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Lobbyists hire lawmakers kid { June 22 2003 }

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Stiffer rules are making it harder to direct cash to a congressman. But you can still put his family on the payroll.
By Chuck Neubauer, Judy Pasternak and Richard T. Cooper , Times Staff Writers

June 22, 2003

WASHINGTON Two years ago, when regional phone companies wanted Congress to make it easier for them to compete in the high-speed Internet market, they did what special interests usually do with billions of dollars at stake: They amassed an army of experienced lobbyists.

But one of the so-called Baby Bells didn't stop there. BellSouth also hired a pair of lobbyists distinguished by their family trees John Breaux Jr. and Chester T. "Chet" Lott Jr.

They are the sons of two of the most powerful men in America when it comes to telecommunications policy: Sen. John B. Breaux (D-La.) and then-Senate Majority Leader Trent Lott (R-Miss.). Both fathers are senior members of the Senate commerce committee and its communications subcommittee.

Soon, the sons and their firms began banking thousands of dollars a month in BellSouth consulting and lobbying fees. In Breaux Jr.'s case, the total now surpasses $280,000, and in Lott's, $160,000, records show.

The son of another heavy hitter on telecommunications, Rep. W.J. "Billy" Tauzin (R-La.), was already on the BellSouth payroll, working in community relations.

While their sons have been getting paid by BellSouth, Sen. Breaux and Rep. Tauzin have sponsored bills to loosen federal restrictions on Baby Bells that want to compete with cable companies in the high-speed Internet market. They didn't prevail on Capitol Hill, so the fathers are now pressing the Federal Communications Commission to lift those restrictions. Sen. Lott has not taken a position on the issue.

BellSouth's "hat trick" reflects an increasingly popular maneuver in the age-old game of influence-seeking in Washington. These days, when a corporation or interest group wants support from a key member of Congress, it often hires a member of the lawmaker's family.

An examination of lobbyist reports, financial disclosure forms, and dozens of other state and federal records reveals that at least 17 senators and 11 members of the House have family members who lobby or work as consultants on government relations, most in Washington and often for clients who rely on the related lawmakers' goodwill.

Perhaps the best-known example is Democratic Senate Leader Tom Daschle, whose wife, Linda, represents the aviation industry. She says she does not lobby the Senate. But her partners do, and her clients benefited from the airline bailout pushed by the Democratic leadership.

In addition, Sen. Daschle's daughter-in-law, Jill Gimmel Daschle, registered as a federal lobbyist in May. She had planned to lobby the Senate but decided against it on Friday, an aide to the senator said.

Others include Republican Ted Stevens of Alaska, powerful chairman of the Senate Appropriations Committee, and Democrat Harry Reid of Nevada, the Senate's minority whip. Virtually every major interest group in their states pays lobbying, legal or consulting fees to their relatives or relatives' firms.

House Speaker J. Dennis Hastert's son Joshua is a lobbyist for technology firms; Hastert is active on technology issues. And California Democratic Sen. Barbara Boxer's son Doug works for a lobbying firm representing clients that have sought her help in Congress on tribal and airport issues.

Without exception, lawmakers contacted by the Los Angeles Times said they had not been influenced by their relatives' business relationships.

Richard Richards, a retired lobbyist and former chairman of the Republican National Committee, said, "I'd think members of Congress would be a little concerned when their kids lobby that there is an appearance of impropriety. If this trend continues, it is going to get pretty sticky."

Corporations, unions and other economic and political interests have always sought favors from members of Congress. But successive reforms have made it harder for individual favor-seekers to distinguish themselves in the eyes of elected officials through traditional campaign contributions alone.

Offering work to the relatives of important members of Congress, however, can send an unusually personal message. The practice is unregulated. It is barred by neither House nor Senate rules.

"It's not an exaggeration to say I get a call once a week with a question about a relative who's a lobbyist," said J. Randolph Evans, an attorney who advises the House Republican leadership on government ethics. By his count, about 70 relatives of U.S. lawmakers are lobbying at the federal or state level. "These numbers are probably on the low side," he said. He declined to add to the list compiled by The Times.

Some relatives, such as Linda Daschle, a former Federal Aviation Administration official, draw on years of experience in the subjects on which they lobby. But many appear to have no such expertise.

When BellSouth hired Chet Lott, for instance, it already had a stable of seasoned communications lobbyists. Lott was living in Kentucky, running a string of pizza franchises and playing polo, having earlier dabbled in country music.

In other cases, the companies or interest groups have had long-standing access to the inner chambers of lawmakers and their support for their positions. A payment to a relative can take on the appearance of a personal "thank you."

Hiring relatives of legislators seems especially prevalent among industries heavily regulated by the federal government, such as telecommunications, prescription drugs and mining.

Thanks in large part to the efforts of Sen. Orrin G. Hatch (R-Utah), for example, the controversial herbal stimulant ephedra remains on the market as an additive to dietary supplements promising weight loss.

Hatch played a leading role in drafting a 1994 law that permits supplements to be marketed without prior scientific evidence of safety and efficacy the standard that is applied to prescription drugs and food additives, even the dye used to make bubble gum pink.

In the last decade, the supplements industry has paid nearly $2 million to lobbying firms where Hatch's son Scott worked. And when Scott Hatch opened his own lobbying firm last year, a dietary-supplements trade group and an ephedra maker were among his first clients.

Although the industry says ephedra products are safe if used properly, the Food and Drug Administration has linked the stimulant to dozens of deaths. It was cited by Northwestern University officials last year as a factor in the death of Rashidi Wheeler, who in 2001 collapsed during a football-conditioning drill. And a medical examiner concluded the stimulant had contributed to the death of Baltimore Orioles pitcher Steve Bechler during a workout this spring.

Sen. Stevens has channeled so much federal money into Alaska that so-called "Stevens money" is considered an engine that drives its whole economy. It has also furthered his son Ben's career as a consultant.

When the senator helped direct $30 million in disaster relief funds to the Southwest Alaska Municipal Conference in 2000, the agency hired his son to mediate negotiations over how to divvy it up.

A dozen Alaska interests benefiting from the senator's efforts have paid Ben Stevens at least $754,976 in consulting fees for part-time work over the last three years, financial disclosure reports show.

The question of whether senators' relatives should be allowed to lobby first arose in 1978, according to William B. Canfield, a Republican who served eight years as senior staff counsel to the Senate Ethics Committee. The committee was asked whether the wife of a senator could be a lobbyist, at a time when women were making strides in the workplace.

"It would have been easier, cleaner to say: 'To hell with a changing society. It's wrong. You can become a plumber. You can do anything you want. But you can't lobby,' " Canfield said. "But they said she could, and now we're splitting hairs 25 years later The horse has left the barn."

Just before the GOP took over the Senate this year, the chamber's ethics committee was presided over by Reid, who seems to have more family members working for interests he supports than anyone else in Congress: three of his four sons, plus his son-in-law.

After The Times began making inquiries about the family-lobby dynamic in September, Reid instituted a written ban on direct lobbying of himself or his office by relatives. Sen. Boxer and her son have agreed that he will not lobby anyone in the Senate. She also said she would recuse herself from anticipated legislation that would affect an Indian tribe that is a client of her son's firm.

Only a handful of the lawmakers with lobbying relatives said they had a blanket rule against sponsoring or voting on legislation that benefits their family members' clients. But nearly all said they had imposed voluntary bans on direct lobbying by relatives.

Yet even when direct lobbying is avoided, the separation may be more about appearance than reality. In Hatch's case, for example, when personal contact is needed, one of Scott Hatch's two partners makes the call.

Do lawmakers have qualms about such practices?

Sen. Hatch, for one, said "not really." He and his son "just do what is right," he explained.

The Times examined the father-son relationships of five powerful senators and, in each case, found striking similarities between the son's client list and the father's legislative record.


John Breaux Jr.

Clients Say Lobbyist 'Knows Washington'

Not everyone can afford to hire a senator's son. Take the residents of New Sarpy, La.

New Sarpy lies smack up against the fence line of a large oil refinery operated by the Orion Refining Corp. Residents understand what that means, economically and politically. "We are not environmentalists," Don Winston, a member of a group called Concerned Citizens of New Sarpy, said. "We know that without the oil business, Louisiana dies."

Still, when oranges on the tree in Dorothy Jenkins' yard turned black, it did stir concern.

The refining plant has a record of flaring off petroleum gases, a practice that pours pollutants into the air including about 1,300 tons of sulfur dioxide over a two-year period, according to a federal study.

The company insisted its "state-of-the-art" design incorporated "sophisticated controls for air, water and solids emissions," ensuring the facility could operate within state and federal regulations. Then, in June 2001, the Orion facility had an enormous tank fire. A month later, a Concerned Citizens delegation traveled to Washington to see Breaux, seeking the senator's help in getting Orion to address their worries. Breaux passed the meeting to a staffer, who was cordial but cool, delegation members said. Nothing came of the trip.

The appeal was a longshot: Breaux has a history of supporting the oil industry in general and Orion in particular. And, as it happened, the company had just hired his son.

Five times from 1998 through 2000, Breaux had written the Environmental Protection Agency urging it to consider letting Orion delay compliance with federal pollution standards for its gasoline. He was and still is chief deputy whip for the Democrats, one of the most powerful leadership positions in the Democratic Senate. The EPA ultimately agreed.

Early in 2001, Breaux had urged the incoming Bush administration to relax rules requiring industries to strengthen air-pollution controls when they built plants or expanded old ones.

At the time, the EPA was investigating Orion and other companies for allegedly violating the upgrade requirements. But the Bush administration heeded the urgings of Breaux and others and relaxed the rules, effectively undercutting the probes. And just before the Concerned Citizens went to see the senator, Orion hired John Breaux Jr. as a lobbyist. Since July 1, 2001, Orion has paid him at least $120,000, lobbyist reports show.

Energy and environmental issues are not the only links between Sen. Breaux's work and his son's lobbying clients.

From telecommunications firms to auto makers and Medicare service providers, all overseen by committees Breaux sits on, interest groups seeking favors from the father have hired the son. Some companies refuse to comment, but most say they hire Breaux Jr. because he is a bright, effective lobbyist and not because of his father. "He's a real bargain He knows Washington, and he knows the South," said Tyron Picard, who was instrumental in Breaux's hiring by an ambulance-service trade group seeking higher Medicare reimbursement fees.

Breaux Jr., 37, has reported nearly $1 million in lobbying and consulting fees in just more than two years of being in business for himself, and after an apprenticeship often spent working for clients who counted on his father's support.

DaimlerChrysler paid him $160,000 in 2001 and 2002 to lobby, among other things, against higher fuel-efficiency rules, according to the lobbyist reports he filed. Initially undecided, Breaux Sr. ended up supporting the automakers, noting that General Motors is a major Louisiana employer.

Breaux Jr. declined to be interviewed for this article. For his part, Breaux Sr. said he has a policy against being lobbied by relatives. He said he sees no conflict of interest when his actions benefit his son's clients. Many of them had his support for years anyway, he said.

The senator said he talks regularly with the head of BellSouth's Washington office, Herschel Abbott, for example. BellSouth pays Breaux Jr. $12,000 or more a month, state utility commission records show. A spokesman for BellSouth said the younger Breaux is Abbott's "eyes and ears in Louisiana." Breaux, who lives in Washington, shares the Louisiana assignment with a former senior aide to his father, James Nickel, who lives in Louisiana.

SBC Communications, another regional telephone company, was the first client the younger Breaux landed when he opened his own shop. Federal lobbyist reports show SBC paid him $10,000 a month from January 2001 through December 2002, and it recently rehired him for an undisclosed amount.

Sen. Breaux has been one of the regional Bells' biggest supporters. He helped pass a 1996 law that let them enter the long-distance phone service market. And he's working to give them greater opportunities in the lucrative market for high-speed Internet service.

Explaining SBC's decision to retain the senator's son, company vice president for federal relations Timothy McKone said, "He's got very good contacts in the House and Senate."

McKone said there was no link between hiring the younger Breaux and his father's support for the company.

Meanwhile, back in New Sarpy, there is new hope for Dorothy Jenkins' oranges.

She and her neighbors got some relief from state officials, who built a case that resulted in the largest fine levied in a Louisiana environmental-enforcement action: Orion admitted no wrongdoing but agreed to pay a $1-million penalty and to spend $17 million on new antipollution measures, plant safety and community programs.


Scott Hatch

Father Says His Son Has the Right to Talk Shop

If John Breaux Jr. took to lobbying from the start, Scott Hatch had to be shoved out of the nest.

He was "very, very reluctant," said Romano Romani, co-founder of Parry, Romani, the lobbying firm Scott Hatch used to work for. "He was worried about capitalizing on his name."

Now a name partner in his own firm, Scott Hatch remains reticent, but that hasn't seemed to hurt business. The three-man shop headed by Hatch, Jack Martin and Laird Walker reported lobbying income of $930,000 in 2002, its first year in operation. Most of the fees were paid by companies and groups that count on Orrin Hatch for support.

As a young man out of junior college, Scott Hatch spent four years in the Senate Clerk's office, where, he said, "I would take microfiches back and forth" to committee offices.

He left to finish college and then spent 10 years at Parry, Romani, where he answered the telephone, monitored legislation and watched congressional hearings on television but refused to lobby, Romani said. The late Tom Parry had been one of his father's closest aides and friends.

A host of pharmaceutical and dietary-supplement clients hired Parry, Romani. The trade association and individual firms in the dietary-supplements industry alone paid the firm nearly $2 million from 1998 to 2002, lobbyist reports show.

When Hatch and Martin left to start their own firm the senator says he encouraged them the supplements clients followed. So did the Pharmaceutical Research and Manufacturers of America, along with GlaxoSmithKline.

At 41, Hatch is an unpretentious man with a full-moon face, mild eyes and close-cropped hair. In an interview, he said, "I don't think I get treated any different in the [congressional and government] offices. I don't get a sense that they're saying, 'Oh, this is Sen. Hatch's son.' I think they see three hard-working gentlemen and respect that."

He said he doesn't lobby his father, even if paid to lobby on legislation with which his dad is involved.

"Scott is very touchy about talking to me about anything that his firm does," Sen. Hatch said. "He has a right to, as far as I am concerned, but he doesn't do it."

Kim Smith, legislative director of the National Nutritional Foods Assn., which represents the dietary-supplements industry, said the group hired Walker, Martin & Hatch because of Martin and not because of the senator's son. "I have never talked to Scott Hatch," she said. The association paid Walker, Martin & Hatch $44,900 in 2002, lobbyist reports show.

Twin Laboratories Inc., a New York-based supplement maker, paid the firm $35,000 to lobby on ephedra and other issues, the reports show. The company, which recently stopped selling ephedra products, did not return phone calls.

Supplement makers seldom need help recruiting Sen. Hatch to their cause. As Smith said, "Sen. Hatch is a champion of the industry," which is centered in Utah.

First and foremost, Sen. Hatch co-sponsored the 1994 law concerning ephedra and other dietary supplements. He pressed unsuccessfully to make dietary supplements a tax-deductible expense. And he helped fend off an attempt by the Food and Drug Administration in 1999 to set federal limits on the dosage of ephedra allowed in supplements. Since the death of the Orioles player, he has urged the FDA to investigate ephedra's safety.

Sen. Hatch has also championed the causes of big pharmaceutical makers. For the last two years, he has fought legislation to close loopholes that drug makers use to extend patents and keep cheaper generic substitutes off the shelves longer. Hatch, who co-authored the existing drug-patent law, was the only senator to vote against the measure when it passed the Senate on Thursday. It still needs approval in the House.

One of the companies with a major stake in the outcome was GlaxoSmithKline, which is fighting companies that want to market generic versions of several products, including the pharmaceutical giant's No. 1 product, Paxil. The antidepressant generated $2.1 billion in U.S. sales last year.

GlaxoSmithKline retained Scott Hatch's new firm, spending $110,000 in 2002, lobbyist reports show. Glaxo spokeswoman Mary Anne Rhyne said the company stayed with Martin and Hatch because "we feel the advice we were given was good. The biggest factor is expertise and knowledge."

The senator sees no problem in the close ties. "Scott is my son," he said, "so naturally I would expect him to have clients that are interested in what I do."

Apparently, the reverse is also true. Sen. Hatch recently hired a new aide with a telecommunications background. Press secretary Adam Elggren said the senator intends to get more involved in the field.

Two telecom firms, Verizon and Qwest, provided nearly 30% of the federal lobbying income that Walker, Martin & Hatch reported last year.


Chet Lott

Pizza Franchise Owner Breaking Into the Game

Chester Trent Lott Jr., who is 35 and goes by Chet, is another Senate son with an affinity for subjects his father, Chester Trent Lott Sr., works on.

He has been a part-time lobbyist for less than two years and still lives in Lexington, Ky., where he owns several Domino's pizza franchises and rides for the company's polo team. For nearly 10 years, his father was a director of RPM Pizza of Gulfport, Miss., the largest Domino's franchise holder in North America.

As Chet Lott has moved into Washington lobbying, he has developed a multitude of new business relationships. He has a firm called Lott & Associates, plus a partnership with Larry Hopkins, a former congressman from Kentucky. Recently, he became affiliated with the lobbying firm headed by former Rep. Bob Livingston (R-La.), a friend of his father.

Chet Lott declined to be interviewed for this article, and Trent Lott's office did not return phone calls. But an employee at Livingston's firm, who asked that his name not be disclosed, said the two Lotts have a written agreement not to talk to each other about legislation.

Hopkins said he first met the younger Lott when the senator's family was growing up in the Washington area and renewed the acquaintance after Chet moved to Lexington. "Chet he was raised in Washington he knows his way around," Hopkins said.

One of Lott & Hopkins' biggest accounts is BellSouth. Sen. Lott, while no longer majority leader, remains a senior member of the Senate commerce committee and its communications subcommittee.

In 1996, Lott played a key role in Senate passage of the landmark telecommunications act that included the provision allowing Baby Bells to sell long-distance phone service.

Lott & Hopkins reported that BellSouth paid the firm $160,000 during an 18-month period ending last year. Hopkins described their services as "nothing heavy." A BellSouth spokesman said, "They keep in touch with what is going on in Kentucky and with the delegation. They keep tabs on political developments."

Shipbuilding is Mississippi's largest industry, and Lott, a senior member of the Senate committee with jurisdiction over the maritime industry, has been a faithful supporter of domestic shipyards.

Recently, Louisiana-based Edison Chouest Offshore needed help as it competed for contracts to build three oil tankers for ExxonMobil. For competitive reasons, it wanted the option of supplying the vessels from overseas shipyards, but a provision of federal law stood in the way.

In November, Lott inserted a last-minute provision in the port-security bill that made it possible for Edison Chouest to sidestep the legal barrier. The waiver was first disclosed by Congressional Quarterly Daily.

The company declined to comment. But federal records show Edison Chouest added a new lobbyist last year: Chet Lott, who collected $110,000 in fees.


Ben Stevens

Former Boat Captain Takes Alaska by Storm

For Alaska's Ted Stevens, this year's war in Iraq provided an opportunity to help out Alaska's leading employer one of his oldest causes and, more recently, a leading source of clients for his son.

In April, as U.S. troops fought their way into Baghdad, President Bush asked for $79 billion in emergency funds, and most members of Congress put aside politics-as-usual to rush the appropriations bill through.

Nevertheless, a handful of senators inserted pork-barrel spending items, and Stevens did another favor for an old friend.

Alaska's fishing industry had been trying in vain to persuade the Agriculture Department to classify the state's wild-caught salmon as "organic." With that designation, the industry hoped to boost sales and raise prices.

Sen. Stevens inserted a rider into the defense bill directing Agriculture to develop regulations allowing wild salmon and other seafood to be labeled organic.

With a war on, such actions infuriated some colleagues.

"Why can't we, for once, bring forward a bill especially when we are at war, especially when we have young men and women fighting and dying that is free of these unnecessary provisions?" Sen. John McCain (R-Ariz.) demanded. "Can't we do that just once?"

Most of the "pork" was deleted, but not the salmon proviso, which passed. It was in addition to other provisions Stevens put into this year's federal budget: $45 million in new subsidies for Alaska's fisheries and a requirement that the U.S. armed forces buy only American fish.

As chairman of the Senate Appropriations Committee and its defense subcommittee, and as the most senior Republican in the Senate, Stevens is one of the most powerful men in Congress. Year after year, he has poured out a cornucopia of benefits including millions of dollars in federal subsidies for Alaska's businesses and other special interests.

At the same time, they have paid hundreds of thousands of dollars in fees to the senator's son Ben, 44, a commercial fisherman-turned-lobbyist and consultant. Ben Stevens reported that he collected $378,754 in consulting fees last year, including $170,400 from the fishing industry.

Both men declined to be interviewed. Melanie Alvord, a Stevens aide, said the senator does not discuss legislation with his son. There is one big exception: He sometimes consults Ben about commercial fishing, because of his expertise.

Alaska's economy is concentrated in a handful of industries, including fishing, that are unusually dependent on federal policies. And a relatively small group of business leaders dominate these industries. The result is a set of tight, interlocking relationships among Sen. Stevens, his son Ben and Alaskan business leaders.

Now active in politics himself, Ben Stevens was recently elected state Senate majority leader after serving less than two years in the Alaska legislature. Some see him as his father's inevitable successor.

Certainly his position has grown as a go-to guy for those who count on his father's support. Last year, the consulting fees Ben Stevens reported jumped 50%. In the previous year, they had doubled. His clients said they have hired him not because of his father but because of his deep knowledge of Alaska's unique issues.

He worked 15 years on a crab boat in the dangerous Bering Sea, rising to captain. "He is a tough, tough guy," said friend John Iani.

In 1995, married and starting a family, Ben moved back to the nation's capital, where he had been born. He also became a lobbyist. Three years later, he was recruited to lead the 2001 Special Olympics back in Alaska. The U.S. senator got the games more than $10 million in federal aid. His son, with no prior experience, got $715,000 over three years to head them up, according to disclosure reports and the nonprofit's tax forms.

The Special Olympics was considered a full-time job, but Ben Stevens also collected hundreds of thousands of dollars more as a government-affairs consultant for various Alaskan interests; many had ties to his father.

One of them is VECO, a large engineering and construction company that serves the oil industry. It is headed by his father's friend Bill Allen and has been a client since 1996.

The elder Stevens is a long-time oil industry supporter who pushed for construction of the Alaska oil pipeline, directed federal job-training money to oil field workers and is now pushing for a natural-gas pipeline. In 1999, he gave VECO some personal attention.

VECO had helped build a $70-million pipeline for Pakistan, but the government was slow to pay. As it happened, Pakistan desperately needed congressional help on a trade issue, and Ted Stevens was positioned to block the necessary legislation. Before long, Pakistan's representatives in Washington concluded that their trade bill would go nowhere until Pakistan settled with VECO and its partners. Pakistan agreed to arbitration. The bill sailed through.

VECO paid Ben Stevens at least $212,000 from 1996 through 2002, according to lobbying reports and financial disclosure statements.

The Native Alaskan population is another powerful political force in the state that has dealings with both Ben Stevens and his dad. The senator pushed special legislation through Congress in 2000 that allowed the Cook Inlet Region Inc., an Alaska Native business, to cash in on an investment in federal wireless-communications licenses.

The company hired Ben Stevens as a consultant the following year and has paid him $218,774 in fees since then, his disclosure statements show. Executive Vice President Barbara Donatelli said Stevens was hired to assist on a new-business venture, but she declined to provide details.

He has been hired by an array of fish-processing companies and factory trawlers as a business consultant. A crabbers association paid him to help vessel owners agree on a plan for carrying out a proposed federal buyback program for crabbing boats. His father then put funding for the buyback in the 2001 appropriations bill.

t seems nearly every major interest in Alaska has found a reason to hire the son of their powerful senator who misses few opportunities to help them.

Sen. Stevens, who holds the Pentagon's purse strings, recently told the Alaska legislature that he was exploring whether the military might add a new item for the rations of America's fighting men and women. The item: Alaska's own "fish jerky."


Monday: U.S. Sen. Harry Reid and family.

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