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Business Feels A Chill On The Hill


As fallen superlobbyist Jack Abramoff hunched his shoulders and walked out of a federal courthouse just blocks from the Capitol on Jan. 3, the frenzied era of no-holds-barred money politics he helped build and exploit for his own ends may have slouched out with him.

For Abramoff, once one of the most powerful unseen players in GOP politics, a guilty plea to federal charges of conspiracy, mail fraud, and tax evasion could cost him a decade behind bars and $26.7 million in restitution. For dozens of lawmakers who received campaign cash or favors from the lobbyist, his pleas mean a stomach-churning wait to learn what he'll spill to prosecutors probing capital corruption.

But for the business community, Abramoff's spectacular fall from grace will make 2006 a year of backlash against the culture of influence-peddling. The almost certain results: new laws to govern lobbying in Washington and a rapidly chilling climate for business' representatives on K Street. "CEOs will want to call in their lobbyists and ask a lot more questions about what they're doing in Washington," says Republican lobbyist Scott Reed. "Jack Abramoff brought a microscope to the whole industry."

Even before Abramoff copped a plea, the push for reform had been gaining momentum. Congress is mulling three major proposals to tighten regulations on lobbyists and the companies that hire them. The one with the most support was unveiled in December by Senator John McCain (R-Ariz.), author of the bipartisan campaign-finance law that bears his name. McCain would double the maximum penalty for filing a false or incomplete lobbying disclosure form, to $100,000. He would require lobbyists to reveal all gifts to lawmakers or staffers worth $20 or more, itemize all fund-raisers they host, and file electronic disclosures of new clients almost immediately. McCain would also close a loophole by requiring so-called grassroots firms to register as lobbyists. These are firms hired to rally support among a lawmaker's constituents for a specific issue. "We must act now to ensure that the erosion we see today in the public's confidence in Congress does not become a collapse of confidence," McCain said when he introduced the bill.

DIALING BACK

Facing skeptical voters in November, lawmakers are likely to act. "They'll want to do something to show that they are doing something," says University of Virginia political scientist Larry J. Sabato. "They'll want to demonstrate that they are independent of Abramoff." But McCain's proposals strike many lobbying critics as weak -- and could end up as just the starting point. Democrats, sensing a political opening in an election year, are pushing to outlaw junkets organized by lobbyists. They would also require members of Congress, senior staff, and executive branch officials to disclose when they're negotiating for jobs in the private sector.

House GOP leaders, meanwhile, hope to co-opt the issue with measures that would rein in the tax-exempt 527 committees that raised millions to oppose George W. Bush's reelection in 2004.

So what should the careful chief executive do now? One senior Hill staffer says that companies doing business in Washington should go beyond the letter of law, double-checking all gifts and entertainment that they offer lawmakers or their staffs. Smart lobbyists will also dial back their direct involvement in writing legislative language that favors clients.

Of course, money isn't going to vanish from politics. But business must now be a lot more cautious about spreading around its largesse. As the line between gift and graft becomes clearer, the risk of getting tarnished when that line is crossed will get higher.

By Eamon Javers, with Richard S. Dunham in Washington


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