2. Gannett Washington Bureau
WASHINGTON Many of Sen. Dianne Feinstein's Capitol Hill colleagues want a
crackdown on an industry worth hundreds of millions of dollars to her husband, San
Francisco financier Richard Blum.
Blum's privateequity firm, Blum Capital Partners, is the largest stockholder in two of the
nation's biggest forprofit college companies, ITT Educational Services Inc. and Career
Education Corp., documents at the Securities and Exchange Commission show.
The shares are worth more than $360 million combined, which is more than onefourth of
the total assets under management by Blum Capital.
In his personal stock portfolio, Blum has holdings in those firms worth between $3.5 million
and $7.6 million combined, Feinstein's latest financial disclosure form shows.
The situation raises possible conflictofinterest questions for Feinstein, DSan Francisco,
because of her role in bills that have aided the industry by boosting the funds that sustain it:
Federal loans and grants to college students.
The office of the 78yearold senator, who is running for her fifth term this year, said she
does not discuss business decisions with her husband, that her husband's holdings "are
his separate property."
Much of the criticism of forprofit colleges comes from some of Feinstein's fellow
Democratic senators, especially Tom Harkin of Iowa, the chairman of the Senate Health,
Education, Labor and Pensions Committee.
Since 2010, Harkin's committee has issued several scathing reports claiming widespread
industry abuse of students and the squandering of the federal student aid dollars. As a
result, he contends, taxpayers are bilked, and students end up with large debts and
inadequate career preparation.
3. "Rather than investing revenues in improving the education and student services they
provide, these companies many of which are owned by Wall Street investors spend half
or more of their revenues on profit and aggressive marketing," Harkin says.
Other prominent Democratic senators, including Richard Durbin of Illinois, the majority
whip, and Thomas Carper of Delaware also are training their sights on the industry.
In the House, Rep. Elijah Cummings, DMd., has called for an investigation into the pay of
the chief executive officers who run forprofit colleges.
Industry officials, however, contend their congressional critics and others are guilty of
cherrypicking in many of their findings and that forprofit schools fill a critical education
need.
Students, especially older ones, they say, need academic options more flexible than those
provided by traditional colleges and universities.
It's a matter of "focused, flexible academic delivery," said former Rep. Steve Gunderson of
Wisconsin, the new president of the American Association of Private Sector Colleges and
Universities.
"If we didn't exist, many of these students would have nowhere to go for postsecondary
education."
Legislative prescriptions offered by Harkin, Durbin and others call for limiting forprofit
colleges to receiving no more than 85 percent of their revenues from federal sources and
eliminating a loophole that allows them to not count GI Bill funds and Defense Department
Tuition Assistance toward that total.
Meanwhile, the Obama Administration tried in 2011 to launch tough regulations linking
federal student aid to the incomes and student loan default rates of an institution's
graduates. The industry's intense lobbying, however, resulted in the regulations affecting
only a small percentage of schools.
4. Harkin also has urged the Department of Veterans Affair to trademark the phrase "GI Bill"
so that forprofit schools could not use it in deceptive advertising to veterans.
Major aid expansion
In all, Blum Capital controls shares worth $235.8 million (15.5 percent) in ITT and $127.1
million (21.3 percent) in Career Education, according to SEC records.
Since she last stood for reelection in 2006, Feinstein has ardently supported bills that
have produced the biggest expansion in federal student aid since World War II the
College Cost Reduction and Access Act of 2007, the Higher Education Opportunity Act of
2008 and the Post9/11 Veterans Educational Assistance Act of 2008.
Feinstein helped craft the 2007 bill and cosponsored and spoke in favor of the two
measures in 2008.
Blum Capital's forprofit investments date back at least that far, SEC records show.
Feinstein spokesman Brian Weiss, however, said those were broad bills aimed at
students at all types of colleges and universities.
"Sen. Feinstein has never advocated for these schools and never cast a vote on legislation
for these schools," he said. "If the question is: Should bad actors in the industry be enrolling
students who rely on Pell Grants, federal loans or veterans educational benefits? the
answer is absolutely not."
Although the bills targeted all colleges, some regarded them as especially beneficial to
forprofit schools, because of their dependence on federal aid. Harkin's staff, in fact, says
the two 2008 bills had special provisions for the latter, including the elimination of an
immediate "death penalty" for having more than 90 percent of their revenues come from
federal funds.
5. After former President George W. Bush signed the 2007 bill into law, Daniel Fitzpatrick,
chief financial officer for ITT, thanked Congress for helping "eligible students access
sufficient financial aid to pay the cost of their ITT Technical Institute education."
Those who attend forprofit schools make up 12 percent of all higher education students
nationwide but receive 26 percent of student loans and 25 percent of Pell Grants. The latter
is double what it was 10 years ago.
Further, the top seven schools in attracting student financial aid under the new GI Bill are
forprofit schools, including both ITT, which received $99 million in 20102011, and Career
Education, which received $71million, according to figures from Harkin's committee.
Bills were beneficial
Feinstein's most recent financial disclosure shows her husband's personal investments in
ITT and Career Education increased significantly since the passage of those bills.
In 2007, his personal stake in Career Education was valued at between $1.6 million and
$3.5 million and his one in ITT at less than $15,000.
In 2010, his Career Education stake was valued at $2.1million to $4.5 million, while his one
in ITT had increased to between $1.4 million and $3.1 million. Congressional rules allow
disclosure of assets in broad dollar ranges only.
Opinions differ, however, on whether these connections have made Feinstein's support of
studentaid bills a conflict of interest for her.
The Senate Ethics Manual recognizes that many pieces of legislation are likely to affect a
member's financial interests in some way but says there is no conflict so long as the impact
on the member's holdings is likely to be "quite minimal in comparison to the impact of the
legislation on the public and the public interest served."
6. Sarah Dufendach, of the watchdog group Common Cause, says she considers Feinstein's
case "curious" but not a conflict of interest. She can claim to be serving the interests of all
college students.
Similarly, Melanie Sloan of Citizens for Responsibility and Ethics in Washington said
criticizing Feinstein is taking conflict of interest too far.
"As I understand it, her husband has tons of business interests, and she could be barred
from participating in decisions about nearly everything," she said.
Craig Holman, who monitors Congress for Public Citizen, disagreed.
"Aggressively pursuing legislation that provides substantial personal enrichment to the
senator and her family reflects poorly on the Senate. While Feinstein may be expected to
vote on all issues in the Senate, she should not have made this legislation a personal
mission," he said.
Peter Byrne, a Northern California investigative journalist, was the first to write about
Feinstein's connections to the forprofit industry.
Schools use loopholes
Many forprofit colleges use loopholes in higher education laws to exceed a federal limit of
90 percent of their revenues from federal student aid.
Their students are mostly over age 25, with 40 percent from families with household
incomes of $40,000 or below. About 50 percent are minorities.
Critics charge they often leave without a degree or with one worth little on the job market as
they try to tackle their education debts.
Nearly 50 percent of federal student loan defaults are traced to forprofit schools.
Degrees from forprofit schools that represent "a worthless or grossly overpriced credential
are worse than no credential at all, especially if the students borrowed to pay for it," Pauline
7. Abernathy, of The Institute for College Access and Success, testified before Harkin's
panel.
Harkin is even more blistering.
"The picture that's emerged is of many forprofit colleges disregarding their purpose to
provide education and opportunity for the sake of making a quick buck. Too many of
these schools are putting people further behind by saddling them with debts they cannot
pay," he said.
In the case of ITT, 37 percent of the federal funds students received in 2009 ended up
boosting profits of the firm rather than enhancing faculty salaries, instruction or facilities, the
Senate committee found.
Forprofit schools also stand accused of taking advantage of military veterans returning
home from Iraq and Afghanistan, seeing them as nothing more than "dollar signs in
uniforms," Holly Petraeus, assistant director of the new Consumer Financial Protection
Board, wrote in a New York Times oped.
Harkin and Durbin of Illinois, the secondranking Senate Democrat, have jointly made
proposals this year to address how the schools market themselves to military personnel.
Gunderson, the industry representative, says the industry makes no apologies for how it's
tried to serve the education needs of veterans.
"We're very proud of that, and we think Congress should be proud of it," he said.
Although outspoken on many education issues, Feinstein has been silent about the
controversy over forprofit schools. She has also not attached her name to recent bills
proposed by Democratic colleagues to hold the industry more accountable.
Harkin and Durbin's proposals to address the forprofit schools marketing to veterans have
gained the support of Sen. Barbara Boxer, DRancho Mirage, but not Feinstein.
10. Feinstein, DSan Francisco, has so far received contributions from 218 lobbyists who are
active on issues ranging from renewable fuels and advanced fighter jets to Internet
gambling, the center's data show.
Many of them rank among Washington's most influential, and they lobby for corporations as
varied as General Electric, General Motors, BP America, ExonMobil, Goldman Sachs,
General Dynamics and Lockheed Martin. Many also represent interests of California cities
and counties.
Some congressional watchdog groups consider campaign contributions from lobbyists
"particularly problematic" because they come from individuals who make their living
seeking access and influence.
Others, however, say these contributions don't change lawmakers' positions. Instead, they
are given as a sign of agreement with their positions.
Feinstein's office said what lobbyists want is not what matters most to her.
"Senator Feinstein evaluates legislation and public policy based on what is best for
California and the country," said spokesman Brian Weiss.
Lobbyists also rank among the top groups of contributors to most of the incumbent
senators seeking reelection this fall, according to center. And they ranked among the top
10 sources of contributions for Sen. Barbara Boxer, DRancho Mirage, when she won
reelection in 2010.
"Senator Boxer has spent her entire career standing up to powerful special interests and
fighting for California's families," spokesman Peter True said. "Her record of working to
protect consumers, seniors, children and the environment speaks for itself."
Of the $7.5 million Feinstein has raised for her 2012 campaign committee and her political
action committee, $357,733 has come from lobbyists. Among industry groups, that ranks
second only to the $449,094 she's received from lawyers and law firms.
11. Her opponent, Republican Elizabeth Emken of Danville, an advocate for developmentally
disabled children, has only $327,686 from all sources. Most of it $200,000 comes from
her own money she is loaning to herself.
Feinstein and Emken won the right to face off against each other in November by finishing
first and second respectively in California's new combinedparty primary in June. Feinstein
got 2,071,501 votes (49.4 percent), compared to Emken's 530,423 (12.6 percent). They
were among nearly two dozen candidates.
Seeking her fifth Senate term, Feinstein, 79, sits on the powerful Senate Appropriations
Committee, which controls how federal funds are doled out among projects and programs.
Her position and tenure make her a prime target for contributions from some of
Washington's most highprofile lobbyists and lobbying firms.
Some of those giving to Feinstein include:
H. Stewart Van Scoyoc: Van Scoyoc is consistently rated as one of Washington's top
lobbyists by Capitol Hill publications. Contributions from individuals at Van Scoyoc
Associates: $22,300.
Anthony Podesta: Older brother of John Podesta, who was chief of staff to former
President Bill Clinton, Anthony Podesta has been ranked as high as No. 3 among the
capital's Top 50 lobbyists by Washingtonian magazine. The New York Times called his
lobbying firm, the Podesta Group, "one of Washington's biggest players." Contributions
from individuals at the Podesta Group: $10,000.
Heather Podesta: Wife of Anthony Podesta and sisterinlaw to the former White House
chief of staff, she too has been ranked among the city's top lobbyists by Washingtonian.
Contributions from individuals at Heather Podesta and Partners: $2,000.
Harold M. Ickes: Former deputy White House chief of staff under Clinton, Ickes is also the
son of Harold L. Ickes, who served as Franklin Roosevelt's secretary of the Interior.
Contributions from individuals at Ickes and Enright: $1,000.
12. Thomas Boggs Jr.: Son of former Rep. Hale Boggs of Louisiana, Boggs has been called
"the king" of Washington lobbyists and was rated No. 1 on Washingtonian's list in 2007. He
is also the brother of political commentator Cokie Roberts. Contributions from individuals
at Patton Boggs: $9,500.
Vic Fazio: A former longtime House member from California, Fazio once headed the
Democratic Congressional Campaign Committee and the House Democratic Caucus.
Rated one of the capital's top lobbyists by The Hill and other publications. Contributions
from individuals at his firm, Akin, Gump, et. al.: $16,000.
Linda Daschle: Wife of former Senate Majority Leader Tom Daschle of South Dakota,
she is also a former deputy administrator of the Federal Aviation Administration. She also
made Washingtonian's Top 10. Contributions from individuals at LHD &; Associates:
$4,500.
In her work on the Senate Appropriations Committee, one of her subcommittees Feinstein
sits involves funding for defense projects.
Disclosure forms show that lobbyists listing defense spending as one of their "issue areas"
include Anthony Podesta, Heather Podesta, Daschle, Van Scoyoc and Ickes, as well as
John Breaux, former Democratic senator from Louisiana and former senior member of the
Senate Finance Committee; Michael S. Berman of the Duberstein Group, named for
Kenneth Duberstein, chief of staff to former president Ronald Reagan; Walter L. Raheb of
RR&;G, who personally has given her $5,000; and Lawrence C. Grossman of the
Grossman Group, who has given her $4,900.
Feinstein also accepts contributions from lobbyists who work on issues that could impact
the business interests of her husband, San Francisco financier Richard Blum.
Blum runs a private equity firm that invests heavily in forprofit colleges, including Career
Education Corp. Anthony Podesta's firm lobbies on behalf of Career Education, while
Fazio at Akin, Gump et. al. lobbies on behalf of the Private Equity Growth Capital Council,
which is concerned about regulatory and tax issues affecting private equity firms.
13. Despite her husband's involvement in the industry, Feinstein frequently acts against the
wishes of private equity firms, said Weiss, her spokesman.
He cited her push for speedy implementation of the DoddFrank financial regulatory bill,
legislation full of provisions that worry the Private Equity Growth Capital Council. Weiss
also said Feinstein supports the "Buffet Rule," named after billionaire Warren Buffet, that
would impose higher taxes on the millionaires and billionaires that often run private equity
firms.
Regardless, congressional watchdog groups such as Public Citizen consider contributions
from lobbyists "particularly problematic," says Craig Holman, who monitors ethics issues
for the organization.
"Lobbyists are professional advocates with a permanent presence on Capitol Hill who
make extensive and even daily use of campaign contributions and fundraisers specifically
for the purpose of furthering their access and influence (with) policymakers."
But Lara Brown, political scientist at Villanova University, has a different view.
"Money follows votes a lot more than it ever attempts to buy them," she said. "Lobbyists,
like others who donate politically, are merely buying access to the officeholder they hope
that the officeholder will make time for them in their busy schedule not votes."
A lobbyist who has given $500 to Feinstein is Howard Marlowe, who is also president of
the American League of Lobbyists, a professional group.
Marlowe said his firm, Marlowe and Co., often keeps contributions to lawmakers low. They
are given as a "thank you" or sign of appreciation for "the work they are doing," he said.
While lobbyists giving to congressional campaigns "is all perfectly legal," Marlowe said, he
remains concerned about lawmakerlobbyist interactions not disclosed to the public, such
as their meetings at the countless daily congressional fundraising events in Washington.
14. Such discussions do not have to be disclosed even though "it is commonplace to be
discussing policy issues (at fundraisers)," Marlowe said.
In a document that cites the "unprecedented level of public distrust" directed at Congress
and lobbyists, Marlowe's group calls for stricter disclosure requirements for their profession
and "developing a standard definition of what constitutes lobbying when engaging with
legislative branch officials."
Such changes are necessary, it states because the "registered lobbyist is oftentimes seen
by the public, elected officials and the media as a convenient scapegoat for all sorts of
issues related to Congress' low approval ratings."
What lobbyists' donations mean:
When lobbyists donate to a candidate, some contend it's effectively a donation on behalf of
the interests they represent.
"Donors have a foot in the door," said Sheila Krumholz, executive director of the Center for
Responsive Politics.
She added that it gives them "a leg up on the competition that hasn't given and for
lobbyists, the benefit extends to the clients they plan to speak to the member about. It's the
way Washington or at least Capitol Hill works."
Feinstein's office denies this, and Krumholz said, "She may be the rare exception, but
members just like the rest of us don't want to appear ungrateful to their supporters; it's
human nature."
Many of the Washington lobbyists who give to Feinstein have extensive client lists.
Take for example Michael S. Berman, president of The Duberstein Group. Berman has
given $2,500 to Feinstein.
15. Berman's clients include: Comcast Corp., Chesapeake Energy, The Business Roundtable,
BP America, America's Health Insurance Plans, Broadridge Financial Solutions,
Accenture, CSX Corporation, Federation of Korean Industries, General Motors, Goldman
Sachs, Grocery Manufacturers Association, Hanesbrands, Honeywell International, Health
Net, Bank of New York Mellon and United Airlines.
Contact Paul C. Barton at pbarton@gannett.com
http://oxycodone.us/2012/05/drugcompaniesbackmarybonomackthedesertsun/
OXYCODONE NEWS
MAY 7, 2012 OXYCODONE NEWS EDITOR LEAVE A COMMENT
DRUG COMPANIES BACK MARY BONO
MACK
By PAUL C. BARTON, Gannett Washington Bureau
WASHINGTON Rep. Mary Bono Mack, a leading congressional voice against
prescription pain medicine abuse, is among many lawmakers who are outspoken on the
issue but accept campaign dollars from makers of some of the mostabused legal pain
drugs.
16. In part, the situation reflects the explosion in the number of narcoticlike medicines over the
past decade, making it hard to find a pharmaceutical company that doesn’t make at least
one.
Regardless, their taking donations from these companies doesn’t sit well with advocacy
groups dedicated to stopping abuse. Some call it “hypocritical” — and worse.
“They are accepting blood money from the drug companies,” Peter Jackson of Chicago,
cofounder of Advocates for Reform of Prescription Opioids, said in a statement.
Jackson’s 18yearold daughter died of an OxyContin dosage three days before she was
to begin college.
The companies, however, say they are helping in the fight against prescription abuse. For
example, Abbott Laboratories, the maker of Vicodin, points to a website it established —
notinmyhouse.drugfree.org — that educates parents about the dangers of teenagers
succumbing to abuse by taking advantage of the family medicine chest.
In response to questions about the donations, Bono Mack’s chiefofstaff, Frank Cullen,
said in a statement:
“Certainly these organizations are well aware of the Congresswoman’s position on the
issue of prescription drug abuse, a position based on principal and nothing else.”
Over the course of her congressional career, the Palm Springs Republican has accepted
$33,0000 from the PACs of such companies, Federal Election Commission records show.
Pfizer alone gave her $9,500 for her 2010 race.
Overall, the contributions are a fraction of the $10.1 million she has raised since 1998 for
her campaigns.
17. Since the start of the 112th Congress in January 2011, Bono Mack has used the
chairmanship of the subcommittee on Commerce, Manufacturing and Trade of the House
Energy and Commerce Committee as a platform to educate fellow lawmakers and the
public about abuse of OxyContin. The widely abused pain drug, made by Purdue Pharma
of Stamford, Conn., contains oxycodone.
(Page 2 of 4)
Such drugs are called “opioids” because in relieving pain, they produce a high similar to
heroin and other opiates.
Bono Mack has held numerous hearings on the topic, appeared many times on national
television and at national conferences, and has introduced legislation — the ”Stop Oxy
Abuse Act” — that instructs the Food and Drug Administration to limit the use of oxycodone
to “severe pain” only. The current standard is “moderate to severe pain.”
She’s also introduced a bill to require doctors to undergo more training in the use of
opioids before getting a federal license to prescribe them.
Bono Mack’s commitment stems from having witnessed members of her family struggle
with addiction.
During her congressional career, she has not taken money from Purdue Pharma’s political
action committee.
But while campaigning against OxyContin, the seventerm lawmaker has accepted money
from PACs of companies and groups linked to other opioid products and addictive
medicines:
For her 2012 reelection so far, Bono Mack has received:
18. $2,000 from Abbott Laboratories, whose Vicodin contains the substance hydrocodone,
considered the secondmost abused pain ingredient after oxycodone.
It also makes Dilaudid, whose key ingredient is hydromorphone. Dilaudid, like OxyContin,
has sometimes been referred to as ”synthetic heroin.”
Abbott found itself as a defendant in hundreds of lawsuits over the past decade because of
an agreement it signed in 1996 with Purdue to help market OxyContin. Even though Abbott
ended the agreement in 2003, it continued to be named as a codefendant in hundreds of
lawsuits.
The classaction suits claimed the two firms aggressively marketed the drug in disregard of
the potential for abuse and diversion to illegal street sales. Many resulted in
multimilliondollar settlements.
$3,000 from Pfizer Inc., which got FDA approval last year for a new oxycodone product
called Oxceta. Pfizer also recently acquired King Pharmaceuticals, the maker of several
opioids, including morphine and oxycodonebased products.
(Page 3 of 4)
$1,000 from the Generic Pharmaceutical Association, a trade group that lobbies on behalf
of numerous manufacturers of opioid medicines, including Teva, Watson, Mallinckrodt and
Mylan, which makes a generic form of Percodan.
$1,500 from Astra Zeneca, the maker of Seroquel.
While used to address sleep and psychiatric issues rather than pain, Seroquel is
increasingly cited an as a prescription drug that abusers crave for a narcoticlike high
obtained by crushing tablets and inhaling the powder through the nose.
19. Not only is it cited for its addictive potential, the medicine, like OxyContin, can cause death
under certain circumstances. Street users call Seroquel “Suzie Q.”
Advocates appalled
While what she has received from drug companies comprise of a small portion of Bono
Mack’s overall campaign contributions, advocacy groups are upset that outspoken
politicians accept such money.
“The members of Congress who are truly concerned about the problem, if they have even a
faint understanding of what has gone on with the drug companies and marketing of
prescription opioids, would not want to touch the drug companies’ money with a 10foot
pole,” Jackson said.
“I believe there are many good members of Congress who want to do the right thing. But for
others, it is entirely hypocritical of them to express concern for the victims of prescription
opioids and then turn around and take the money. They should know better.”
Many members of the Congressional Caucus on Prescription Drug Abuse — which Bono
Mack chairs — take money from opioid makers.
Rep. Hal Rogers, RKy., cofounder of the caucus, has so far accepted $2,000 in 2012
from Abbott, the maker of Vicodin and Dilaudid.
Other caucus members who have accepted contributions in 2012 from opioid makers
include Reps. Jack Kingston, RGa.; Geoff Davis, RKy.; Brett Guthrie, RKy.; and William
Keating, DMass.
And Sen. Charles Schumer, DN.Y., who has become a leading Senate voice against
prescription drug abuse, accepted money for his 2010 reelection from Endo
20. Pharmaceuticals, which makes Percocet, another highly abused oxycodonebased
medicine.
(Page 4 of 4)
“That is disappointing,” April Rovero, of the National Coalition Against Prescription Drug
Abuse, said of members accepting such donations.
“How in the world could that not influence their decisions?”
Opioid makers are also major contributors to Congress generally. Abbott’s PAC has so far
given $1 million to lawmakers for the 2012 election; Pfizer has given $1.3 million.
The generosity also extends to many members of the Subcommittee on Commerce
Manufacturing and Trade, which has been holding hearings on the issue. Reps. Marsha
Blackburn, RTenn., the vice chair of the subcommittee, and G.K. Butterfield of North
Carolina, the subcommittee’s ranking Democrat, both take money from Purdue.
Besides educational efforts aimed at preventing abuse, drugmakers promote what they
say is “abuseresistant technology” going into new opioids.
Pfizer, for instance, makes that claim about Oxceta. It’s a reference to making the pills
harder for addicts to crush, their technique for getting the effect of the drugs immediately
rather than allowing them to work on a timerelease basis.
Both Jackson and Rovero discount the abuseresistant claims.
“That’s baloney,” Rovero said. “All you have to do is take more pills.”
And Jackson wrote in 2009 that “most people I have spoken with whose child or spouse
died from an OxyContin overdose said exactly the same thing — they took it like aspirin.
22. WASHINGTON, D.C. In a year when earmarks are off limits to members of Congress,
California's highspeed rail project illustrates another option for getting federal funding to
trumpet to constituents lobby the executive branch exhaustively.
In the end, budget analysts say, lawmakers can claim credit just as if they had obtained
money for a special project in their home states or districts the oldfashioned way: by
inserting it into a spending bill.
In the name of fiscal responsibility, both the House and Senate have banned such
"earmarking" practices for two years. But that doesn't mean an oftenfurious competition
for federal spending isn't still going on behind the scenes.
And the White House tried to give bragging rights to as many congressional Democrats as
possible last week by spreading $2 billion in highspeed rail money all over the country.
California got $300 million, and several Golden State Democrats rushed out press
releases to associate themselves with the grant or to tout its benefits to the state.
The federal money was available because Rick Scott, the Republican governor of Florida,
turned it down, as have several other Republican governors.That thrilled California
Democrats.
"These investments will help reduce our dependence on foreign oil, ease congestion on
our roads and offer more transportation options for residents," said Rep. Doris Matsui of
Sacramento.
But California Republicans, including Reps. Mary Bono Mack of Palm Springs and Devin
Nunes of Tulare, want no part of it.
"Simply put, the highspeedrail project will cost too much money by some estimates, up
to $80 billion and will provide too few benefits to residents of the Coachella Valley," Bono
Mack said. "We just can't afford it, especially in these difficult economic times."
23. The rail money is "the closest thing to an earmark," said Scott Frisch, congressional
scholar at California State University, Channel Islands. "This is something very big and
visible."
Frisch and Sean Kelly, another political expert at the university, last year published the
book Cheese Factories on the Moon that challenged the conventional argument that
earmarks are wasteful, porkbarrel projects that symbolize outofcontrol federal spending.
While some earmarks may qualify for that label, they argued, earmarks overall make up a
tiny part of the $3.7 trillion federal budget. And they provided a way to tell which lawmakers
were fighting for which projects.
Now, Frisch said, "A lot of it is behind the scenes."
Members of Congress and their staffs contact executive branch agencies in a variety of
ways to lobby for distributions of federal funds. Terms such as "lettermarks" and "phone
marks" have come to describe the practice.
"Everybody complained about earmarks, but at least you could [track] them," Frisch said.
While lawmakers' efforts to lobby agencies are largely out of view, they have little problem
revealing some of their methods when they work.
When California got its highspeedrail grant last week, for instance, Democratic Sens.
Dianne Feinstein and Barbara Boxer released a copy of a letter they had sent in February
to Transportation Secretary Ray LaHood, asking for highspeed rail funds.
The letter, in fact, asked the Obama administration to give California virtually all of the $2
billion. Off all the highspeed rail projects around the country, the senators said, California's
had "the greatest potential for success" in transforming transportation patterns and
demonstrating economic and environmental benefits.
Representatives of watchdog groups that traditionally oppose earmarks, such as
Taxpayers for Common Sense and Citizens Against Government Waste, said they are
24. reluctant to consider such grants as substitutes for earmarks because the decisions are
being made by agencies, not lawmakers.
But if it becomes apparent that grant decisions are not based on established, clearly
identifiable criteria, then they do merit questioning, the watchdog groups say.
Tom Schatz of Citizens Against Government Waste said lawmakers will continue to take
credit for grants. Most constituents won't know the difference from an earmark, he said.
Meanwhile, the California delegation remains divided along party lines on the merits of the
rail grant.
Said Sam Farr, DCarmel: "We cannot ignore the benefits of highspeed rail, especially at
a time when our local economy continues to struggle with high unemployment and stagnant
economic development."
Countered Nunes: "If there is infrastructure money available, it should be used to improve
Highway 99, where it would actually improve the economic health and environment of our
region. Yet the Obama administration proved long ago that it had no concept of how to
prioritize spending."
Gannett, Washington Bureau
26. EPA said Tennessee's plants produced 1,903 pounds of carbon pollution per
megawatt hour of electricity in 2012. It wants that down to 1,163 pounds per
megawatt hour by 2030.
That would be a 39 percent reduction.
Related: Group points out ways to lower TN's carbon emissions
Related: Power plants put Tennessee among top 25 air polluters
Each state will have the flexibility to devise its own plan for meeting the assigned
numbers. The EPA said it took into account each state's energy mix before setting
limits on carbon pollution, regarded as a leading cause of global warming.
"Climate change, fueled by carbon pollution, supercharges risks to our health, our
economy, and our way of life," said Gina McCarthy, EPA administrator.
The muchanticipated announcement was widely praised by environmental groups as
setting an example for the world to follow, one that would lead to new investment and
lowere energy costs for ratepayers.
But many business groups and conservatives denounced it as the imposition of a
"national energy tax" on an alreadystruggling American economy and said it would
cost jobs.
In the coming months, the federal agency will be taking comments from interested
parties — especially utilities and environmental groups — with the rules not due to be
implemented until 2015 and with states having until 2016 to comply.
27. "The new safeguards not only protect our health and communities, but they will also
spur innovation and strengthen our economy. By moving to 100 percent clean energy
sources, we'll create tens of thousands of American jobs and billions of dollars in new
investment," said Scott Banbury of the Tennessee Sierra Club.
Rep. Jim Cooper, DNashville, said EPA acted "because Congress failed to."
"I haven't seen the new regulation yet, but I am hopeful it will insure against any more
harm to the planet. Every nation needs to join our effort," Cooper said.
Related: Cleaner skies on horizon for Gallatin coal plant
Related: Group calls TVA to close coal plants during vigil
But congressional Republicans and business advocates had a different take.
"Today's regulations issued by EPA add immense cost and regulatory burdens on
America's job creators. They will have a profound effect on the economy, on
businesses, and on families," said Thomas J. Donohue, president of the U.S.
Chamber of Commerce.
Rep. Marsha Blackburn, RBrentwood, vice chairman of the House Energy and
Commerce Committee, said the regulations were a continuation of "the Obama
administration's war on coal."
"This rule is another tax on the American taxpayers and will lead to higher electricity
rates and fees," she said in a statement.
28. Assessing where Tennessee and TVA stand in regard to the new rule will require
separating environmental data for the state from systemwide data for the federal
power authority, which serves six other Southeastern states and nine million
customers overall.
In 2012, TVA ranked 5th in carbon emissions among the 100 largest electric utilities,
according to Ceres, an advocacy group for sustainable energy, releasing 77.35
million tons of carbon dioxide.
Tennessee as a state, however, ranked 21st highest, emitting 41.9 million tons in
2012.
TVA reports that its systemwide total is already down 30 percent since 2005 and that
it already had a goal of reducing it 40 percent by 2020.
For just Tennessee electric power plants — and not emissions from sources such as
transportation — EPA figures show 39.44 million tons of carbon emissions in 2011,
down from 54.8 million tons in 2005.
"So we are off to a good start," said Bill Johnson, TVA president and chief executive
officer.
Part of the reductions that already have occurred are due to decreased demand
caused by an economic slowdown and a move to cleaner fuels like natural gas to
generate power.
30. WASHINGTON – In trying to revamp how Americans finance their homes, key to
about 20 percent of the U.S. economy, Sen. Bob Corker knows he has stepped into a
specialinterest minefield. Forces on all sides rank among the nation’s most powerful
lobbying interests and campaign contributors.
Corker, RTenn., has been working for nearly a year to garner support for legislation
to make mortgage lending more dependent on private capital and less on the federal
government. He would put out of business, within five years, the two
governmentsponsored entities that fuel most mortgage lending now: the Federal
National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage
Corporation (Freddie Mac).
He would replace them with a new Federal Mortgage Insurance Corporation that
would backstop private mortgage lending much like the Federal Deposit Insurance
Corporation backstops banks.
However, private firms would shoulder the first 10 percent of any losses themselves.
Corker’s bill has been adopted by the chairman of the Senate Banking Committee,
Sen. Tim Johnson, DS.D., and on Tuesday, the panel begins voting on possible
amendments. The Obama administration also supports reducing the government’s
role in mortgages.
The Tennessee senator has taken on a subject vital to finance, insurance and real
estate interests that spent close to $500 million lobbying Congress in 2013, according
to the Center for Responsive Politics. In the 201314 election cycle, they have given
nearly $149 million to federal candidates.
Corker said not everybody wants change.
31. “There are very, very wealthy investors at hedge funds in New York who want to kill
this bill,” he said in an interview.
It was a reference to various funds that own stock, especially preferred stock, in
Fannie Mae and Freddie Mac. Fund managers see Corker’s bill as ending any chance
of shareholders ever seeing a dividend again. Since August 2012, the Treasury
Department has been keeping all of the profits from the two “governmentsponsored
enterprises.”
Corker said hedge funds want the status quo, with the federal government
responsible for 90 percent of mortgage lending, “because they benefit.” In addition to
Fannie Mae and Freddie Mac, other agencies involved are the Federal Housing
Administration and the Department of Veterans Affairs.
But the 100 percent government guarantee behind such lending, Corker said, “is not
what the American taxpayers want.”
One of those who represents Fannie Mae and Freddie Mac investors in Tennessee is
Timothy Pagliara, chairman of CapWealth Advisors in Franklin.
Pagliara, who has supported Corker politically and helped him raise campaign
money, couldn’t be in more disagreement with the senator when it comes to his
housing finance proposal. He describes the refusal to consider compensation for
shareholders as an unconstitutional taking of their property.
“They started with a faulty premise that Fannie and Freddie had to go,” he said. “I call
it residential Obamacare.”
32. Others contend the betterfinanced interests in the battle back Corker, especially Wall
Street investment bankers who want a chance at the profits Fannie Mae and Freddie
Mac now reap.
In contrast to their image at the height of the 2008 financial crisis — as embodying all
that was wrong with federal housing policy — Fannie Mae and Freddie Mac operate in
the black today. Their combined profits for 2013 topped $130 billion.
“This would be huge for the financial sector. They are drooling,” Dean Baker of the
liberal Center for Economic and Policy Research said of the Corker bill.
But Baker and other critics question whether a new agency, the FMIC, should
continue the practice of taxpayers guaranteeing mortgages. Even a 90 percent
guarantee would be pretty sweet for private firms, they contend.
“I can’t believe we would be going back to that,” Baker said. “Were these people not
alive in 2008?”
Julia Gordon, a housing expert at the Center for American Progress, said that
lawmakers should revisit a part of the bill that could let Wall Street engage in the
same kind of risky practices that led to the housing crisis, leaving the taxpayer on the
hook yet again.
“You don’t want to give the keys to the car back to the guy who drove it into the ditch,”
Gordon said
But Corker said his bill levels the playing field by giving local lenders, like credit
unions, access to many of the databases and other technologies Fannie Mae and
Freddie Mac employ.
38. Watchdog groups worry that these exstaffers and members are “cashing in” on their
connections, gaining privileged access to lawmakers and crowding out the views of
ordinary constituents. And for those who leave K Street to work for a lawmaker, they
say, the question is whether their former clients have so influenced their views that
they, too, have a hard time thinking like constituents.
“Congress is becoming a farm team for K Street. In essence, Congress is
outsourcing its expertise to the private sector,” said Lee Drutman, who monitors
lobbying for theSunlight Foundation.
Lobbyists say they are doing nothing more than exercising their First Amendment
right to petition the government. And Tennessee lawmakers say their former staff
members follow congressional ethics rules, including that they not lobby former
colleagues for one year after leaving Capitol Hill.
Lobbyists must register with the House and Senate when they spend at least 20
percent of their time over a threemonth period engaged in activities such as
contacting members about issues or drafting legislation. But some say public
disclosure and a waiting period before lobbying don’t remove the danger.
The watchdog group Public Citizen asserts in a recent report that members of
Congress and congressional staff “could well be influenced in their official actions” by
the prospect of morelucrative employment later as lobbyists.
And those who become lobbyists, the group says, “typically have developed a closed
network of friends and colleagues still in government service that they can tap on
behalf of their paying clients as well as insider knowledge of legislators and public
officials … and the legislative process not available to others.”
40. One of Sen. Bob Corker’s former staffers, Courtney Geduldig, has gone to lobby for
the Financial Services Forum, which represents Wall Street firms, and now works for
Standard & Poor’s, the financial rating agency.
Rep. Jim Cooper, DNashville, has three former employees in the lobbying ranks,
including Cicely Simpson, who was his legislative director. In July 2012, she became
vice president for government affairs at Dunkin’ Brands Group, the parent company of
Dunkin’ Donuts and BaskinRobbins.
In announcing her appointment, the company made no bones about the value it
placed on her experience. “Leveraging more than 10 years of leadership experience
in legislative affairs and public policy,” said a news release from the firm, “Ms.
Simpson will … continue to build and maintain Dunkin’ Brands’ relationships with
members of Congress, congressional staff, regulatory agencies, state and local
elected officials, and trade associations.”
Former Cooper staffers have lobbied for the ABC television show “Nashville” and for
Vanderbilt University. But Cooper promises he will never do it himself.
“One of the biggest problems with Congress today is that members leave to become
highpaid lobbyists who leverage their connections made in public life to advance
themselves in private life,” said his spokesman Chris Carroll. “Jim has pledged not to
do that.”
Meanwhile, lobbyists sometimes want to go back to work as congressional staff. Rep.
Marsha Blackburn, RBrentwood, hired her chief of staff, Michael Platt, from the
Recording Industry Association of America. Jessica Carter, the top aide to Rep.
Stephen Fincher, RFrog Jump, came from the National Industries for the Blind.
42. • Rep. Marsha Blackburn, RBrentwood: nine and six.
• Rep. Diane Black, RGallatin: one and one.
• Republican Sen. Bob Corker: six and three.
• Rep. John Duncan Jr., RKnoxville: four and three.
• Rep. Jim Cooper, DNashville: three and one.
• Former Rep. Harold E. Ford Jr., DMemphis: 14 and six.
• Former Republican Sen. Fred Thompson: 11 and four.
• Former Rep. John Tanner, DUnion City: eight and seven.
• Former Rep. Bart Gordon, DMurfreesboro: eight and seven.
• Former Republican Sen. Howard Baker Jr.: eight and three.
• Former Rep. Bill Boner, DNashville: two and one.
• Former Rep. Ed Bryant, RHenderson: three and two.
• Former Rep. Bob Clement, DNashville: four and two.
• Former Rep. Lincoln Davis, DPall Mall: four and two.
46. WASHINGTON — Two of the leading sources of political contributions to Sen. Lamar
Alexander in his current term reflect what campaign finance experts call
insideWashington money, Federal Election Commission records show.
Lobbyists and leadership political action committees are two of the top "industries"
giving to the Tennessee Republican since his last election in 2008, according to a
breakdown of FEC data by the Center for Responsive Politics, a nonpartisan
research group that tracks political dollars.
The top five are pharmaceutical and health products ($263,650); lobbyists ($183,485);
insurance ($170,250); health professionals ($166,450); and leadership PACs
($165,000).
The totals include money going to Alexander's campaign committee as well as his
own leadership PAC, Tenn PAC.
Alexander is running for a third term in 2014.
Leadership PACs are special fundraising entities lawmakers use to give money to
other senators or House members, enhancing the influence of the donor. They can
also be used for miscellaneous noncampaign expenses.
"It is clear that Washington lobbyists and leadership PACs overwhelmingly favor
incumbents," said Meredith McGehee of the Campaign Legal Center, a group that
pushes for campaign finance reform.
They are, McGehee said, "the very embodiment of insider money."
47. But Alexander's campaign manager, Alice Rolli, said the overwhelming majority of the
senator's campaign funds come from ordinary Tennesseans.
"The Alexander campaign is grateful to have raised $3.9 million in the first nine
months of this year — $2.7 million of this came from several thousand individuals,
most of whom are Tennesseans. The $3.9 million includes $120,000 raised for the
leadership PAC, most of which is contributed to other Republicans," Rolli said in a
statement.
A lot of the money Alexander attracts is due to his own political connections and
committee assignments, political observers say. He is the ranking Republican on the
Senate Health, Education, Labor and Pensions Committee.
"He's got Washington wired," said analyst Kathy Kiely of The Sunlight Foundation, a
watchdog group. "They are going to put money where they think it is going to pay off."
Added Cal Jillson, political scientist at Southern Methodist University: "They want to
make sure they have made a contribution that puts them on (the member's) radar
screen" in terms of getting access. "Their time is being rented; their vote is not being
bought."
Top leadership PACs giving to Alexander include those associated with Republican
Sens. Pat Toomey of Pennsylvania ($10,000), John Barrasso of Wyoming ($10,000),
Richard Shelby of Alabama ($10,000) and John Thune of South Dakota ($10,000).
"Challengers don't generally have these leadership PACs, though they are now
instructed by their parties to set one up quickly if they happen to win," McGehee said.
"If a challenger does set up a leadership PAC, it can be hard to attract the
contributions since the challenger has no power to wield."
49. http://www.tennessean.com/story/news/2014/03/06/marshablackburnoffersspaandcoo
kingsessionstocampaigndonors/6127941/
Marsha Blackburn offers spa and
cooking sessions to campaign donors
Paul C. Barton, Tennessean Washington Bureau;1:02 p.m. CST March 6, 2014
1CONNECTTWEETLINKEDINCOMMENTEMAILMORE
WASHINGTON – Members of Congress like to make it as fun as they can when
they ask campaign contributors for money.
Making it fun can mean anything from offering a ski outing, a round of golf at
an exclusive course or country club or sharing a luxury box at a sporting
event or Bruce Springsteen concert.
In the case of Rep. Marsha Blackburn, RBrentwood, it means offering a "spa
and cooking weekend" in exchange for donations.
Blackburn held just such a fundraiser Friday through Sunday at the upscale
Alluvian Hotel in Greenwood, Miss., in the heart of the Mississippi Delta.
According to an invitation forwarded to the Sunlight Foundation, individual
contributors going to the event were expected to give $1,500 while the
suggested amount for political action committees was $2,500.
50. Blackburn worked with the hotel to arrange a reduced rate of $215 a night, not
counting taxes and fees.
The Alluvian, named after the alluvial process by which the Mississippi River
deposits soil and sediments downstream, describes itself on its website as a
"cosmopolitan boutique hotel" with a "nouveau chic ambiance" and offering
"the finest in luxury experiences."
It's the site of the Viking Cooking School and the Alluvian Spa offering "the
healing, lifegiving powers of the air, earth and water."
The hotel also offers a yoga studio and maintains separate steam rooms for
men and women — "so swimsuits are optional."
Blackburn's campaign staff commented only that she's held the cooking and
spa weekends for several years and regards them as an attractive alternative
to the golf outings donors so often get invited to.
Campaign finance experts say wealthier donors like special events such as a
spa weekend instead of just mailing politicians a check.
"For Blackburn's Tennessee donors, this is the kind of weekend they would
enjoy and talk about with friends when they got back," said Larry Sabato,
political analyst at the University of Virginia. "Many people want schmooze
time with the member of Congress, and this can be quite an inducement to
writing Blackburn a check at or near the suggested contribution level, plus
building a personal relationship for the future.”
53. WASHINGTON Putting mustard oil, kerosene, diesel fuel and other
blistering agents on Tennessee Walking Horses has long been part of the
cruelty of soring the infliction of pain on the animals' front legs and hooves
so that touching the ground causes them to recoil in agony and achieve a
higherstepping gait.
But Department of Agriculture documents show the horses frequently face a
second set of chemicals as well those used to mask scars and numb a
horse's pain to fool inspectors.
And walking horses at the Tennessee Walking Horse National Celebration in
Shelbyville, Tenn. which starts Aug. 20 test positive for masking and
numbing agents more often than not, leaving critics to doubt the industry's
claim that at least 97 of every 100 horses are free of soring and their owners
and trainers in compliance with the Horse Protection Act of 1970.
USDA's Animal and Plant Health Inspection Service (APHIS) has a long list of
banned "foreign substances" its inspectors test for at events like the
Celebration. They are banned because they can be used to hide evidence of
soring.
The list includes many substances associated with industrial processes, such
as making dyes and pesticides, bleaching wood pulp and making paper and
packaging.
Some, such as oAminoazotoluene or anthraquinone, are animal carcinogens.
Still another, sulfur, is sometimes mixed with motor oil to make a paste that is
rubbed on a horse's damaged areas to cover up soring.
55. Jeffrey Howard, spokesman for the Shelbyvillebased Performance Show
Horse Association, one of the major groups representing the industry's Big
Lick faction, declined to answer questions about the results for banned
substances, saying they were based on "fundamentally flawed" information
coming from "other parties," a reference to groups like the Humane Society
and the USDA itself.
But John Bennett, a Shelbyville veterinarian representing PSHA, attacked the
bannedsubstance figures in a November 2013 appearance before the House
Energy and Commerce Committee, saying they were "unscientific, wholly
misleading and provide no support" for the position of PAST Act supporters.
In a horseshow environment, he said, it's unrealistic to think a horse's lower
leg called the "pastern" and hooves could avoid trace amounts of various
substances.
He and other bill opponents argue the legislation goes too far and would
decimate the industry.
"We want to save a Tennessee industry that has a 97 percent compliance rate
and protect these animals from the bad actors who make up the 3 percent on
noncompliance," said Mike Reynard, a spokesman for Rep. Marsha
Blackburn, RBrentwood, one of the most prominent PAST Act opponents.
Blackburn's office issues the comment repeatedly when asked about her
opposition.
But questions about compliance rates remain central to the debate over the
bill, which is stalled on Capitol Hill despite having overwhelming numbers of
cosponsors in both the House and Senate.
56. In a 2012, when finalizing minimum penalties for violations of the 1970 law,
USDA officials said in the Federal Register that they had received public
comments describing the 97 percent to 98 percent compliance claims as
"meaningless." USDA officials themselves said the rates were "not in and of
themselves" proof of effective industry selfpolicing.
While declining to discuss such criticisms, Howard, the PSHA spokesman, said
the industry has adopted new standards for protecting horses that "far
surpass the requirements set down by the U.S. government."
PAST Act supporters, meanwhile, say the banned substances are far from the
only factor skewing the 97percent figure.
First, the say, the rate only considers violations found by industryhired
inspectors, not those USDA veterinarians spot when they perform
unannounced inspections.
Because USDA can only afford to send its own veterinarians to a fraction of
the nearly 500 horse shows held annually, Congress amended the Horse
Protection Act in 1976 to allow "horse industry organizations" to provide
inspectors.
When USDA veterinarians do show up, they both make their own inspections
and monitor the work of industryhired inspectors. And between 2007 and
2012, USDA figures show, 61.2 percent of Horse Protection Act violations were
issued at the roughly 10 percent of shows federal officials were able to attend
and look over their shoulders.
57. Further, a 2010 USDA inspector general's report described the industryrun
system as rife with conflicts of interest, another factor suppressing violation
totals.
The industrypaid inspectors, it said, "understand that they will not please
their employers by excluding horses from the show due to violations of the
Horse Protection Act." It added "they have a direct conflict of interest with
enforcing the law and regulations."
Also, the violations total is divided by the number of "entries" in nationwide
shows. The distinction is important because owners often withdraw entries
rather than risk an inspection that could reveal soring, PAST ACT supporters
say.
Dane, of the Humane Society, says a more accurate measure would be to take
the number of violations issued by both industry and USDA inspectors and
divide by the number of Big Lick horses not other breeds actually
inspected, not just entered. That would result in a far smaller denominator and
a higher violations rate, he said.
Even with other breeds factored in, USDA figures for 2013 show 94 percent of
all Horse Protection Act violations were at Big Lick events.
Said W. Ron DeHaven of the American Veterinary Medical Association at the
2013 congressional hearing: "As many like to say, this system is set up much
like a fox watching a hen house not a good way to ensure the good welfare
of these beautiful horses."
