Lobbyists Find Detour Around Latest Ethics Rules

JANUARY 17, 2009
Article
By BRODY MULLINS and ELIZABETH WILLIAMSON

Lobbyists and corporations have found an opening in the latest congressional-ethics law that allows them to pay for special access to lawmakers and members of the incoming Obama administration during next week's inaugural festivities.

President-elect Barack Obama was a vocal champion of rules enacted last year that prohibit companies and lobbyists from buying anything worth more than $10 for lawmakers. But well-heeled interests have found a way to circumvent the ban by partnering with "state societies" that are throwing parties to celebrate Mr. Obama's inauguration.

These Washington-based nonprofits, whose members include lawmakers, congressional aides, lobbyists and executives from a given state, aren't subject to the ethics law -- even though their social and charitable activities are paid for with corporate money.

State societies' parties will help lobbyists skirt rules. Above, a 2005 inaugural ball sponsored by Texas State Society.
Mr. Obama's home state of Illinois, for example, is holding its own inaugural ball on Monday, the night before Mr. Obama is sworn in. It is offering executives of Motorola Inc., Exelon Corp., and the American Road and Transportation Builders Association a chance to pay big money to dine and pose for photos with Illinois lawmakers and incoming Transportation Secretary Ray LaHood, who recently retired as congressman from the state. The price: $5,000 to $55,000, event organizers said.

Hawaii, Mr. Obama's birthplace, has invited companies and lobbyists who pay as much as $25,000 into a roped-off VIP lounge at its Tuesday night affair, where they can mingle with influential policy makers. Among the drawing cards: Hawaii Sen. Dan Inouye, the new chairman of the Senate Appropriations Committee, and Gen. Eric Shinseki, a Hawaiian tapped to lead the Veterans Affairs Department.

Takers so far include Lockheed Martin Corp., which gave $25,000 for access to the party. Jeff Adams, a spokesman for Lockheed, said: "I can confirm that Lockheed Martin is co-sponsoring some of the unofficial inaugural events."

Gen. Shinseki and Mr. LaHood canceled their appearances at the galas after The Wall Street Journal contacted the transition team about them. Obama spokesman Tommy Vietor declined to comment on the balls.

State societies didn't seek an exemption to the ethics rules, but fall under exceptions that permit lawmakers to attend corporate-sponsored events if they are "widely attended" and considered part of a lawmaker's "official duty." Lawmakers also can accept free attendance at charitable events.

Most state-society members are residents who are living or working in Washington. The attendance of these home-state constituents qualifies lawmakers and the societies' events for ethics exemptions that permit companies to pick up the tab for food, drinks and entertainment. Tickets are free for members.

The ethics rules "don't affect us too much," said Mark Rhoads, a historian with the National Conference of State Societies, which represents all the state groups.

The inaugural balls can be boons to lawmakers. State societies bill their galas as celebrations of their elected leaders. The events also offer politicians a highly visible chance to mix with voters, corporate leaders and campaign donors. In all, more than two-dozen state societies are throwing inaugural balls paid for by corporations. Each sponsor gets access to members of Congress and state politicians through VIP rooms or smaller dinners beforehand.

"The bread and butter of being a sponsor is getting into that dinner, because certainly members of Congress are invited to that dinner," said Jenifer Sarver, historian for the Texas society.

The state balls aren't part of the formal inaugural celebrations. Mr. Obama's Presidential Inaugural Committee is hosting 10 official balls on Jan. 20, paid for by a mix of private donations and government funds. Mr. Obama has banned donations from corporations and lobbyists.

The Illinois society gave more than a dozen companies and lobbying firms that paid as much as $55,000 the option to have dinner with an "honored guest" -- including No. 2 Senate Democrat Richard Durbin and other members of its congressional delegation -- "on a first-come, first-served basis." Mr. LaHood planned to speak at the event, before he canceled. Sen. Durbin has the ball on his schedule but, an aide said, "If he makes it there he's not going to spend more than a few minutes."

The American Road Transportation Builders sponsored the event for the "positive connections" and because one of its lobbyists sits on the Illinois society's board, said David Bauer, a senior vice president for government affairs for the group. "It could be perceived as something that it's not," meaning an effort to influence lawmakers, Mr. Bauer said.

A Motorola spokeswoman said that as an Illinois-based company and state-society member, the telecommunications-equipment maker has served as a sponsor since 1997. An Exelon spokesman said the energy company's sponsorship "is an extension of its commitment to the development of sound public policies concerning energy, the environment, and a number of other issues at the federal, state, and local levels."

The Jan. 19 sold-out Illinois event at the Renaissance Washington D.C. Hotel is one of next week's most elaborate balls. The society raised more than $1 million from corporate sponsors, quadruple its 2005 take.