I haven't read many diaries around here about the Congressional ethics reform bill that recently passed. But after reading articles like this one from Saturday's NYT's, I was none too happy:
If the idea was to shame lawmakers into restraint, it did not work.
Eight months after Democrats vowed to shine light on the dark art of "earmarking" money for pet projects, many lawmakers say the new visibility has only intensified the competition for projects by letting each member see exactly how many everyone else is receiving.
So far this year, House lawmakers have put together spending bills that include almost 6,500 earmarks for almost $11 billion in local projects, only half of which the Bush administration supported.
After the Minnesota bridge collapse, I realized that some earmarks probably are necessary: for every Bridge to Nowhere or prison museum, there probably is a bridge that legitimately needs to be built to somewhere. I just wish Congress had a better system for making sure the taxes we pay get distributed to the projects that would help taxpayers best.
Nevertheless, this NYT article, Tougher Rules Change Game for Lobbyists, gave me hope that the ethics reform package has real teeth:
H. Stewart Van Scoyoc, founder of one of the biggest lobbying firms in Washington, spent an anxious morning with his lawyer last week assessing the far-reaching ethics and lobbying rules Congress had passed the day before.
The first worry was what lobbyists are calling the new "temptation rules." Not only do they bar lawmakers and aides from accepting any gifts, meals or trips from lobbyists, they also impose penalties up to $200,000 and five years in prison on any lobbyist who provides such freebies.
And worse still for Mr. Van Scoyoc, under the new law he is required to certify each quarter that none of the 50 lobbyists in his firm bought so much as a burger or cigar for someone on a lawmaker’s staff...
The new law has quickly sent a ripple of fear through K Street. It comes amid signs that federal prosecutors are taking a newly aggressive approach to corruption cases — including treating campaign contributions as potential bribes.
That last paragraph was like music to my ears. Despite my admiration for Hillary Clinton, my heart sank when I first heard her answer to the lobbyist question at YearlyKos. How clueless could she be, I thought. However, as I read about how the other candidates were still compromised by the contributions they receive from certain sectors, I realized that, although I'm still disturbed by her answer, this campaign system we have compromises every candidate. (With talk of the need to change the rate of taxation on hedge funds, you can't tell me that the preponderance of contributions Edwards and Obama receive from hedge funds aren't the equivalent of contributions from lobbyists.) No matter how concerned I continue to be about the influence of lobbyist money, it seems this law - at least for now - may just work to rein them in just a bit:
By requiring them to certify the good behavior of their employees, the law puts lobbyists at new legal risk and could subject them to new pressure from prosecutors. And new centralized disclosures of lobbyists’ campaign contributions, fund-raising activities and even their achievements — in the form of Congressional earmarks in spending bills — make it only easier for federal investigators to paint unflattering portraits of lobbyists’ influence.
The fear of the ramifications of this bill have made lobbyists look at the most minute activities they've used to win favors from Congresscritters:
One lobbyist, who would speak only anonymously to avoid attracting the attention of prosecutors or rivals, said he had started sending himself date-stamped e-mail to create a record of every phone conversation he had with a lawmaker. Then he stopped making campaign contributions.
Another lobbyist recently scaled back the menu at a breakfast briefing for lawmakers, offering bagels and cream cheese instead of ham and eggs. The rules permit lobbyists to provide refreshment of "only nominal value." The House ethics committee guidelines suggest "light appetizers and drinks, or soda and cookies," a standard that is known as "the toothpick test."
The firm also advised a client distributing flashlights on Capitol Hill — to promote government openness — to make sure not only that they cost less than $10 each but also that they looked cheap, to avoid the appearance of impropriety.
And the "staff briefing" — in which a lobbyist enticed Congressional staff members to hear a talk about some dry legislative concern by offering pizza — has become extinct. No one will come without the free food.
I realize this is Washington and old habits die hard. You can be sure clever minds will find loopholes and we may even find that these reforms may have unintended consequences no one has yet envisioned. But for now, I feel like maybe, just maybe, Congress is going to be responsive to the greater good rather than to narrow monied interests.
Update [2007-8-7 14:49:56 by John Campanelli]: FoundingFatherDAR makes a point in the comments with which I agree and therefore I would like to clarify a point I was trying to make concerning taxation and hedge funds. I will quote FoundingFatherDAR's post:
For one thing, it's not the taxation of the hedge funds themselves that are in question, it's the taxation of income recognized by fund managers.
For another, it's not changing the tax rate that's the core issue, it's changing the classification of income recognized by the fund managers (and other kinds of partners.)
As I understand it - and someone could correct me if I'm wrong here - the money being earned by hedge fund managers gets taxed as if it's merely capital gains when in fact it is often the primary income for these people. Capital gains taxation is significantly lower than income taxation. The move to change the classification for hedge fund managers is what is at issue in the legislation being considered before Congress. Considering the billions of dollars invested in hedge funds, it is easy to see the vested interest hedge fund managers may have in maintaining the present classification.