Both Barack Obama and John McCain are currently trying to stake out their ground as good government reform candidates: disavowing lobbyists, touting their work on campaign finance reform, and requesting that potential donors bypass independent 527 organizations and instead donate directly to their campaigns. The media, eager to find contradictions between the candidates' public image and their politicking, have started exploring potential dirty connections. But some of these ties are clearly more damning than others.
On the weaker side of the spectrum is Michael Isikoff's story, "Obama's Lobbyist Connection," in the current issue of Newsweek. In the piece, Isikoff digs up some work that Obama chief strategist David Axelrod conducted in Chicago four years ago, a contract he suggests should raise eyebrows:
When utility wanted state lawmakers to back a hefty rate hike two years ago, it took a creative lobbying approach, concocting a new outfit that seemed devoted to the public interest: Consumers Organized for Reliable Electricity, or CORE. CORE ran TV ads warning of a "California-style energy crisis" if the rate increase wasn't approved—but without disclosing the commercials were funded by Commonwealth Edison. The ad campaign provoked a brief uproar when its ties to the utility, which is owned by , became known. "It's corporate money trying to hoodwink the public," the state's Democratic Lt. Gov. Pat Quinn said. What got scant notice then—but may soon get more scrutiny—is that CORE was the brainchild of ASK Public Strategies, a consulting firm whose senior partner is , now chief strategist for .
But does this really qualify as an Obama "lobbyist connection"? It depends on how one defines "lobbyist." While Axelrod's advertising campaign surely assisted Exelon in its bid to raise utility rates, Axelrod never talked to a lawmaker (Obama included) about his client nor was he or any of his partners at ASK required to register as lobbyists under Illinois's loose campaign finance laws. In an interview with the Huffington Post yesterday, Axelrod defended his work with ASK:
"I never lobbied anybody," Axelrod said. "What I do is make ads and try to involve people in the process, people outside the halls of legislatures or city councils, to get involved in public issues. What lobbyists do is go behind closed doors and try to influence lawmakers sometimes with implied promises of support for their campaign and so on, It is fundamentally different. I have never lobbied a politician on behalf of a client in my life. And I certainly have never talked to Obama about any client. It is a red herring."
By comparison, the lobbying work of former Sen. Phil Gramm (R-TX), John McCain's campaign co-chair and economic adviser, is far less ambiguous.
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A staunch deregulator during his tenure in the Senate, he repeatedly turned down requests from the SEC for more funds to police Wall Street. Gramm also pushed through the historic 1999 banking deregulation bill that, as Mother Jones' David Corn explained, "decimated Depression-era firewalls between commercial banks, investment banks, insurance companies, and securities firms—setting off a wave of merger mania."
But that's not all. By authoring the lobbyist-written Commodity Futures Modernization Act, Gramm enabled the subprime mortgage fiasco by ensuring that no regulators could implement oversight on newly-devised financial instruments called swaps:
These unregulated swaps have been at "the heart of the subprime meltdown," says Greenberger. "I happen to think Gramm did not know what he was doing. I don't think a member in Congress had read the 262-page bill or had thought of the cataclysm it would cause." In 1998, Greenberger's division at the cftc proposed applying regulations to the burgeoning derivatives market. But, he says, "all hell broke loose. The lobbyists for major commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the government looking over their shoulder."
His reward for taking down the global economy? As MSNBC's Keith Olbermann reported this week, it was highly lucrative job at UBS, Switzerland's largest bank, for which he lobbied Congress, the Fed, and the Treasury Department on banking and mortgage matters well into McCain's presidential run:
Countdown with Keith Olbermann” reported Tuesday night that lobbying disclosure forms, filed by the giant Swiss bank UBS, list McCain’s campaign co-chair, former Texas Sen. Phil Gramm, as a lobbyist dealing specifically with legislation regarding the mortgage crisis as recently as Dec. 31, 2007.
Gramm joined the bank in 2002 and had registered as a lobbyist by 2004. UBS filed paperwork deregistering Gramm on April 18 of this year. Gramm continues to serve as a UBS vice chairman ...
As early as October, 2006, RealClearPolitics.com reported that Gramm was advising McCain on economic issues. Politico.com quoted McCain advisors saying that Gramm had input on McCain’s March 26 policy speech about the mortgage crisis. McCain himself has often cited Gramm’s influence as a way to establish his bona fides with economic conservatives.
That, my friends, is what we call a "lobbyist connection."
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