February 20, 2009
BILL MOYERS: Welcome to the Journal. That great movie comic and professional curmudgeon W.C. Fields once said, "you can fool some of the people some of the time — and that's enough to make a decent living."
Watching the news unfold this week about Robert Allen Stanford — he prefers "Sir Allen" as befits a true Texas charlatan — I was reminded how right the old comedian was. As Stanford was allegedly bilking investors of billions of dollars, and making a decent living at it, he was also stroking the backs of Washington politicians causing them to purr like kittens as they licked his hand.
This story is the gift that just keeps on giving.
Sir Allen Stanford was knighted by the Governor-General of the Caribbean island of Antigua, off-shore headquarters for his alleged multi-billion dollar con game. He bankrolled junkets to its balmy shores for several members of Congress including Texas Republican Senator John Cornyn and New York Democratic Congressman Charlie Rangel, chair of the powerful House Ways and Means Committee. Stanford partied with Nancy Pelosi and Bill Clinton at the Democratic National Convention last summer. And when Tom DeLay was still House Majority Leader, he flew the friendly skies in Stanford's private jet 16 times in three years, including a trip to Houston for DeLay's arraignment on money-laundering charges. I am not making this up!
Sir Allen also showered millions of dollars on political campaigns; much of it in the very year Congress was debating a bill to curb financial fraud. Two of the biggest recipients were Democratic Senator Bill Nelson and Republican John McCain, one of the original Keating Five. Three key Democrats on the Senate Banking Committee got checks from Stanford, too. Surprise, surprise — the reform bill never got out of the Senate.
According to the indispensable Center for Responsive Politics, over the last decade, Robert Allen Stanford spent nearly five million dollars lobbying the Senate and House.
Altogether, however, Stanford's contributions were a spit in the bucket of what he's alleged to have swindled and just a tiny slice of the multibillion dollar pie the lobbying business has become in Washington. Never an industry to let opportunity pass by, lobbyists already are jumping all over Obama's economic stimulus, so much so, The Washington Examiner newspaper, renamed the bill The Lobbyist Enrichment Act.
My next guest, Robert G. Kaiser, says that the lobby industry "has helped moneyed interests protect their status and privileges, undermined government regulation of business and turned our elected officials into chronic money-chasers."
Bob Kaiser has been at The Washington Post for more than 45 years, covering just about every position on that distinguished paper's masthead, from foreign correspondent in Saigon and Moscow to National Editor and Managing Editor. He's now Associate Editor, and the author of seven books. A native Washingtonian, Bob Kaiser says the problem in D.C. is that there's just So Damn Much Money. That's the title of his new book on the corrosion of American government.
Welcome, Bob, to the Journal.
ROBERT KAISER: Thanks very much, Bill, wonderful to be here.
BILL MOYERS: Any of this news about Sir Allen surprise you?
ROBERT KAISER: It's extraordinary. There have been so many embarrassments. So many careers ended over the years by people being caught in an embarrassing kind of situation, having accepted some favor or hospitality. And somehow, the lesson has to be relearned again and again, and is never learned somehow.
My biggest theory is, my most central theory, these people come to Washington, member of the House of Representatives, senator of the United States. They think they're really big stuff. They think they're entitled to be treated like potentates. And when somebody comes along and says, "Gee, I'd like to treat you like a potentate, how about it?" Too many of them say, "Okay, let's try that. Let's see how it feels."
BILL MOYERS: Where does the title of your book come from?
ROBERT KAISER: That's your old Texas pal, Bob Strauss, Robert Strauss, former chairman of the Democratic National Committee, started out as a fixer in Dallas, Texas, and ended up as a fixer in Washington. A remarkable character. I went to Strauss, and I said, "Explain to me why the lobbying business has boomed so, in the years that you've been in it, 35 years." And he thought about it for a minute, and he said, "You know, there's just so damn much money in it."
BILL MOYERS: He took his share of it, didn't he?
ROBERT KAISER: Sure. I mean, the money has become so important in politics now. You've been reporting about this for years. The cost of a campaign has gotten so high, the compulsion of incumbents, who want to get re-elected, to raise that money, is the single biggest gift the lobbyists get. Because lobbyists see that they need that money. They know how to help them raise it. And they know how to exploit the gratitude that comes after they've raised it.
BILL MOYERS: Your book is so full of examples that show people the price that taxpayers and citizens pay for this kind of conduct. But you also have recently been writing about some later examples of it. For example, sweeteners. You say that after the House defeated the huge bailout bill last fall, for the banks, it was saved by sweeteners. How so?
ROBERT KAISER: "Sweeteners" is a wonderful Washington term. It means a provision that helps out somebody in a Congressman or a senator's constituency. It makes it possible for that person — he thinks to vote for the measure that's on the table. In this case, as you remember, the House voted down the bailout bill. The stock market plummeted, though, as it was happening. They had to go back to the drawing board, and they gave new breaks. And with those sweeteners, they got the votes they needed. They came back and passed the Bailout Bill.
BILL MOYERS: And when you say a break, you're talking about, you know, a $100 million to stock car racetracks, $192 million taxpayer dollars to that Puerto Rican rum industry, $478 million for movie makers who shoot their films in the USA. And you say that did the trick? They got the bill passed?
ROBERT KAISER: That's over ten years, though, Bill.
BILL MOYERS: Right. Well, but it's still out of the taxpayers pocket.
ROBERT KAISER: Yes, it is. You referred to the Bailout Bill as the Lobbyist Enrichment Act, and it is that, in a way. When the government spends so much money, we have to be ready to see the potential recipients of that money, troop to town, and look for their share, as you put it.
BILL MOYERS: There was another story you tell, of what happened during the bankruptcy bill a few years ago. How money influenced that process.
ROBERT KAISER: You know, one of the themes of my book is the way the moneyed interests of America have been able to protect themselves and their own interests, over many years now. One of my favorite statistics: Since 1973, working class incomes in this country have been stagnant. In the same period, 35 years, we've seen skyrocketing incomes at the top. And this is part of that. The bankruptcy bill, which was pushed for years and years, opposed vigorously by a group of liberals, Ted Kennedy in the lead. But in the end, they got 75 votes in the Senate. A lot of Democrats voted for a bill, which made it much, much harder to file for bankruptcy.
And what they did was make it now a requirement that you have to repay your credit card debt, even before you pay your alimony or your child support. The Center for Responsive Politics, a very good Washington organization, did a study which showed that the banking interests and the credit card interests, over many years, contributed $40 million to members of Congress to win the overwhelming victory they won on that bill. Now, interestingly, it's going to be amended. Obama has said in the context of this mortgage crisis, that we have to have an easier path to bankruptcy. They're going to go back and take it back. Interestingly now, the bank's $40 million isn't going to talk as loudly. But it's really a sad story, to me of how that money works.
BILL MOYERS: I've read a lot of books on money and politics. But yours is absolutely unique, because it does, as you just said, make clear why, for the last 30 or 40 years, policies in Washington have favored the rich over the poor, right?
ROBERT KAISER: You know, it's not a secret. Politicians have been embedding this. There's a wonderful quote in the book from Bob Dole, from 1983 or -2, where he says, you know, poor people don't contribute to campaigns. And there it was. You know, 30 years ago, the whole story is right in that phrase. I think -- we've watched the cost of these elections climb every two years. Like clockwork. We've seen lots of efforts at reform. We've seen some real reforms. But you know, $25 million it costs to run for the Senate in North Carolina, last November.
BILL MOYERS: And they have to get that money somewhere.
ROBERT KAISER: They do. Absolutely.
BILL MOYERS: And it comes from corporations, lobbies, wealthy individuals, as we see with Sir Allen.
ROBERT KAISER: Exactly.
BILL MOYERS: You build your story around a fella named Gerald Cassidy, a liberal Democrat, who once worked for George McGovern, back in 1972. Who became, for a spell, the single biggest lobbyist in Washington. Even hired, at one time, the notorious Jack Abramoff. This is a fella who once did legal aid work for poor people. How did he become this lobbying superstar you write about?
ROBERT KAISER: He's a classic American type to me. I call him the Jay Gatsby of modern Washington. He's a self-invented man. And he, just as you say, he went to work for migrant workers in Florida as a lawyer, a young lawyer. He still would call himself today a liberal Democrat. He gives more money to Democrats, by far, than Republicans.
He thinks of himself as doing good work when he can. But more important to him is to get rich. And he's gotten really rich. He's worth more than $100 million. Partly because he's a good investor, but mostly because he's a great lobbyist, and a very shrewd businessman. And to me, the Cassidy story is wonderfully illustrative of how Washington became a venue, in my time and your time, a venue for the great American pastime, which is not baseball, but making money.
BILL MOYERS: And his first clients were not greedy corporations, but they were —
ROBERT KAISER: Colleges and universities. And he was — it's a wonderful story, really. He invented, he and his original partner, the modern earmark that John McCain got so agitated about. That you've talked about so often on this program. They had a first client — was Jean Mayer, the president of Tufts University, famous nutritionist. And these two guys in the lobbying firm, and had worked with Mayer on nutrition issues for McGovern, when they worked on McGovern's hunger committee. They were friends. Mayer says, "I got an idea, come and talk to me. My congressman here, wants to help me, Tufts University, what can he do to help me?" Well, his congressman was a guy named Tip O'Neill. Then only the Majority Leader.
BILL MOYERS: The Majority Leader and Speaker.
ROBERT KAISER: And with O'Neill's help, they figured out how to get $26 million for Tufts to build a center on Human Nutrition Research.
BILL MOYERS: Not a bad thing.
ROBERT KAISER: Not a bad thing, by itself. This was the first modern earmark, I argue. Then they got a veterinary school for Tufts. Then they got a medical library for Tufts. Then Boston College, over across town, heard about this, they hired Cassidy. Then Boston University wanted to get on board. John Silber, the new president, he hired Cassidy. And suddenly, this little lobbying firm, had a big new business going of academic earmarks.
BILL MOYERS: Of actually getting money designated for specific university projects?
ROBERT KAISER: Exactly. And as you said, you know, "What's wrong with that?" Well, what's wrong with it is that, you know, Tufts wanted to build a Nutrition Research Center, it got the money. But nobody asked if Princeton had a better idea, or if University of Texas had a better idea. It was a fix. The fix was in for Tufts. That's the essence of the earmark system. The congressman gets the credit, because the fix is in. The lobbyist gets the money, because he got the fix in. It's a wonderful circle, it pleases everybody, but it doesn't create a fair, competitive, open system.
BILL MOYERS: And Cassidy became so successful doing this for universities, as you write in the book, that corporations begin to say, "Hey, look what that guy is doing. He could do that for us, right?"
ROBERT KAISER: Yes. And there's some wonderful stories of how he did.
BILL MOYERS: What was his expertise?
ROBERT KAISER: The system. How it worked. How the appropriations system works. It's a very technical system. You know the rules. You have to pass two bills traditionally. You have to pass an authorization bill, to authorize spending on such and such. And then you have to pass the appropriation to pay for such and such. It's a tricky, complex system. It takes a couple years, often, to get one of these things through. And the Cassidy method was to master the technicalities. And interestingly, literally to teach members of Congress how to do it.
BILL MOYERS: And a lot of these members of the staff graduate from the staffs of their members of Congress, and go to work for the lobbyists downtown, right?
ROBERT KAISER: To me, that's one of the biggest changes in Washington in my time. There was a famous case in the late '70s, Jim O'Hara, you may remember. A good congressman from Michigan. Liberal Democrat. Ran for the Senate and lost. And came back to town. He had five or six children, and no job. And he went to work for one of the biggest lobbying firms in town. And I remember this vividly. It was a scandal. "Jim O'Hara's become a lobbyist? Gee, that doesn't look very good."
Well, that was then. Today we've got 185 former members of the House and Senate registered as lobbyists. It's absolutely routine, happens all the time. And nobody's eyebrows go up the way yours just did.
BILL MOYERS: Yeah. And it is all legal.
ROBERT KAISER: It's all legal.
BILL MOYERS: So what's wrong with it?
ROBERT KAISER: Well, it creates a system of self-dealing and cashing in your experience and your contacts from public service for your and your clients private gains. Which, as a citizen, bothers me. But you know, we saw this with Tom Daschle. I think it was fascinating. Daschle obviously thought, "Hey, everybody does this. I'll do it now. It's my turn. I'll cash in, too." It troubles me. I don't think it's the way it was always meant to be.
BILL MOYERS: And the elites of Washington seem to be ready to go along with Daschle, despite this digression.
ROBERT KAISER: Right. Even the editorial page of my own newspaper. It was interesting. Frank Rich took The Washington Post to task in The New York Times, for being the only big newspaper that did not call for Daschle to withdraw. I don't know if it's fair to my colleagues on the editorial page, but it does leave the impression that we have a kind of a different standard inside the Beltway.
BILL MOYERS: What would they say to you about why they defended Daschle?
ROBERT KAISER: I suspect that my colleagues writing that editorial, thought that, you know, "Well, it's unfortunate that this had to happen, but he is the right guy for the job. He probably ought to go ahead and get the job." And what they knew, and it was true for sure, is that had the matter come to a vote, Daschle would have been confirmed.
BILL MOYERS: By his peers.
ROBERT KAISER: By his peers.
BILL MOYERS: Judgment of his peers that there's nothing wrong with it.
ROBERT KAISER: Exactly.
BILL MOYERS: I was amazed the extent to which Cassidy, the lobbyist, talked to you. How do you explain the fact that he gave you so much time? And told you so many secrets?
ROBERT KAISER: Well, I think what happened is that his associate Jody Powell, Jimmy Carter's old press secretary, who Cassidy hired years ago to set up a PR firm, within the confines of his lobbying firm, a firm called Powell Tate. I think Jody advised Cassidy, probably correctly, "This Kaiser guy is so determined to do this, he's going to do it whether we can cooperate with him or not. I can't promise how good it'll be. But I know one thing, it'll be worse if we don't cooperate than if we do." Jody's told me that that's what he told him. And I'm sure that was the key thing.
So, Cassidy decided to talk. Once he started to talk, he got into it. And you've seen this over the years. People in Washington, who think that they're big players, and they're important people, but have never had much attention, and that's certainly true of Cassidy. I'm sure most of your viewers have never heard of Gerald Cassidy. But he liked the idea, clearly, of getting this attention from a reporter from The Washington Post, an old hand, and so on. And he liked telling his story.
He's very proud, understandably, of his accomplishments. He came from a really horrible, painful, booze sodden, Irish childhood in Brooklyn. He was the first member of his family to go to college, the first to go to law school, a professional school. He's done extremely well, he's a shrewd businessman. He's accumulated all this money. He didn't mind the world knowing how well he'd done, clearly. And I was a way -- talking to me was a way to make that known.
BILL MOYERS: And how well he has done. You have some photographs in here that are quite revealing. There is his home on 165 acres.
ROBERT KAISER: On the Eastern Shore, it's quite remarkable.
BILL MOYERS: Eastern Shore, yeah. Eight million dollar estate.
ROBERT KAISER: On the previous page, he's turkey hunting with his friend Jody Powell, who he made rich also.
BILL MOYERS: And you've got this photograph of Jack Abramoff. There's a moment in your book, when Cassidy goes to Abramoff and –
ROBERT KAISER: Cassidy's firm, as I said, was number one on the revenue table, by the macho way these guys have measured themselves, for many years. And just at the moment that Abramoff was fired in 2003 by his previous Florida law firm, the new revenue table was published, and Cassidy had fallen into second place. And I'm sure that he, at that moment, thought, "I've got to do something to get back in first place. This guy Abramoff is obviously a hell of a rainmaker. He brings in a lot of money. I'm going to see if I can make contact with him." They were completely different. Abramoff, a right wing Republican. Cassidy, a liberal Democrat. They had no acquaintances in common to speak of. They had no past in common to speak of.
BILL MOYERS: What did they have in common?
ROBERT KAISER: Appetite for big bucks, and it was a natural marriage. They made a deal quickly. And Cassidy drove right through flashing red lights. It was a really a silly mistake he made. But he was called on it, it's a wonderful Washington story, by his old — he called him a friend, Senator Dan Inouye of Hawaii. I asked Inouye repeatedly, "Is Cassidy your friend?" He would never say the word ‘friend’. He'd say, "Well, I've known him for a long time. We've worked together on a lot of things." Well, in Washington context, they were friends, because Cassidy had hired Inouye's closest aid for many years, a guy called Henry Giugni, to be a vice president of Cassidy & Associates. This is another gimmick in town for getting the attention of members you want to influence. You hire their aides. And Henry Giugni helped make Cassidy even richer by bringing in a lot of new clients. And so they had this connection. Inouye was a member of the Indian Affairs committee, which was investigating Abramoff. He called Cassidy, when he realized what was coming, how bad it was going to be and told Cassidy, "You got to get rid of this guy right now." And Cassidy did.
BILL MOYERS: What do those two guys do that makes Washington unique in refusing to pass judgment on them until one of them breaks the law?
ROBERT KAISER: The falling away of taboos, the changing standards in Washington. The "everybody does it" syndrome, which has taken control there. I think has made moral judgments really difficult in our nation's capital. People shy away from saying, "That's just wrong." There's a wonderful story here from John Stennis. It's a real signal of what was happening. It's from the '80s, '82. John Stennis is running for the seventh term in the Senate. He's never spent more than $5,000 on a campaign before. You knew Stennis, a lot of your viewers don't remember him. He was a vicious racist from Mississippi, a bad guy on the race issue. But on other things, a very serious, very smart man. And interestingly, the first chairman of an Ethics Committee in the Senate, believed in ethics. He was in trouble, because a young guy called Haley Barbour, then 34 years old, I think, was going to run against him. First time he had a serious opponent.
And his friends in the Senate were scared. Russell Long of Louisiana and Lloyd Bentsen of Texas, particularly. They literally hired a political consultant for Stennis, which he never would have dreamed of, I don't think, sent this guy down to Mississippi to check out the situation. It's a charming Southerner named Ray Strother. Anyway, he comes back and explains to Stennis that it's going to be an ugly campaign. That this Barbour is going to make a lot of TV commercials, which is just becoming the main vehicle for campaigning. He's going to accuse you of being too old and too feeble to run for another term. We're going to have to respond to him. We're going to have to make our own TV commercials. It's going to cost $2 or $3 million.
And Stennis was shocked. He said, "How could I raise so much money?" And Ray started to explain, "Well, you're going to go to the defense contractors, who you've helped as the chairman of the Armed Services Committee for so long. And you're going to ask them for contributions." And Stennis utters this memorable line, which I love. He looks at Strother and says, "Young man, would that be proper?" And then he answers it, "No, it wouldn't be proper. I hold life and death power over those companies. I will not solicit their money," he says. But he did. And they got it. And the commercials were made. And they won the election. And I think that was 1982. And I think that was sort of when we lost the war here. From then on, "Would that be proper?" is a question we don't hear very often. And I wish we heard it more.
BILL MOYERS: What about the fact that some people who defend the system, or explain the system, say that it was when liberal government arose in the new deal, and Washington began throwing money at so many problems, that it became just a fact of life that there was money to be made by trying to help connect people who needed money with government money that was available?
ROBERT KAISER: There's no avoiding this, you know? And it's also important to say that lobbying is protected in the same First Amendment to the Constitution that you and I like for its journalistic implications. The right to petition the government for redress of grievances is right there in the First Amendment. And that's lobbying. And that's true that big government means big spending, means big opportunities, means business for lobbyists. So, it's inevitable. There's no way to stop it. But it can be much more transparent than it's been. We can see people, what they're doing, much more clearly than we've been able to do so far. There are reforms that are possible. But we're never going to make people into pure, you know, Christian gentleman. It doesn't happen that way.
BILL MOYERS: So, is there any way, realistically, you think that this could at least be tamed?
ROBERT KAISER: Obviously, public financing of elections would have the most dramatic impact. It's very hard to imagine how that would come to pass. But there are ways it could come to pass.
BILL MOYERS: It has in some states. Arizona, for example.
ROBERT KAISER: Exactly. Our new Secretary of Homeland Security, the former Governor of Arizona has said very articulately on the record, what a difference it made to her to be able to run for re-election without raising any money. That she didn't feel indebted to anybody. And that's a liberating thing. I have an idea that would be fun, and I think very significant, if you required every official in the government to report, which we can do now, technologically, on the internet, at the end of the business day, every day. "Here are the lobbyists I met with today. And here's what we talked about."
BILL MOYERS: Ah.
ROBERT KAISER: Just a daily file of, you know, real transparency. That would have a huge impact.
BILL MOYERS: Do you think reforming of earmarks is possible? Just take earmarks themselves.
ROBERT KAISER: Yeah. It's already happened. I mean, it's interesting. The new rules that were imposed by the Democrats, after they came back to power in '07 are full of new details. So that we can actually trace the earmarks. And members have to stand up and take responsibility for them. There's a juicy scandal breaking this week, around this lobbying firm called PMA consisting mostly of, or led by aides to John Murtha of Pennsylvania, the world champion earmarker.
BILL MOYERS: A Democrat.
ROBERT KAISER: A Democrat. And they got 103 earmarks in the defense appropriations bill that Murtha passed through the House last year. That's just come out, thanks to the new reporting requirements of the new reforms that have been passed about earmarks. And they will have an impact, for sure. These reforms. All these things are pliable, malleable. They can be changed. If you make people admit what they're doing, and report on what they're doing quickly, less bad things will happen. I'm sure of that.
BILL MOYERS: Does Obama understand this?
ROBERT KAISER: You know, he does. Remarkably well. I credit him in a recent piece for being a good cultural anthropologist. He only spent two years, really in the Senate, before he started to run for president. But he did figure out, he's the one who said, "Politics has become not a mission, but a business." He said that during the campaign.
BILL MOYERS: So, there is some hope?
ROBERT KAISER: Well, I'm a believer.
BILL MOYERS: For renewing democracy?
ROBERT KAISER: I'm an optimistic person. I can't say there's no hope. But boy, it won't be easy.
BILL MOYERS: The book is must reading. So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government. Bob Kaiser, thank you for joining me on the Journal.
ROBERT KAISER: Thanks, Bill. It was fun.