increased spending across the board, not just on homeland security and defense, and the federal deficit is now $400 billion and growing. And even as Congress grew fat on a pile of pork that more than doubled during his tenure, the president has not vetoed a single bill.

At the pre-leadership-vote meeting of House Republicans in Baltimore, GOP conservatives appealed to their colleagues for a return to the party's roots. "Republicans have been and are the party of reform," said Rep. David Dreier of California.

Mr. Shadegg, also in attendance, acknowledged that "real reform means more than tightening bureaucratic rules; it means fundamental changes to the way Congress does business."

Could this be the time that reform truly takes? "If it doesn't happen now, it's hard to imagine a set of circumstances where there would be more pressure for change," Mr. Keating said. "Between the wasteful spending and the scandals, if [Congress] can't change it now, they might not ever be able to."

-with reporting by Kristin Chapman