By Jeffrey H. Birnbaum
Tuesday, March 20, 2007
Retailers and credit card companies normally love each other. In fact, it's no exaggeration to say that they can't live without each other. Except on Capitol Hill.
Here, retailers are lobbying intensively to try to persuade the federal government to force credit card companies to reduce the fees they charge merchants to use their cards. And the card companies are fighting back, accusing the merchants of seeking price controls.
"They collect a hidden tax, and it's excessive," said Steve Pfister of the National Retail Federation about the card companies.
"They want to shift their costs of doing business onto the consumer through price controls," responded Rhonda B entz of Visa USA.
Lobbyists for both sides have been briefing lawmakers about "interchange fees" -- the average 1.9 percent assessment that merchants pay on every credit card charge they make.
The card companies (and banks that issue the cards) say the fee is fair and necessary to cover both the cost of processing and of popular bonus programs that the cards often feature. Retailers and other businesses required to pay the fee say the amount is too high, violates antitrust laws and often all but erases their narrow profit margins.
In true Washington style, each side has created a coalition and has put its arguments into cyberspace. The Merchants Payments Coalition, the retailers' lobby, operates UnfairCreditCardFees.com. The Electronic Payments Coalition, the card and bankers' lobby, can be found at the far less imaginative ElectronicPaymentsCoalition.com.
But why are they making the arguments at all? Is this an issue that the government can even tackle?
Military theorist Carl von Clausewitz said, "War is a continuation of politics by other means." In this case, lobbying appears to be the continuation of commercial negotiations by other means. Both sides acknowledge that they would prefer to settle their dispute through inter-corporate conversations rather than by legislation or regulation.
But clearly the pressure applied in Washington -- and also in a court case pending in New York -- is meant to hurry along that settlement. "The elements do play well against each other," said John J. Motley III of the Food Marketing Institute, which represents grocers who oppose the card companies.
A sure sign that the battle is at least partly for show -- to leverage a negotiated resolution -- is that the retailers have yet to propose a specific bill to stop what they say is unconscionable gouging. Retailers also may not want to go too far in angering "the hand that feeds us," as Pfister puts it. Indeed, the credit card coalition is just as equivocal.
"We're not fighting against anybody -- we're fighting for the current system," said Peter T. Madigan, executive director of the Electronic Payments Coalition. "These are our valued customers."New King of Campaign Donations
The merger of AT&T and BellSouth has created something more than just a massive corporation: The merger makes the new AT&T, through its political action committee, the largest donor to federal candidates in the business world.
The PAC contributions of the combined firm, which includes AT&T, BellSouth and Cingular Wireless, totaled $3.4 million for the 2005-06 election cycle, according to PoliticalMoneyLine. Before the merger, AT&T was the second-biggest giver, behind United Parcel Service.
This year, AT&T is No. 1 in PAC receipts and dispensed an impressive $218,000 to 78 federal candidates in February alone.D.C.'s All-in-the-Family Lobby
Even in an era rife with familial entanglements, District Mayor Adrian M. Fenty (D) has inherited a beaut. JoAnne Ginsberg is Fenty's top in-house lobbyist. Her husband, Benjamin L. Ginsberg, is co-chair of the public policy department -- read: the lobbying practice -- at the law firm Patton Boggs. Patton Boggs, Washington's largest lobbying firm, lobbies on contract for the District. Too close for comfort?
The principals say no. JoAnne Ginsberg and Patton Boggs lobbyist Edward J. Newberry do work together sometimes. But the firm has lobbied for the District since 2003, long before the Ginsbergs got their current jobs. JoAnne Ginsberg, who started in January, said she has had no involvement with the arrangement -- it's actually run by the District's chief financial officer -- and will continue to steer clear of it when the contract comes up for renewal at the end of the year.
Benjamin Ginsberg, former national counsel to both Bush-Cheney presidential campaigns, is also staying hands-off. "I have nothing to do with it," he said.Hires of the Week
Rick Santorum (Pa.), the former No. 3 Republican in the Senate, was defeated last year in part because he used to host a regular meeting with lobbyists at which job listings on K Street were handed out -- an element of what was known by some as the K Street Project. Yesterday, Santorum found employment on K Street himself. He joined the Washington office of the Pittsburgh-based law firm Eckert Seamans Cherin & Mellott.
Santorum, who is barred from lobbying former colleagues for a year, will "provide business and strategic counseling services," the firm said.
On the Democratic side, Karin Johanson, an architect of the party's takeover of the House, has joined the Dewey Square Group's Washington office as a principal in its grass-roots and government relations practices. Johanson, former executive director of the Democratic Congressional Campaign Committee and a 25-year veteran of Democratic politics, is also an ex-chief of staff to House Majority Leader Steny H. Hoyer (D-Md.).
Two top trade lobbyists have jumped to Akin Gump Strauss Hauer & Feld from Miller & Chevalier: Hal S. Shapiro, a trade aide in the Clinton White House, and Greg Mastel, a former chief of staff to Senate Finance Committee Chairman Max Baucus (D-Mont.).
Telephone industry veteran Jonathan Banks is the new general counsel of the U.S. Telecom Association. He had been BellSouth's vice president of regulatory affairs. He replaces Ja mes Olson, who has left to do consulting, the group said.
Citigroup has named Laura Lane senior vice president of international government affairs. She was previously a Time Warner vice president and a negotiator for the U.S. trade representative.
Steve Judge, former head of the Washington office of the Securities Industry Association, is vice president for government affairs of the new Private Equity Council. Heather Urban, former director of Nevada operations and legislation for Senate Majority Leader Harry M. Reid (D-Nev.), was hired by the Podesta Group. And former congressman Bill Luther (D-Minn.), who lost his bid for a fifth term in 2002, is now a senior vice president of Fleishman-Hillard Government Relations.
The American International Automobile Dealers Association named Rachel Robinson, onetime chief of staff to former House Republican Conference Chairman Deborah Pryce (Ohio), as vice president of government relations.
Stephen Koplan, an ex-member of the International Trade Commission, joined the Wessel Group. And Katherine G. Lugar, the daughter-in-law of Sen. Richard G. Lu gar (R-Ind.), is the new senior vice president, government affairs, of the Retail Industry Leaders Association. She previously worked at Travelers Insurance and the National Retail Federation.
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