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Event: 12:30 – 1:30 p.m.
WHAT: Council on Foreign Relations (CFR) Briefing with Robert S. Mueller, Director, Federal Bureau of Investigation (FBI), U.S. Department of Justice on “Global Terrorism: The FBI’s Role.” Mr. Mueller will discuss the FBI’s efforts to act as a global security, national security, and law enforcement organization, and to effectively address the threat of global terrorism.
WHERE: CFR, 1777 F St., NW, Washington, DC.
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TOPIC: “ETHICS IN THE OBAMA ADMINISTRATION – ARE THE RULES CHANGING?”
TUESDAY, FEBRUARY 17, 2009, 11 A.M. EST
MODERATOR: Welcome to the State Department’s Washington Foreign Press Center. I’d especially like to welcome our colleagues at the New York Foreign Press Center who are joining us this morning via digital video conference.
On his first day in office, President Obama established a set of rules for his Administration that have been called the toughest ethical standards of any modern U.S. presidency. During the first month of his term, the President’s commitment to these rules has been put to the test. And the question is being raised – can we realistically expect the way Washington operates to change in such a dramatic fashion? And there’s a corollary – can the President find the most qualified men and women to advance his policies if they must adhere to stringent ethical guidelines?
Now, our guest today has been examining these and related questions for more than 30 years. Fred Wertheimer is the President and CEO of the nonprofit, nonpartisan organization Democracy 21, which he founded in 1997. Democracy 21 describes its mission as working to eliminate the undue influence, big money in American politics, and to ensure the integrity and fairness of government decisions in elections. Mr. Wertheimer was president of the citizens action organization Common Cause from 1981 to 1985 and is a frequent commentator and consultant for the print and broadcast media.
He has some opening remarks for you, and then we’ll open the floor to questions. Mr. Wertheimer, welcome to the Foreign Press Center.
MR. WERTHEIMER: Thank you. Well, it is an interesting question about whether the rules of Washington can change. And what we’re seeing here is a potential clash between a culture that’s developed in recent decades in Washington, which is a lobbyist, special interest money and politics culture, and a new president who comes from a different culture in terms of his own career, with a long track record on government integrity reform issues.
In the state where he comes from, there are two strains of politicians. There’s one strain that creates the scandals of which have led to four governors being indicted and many other problems. And there’s another reform strain that goes back to Senator Paul Douglas and includes Senators – the late Senator Paul Simon, Representative Mikva, Senator Durbin, and now President Obama who has a long track record on these issues. It did not start with his first day of office.
What is being fought here, however, is a deeply engrained influence money culture, at least that’s what I call it, and it’s grown up out of the fact that the size and economic stakes in government have grown exponentially in recent decades, and so the economic stakes for interest groups and others have grown tremendously. So what we have seen is enormous amounts of money being invested in lobbying and trying to influence government decisions that on a relative basis are small amounts – they’re almost asterisks for the people who are investing the money compared with the potential returns if they win government decisions.
And this has just led to an ever-growing amount of money being put into the lobbying world, and it’s come in different forms. A lot of it comes in the form of campaign contributions. It has come in the past in the forms of all kinds of financial favors and benefits for members of Congress.
And it kind of culminated publicly in the so-called Jack Abramoff scandals, which occurred a few years ago and revealed the extent to which one lobbying operation, a rogue operation that is not the norm, poured enormous amounts of money into providing meals, entertainment, trips, corporate jets and the like for members of Congress who were there trying to influence, and apparently were influencing. That led in 2007 to a set of reforms in Congress. Senator Obama then was one of the leaders of the reform legislation. Speaker of the House Pelosi really led the fight in the House, and in the Senate it was Senators Feingold and Obama and the Majority Leader Reid. And out of that came very tough new ethics and lobbying disclosure rules that shut down – pretty much shut down the ability of not just lobbyists, but lobbying organizations to pay for trips for members of Congress, to pay for their entertainment, to pay for meals.
Some people raised the question of what’s so special about buying a dinner, even expensive dinner for a member of Congress. But what’s special about it is no one gets to spend an hour and a half, two hours with a member of Congress, with uninterrupted time. So in some ways it’s a very cheap way of getting an extraordinary benefit. Certainly, constituents don’t get the undivided attention of a member of Congress for a couple of hours. This system really was a system that we looked at as members just not being comfortable paying their own way and getting into a mindset of entitlement where others picked up their bills and costs.
Now, we have had very good rules for a long time that really do prevent traditional forms of corruption: bribery, kickbacks, payoffs. You see very, very little of that in our system. The Executive Branch rules are extremely good on that, the congressional rules are also very good. We just have other ways in which money can be used to benefit, particularly members of Congress. And the 2007 law shut down a number of those rules. And following that, we saw Senator Obama’s presidential campaign in which he really chose lobbyists and special interests as a symbol of what he was trying to change in Washington.
Now, every president we elect runs against Washington, even if they’ve been here forever. It’s the way you run in this country. But President Obama ran in pretty much of a focused way on the way the city was working and also on the role of lobbyists. And this new executive order, which is what he could do by himself in terms of the Executive Branch, took on one of the really tough issues to challenge in Washington, and that is the process of people going into government, whether it’s the Executive Branch or Congress, and then coming out and capitalizing on their public service for quick private gain.
In the 2007 Act, we tried to adopt some tough ethics rules for members of Congress on the “revolving door.” And we made some progress in the Senate, none really in the House. And when I came to Washington it was the exception that members of Congress when they left Congress would stay here. They would go back home. Now the exception is members of Congress going back home, and we have hundreds of former members of Congress who are lobbyists in Washington.
The new Obama rules, which could only apply to the Executive Branch, were by far the toughest rules that anyone’s ever seen, and they were also groundbreaking rules. The revolving door provisions for people who leave the Obama Administration prevent them from coming back as lobbyists for the entire length of his presidency. And if he’s reelected, that means once you leave you can’t come back during that whole eight-year period. They cover the entire Executive Branch. Now, almost all revolving door rules only apply to the branch of the department or agency where you work.
He also for the very first time, and this has caused some bumps, no one has ever applied reverse revolving doors. That is to say, rules to govern people who were lobbyists and are now coming into the government. I thought this was a very, very powerful first step, not just for the rules but for the signal it sent that he does – did want to attack the culture in Washington and the way it works. And he has, as I said, he has a long track record of being very serious and very committed on these issues. Now these are very tough issues. We’ve never had a president who has seriously taken these on. In order to make substantial inroads, you have to do it over a sustained period of time. It has to carry on beyond first day’s actions. And you have to challenge a way of life in Washington at the very time your need to build coalitions, particularly in Congress, for your proposals. So it’s a tough proposition.
And in the end, what you really must take on is the role of campaign contributions in our elections. We had a very good public financing system for presidential elections for many years. It broke down, and is not functioning very properly. Senator Obama when he was in the Senate was one of the principal sponsors of the legislation to fix this system. When he ran for president, he did not enter the system and that caused some concerns among some people. But it was a broken system, particularly in the primary, because the most concerns was that he said he would go into the system, and then changed his mind and did not.
But he also made a commitment to fix the system, and that is standing there. And that’s one of our major issues, fixing the presidential public financing system. So we expect him to do so. The conventional wisdom in Washington is they won’t bother doing it because they had such an advantage in the 2008 election. Why do they want to change the rules for 2012 when he can have another big advantage? We’ll see what happens.
I am choosing to believe that he will stick with his commitments and his long track record and be actively involved in fixing the presidential public financing system. And then after that, you have to ultimately end up with a congressional public financing system if you’re to take on the undue influence that campaign contributions have in this city over government decisions, usually at the expense of the American people.
So bottom line, and answer to the question, are the rules changing? President Obama has set out to change these rules in a way that we haven’t seen before at the presidency. And we can all watch and see what happens. Our goal, as an organization, is to work with the Obama Administration and to fight the battle to change these rules. These rules create a very divided country in which the Washington establishment and culture lives under one set of rules and one way of life, and the rest of the country watches this and believes that the system is rigged against them too much at their expense.
So challenging this is extremely important. As I said before, we’re not dealing here with standard forms of corruptive problems in the sense of money exchanging hands for personal profit of government officials. But what we’re dealing with is the same kind of system that exists all over the world in democracies, where those with large sums of money and large interests try to get an edge in government decisions. And we are hopeful that this can be changed under the new president. We know it’s going to be quite a battle, but that’s a battle we’re going to be fighting.
Let me just add one last point. There’s a very, very good new book out on the history and the way this culture in Washington has developed. It was written by Robert Kaiser, who is a longtime journalist at The Washington Post and then was managing editor. It’s called “So Damn Much Money,” which was taken from a quote when Bob Kaiser asked Robert Strauss, who’s a legendary fundraiser and Democratic Party official, why he thought the problems of Washington had developed, and his answer was “so damn much money” on both sides.
These stakes are extraordinary. It’s a natural act that people are going to try to figure out how to protect their interests. And lobbying is a constitutional right in this country. I’ve been a registered lobbyist for 35 years. I have no problem with the concept of lobbying. I think it’s inherent in our system. The problem is when the rules of the game allow lobbyists to use money and other forms of financial benefits to gain a big edge on everyone else in influencing government decisions, and I’ll give you one example. Of course, the financial crisis in this country seems to be a modest issue these days, both here and around the world. And one of the issues that has been raised here is the absence of regulation of financial institutions as having been – the absence of effective regulation of having been a major factor in the problems we’ve run into now.
If you look at the issue of campaign money, over the past decade, the financial sector gave $1.5 billion in campaign contributions to members of Congress, other congressional candidates and their political parties. $1.5 billion is going to have some impact, and it did, just as the same thing happened when we ran into our savings and loans scandals in the late 1980s where we had an absence of effective regulations of the savings and loan industry, and we found large amounts of money from the savings and loan industry going in the form of campaign contributions. Now money is not the only factor. It never is, and there are lots of other factors. But it plays not only an undue role, but it’s a role that, when citizens see it, they know they can’t play in that game. So it instinctively tells citizens that they just don’t have the chance of being represented to the extent they should be represented because interjected between them and their elected officials are large amounts of money coming to influence decisions.
So let me stop there and see if anyone has any questions.
MODERATOR: Thanks, Mr. Wertheimer. Let’s take a couple questions. First, here from Washington and then we’ll go to New York. Don’t forget to wait for the microphone, identify yourself by name and affiliation.
First question.
QUESTION: Thanks. My name Andrei Sitov. I’m with Tass, the Russian news agency here in Washington, D.C., and I thank you for an interesting discussion. For me – before I came here, the whole idea was not really clear of what we’re discussing, because ethics in my culture is sort of separate from a set of laws. That is, a moral code is separate from a set of laws. While here, we are already discussing a set of laws and rules, right?
MR. WERTHEIMER: Right.
QUESTION: Actually, it is my first question. But is there a separate moral code for politicians, for business, for big business, for that matter, that you are looking at as a model that you want to enforce as a set of laws? Because even if you look at the examples that you cited, morally it was probably wrong for President Obama to accept – to reject public finances, but he did it. Morally, it’s probably indefensible for Governor Blagojevich to keep on being governor of his state until he was ejected. But he did it because it was legal.
So this difference between the laws, as the governing principle here and the morals is something that you argue for. That is – well, my first question. And then secondly, you also referred to this, the financial crisis, do you think it will be easier or harder for you in your work to argue for a more ethical system here, given the financial constraints for the country in general? Thanks.
MR. WERTHEIMER: You know, morals are an individual judgment and defined often in collective terms, you know, what is the moral, the right or the wrong thing to do ethically. And you cannot impose morality by rules. What you can do, however, is control behavior by rules. So if you have a set of good rules, you can limit conduct that the individual may think is moral or not moral. The Illinois Governor seems to have his own sense of morality that I don’t think matches up with a whole lot of other people. But rules can govern behavior and limit immoral conduct or improper conduct or conduct that undermines governance. So whenever people say to me – and it’s been often over my 35 or 40 years – you can’t legislate morality, you cannot. But I can give you a set of rules that will eliminate or minimize the problems that immoral conduct causes and will benefit the citizens of the country.
And I’ll give you just one small example. We use to have – under the earlier system before we adopted a set of rules, members of Congress could receive honoraria speaking fees, which went directly into their pockets from groups that were trying to influence their decisions. This was 30 years ago. Or members of Congress could work for law firms or corporations and earn money from them, at the same time that these groups had big stakes in congressional decisions. Now we adopted rules that banned honoraria fees and that limited members of Congress from working in outside jobs at the same time they were in Congress.
We didn’t legislate morality, but those rules greatly minimized the ability to use money to buy influence with elected officials. And as I said earlier, we have an excellent set of rules that rarely get noticed because it’s just too easy to focus on the problems. We have a terrifically effective set of rules for the Executive Branch that absolutely minimized the ability for people to misuse their office for their own personal gain while they’re in office. And we have a very good set of rules in Congress that do that as well.
So we had that scandal with Representative Cunningham, who was a criminal, and going around with his hand out for money in his pocket for bribes. And the only way you deal with that is you have rules to prohibit it, and when you’re able to catch the people you put them in jail, and that’s what happened there. We had very, very few examples of that happening in Congress, over decades of time. And so the rules can prevent immoral conduct even if the individual stays immoral.
On your second question, does the financial crisis increase the ability to obtain the kind of reforms that we seek? Yes, it does. And these happen – the kind of reforms that we work for happen over time. They never, almost never respond to one event or one potential problem. They’re building blocks. And when it builds up to a big enough problem, we can achieve fundamental change. The Enron scandals helped bring about the end of a campaign finance system that had the political parties circumventing the rules, but it was the last block in an effort that had been going on for 12 years to change these rules. It didn’t create the single opportunity to change the rules. It got you to the point where you could get across the finish line and do it 12 years after we had started this battle.
So my own sense of this is I’ve worked for citizens groups. I worked for Common Cause for 25 years, it was a citizen lobbying organization. Citizens in this country do not like these kinds of activities occurring. They completely understand that it comes at their expense. They have a continuing sense of outrage about it. And they’d never accept it, even if they have to live with it, they do not accept it. And it creates the opportunity for change and progress. And I have seen an awful lot of that, both at the national level and in the states during the time I’ve worked on these issues. I mean, people can get skeptical or cynical at times. But the public in this country does not get jaded about these kinds of practices. And that is why you see members passing in 2007 very fundamental changes in the rules for members of Congress, and that’s why you saw citizens responding to Senator Obama, when he went out and said, I don’t live by these rules, and I don’t want them and I want to change them.
And in my dealings with him when he was in the Senate and with his office, he had a clear track record – going back to Illinois and from the time he got to the Senate – of not only rejecting the rules of the game, but willing to challenge his colleagues. When he first got to the Senate, he introduced a bill to create an independent ethics commission to investigate ethic issues or problems that arose with individual House members and senators. This was not a very popular concept because the ethics committees are made up concurrently of members of Congress, who have to judge their peers, which is a very hard process. But he introduced it and he made a number of his Senate colleagues very angry.
So I mean, my view of the President on these issues is based on what I have seen him do when a whole lot of people weren’t paying that much attention. And it’s been consistent, a consistent, strong record, and that’s why I go against the grain of Washington and believe that he will follow through on his commitment to support efforts to repair the presidential public financing system, which is essential, in my view, to moving down the road on dealing with an influenced money culture.
MODERATOR: Okay. Andrew, let’s go to you for your second question, then we’ll go to New York after that.
QUESTION: Hi, I’m Andrew Siddons with Japan’s Yomiuri Shimbun. My question is about whether you think it’s appropriate or fair for the – in the provision to have the waiver for certain people who are registered lobbyists, and whether or not you think it’s appropriate for certain people who weren’t technically registered lobbyists, but by most people’s standards, could have been doing lobbying-related or influence peddling activities to also be part of the Administration, whether you think that the rules go far enough about that?
MR. WERTHEIMER: Well, first of all, on the waiver provision, I think that’s a normal part of these kinds of rules. It’s not unusual. The Administration may have been better off making it very – clearer to the public and to the media that the provision was there and why it was there. But there’s nothing unusual about it or unexpected about it.
And the standard for that kind of provision involve two things: Can you justify the waiver based on the merits, weighing all the circumstances? If you look at what the individual did, what the potential dangers are from what the individual was doing, what the individual’s overall experience was, what kinds of constraints are going to be put on them when they go into government, you can make individual judgments about whether the waiver is justified on the merits. So the waiver needs to be justifiable on the merits for a particular case. And secondly, you have to use it in a limited way, not – it can’t become the rule rather than the exception.
Now in this particular case, you had a brand new set of rules for lobbyists coming into government. No one had ever tried it; not just here, but anywhere in the country. Secondly, you had a whole new administration being appointed at a time when we had a huge economic problem on our hands and everyone was rushing around. And third, you had hundreds and hundreds of people being appointed while the focus came on a couple of examples of waivers.
My view – I have said you’re not going to be able to judge this waiver provision until we see some experience over time. And, you know, people have had different views on whether the waiver was appropriate or not for a couple of the individuals involved, but in the larger sense, none of this, in my view, detracts from the real power of these rules, nor does the fact that there’s a waiver provision indicate that there’s a problem with the rules.
On your second question, which I am now working to remember – yeah, go ahead.
QUESTION: Whether or not you think people who aren’t really registered as lobbyists --
MR. WERTHEIMER: Oh, yeah, I remember. Well, it’s kind of interesting, and in discussing this, I think we may be able to come up with a way of dealing with parts of this in the future as people have asked me about it. You have to build these rules off a set of definitions that explain who is covered.
We have a set of definitions in the Lobbying Disclosure Act. And the new executive order was built off of those rules in the Lobbying Disclosure Act. And those rules distinguish between people who directly lobby an Executive Branch official or a member of Congress and people who give strategic lobbying advice to others who are going to lobby. Now often, that strategic advice comes from former officials, particularly former members of Congress, because most people are not going to be paid money to give strategic advice on how to influence Congress. Members of Congress, however, are.
You can’t easily define a rule that covers someone who gives strategic lobbying advice, and that’s why it wasn’t covered in the definitions when the lobbying disclosure rules were enacted in the mid-1990s. If I am sitting in Dearborn, Michigan in a small company and the CEO of the company comes to me, as the general counsel, and asks me what I think we ought to do to try to win our case in Washington, you can consider that strategic lobbying advice. But if you covered it, your coverage would be so overbroad in terms of covering citizens or people who are doing something like that that it probably wouldn’t stand up constitutional.
So that’s why the definitions were focused on people who are being paid and are directly contacting public officials. If I’m a volunteer lobbyist and no one is paying me, even if I directly lobby public officials, I’m not covered. But what came out of this, to my way of thinking, is you could have a special set of rules that apply to the only people who really are going to be paid for providing strategic lobbying advice. There is a definition for lobbying activities in the statute that is separate from lobbying contacts. Lobbying contacts triggers the statute for an individual. Lobbying activities do not.
So if you defined a provision that covered former officials, particularly former members of Congress, and said that if they are giving strategic advice, that class of people is going to be covered and required to be reporting and treated as lobbyists, then they would get picked up by this executive order. The only problem with that is you have to pass that provision through the United States Congress, although I guess the Executive Branch could amend the executive order.
Now that’s kind of a long answer, but many of these problems exist for reasons that go beyond what is on the surface. The reason a Daschle isn’t covered as a lobbyist is because at the time the definitions were being made, the thought process was you can’t cover him without covering everyone in the country who has a discussion about how to win a legislative battle. It was just far too broad.
MODERATOR: Thanks. New York, you’ve been very patient. Can we have a question, please?
QUESTION: Yes, my name is Sveinn Helgason from Icelandic Broadcasting Service. You mentioned Tom Daschle. What do you think about the President’s handling of this case? Was it embarrassing in any way for the President? And also bearing in mind other slight tax problems that other nominees had for cabinet positions. Thanks.
MR. WERTHEIMER: Well, the President himself said he made a mistake in the Daschle case and I think what he meant by that was in not understanding the potential impact that the information they knew would have as it came out and became public and became a public issue. And probably the biggest single impact came from the notion of Senator Daschle driving around in a chauffeured limousine provided by an associate of his and not having to pay taxes on it.
Senator Daschle, from my personal experiences of dealing with him, was a terrific public servant for many years in the Congress. And I had, during the time I worked with him, the highest regard for him. He kind of was a product of the rules of Washington, this kind of Washington culture, and he fell into it like others have. And he got caught up in this clash between what has been a normal Washington culture, which Washington accepts, and a set of circumstances created by Obama’s campaign, which led to expectations of a change in this culture. And he got caught in the middle of that.
So I think the President moved quickly to try to cut this off and to cut it off, and he was not comfortable with what happened. And I guess, you know, he answers this question. I think he did feel it was embarrassing, he did feel it was a mistake, and he cut it off. I’m sure Senator Daschle withdrew because he knew he had to, that this was becoming too big a problem.
In terms of the other tax mistakes, you know, the Geithner tax mistakes were significant. The Administration felt, given the enormous crisis here and given his expertise, that they needed him for this situation. And that, basically, in their mind and I think in the Senate’s mind, resolved that question. The – and, you know, there have been a couple of these so far. I don’t know how many we have.
I mean, some of these get out of hand when someone has failed innocently or without malice to pay unemployment taxes or Social Security taxes on a household employee. I don’t know that that in and of itself should bar someone from serving in the government. So there’s a balance question. But these things built. You had the Geithner question and it created this whole public attention to tax problems, and then along comes Senator Daschle with a whole set of tax problems. In the middle of it, the person who was appointed to oversee performance had a $900 tax problem and she goes.
So right now, I’m sure anyone with the slightest kind of tax problem is being triply vetted because any new tax problem is going to be magnified in the eyes of the media and the public.
MODERATOR: Is there another question from New York? I guess not. Okay, back here in Washington to this questioner.
QUESTION: Thank you. My name is Sonia Schott with Radio Valera and Selecta, Panama. Probably you know that in Latin America, lobbying is considered against the rules. Despite that, so many governments are coming here to Washington and hire some lobbyists, right – to get connections or to be more positioned here or better positioned in the Washington agenda. I would like to know, do you think this Obama new initiative in that regard will affect all these foreign governments’ activities here? Thank you.
MR. WERTHEIMER: Well, I don’t know the answer to that. It’s very interesting, because for a long time, the thought process was government deals government-to-government over quite a period of time. But as this lobbying culture developed here, countries from all over the world decided, well, that’s the way that system works, so we have to hire the best lobbyists in Washington to make our case for us rather than making our case directly by ourselves.
It’s a little bit unusual, but it kind of reflects the reality of the way the system has worked here. I don’t know what effect the efforts that the President undertakes will have on those activities. We have a foreign lobbyist registration act here which requires lobbyists who work for foreign governments to register and report to their clients, the foreign governments, how much they’re being paid and the issues that are being worked on. So there is a disclosure system for that.
I don’t know that we’ll see much more beyond that, except that if the President decides that he wants more influence on how our country is responding to other foreign countries’ interests, he does have the ability to try to influence Congress and challenge the efforts being made by lobbyists for a particular country. So that’s going to depend on how the Administration perceives this and approaches the problem. But they certainly can go to Congress and try to block or advance the interests of a country regardless of what the lobbyists are doing. And if lobbyists are lobbying in the Congress to get a particular program funded, the Administration, if it wants to, can play a role.
MODERATOR: Here in the second row.
QUESTION: Yes, my name is Xingfu Zhu from Chinese media. Sir, you have been working on the issues of money and politics, and also the reform of political system. For the U.S. presidential campaign, it takes at least two years from the primary to the general election. Do you think this period of time is too long and it’s too expensive? This is my first question.
Follow-up question: During the 2008 presidential campaign, how much money was spent? And also, should the presidential nominees of both party accept the federal-provided fund or not? Thank you.
MR. WERTHEIMER: Well, the length of presidential campaigns concerns people in this country. The primary process runs 20 months. The general election process runs two months, technically. So the primary becomes a general election as well. I think most people in this country would like to see a shorter period, but you can’t do it under our Constitution. It would be very, very hard. You’d have to change the Constitution, in my view, to stop people from running before a particular point of time.
And this period when they run seems to get longer and longer. When President Clinton announced for the election in 1992, when he announced that he was running in the primary, it was September of 1991. In this last election, everyone announced in January of 2007, so it had moved back nine months. It’s a very long period of time, and one of the ways you might be able to shorten it is if you change the way the primary process works. But now, most of the primaries are held in the beginning months of the presidential election year – January, February. So everything moves back.
So, bottom line, I would like to see it shorter. I would assume a majority of people in this country would like to see it shorter. It’s not going to be shorter. You have to change the Constitution.
On the amount of money spent, I guess the overall amount was probably about a billion, two hundred million, a billion, three hundred million. Now one of the changes that occurred in this election is for the very – for the first time, someone, namely President Obama, tapped the internet – the capacity to raise money on the internet in an extraordinary way. It’s been tapped before, but no one has raised large amounts of small contributions on the internet in the way that President Obama did. And that kind of fundraising – lots of small contributions from lots of people – is healthy. That’s a healthy way of raising money. It’s a form of public financing even though it’s all private money. So it may be that the internet and the ability of candidates to raise small contributions on the internet is the wave of the future for raising money in this country. It would be very healthy if it is.
Should candidates go into the presidential public financing system? They should once we fix it, and we have a proposed new system in which everyone would go in. The reason everyone – almost every candidate used public financing for presidential elections in this country, from 1976 until 1996, was it was to your advantage as a candidate to use this system, because it’s a voluntary system. We can’t mandate it. We can’t mandate spending limits under the Constitution. And with public financing comes spending limits.
But it was an advantageous system. It broke down because no one allowed it to be modified and updated over that period of time, so it started breaking down first in 2000, and by 2008, it was broken. Once we repair this system, every candidate will want to go into it based on the model we have. And I think it would benefit the candidates, it would certainly benefit the country, and it would focus the system on, at least the private money in the system, because there would still be some private money. But it would be focused on small donors as the most important contributors.
And that money is – that money is democratized money. It’s not large amounts or bundling of large contributions. It costs almost nothing to raise money on the internet. And a candidate doesn’t have to spend any time raising money on the internet. So it is – it has extraordinary potential to dramatically change the way we finance campaigns in this country.
MODERATOR: Let’s check to see if there’s a question in New York.
NEW YORK MODERATOR: No, we have no questions at this time.
MODERATOR: Thanks, New York. A question here in the third row. Here’s the mike.
QUESTION: Thank you. My name is Alexander Panov. I’m from RTV-I. It’s a Russian satellite television. And your organization is called Democracy 21. It sounds very democratic when President Obama said to Republicans, look – go forward with your ideas; your opinion must be counted, but – and even though he has a secretary – a Defense secretary from the former administration, and he makes a proposal for one senator to be a secretary for Commerce. But what was the response of Republican Party? And does lobbying have any impact on, so far, not very successful attempts to involve the Republican Party in the administration?
MR. WERTHEIMER: First of all, we don’t support or oppose candidates. Secondly, we have had for some time a very polarized political system between the Democrats and the Republicans. It has been going on for more than a decade in which there have been very strong lines drawn on each side between the Democrats and Republicans.
The second thing that’s happened in the last 10, 20 years is we have gradually evolved into a permanent campaign. So the campaign never ends here. You don’t move from campaigns to governing, at least among the political parties. That means it is very, very difficult to break this system and start to rebuild the ability for a bipartisan effort. I worked in Congress in the 1970s and you still had partisan battles, but you also had compromise and consensus and bipartisan efforts and successful bipartisan efforts.
It’s very hard to break this apart, and it will take time before we know whether President Obama will be able to do it. I mean, my sense is he has been committed to trying to do this. But the recent stories show that I think they feel, and the President feels, that he is going to continue outreaching to try to build bipartisan efforts on particular bills, but they are not going to let it dominate the debate.
If you noticed in the last week or two weeks in Washington, the debate was over whether they had achieved a bipartisan bill or not. That wasn’t the debate in the country. The debate in the country is, what’s in that bill and is it good for me or not? And so you had two very different results. You had pretty significant public support around the country for the proposals, where you had this clash here where it looked like the issue in Washington was did they achieve bipartisanship. If you look out around the country, you will see a number of Republican governors signed on to this bill, because they live in what can euphemistically be called the real world. They’ve got budgets, they’ve got programs to run, they got people to serve every day. So you had one of John McCain’s strongest supporters, Governor Crist in Florida, welcome Obama to Florida and praise what he was trying to do the same time that Senator McCain was adopting it.
So I think there’s a complexity here, and what the Washington story is was not necessarily the national story. It will continue to be hard to break old habits here and to start creating bipartisan efforts. Some issues are much more naturally attuned to them and they may come easier than this one. What you saw here – we’ve also seen the Republican Party get more conservative and the Democratic Party get more liberal. But the Democratic Party in Congress has a block of moderate conservative Democrats, far more so than the Republicans have a block of moderate Republicans.
So you have very stiff drawn lines here, and you could basically hear the Republicans in Congress trying to define this in terms of whether they had won this in terms of the next election. I mean, that was part of it. Certainly there are a number of people who have ideological objections to this program, but given the extraordinary crisis, economic crisis we’re facing here, you would have thought you could have gotten more than zero Republicans in the House to join.
So you’re seeing a mixture of policy and heavy politics and deep lines of partisanship that President Obama has said he wants to change. I think he’s very serious about changing it, but we’ll see whether it can be changed in this immediate timeframe.
MODERATOR: Okay. We’re just about out of time. Thank you very much for your participation and for your questions --
MR. WERTHEIMER: Thank you.
TUESDAY, FEBRUARY 17, 2009, 11 A.M. EST
MODERATOR: Welcome to the State Department’s Washington Foreign Press Center. I’d especially like to welcome our colleagues at the New York Foreign Press Center who are joining us this morning via digital video conference.
On his first day in office, President Obama established a set of rules for his Administration that have been called the toughest ethical standards of any modern U.S. presidency. During the first month of his term, the President’s commitment to these rules has been put to the test. And the question is being raised – can we realistically expect the way Washington operates to change in such a dramatic fashion? And there’s a corollary – can the President find the most qualified men and women to advance his policies if they must adhere to stringent ethical guidelines?
Now, our guest today has been examining these and related questions for more than 30 years. Fred Wertheimer is the President and CEO of the nonprofit, nonpartisan organization Democracy 21, which he founded in 1997. Democracy 21 describes its mission as working to eliminate the undue influence, big money in American politics, and to ensure the integrity and fairness of government decisions in elections. Mr. Wertheimer was president of the citizens action organization Common Cause from 1981 to 1985 and is a frequent commentator and consultant for the print and broadcast media.
He has some opening remarks for you, and then we’ll open the floor to questions. Mr. Wertheimer, welcome to the Foreign Press Center.
MR. WERTHEIMER: Thank you. Well, it is an interesting question about whether the rules of Washington can change. And what we’re seeing here is a potential clash between a culture that’s developed in recent decades in Washington, which is a lobbyist, special interest money and politics culture, and a new president who comes from a different culture in terms of his own career, with a long track record on government integrity reform issues.
In the state where he comes from, there are two strains of politicians. There’s one strain that creates the scandals of which have led to four governors being indicted and many other problems. And there’s another reform strain that goes back to Senator Paul Douglas and includes Senators – the late Senator Paul Simon, Representative Mikva, Senator Durbin, and now President Obama who has a long track record on these issues. It did not start with his first day of office.
What is being fought here, however, is a deeply engrained influence money culture, at least that’s what I call it, and it’s grown up out of the fact that the size and economic stakes in government have grown exponentially in recent decades, and so the economic stakes for interest groups and others have grown tremendously. So what we have seen is enormous amounts of money being invested in lobbying and trying to influence government decisions that on a relative basis are small amounts – they’re almost asterisks for the people who are investing the money compared with the potential returns if they win government decisions.
And this has just led to an ever-growing amount of money being put into the lobbying world, and it’s come in different forms. A lot of it comes in the form of campaign contributions. It has come in the past in the forms of all kinds of financial favors and benefits for members of Congress.
And it kind of culminated publicly in the so-called Jack Abramoff scandals, which occurred a few years ago and revealed the extent to which one lobbying operation, a rogue operation that is not the norm, poured enormous amounts of money into providing meals, entertainment, trips, corporate jets and the like for members of Congress who were there trying to influence, and apparently were influencing. That led in 2007 to a set of reforms in Congress. Senator Obama then was one of the leaders of the reform legislation. Speaker of the House Pelosi really led the fight in the House, and in the Senate it was Senators Feingold and Obama and the Majority Leader Reid. And out of that came very tough new ethics and lobbying disclosure rules that shut down – pretty much shut down the ability of not just lobbyists, but lobbying organizations to pay for trips for members of Congress, to pay for their entertainment, to pay for meals.
Some people raised the question of what’s so special about buying a dinner, even expensive dinner for a member of Congress. But what’s special about it is no one gets to spend an hour and a half, two hours with a member of Congress, with uninterrupted time. So in some ways it’s a very cheap way of getting an extraordinary benefit. Certainly, constituents don’t get the undivided attention of a member of Congress for a couple of hours. This system really was a system that we looked at as members just not being comfortable paying their own way and getting into a mindset of entitlement where others picked up their bills and costs.
Now, we have had very good rules for a long time that really do prevent traditional forms of corruption: bribery, kickbacks, payoffs. You see very, very little of that in our system. The Executive Branch rules are extremely good on that, the congressional rules are also very good. We just have other ways in which money can be used to benefit, particularly members of Congress. And the 2007 law shut down a number of those rules. And following that, we saw Senator Obama’s presidential campaign in which he really chose lobbyists and special interests as a symbol of what he was trying to change in Washington.
Now, every president we elect runs against Washington, even if they’ve been here forever. It’s the way you run in this country. But President Obama ran in pretty much of a focused way on the way the city was working and also on the role of lobbyists. And this new executive order, which is what he could do by himself in terms of the Executive Branch, took on one of the really tough issues to challenge in Washington, and that is the process of people going into government, whether it’s the Executive Branch or Congress, and then coming out and capitalizing on their public service for quick private gain.
In the 2007 Act, we tried to adopt some tough ethics rules for members of Congress on the “revolving door.” And we made some progress in the Senate, none really in the House. And when I came to Washington it was the exception that members of Congress when they left Congress would stay here. They would go back home. Now the exception is members of Congress going back home, and we have hundreds of former members of Congress who are lobbyists in Washington.
The new Obama rules, which could only apply to the Executive Branch, were by far the toughest rules that anyone’s ever seen, and they were also groundbreaking rules. The revolving door provisions for people who leave the Obama Administration prevent them from coming back as lobbyists for the entire length of his presidency. And if he’s reelected, that means once you leave you can’t come back during that whole eight-year period. They cover the entire Executive Branch. Now, almost all revolving door rules only apply to the branch of the department or agency where you work.
He also for the very first time, and this has caused some bumps, no one has ever applied reverse revolving doors. That is to say, rules to govern people who were lobbyists and are now coming into the government. I thought this was a very, very powerful first step, not just for the rules but for the signal it sent that he does – did want to attack the culture in Washington and the way it works. And he has, as I said, he has a long track record of being very serious and very committed on these issues. Now these are very tough issues. We’ve never had a president who has seriously taken these on. In order to make substantial inroads, you have to do it over a sustained period of time. It has to carry on beyond first day’s actions. And you have to challenge a way of life in Washington at the very time your need to build coalitions, particularly in Congress, for your proposals. So it’s a tough proposition.
And in the end, what you really must take on is the role of campaign contributions in our elections. We had a very good public financing system for presidential elections for many years. It broke down, and is not functioning very properly. Senator Obama when he was in the Senate was one of the principal sponsors of the legislation to fix this system. When he ran for president, he did not enter the system and that caused some concerns among some people. But it was a broken system, particularly in the primary, because the most concerns was that he said he would go into the system, and then changed his mind and did not.
But he also made a commitment to fix the system, and that is standing there. And that’s one of our major issues, fixing the presidential public financing system. So we expect him to do so. The conventional wisdom in Washington is they won’t bother doing it because they had such an advantage in the 2008 election. Why do they want to change the rules for 2012 when he can have another big advantage? We’ll see what happens.
I am choosing to believe that he will stick with his commitments and his long track record and be actively involved in fixing the presidential public financing system. And then after that, you have to ultimately end up with a congressional public financing system if you’re to take on the undue influence that campaign contributions have in this city over government decisions, usually at the expense of the American people.
So bottom line, and answer to the question, are the rules changing? President Obama has set out to change these rules in a way that we haven’t seen before at the presidency. And we can all watch and see what happens. Our goal, as an organization, is to work with the Obama Administration and to fight the battle to change these rules. These rules create a very divided country in which the Washington establishment and culture lives under one set of rules and one way of life, and the rest of the country watches this and believes that the system is rigged against them too much at their expense.
So challenging this is extremely important. As I said before, we’re not dealing here with standard forms of corruptive problems in the sense of money exchanging hands for personal profit of government officials. But what we’re dealing with is the same kind of system that exists all over the world in democracies, where those with large sums of money and large interests try to get an edge in government decisions. And we are hopeful that this can be changed under the new president. We know it’s going to be quite a battle, but that’s a battle we’re going to be fighting.
Let me just add one last point. There’s a very, very good new book out on the history and the way this culture in Washington has developed. It was written by Robert Kaiser, who is a longtime journalist at The Washington Post and then was managing editor. It’s called “So Damn Much Money,” which was taken from a quote when Bob Kaiser asked Robert Strauss, who’s a legendary fundraiser and Democratic Party official, why he thought the problems of Washington had developed, and his answer was “so damn much money” on both sides.
These stakes are extraordinary. It’s a natural act that people are going to try to figure out how to protect their interests. And lobbying is a constitutional right in this country. I’ve been a registered lobbyist for 35 years. I have no problem with the concept of lobbying. I think it’s inherent in our system. The problem is when the rules of the game allow lobbyists to use money and other forms of financial benefits to gain a big edge on everyone else in influencing government decisions, and I’ll give you one example. Of course, the financial crisis in this country seems to be a modest issue these days, both here and around the world. And one of the issues that has been raised here is the absence of regulation of financial institutions as having been – the absence of effective regulation of having been a major factor in the problems we’ve run into now.
If you look at the issue of campaign money, over the past decade, the financial sector gave $1.5 billion in campaign contributions to members of Congress, other congressional candidates and their political parties. $1.5 billion is going to have some impact, and it did, just as the same thing happened when we ran into our savings and loans scandals in the late 1980s where we had an absence of effective regulations of the savings and loan industry, and we found large amounts of money from the savings and loan industry going in the form of campaign contributions. Now money is not the only factor. It never is, and there are lots of other factors. But it plays not only an undue role, but it’s a role that, when citizens see it, they know they can’t play in that game. So it instinctively tells citizens that they just don’t have the chance of being represented to the extent they should be represented because interjected between them and their elected officials are large amounts of money coming to influence decisions.
So let me stop there and see if anyone has any questions.
MODERATOR: Thanks, Mr. Wertheimer. Let’s take a couple questions. First, here from Washington and then we’ll go to New York. Don’t forget to wait for the microphone, identify yourself by name and affiliation.
First question.
QUESTION: Thanks. My name Andrei Sitov. I’m with Tass, the Russian news agency here in Washington, D.C., and I thank you for an interesting discussion. For me – before I came here, the whole idea was not really clear of what we’re discussing, because ethics in my culture is sort of separate from a set of laws. That is, a moral code is separate from a set of laws. While here, we are already discussing a set of laws and rules, right?
MR. WERTHEIMER: Right.
QUESTION: Actually, it is my first question. But is there a separate moral code for politicians, for business, for big business, for that matter, that you are looking at as a model that you want to enforce as a set of laws? Because even if you look at the examples that you cited, morally it was probably wrong for President Obama to accept – to reject public finances, but he did it. Morally, it’s probably indefensible for Governor Blagojevich to keep on being governor of his state until he was ejected. But he did it because it was legal.
So this difference between the laws, as the governing principle here and the morals is something that you argue for. That is – well, my first question. And then secondly, you also referred to this, the financial crisis, do you think it will be easier or harder for you in your work to argue for a more ethical system here, given the financial constraints for the country in general? Thanks.
MR. WERTHEIMER: You know, morals are an individual judgment and defined often in collective terms, you know, what is the moral, the right or the wrong thing to do ethically. And you cannot impose morality by rules. What you can do, however, is control behavior by rules. So if you have a set of good rules, you can limit conduct that the individual may think is moral or not moral. The Illinois Governor seems to have his own sense of morality that I don’t think matches up with a whole lot of other people. But rules can govern behavior and limit immoral conduct or improper conduct or conduct that undermines governance. So whenever people say to me – and it’s been often over my 35 or 40 years – you can’t legislate morality, you cannot. But I can give you a set of rules that will eliminate or minimize the problems that immoral conduct causes and will benefit the citizens of the country.
And I’ll give you just one small example. We use to have – under the earlier system before we adopted a set of rules, members of Congress could receive honoraria speaking fees, which went directly into their pockets from groups that were trying to influence their decisions. This was 30 years ago. Or members of Congress could work for law firms or corporations and earn money from them, at the same time that these groups had big stakes in congressional decisions. Now we adopted rules that banned honoraria fees and that limited members of Congress from working in outside jobs at the same time they were in Congress.
We didn’t legislate morality, but those rules greatly minimized the ability to use money to buy influence with elected officials. And as I said earlier, we have an excellent set of rules that rarely get noticed because it’s just too easy to focus on the problems. We have a terrifically effective set of rules for the Executive Branch that absolutely minimized the ability for people to misuse their office for their own personal gain while they’re in office. And we have a very good set of rules in Congress that do that as well.
So we had that scandal with Representative Cunningham, who was a criminal, and going around with his hand out for money in his pocket for bribes. And the only way you deal with that is you have rules to prohibit it, and when you’re able to catch the people you put them in jail, and that’s what happened there. We had very, very few examples of that happening in Congress, over decades of time. And so the rules can prevent immoral conduct even if the individual stays immoral.
On your second question, does the financial crisis increase the ability to obtain the kind of reforms that we seek? Yes, it does. And these happen – the kind of reforms that we work for happen over time. They never, almost never respond to one event or one potential problem. They’re building blocks. And when it builds up to a big enough problem, we can achieve fundamental change. The Enron scandals helped bring about the end of a campaign finance system that had the political parties circumventing the rules, but it was the last block in an effort that had been going on for 12 years to change these rules. It didn’t create the single opportunity to change the rules. It got you to the point where you could get across the finish line and do it 12 years after we had started this battle.
So my own sense of this is I’ve worked for citizens groups. I worked for Common Cause for 25 years, it was a citizen lobbying organization. Citizens in this country do not like these kinds of activities occurring. They completely understand that it comes at their expense. They have a continuing sense of outrage about it. And they’d never accept it, even if they have to live with it, they do not accept it. And it creates the opportunity for change and progress. And I have seen an awful lot of that, both at the national level and in the states during the time I’ve worked on these issues. I mean, people can get skeptical or cynical at times. But the public in this country does not get jaded about these kinds of practices. And that is why you see members passing in 2007 very fundamental changes in the rules for members of Congress, and that’s why you saw citizens responding to Senator Obama, when he went out and said, I don’t live by these rules, and I don’t want them and I want to change them.
And in my dealings with him when he was in the Senate and with his office, he had a clear track record – going back to Illinois and from the time he got to the Senate – of not only rejecting the rules of the game, but willing to challenge his colleagues. When he first got to the Senate, he introduced a bill to create an independent ethics commission to investigate ethic issues or problems that arose with individual House members and senators. This was not a very popular concept because the ethics committees are made up concurrently of members of Congress, who have to judge their peers, which is a very hard process. But he introduced it and he made a number of his Senate colleagues very angry.
So I mean, my view of the President on these issues is based on what I have seen him do when a whole lot of people weren’t paying that much attention. And it’s been consistent, a consistent, strong record, and that’s why I go against the grain of Washington and believe that he will follow through on his commitment to support efforts to repair the presidential public financing system, which is essential, in my view, to moving down the road on dealing with an influenced money culture.
MODERATOR: Okay. Andrew, let’s go to you for your second question, then we’ll go to New York after that.
QUESTION: Hi, I’m Andrew Siddons with Japan’s Yomiuri Shimbun. My question is about whether you think it’s appropriate or fair for the – in the provision to have the waiver for certain people who are registered lobbyists, and whether or not you think it’s appropriate for certain people who weren’t technically registered lobbyists, but by most people’s standards, could have been doing lobbying-related or influence peddling activities to also be part of the Administration, whether you think that the rules go far enough about that?
MR. WERTHEIMER: Well, first of all, on the waiver provision, I think that’s a normal part of these kinds of rules. It’s not unusual. The Administration may have been better off making it very – clearer to the public and to the media that the provision was there and why it was there. But there’s nothing unusual about it or unexpected about it.
And the standard for that kind of provision involve two things: Can you justify the waiver based on the merits, weighing all the circumstances? If you look at what the individual did, what the potential dangers are from what the individual was doing, what the individual’s overall experience was, what kinds of constraints are going to be put on them when they go into government, you can make individual judgments about whether the waiver is justified on the merits. So the waiver needs to be justifiable on the merits for a particular case. And secondly, you have to use it in a limited way, not – it can’t become the rule rather than the exception.
Now in this particular case, you had a brand new set of rules for lobbyists coming into government. No one had ever tried it; not just here, but anywhere in the country. Secondly, you had a whole new administration being appointed at a time when we had a huge economic problem on our hands and everyone was rushing around. And third, you had hundreds and hundreds of people being appointed while the focus came on a couple of examples of waivers.
My view – I have said you’re not going to be able to judge this waiver provision until we see some experience over time. And, you know, people have had different views on whether the waiver was appropriate or not for a couple of the individuals involved, but in the larger sense, none of this, in my view, detracts from the real power of these rules, nor does the fact that there’s a waiver provision indicate that there’s a problem with the rules.
On your second question, which I am now working to remember – yeah, go ahead.
QUESTION: Whether or not you think people who aren’t really registered as lobbyists --
MR. WERTHEIMER: Oh, yeah, I remember. Well, it’s kind of interesting, and in discussing this, I think we may be able to come up with a way of dealing with parts of this in the future as people have asked me about it. You have to build these rules off a set of definitions that explain who is covered.
We have a set of definitions in the Lobbying Disclosure Act. And the new executive order was built off of those rules in the Lobbying Disclosure Act. And those rules distinguish between people who directly lobby an Executive Branch official or a member of Congress and people who give strategic lobbying advice to others who are going to lobby. Now often, that strategic advice comes from former officials, particularly former members of Congress, because most people are not going to be paid money to give strategic advice on how to influence Congress. Members of Congress, however, are.
You can’t easily define a rule that covers someone who gives strategic lobbying advice, and that’s why it wasn’t covered in the definitions when the lobbying disclosure rules were enacted in the mid-1990s. If I am sitting in Dearborn, Michigan in a small company and the CEO of the company comes to me, as the general counsel, and asks me what I think we ought to do to try to win our case in Washington, you can consider that strategic lobbying advice. But if you covered it, your coverage would be so overbroad in terms of covering citizens or people who are doing something like that that it probably wouldn’t stand up constitutional.
So that’s why the definitions were focused on people who are being paid and are directly contacting public officials. If I’m a volunteer lobbyist and no one is paying me, even if I directly lobby public officials, I’m not covered. But what came out of this, to my way of thinking, is you could have a special set of rules that apply to the only people who really are going to be paid for providing strategic lobbying advice. There is a definition for lobbying activities in the statute that is separate from lobbying contacts. Lobbying contacts triggers the statute for an individual. Lobbying activities do not.
So if you defined a provision that covered former officials, particularly former members of Congress, and said that if they are giving strategic advice, that class of people is going to be covered and required to be reporting and treated as lobbyists, then they would get picked up by this executive order. The only problem with that is you have to pass that provision through the United States Congress, although I guess the Executive Branch could amend the executive order.
Now that’s kind of a long answer, but many of these problems exist for reasons that go beyond what is on the surface. The reason a Daschle isn’t covered as a lobbyist is because at the time the definitions were being made, the thought process was you can’t cover him without covering everyone in the country who has a discussion about how to win a legislative battle. It was just far too broad.
MODERATOR: Thanks. New York, you’ve been very patient. Can we have a question, please?
QUESTION: Yes, my name is Sveinn Helgason from Icelandic Broadcasting Service. You mentioned Tom Daschle. What do you think about the President’s handling of this case? Was it embarrassing in any way for the President? And also bearing in mind other slight tax problems that other nominees had for cabinet positions. Thanks.
MR. WERTHEIMER: Well, the President himself said he made a mistake in the Daschle case and I think what he meant by that was in not understanding the potential impact that the information they knew would have as it came out and became public and became a public issue. And probably the biggest single impact came from the notion of Senator Daschle driving around in a chauffeured limousine provided by an associate of his and not having to pay taxes on it.
Senator Daschle, from my personal experiences of dealing with him, was a terrific public servant for many years in the Congress. And I had, during the time I worked with him, the highest regard for him. He kind of was a product of the rules of Washington, this kind of Washington culture, and he fell into it like others have. And he got caught up in this clash between what has been a normal Washington culture, which Washington accepts, and a set of circumstances created by Obama’s campaign, which led to expectations of a change in this culture. And he got caught in the middle of that.
So I think the President moved quickly to try to cut this off and to cut it off, and he was not comfortable with what happened. And I guess, you know, he answers this question. I think he did feel it was embarrassing, he did feel it was a mistake, and he cut it off. I’m sure Senator Daschle withdrew because he knew he had to, that this was becoming too big a problem.
In terms of the other tax mistakes, you know, the Geithner tax mistakes were significant. The Administration felt, given the enormous crisis here and given his expertise, that they needed him for this situation. And that, basically, in their mind and I think in the Senate’s mind, resolved that question. The – and, you know, there have been a couple of these so far. I don’t know how many we have.
I mean, some of these get out of hand when someone has failed innocently or without malice to pay unemployment taxes or Social Security taxes on a household employee. I don’t know that that in and of itself should bar someone from serving in the government. So there’s a balance question. But these things built. You had the Geithner question and it created this whole public attention to tax problems, and then along comes Senator Daschle with a whole set of tax problems. In the middle of it, the person who was appointed to oversee performance had a $900 tax problem and she goes.
So right now, I’m sure anyone with the slightest kind of tax problem is being triply vetted because any new tax problem is going to be magnified in the eyes of the media and the public.
MODERATOR: Is there another question from New York? I guess not. Okay, back here in Washington to this questioner.
QUESTION: Thank you. My name is Sonia Schott with Radio Valera and Selecta, Panama. Probably you know that in Latin America, lobbying is considered against the rules. Despite that, so many governments are coming here to Washington and hire some lobbyists, right – to get connections or to be more positioned here or better positioned in the Washington agenda. I would like to know, do you think this Obama new initiative in that regard will affect all these foreign governments’ activities here? Thank you.
MR. WERTHEIMER: Well, I don’t know the answer to that. It’s very interesting, because for a long time, the thought process was government deals government-to-government over quite a period of time. But as this lobbying culture developed here, countries from all over the world decided, well, that’s the way that system works, so we have to hire the best lobbyists in Washington to make our case for us rather than making our case directly by ourselves.
It’s a little bit unusual, but it kind of reflects the reality of the way the system has worked here. I don’t know what effect the efforts that the President undertakes will have on those activities. We have a foreign lobbyist registration act here which requires lobbyists who work for foreign governments to register and report to their clients, the foreign governments, how much they’re being paid and the issues that are being worked on. So there is a disclosure system for that.
I don’t know that we’ll see much more beyond that, except that if the President decides that he wants more influence on how our country is responding to other foreign countries’ interests, he does have the ability to try to influence Congress and challenge the efforts being made by lobbyists for a particular country. So that’s going to depend on how the Administration perceives this and approaches the problem. But they certainly can go to Congress and try to block or advance the interests of a country regardless of what the lobbyists are doing. And if lobbyists are lobbying in the Congress to get a particular program funded, the Administration, if it wants to, can play a role.
MODERATOR: Here in the second row.
QUESTION: Yes, my name is Xingfu Zhu from Chinese media. Sir, you have been working on the issues of money and politics, and also the reform of political system. For the U.S. presidential campaign, it takes at least two years from the primary to the general election. Do you think this period of time is too long and it’s too expensive? This is my first question.
Follow-up question: During the 2008 presidential campaign, how much money was spent? And also, should the presidential nominees of both party accept the federal-provided fund or not? Thank you.
MR. WERTHEIMER: Well, the length of presidential campaigns concerns people in this country. The primary process runs 20 months. The general election process runs two months, technically. So the primary becomes a general election as well. I think most people in this country would like to see a shorter period, but you can’t do it under our Constitution. It would be very, very hard. You’d have to change the Constitution, in my view, to stop people from running before a particular point of time.
And this period when they run seems to get longer and longer. When President Clinton announced for the election in 1992, when he announced that he was running in the primary, it was September of 1991. In this last election, everyone announced in January of 2007, so it had moved back nine months. It’s a very long period of time, and one of the ways you might be able to shorten it is if you change the way the primary process works. But now, most of the primaries are held in the beginning months of the presidential election year – January, February. So everything moves back.
So, bottom line, I would like to see it shorter. I would assume a majority of people in this country would like to see it shorter. It’s not going to be shorter. You have to change the Constitution.
On the amount of money spent, I guess the overall amount was probably about a billion, two hundred million, a billion, three hundred million. Now one of the changes that occurred in this election is for the very – for the first time, someone, namely President Obama, tapped the internet – the capacity to raise money on the internet in an extraordinary way. It’s been tapped before, but no one has raised large amounts of small contributions on the internet in the way that President Obama did. And that kind of fundraising – lots of small contributions from lots of people – is healthy. That’s a healthy way of raising money. It’s a form of public financing even though it’s all private money. So it may be that the internet and the ability of candidates to raise small contributions on the internet is the wave of the future for raising money in this country. It would be very healthy if it is.
Should candidates go into the presidential public financing system? They should once we fix it, and we have a proposed new system in which everyone would go in. The reason everyone – almost every candidate used public financing for presidential elections in this country, from 1976 until 1996, was it was to your advantage as a candidate to use this system, because it’s a voluntary system. We can’t mandate it. We can’t mandate spending limits under the Constitution. And with public financing comes spending limits.
But it was an advantageous system. It broke down because no one allowed it to be modified and updated over that period of time, so it started breaking down first in 2000, and by 2008, it was broken. Once we repair this system, every candidate will want to go into it based on the model we have. And I think it would benefit the candidates, it would certainly benefit the country, and it would focus the system on, at least the private money in the system, because there would still be some private money. But it would be focused on small donors as the most important contributors.
And that money is – that money is democratized money. It’s not large amounts or bundling of large contributions. It costs almost nothing to raise money on the internet. And a candidate doesn’t have to spend any time raising money on the internet. So it is – it has extraordinary potential to dramatically change the way we finance campaigns in this country.
MODERATOR: Let’s check to see if there’s a question in New York.
NEW YORK MODERATOR: No, we have no questions at this time.
MODERATOR: Thanks, New York. A question here in the third row. Here’s the mike.
QUESTION: Thank you. My name is Alexander Panov. I’m from RTV-I. It’s a Russian satellite television. And your organization is called Democracy 21. It sounds very democratic when President Obama said to Republicans, look – go forward with your ideas; your opinion must be counted, but – and even though he has a secretary – a Defense secretary from the former administration, and he makes a proposal for one senator to be a secretary for Commerce. But what was the response of Republican Party? And does lobbying have any impact on, so far, not very successful attempts to involve the Republican Party in the administration?
MR. WERTHEIMER: First of all, we don’t support or oppose candidates. Secondly, we have had for some time a very polarized political system between the Democrats and the Republicans. It has been going on for more than a decade in which there have been very strong lines drawn on each side between the Democrats and Republicans.
The second thing that’s happened in the last 10, 20 years is we have gradually evolved into a permanent campaign. So the campaign never ends here. You don’t move from campaigns to governing, at least among the political parties. That means it is very, very difficult to break this system and start to rebuild the ability for a bipartisan effort. I worked in Congress in the 1970s and you still had partisan battles, but you also had compromise and consensus and bipartisan efforts and successful bipartisan efforts.
It’s very hard to break this apart, and it will take time before we know whether President Obama will be able to do it. I mean, my sense is he has been committed to trying to do this. But the recent stories show that I think they feel, and the President feels, that he is going to continue outreaching to try to build bipartisan efforts on particular bills, but they are not going to let it dominate the debate.
If you noticed in the last week or two weeks in Washington, the debate was over whether they had achieved a bipartisan bill or not. That wasn’t the debate in the country. The debate in the country is, what’s in that bill and is it good for me or not? And so you had two very different results. You had pretty significant public support around the country for the proposals, where you had this clash here where it looked like the issue in Washington was did they achieve bipartisanship. If you look out around the country, you will see a number of Republican governors signed on to this bill, because they live in what can euphemistically be called the real world. They’ve got budgets, they’ve got programs to run, they got people to serve every day. So you had one of John McCain’s strongest supporters, Governor Crist in Florida, welcome Obama to Florida and praise what he was trying to do the same time that Senator McCain was adopting it.
So I think there’s a complexity here, and what the Washington story is was not necessarily the national story. It will continue to be hard to break old habits here and to start creating bipartisan efforts. Some issues are much more naturally attuned to them and they may come easier than this one. What you saw here – we’ve also seen the Republican Party get more conservative and the Democratic Party get more liberal. But the Democratic Party in Congress has a block of moderate conservative Democrats, far more so than the Republicans have a block of moderate Republicans.
So you have very stiff drawn lines here, and you could basically hear the Republicans in Congress trying to define this in terms of whether they had won this in terms of the next election. I mean, that was part of it. Certainly there are a number of people who have ideological objections to this program, but given the extraordinary crisis, economic crisis we’re facing here, you would have thought you could have gotten more than zero Republicans in the House to join.
So you’re seeing a mixture of policy and heavy politics and deep lines of partisanship that President Obama has said he wants to change. I think he’s very serious about changing it, but we’ll see whether it can be changed in this immediate timeframe.
MODERATOR: Okay. We’re just about out of time. Thank you very much for your participation and for your questions --
MR. WERTHEIMER: Thank you.
