Tuesday, April 1, 2008; 1:00 PM
K Street columnist Jeffrey Birnbaum will be online to discuss lobbying and politics on Tuesday, April 1, at 1 p.m. ET.
A list of Birnbaum's columns can be found here.
A transcript follows.
Jeffrey Birnbaum: Hello everyone. I am glad to see so many excellent questions today. But please send more. There's lots to talk about. So don't be shy. Let's begin.
Washington, D.C.: Hi, hope you like the Post better than Fortune. This is not about his lady friend, but I do wonder how McCain gets away with bashing lobbyists and then having Charlie Black as campaign spokesman. He's got nerve.
Jeffrey Birnbaum: Yes, thank you, I do like the Post very well. The column is a real treat, and I rely on people like you to help me fill it. So please send tips to email@example.com
As for Charlie Black, he is not alone in McCain's hierarchy as a lobbyist. McCain's campaign manager, his chief finance officer and most of his inner circle are current or former lobbyists. This will surely be an issue in the general election campaign, particularly if Obama wins the Democratic nomination. He does not have lobbyists in such high positions and is sure to beat up McCain on the topic.
Los Angeles, CA: A flaw with U.S. capitalism is that Bear Sterns' Chairman can receive $61 million after leading the company to its demise, billions in shareholder losses and a government-backed bailout. Formerly, Republicans championed limited government regulations (perhaps because regulated company officials make large political contributions). But Bush killed that Republican brand with regulatory expansion through the Patriot Act leading to reduced civil liberties. Now Bushies want to expand regulation of financial markets. One wonders if these new regulations would've exposed Elliot Spitzer's hooker uses sooner than Patriot Act SARs.
I have some new regulations to propose: Bar federal employees regulating banks, brokerages and hedge funds from working for these companies until a reasonable period has expired, say 3-5 years (helps avoid conflicts of interest such as occurred in the in 2002-03 Boeing-Pentagon scandal). Purchasers of a stock that experiences dramatic decline in stock price within 60-90 days of purchase (e.g., Bear Stern going from $100+ to $2 since Dec 07) should be able to reverse the transaction if the purchase decision was based on fraudulent or grossly inaccurate accounting information the company reported. If grossly inaccurate or fraudulent information is discovered, all bonuses paid to company and brokerage officials based on such information should be subject to recovery by regulators and paid to company shareholders.
Jeffrey Birnbaum: Well, I wouldn't want to endose any of those ideas, but you are certainly part of a trend in suggesting them. There will be a blizzard of proposals on the topic. Any others out there?
Washington, D.C.: Nice article on Roseanna Haley. Also note that Ward and Lawless, whose partners were formerly with Skadden Arps, also started their own LDA/HLOGA compaliance shop in January. Ward and Lawless also expands their services to include state and local lobby filings, as well as campign finance filings.
Perhaps the new boutique start-up businesses in the D.C. area are a story in themselves.
Jeffrey Birnbaum: Maybe. Thanks for the update.
Baltimore: Al Wynn has been a fine congressman. I don't think you should attack him after he just lost on top of that.
washingtonpost.com: 'Wynn-Win' for K Street, Loss for the Public?
Jeffrey Birnbaum: You are referring to the lead item in my column this morning, which does criticize Wynn for staying in Congress a couple extra months while waiting to join a lobbying law firm. I stand by that criticism. You are correct that Wynn did just lose his Democratic primary and therefore has no chance to regain his seat. But that does not excuse his extraordinary decision. Anyone out there agree? Disagree?
Wilmington, Del.: Aren't there rules against a congressman overstaying his welcome if he decided to go into lobbying?
Jeffrey Birnbaum: There are no such rules. Wynn may have to recuse himself from votes on issues his soon-to-be-employer lobbies on or deals with extensively. We will see what Wynn does in that regard. Technically, in addition, Wynn cannot register to lobby for a year after he leaves Congress, but he can do what a normal human being would call lobbying during that period--advise clients how to deal with Congress.
Old Town, Va.: Will the economy begin to pick up soon? All the money that's gone into the system must be having an effect, and it has to be a good one. Please tell me it's working.
Jeffrey Birnbaum: I don't see an economic recovery soon, but it shouldn't take too terribly long. It's possible, in fact, in part because of the Federal Reserve's effort to stimulate growth (and Congress's stimulus plan as well) that growth could return to more normal levels by the fall. That would certainly be good news for Republicans (and not so good news for Democrats) and also good news for all of us who want a healthier economy to live in.
Richmond, Va.: Will I be able to keep saving at my credit union or will the changes in the wind take credit unions away?
Jeffrey Birnbaum: You are referring to the Treasury Department's new blueprint for changing the way the federal government regulates all things financial. One of the proposed changes is to consolidate the agencies that oversee the various kinds of banks--commercial, thrifts and credit unions. The Credit Union National Association, the main credit union lobby, is worried about credit unions disappearing. The Treasury says that won't happen, but that they simply will be overseen by a different regulator. This will end up being a major fight, but one that will take a very long time. You certainly will not lose your credit union anytime this year, and maybe not at all.
District of Columbia: I didn't realize lobbyists had to add so many documents to the ones they already have to turn in to the Senate. How many are there now and won't it be an impediment to people becoming lobbyists in the future?
Jeffrey Birnbaum: Under the old law, lobbyists had to file a disclosure about each of his or her clients twice a year. Now those filings are quarterly, or twice as often. In addition, lobbyists have to say if they bundled checks for candidates for Congress or made other campaign-related contributions in disclosures that occur twice a year. Previously, there were no such reports required. That's a lot more paperwork, but not so much to discourage people from lobbying, in my view.
New York: There's all this going on about regulating the markets. It's more than I ever remember. What do you think will happen with it?
Jeffrey Birnbaum: I don't think much will happen, at least right away. It will probably take years for most of the Treasury's proposals to streamline financial regulation to even be seriously considered. One suggestion to impose stiffer regulation on mortgage origination could have faster legs, but that's about it, and even that probably faces some serious opposition from industry groups. So I wouldn't count on much federal reorganization. Other efforts to help homeowners in distress could move much more quickly through Congress (and maybe face opposition from President Bush), but that's a separate set of bills.
Fairfax, Va.: Will Hillary ever leave the race, and do you think she really should?
Jeffrey Birnbaum: It's possible she will never leave. One reason, of course, is that she wins the Democratic nomination, but that's not a strong possibility at the moment. I take her at her word that she intends to fight right up to convention in August. In fact, I believe she will not concede unless the superdelegates abandon her in such large numbers that she will have, in fact, lost the nominiation to Sen. Obama.
Washington: Do you think Congressman Al Wynn will resign?
Jeffrey Birnbaum: Congressman Wynn has resigned, but has delayed his actual departure to some time in June. That's what my column is about today. He is praised by lobbyists for remaining on the "inside" while he has agreed to work for a lobbying law firm. Yet good government types complain that that gives lobbying clients an unfair advantage. What do you think? Please write in.
RE: Your Response to Los Angeles: Since reported company operating information is the basis of stock pricing and purchase decisions, these proposed regulations appear to have merit. What don't you like about them? Had the Enron gang faced these types of sanctions, they would not have been as loose with the figures they reported and shareholders would have another layer of protection. I'm concerned about people who knowingly sell or unknowingly purchase stock right before the bad news hits. These types of regulations would place the responsibility for inaccurate or fraudulent information more on company officials and the brokerage houses that promote these IPO or capitalization deals.
Jeffrey Birnbaum: I don't take sides on such proposals. But you are free to, of course.
NYC: Are newspapers lobbied as well? I'm always fascinated by the amount of manipulation of the stories they are able to obtain. Like, how the Post wrote the story of the financial deregulation proposed by Paulson as somehow an increase in oversight.
Jeffrey Birnbaum: Interests do provide newspapers with their points of view and I guess you can say that's lobbying in the broadest sense. My sense is that Paulson's proposal is deregulation in some ways and increased regulation in others. It is not a simple matter.
New York: In a chat a few months ago, in response to a query from me, you denied it was obvious Trent Lott was resigning early to become a lobbyist. But you're much more willing to "read between the lines" with Wynn. I doubt you are a racist, but you are coming off as one.
Jeffrey Birnbaum: I am certainly no racist and I doubt that I dismissed the possibility that Lott would lobby. I probably pointed out that he cannot register to lobby for a year after he left Congress. I was just being accurate.
New York: The Post thoroughly ripped Albert Wynn for announcing an early resignation in order to take a job as a lobbyist. Fine- I disliked Wynn immensely as a Republican appeaser and was glad to see him lose the Democratic primary. But I couldn't help but notice I don't recall the Post similarly whipping up on Trent Lott, Dennis Hastert or Tom De Lay. Is this discrepancy in attention because Wynn is local and the Post was making a local commentary, or are the motives of black guys much more easily impugned by the Post?
Jeffrey Birnbaum: This is a similar question to the previous one. And, to be completely accurate, again, I do not say that Wynn will lobby. I say that he is joining a lobbying law firm, which is correct. The press release also indicates he will be counseling clients, which is pretty close to being on the mark.
Ann Arbor, Mich.: Could the government charge an excise tax on lobbying efforts in an attempt to make the gravy train more expensive without running afoul of freedom of speech protections?
Jeffrey Birnbaum: Yes it could. Not a bad idea, if you're into that sort of thing. Anyone else like it?
Fairfax, Va.: Is K street worried at all that should Obama be elected he will constrain their disproportionate influence on Congress?
Jeffrey Birnbaum: Not that I can find. He does not propose to clamp down on lobbying any more than it is already. He would restrict what lobbyists can or can't do in his administration, but not go further. That's what I think anyway.
Baltimore: Given the turmoil over Wall Street, subprime mortgages and all the rest, can we presume that the business community's attempt to water down Sarbanes-Oxley won't succeed any time soon? Thanks.
Jeffrey Birnbaum: That would be my guess, but you have to keep your eye on the Securities and Exchange Commission. There is already on the way a plan to make the paperwork a little less onerous. I bet small items like that could happen, maybe a whole bunch of them. Under the radar.
Washington, D.C.: Al Wynn is lucky some firm would hire him six months before his term is up.
Jeffrey Birnbaum: The firm, Dickstein Shapiro, is very happy to have him and says so regularly. They would take him whenever he agreed to show up.
Washington, D.C.: I wanted to ask about the commercial aspects of global warming, as i see people on the Hills like Congresswoman Capps and Senator Snowe pushing coastal zone bills to have states assess climate change impacts to their coastlines. Are there people pushing the Hill to go green?
Jeffrey Birnbaum: There's lots of pressure to go green in many ways. Yes. I see that as a growing trend, especially if, as expected, Congress remains in Democratic hands after the next election.
Yonkers, N.Y.: Do you see any real change in the lobby industry no matter who wins in Nov.?
Jeffrey Birnbaum: No, I do see a change. It will get larger, and much more active.
Woodbridge, Va.: Jeff - Critics of the Bush Administration's plan to totally revamp the federal financial regulatory structure are saying this is actually a reduction in regulation despite the apparent increase in the Federal Reserve's authority over investment banks and hedge funds. Is this just pushback from OTS and CFTC employees who will see their agencies merged with others?
Jeffrey Birnbaum: Maybe. But a movement to principles-led regulation, of the kind being advocated, often leads to less strict rules and regulation.
Long Beach, Calif.: Which lobbiests/industries are major contributors to Hillary's campaign?
She refuses to say.
I know that Obama has some working as volunteers, but has accepted none of their bundled cash.
Do you know which industries are represented by that volunteerism?
If mercenary lobbyists were forced to work for a single client as a W2 employee much of the problem would be mute. But as it is they can bundle cash from, and work for, multiple clients in a single industry - and they run the tables in DC as a result.
Do you know which lobbyists fund Clinton's campaign?
Jeffrey Birnbaum: You can easily find out by looking on www.opensecrets.org or to look at my column of a month or so ago that listed which industries gave the most to the three remaining candidates.
More from Los Angeles: I didn't expect an endorsement but the notion that the Bear Sterns could wind up with $61 million presiding over the company's demise, billions in shareholder loses and taxpayers being on the hook need to be corrected. Honest mistakes are one thing, but likely the Bear Stern insiders knew where the company was heading well before it was announced publically. Forcing company or brokerage officials to lose bonuses or go to jail if they report fraudulent information that resulted in those bonuses is strong but appropriate tonic. Otherwise since there is so much money involved, some insiders hope they can get far enough in time away from ill deeds before things come to light.
Jeffrey Birnbaum: I still can't endorse.
Fairfax City, Va.: Would you please explain what it means to the average American when a corporation is said to take a "write down"? The term is usually followed by an amount in the millions of dollars but I've never seen an explanation of who's affected.
Jeffrey Birnbaum: A write down happens when a company acknowledges that its assets are not what it had been saying they were worth. So it corrects its balance sheet by writing down their value. This sometimes leads to losses but not always.
Jeffrey Birnbaum: Thanks for all the great questions. Let's do this again in a couple weeks. Cheers!
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