Fat City

By Howard Kurtz
Washington Post Staff Writer
Thursday, February 5, 2009 7:51 AM

This is a city in which people turn modest-paying government jobs into lucrative careers selling their influence on behalf of corporate interests.

A city in which prosecutors become defense lawyers, Pentagon officials become defense contractors, lawmakers become trade association chiefs, securities overseers decamp for Wall Street and environmental regulators sign on with polluters.

A city in which people come to do good and stay to do well.

A city where, at any moment, limousines are ferrying around self-important ex-officials who are still called "Senator," "Congressman" and "Mr. Secretary" even as they seek special favors for moneyed clients.

That is the culture that Barack Obama promised to change. And that, beyond the details of Tom Daschle's withdrawal, is where he stumbled.

Too many Beltway journalists have become inured to the District's cashing-in culture, but people out there get it, and the new president has admitted that he, not to put too fine a point on it, screwed up. "I think that, look, ultimately, I campaigned on changing Washington and bottom-up politics," he told CNN. "And I don't want to send a message to the American people that there are two sets of standards, one for powerful people, and one for ordinary folks who are working every day and paying their taxes."

There's been a bit of an unseemly rush on the right to declare the Obama presidency a failure. A year from now, if a big economic package has passed and jobs are being created, Daschle's back taxes for a car and driver will seem like a mere footnote. But Obama's stumble could also wind up being viewed as the moment his idealistic rhetoric was trumped by grubby reality, and the air began to leak from his balloon of hope.

In fairness, the new president has imposed stricter rules--no one who works for him can lobby his administration while he remains in office--than any previous White House. But he also had to show that his top honchos wouldn't get a pass for not paying their taxes, especially when they are viewed as a symbol of the city's get-rich-quick culture.

You know you've messed up when Maureen Dowd writes, "It took Daschle's resignation to shake the president out of his arrogant attitude that his charmed circle doesn't have to abide by the lofty standards he lectured the rest of us about for two years." And when she denigrates your stimulus measure this way: "Mr. Obama should have taken a red pencil to the $819 billion stimulus bill and slashed all the provisions that looked like caricatures of Democratic drunken-sailor spending."

In the New Republic, Norm Ornstein opines on Washington's legal-but-sleazy ethos:

"Jack Abramoff and his colleagues showed that corruption can be painfully blatant. But often a more subtle dynamic is present: congressional staffers, members of Congress, and executive officials answer the phone calls and see the unsavory clients of lobbyists who enjoy prime tickets to Redskins games and golf at Burning Tree or might at some future point be their employers--who wants to alienate someone who might hold the key to a million-dollar job? Laws and regulations get more complicated when drafted by staffers and agency officials who know their market value is much higher when they are the ones who can interpret the nuances or find the loopholes when they leave government service.

"Many of these lobbyists and consultants are my friends; most are very honorable people, but all--including Tom Daschle, a man of real integrity and strong basic values--are caught up in a system that is becoming more difficult to keep on the straight and narrow."

The editorialists at the Wall Street Journal blame--guess who?--the libs:

"The political left seems to want to make this a morality play about Mr. Daschle's $5.2 million post-Senate windfall as lobbyist and speaking-circuit regular, notably in front of the health-care industry. Apparently these people expected Mr. Daschle to return to Sioux Falls after his 2004 re-election defeat and eke out a hardscrabble existence as a farmer.

"But Mr. Daschle's embarrassment of riches is a typical story, and in fact is the result of the liberal ideology his critics have been advocating for decades. The main story of the Obama presidency so far isn't the contradiction between Mr. Obama's campaign promises and the messier reality of his nominees. That was always inevitable. The real story is the massive transfer of power and wealth now underway from the private sector to the political class. Mr. Daschle could make so much money and achieve such prominence because he was expected to be a central broker in that wealth transfer . . .

"We have come a long way from liberal outrage over the 'K Street Project,' Tom DeLay's effort to strong-arm lobbyists into hiring more Republicans."

Until that glancing reference to the Republicans, I was afraid the WSJ board had developed amnesia and forgotten all about the legions of GOP apparatchiks who cashed in during the Reagan and Bush years.

Some conservatives, such as National Review's Victor Davis Hanson, are crowing pretty loudly:

"Some of us have been warning that it was not healthy for the U.S. media to have deified rather than questioned Obama, especially given that they tore apart Bush, ridiculed Palin, and caricatured Hillary. And now we can see the results of their two years of advocacy rather than scrutiny.We are quite literally after two weeks teetering on an Obama implosion--and with no Dick Morris to bail him out--brought on by messianic delusions of grandeur, hubris, and a strange naivete that soaring rhetoric and a multiracial profile can add requisite cover to good old-fashioned Chicago politicking.First, there were the sermons on ethics, belied by the appointments of tax dodgers, crass lobbyists, and wheeler-dealers like Richardson--with the relish of the Blago tapes still to come. (And why does Richardson/Daschle go, but not Geithner?).

"Second, was the 'stimulus' (the euphemism for 'borrow/print money') that was simply a way to go into debt for a generation to shower Democratic constituencies with cash . . .

"Obama is becoming laughable and laying the groundwork for the greatest conservative populist reaction since the Reagan Revolution."

Pretty amazing for 15 days' work.

Michelle Malkin is also offering a sweeping judgment:

"You never get a second chance to make a first post-inaugural impression. Less than three weeks into his first 100 days, Barack Obama has left an indelible mark on his nascent presidency: The mark of incompetence and hubris. Despite the administration's much-touted wealth of bright minds and high bars, the transition has been a complete disaster."

One reason Daschle withdrew, in my view, is that he wasn't exactly being championed by the left. (That NYT editorial didn't help either.) The Nation's John Nichols, for instance, isn't sorry to see him go:

"Republicans think they have dealt the new president a blow.

"In fact, by opposing Daschle so strenuously, and appropriately, Republicans and a handful of principled Democratic senators (who had quietly let the White House know they were not going to back the nomination) have done the new president and the nation a favor.

"The scandal over Daschle's lavish lifestyle and failure to pay taxes simply emphasized why the former Senate majority leader was exactly the wrong choice to serve in the administration of a Democratic president who aspires to make a break with the worst of the compromises that characterized his party during the Bush-Cheney era."

Should Obama have vetted himself? "Documents acquired by NewMajority indicate Barack Obama overstated his real estate tax deduction on his taxes in 2002 by $792," writes Moira Bagley on David Frum's new site. "Though he paid the correct amount in the previous and succeeding years, his overstatement on his federal tax forms in 2002 is an anomaly."

The president did manage to change the subject yesterday, following through on his denunciation of Wall Street bonuses with a half-million-dollar limit on compensation for those running the companies rescued by the taxpayers:

"In announcing executive pay limits on Wednesday," the NYT says, "President Obama is trying to hold the financial industry accountable to taxpayers while aiming to change an entrenched corporate culture that endorses outsize bonuses and perks that often bear little relationship to corporate performance.

"Mr. Obama also needs to deflect a growing populist outrage over sky-high pay among the banks and other companies now on the public dole. His announcement comes just days before the administration is expected to unveil a new strategy -- and possibly request more money from Congress -- to guarantee or buy outright hundreds of billions of dollars in bad assets held by banks."

Chicago Tribune: "In a pointed effort to assuage public anger over sky-high pay for corporate executives of failing companies, President Barack Obama proposes tight limits on compensation for business leaders who accept major infusions of tax dollars during hard times, including a $500,000 pay cap for top execs."

Adds the WSJ: "It also restricts severance packages, known as 'golden parachutes,' for dismissed executives and requires the disclosure of policies on so-called luxury spending on things such as holiday parties, corporate jets and office renovations. The administration called the latter part of the initiative the 'name and shame' provision, designed to make companies think twice."

Uh-oh: "Corporate watchdogs applauded the intent of the new measures, but compensation experts cautioned that abundant loopholes -- and crafty lawyers -- could undermine any lasting effect," says the L.A. Times.

The question now becomes whether Obama botched the rollout of his, or Nancy Pelosi's, economic package. Atlantic's Marc Ambinder has some thoughts:

"Did the Obama White House err in deferring to Congress? That's the argument that many Democratic strategists are chewing on. A case can be made, however, that giving the House latitude to pass a wild bill was the only way to ensure that the Senate passed a responsible one. The theory here is that the Senate could be played off against the House. Let the House lard up the bill with items having little to do with stimulus and a lot to do with interest group priorities . . .

"Then, let the Senate's natural prerogatives go to work. Pass a bill that retains the core elements of Obama's original plans, but without a lot of the marginalia that proved politically perilous in the House . . .

"Republicans won a PR battle by imputing a tiny objectionable fraction of the House legislation to the entire bill, which is disingenous and effective. More legitimate objections are the tax cut v. spending mix, although it's a bit curious: the classic idea of stimulus is to have the government spend money."

Guess who's enjoying the latest spectacle? The former vice president of the United States, who tells Politico:

"You have Daschle with his tax problem. You have [Treasury Secretary Tim] Geithner with his tax problem. You have Charlie Rangel, who's chairman of the Ways and Means Committee -- doesn't understand the tax code. You have Chris Dodd, who got special -- alleged special terms' on a mortgage. If I look at that from our standpoint, I'd start to worry about it if I were a Democrat. There's nothing more dangerous, politically, than hypocrisy."

Cheney also plays the terror card:

"Former Vice President Dick Cheney warned that there is a 'high probability' that terrorists will attempt a catastrophic nuclear or biological attack in coming years, and said he fears the Obama administration's policies will make it more likely the attempt will succeed."

Isn't there an expiration date on that elixir? Andrew Sullivan is appalled:

"It seems to me that regardless of the merits or demerits of his view, it's a remarkable violation of civil norms for a vice-president just out of power to assault his successors and all-but declare them indifferent to public safety. It's deeply divisive, deeply partisan and utterly self-serving. In other words: as cheap as one would expect."

It's impossible to overstate the quadrennial influence of David Yepsen as the top political columnist of the Des Moines Register, given the importance of the Iowa caucuses and the way every candidate had to court his favor. Now he's left the paper for academia.

Did the WSJ drop the ball on the Madoff scandal? The paper has to report that Harry Markopolos, the fraud investigator who blew the whistle on the , said on the Hill "that in December 2005, he contacted a reporter at The Wall Street Journal, resulting in a number of phone calls and emails. Mr. Markopolos said he thinks that senior editors prevented the reporter from the newspaper's Washington bureau from flying to Boston to meet and discuss the Madoff issue. A spokesman for Dow Jones & Co., publisher of The Wall Street Journal, declined to comment on Mr. Markopolos's statements."

If a government spokesman said that, we'd call it stonewalling.

In the testimony, Markopolos said he'd been in touch with senior investigative reporter John Wilke, and "Mr. Wilke and I would become friends over the next three years. Unfortunately, as eager as Mr. Wilke was to investigate the Madoff story, it appears that the Wall Street Journal's editors never gave him approval to start investigating. As you will see from my extensive e-mail correspondence with him over the next several months, there were several points in time in which he was getting ready to book air travel to start the story and then would get called off at the last minute. I never determined if the senior editors at the Wall Street Journal failed to authorize this investigation."

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