Amid widespread criticism, two former U.S. senators say they are not lobbying Congress on behalf of a shady Russian bank, although a federal disclosure suggests otherwise.Amid widespread criticism, two former U.S. senators, including Louisiana‘s John Breaux, say they are not lobbying Congress on behalf of a shady Russian bank, although a federal disclosure suggests otherwise. By Walter Pierce
Monday, Sept. 14, 2014
[Editor‘s Note: The Associated Press reports that Thomas Hale Boggs Jr. died at age 73 on Monday, Sept. 15, 2014 - the distribution day for the print issue of ABiz in which this story appears; Boggs is mentioned below.]
A recent headline in the national political press says it best, "K Street is the Real Winner in Growing Tensions Between the U.S. and Russia," or as Gary Hufbauer, a former Treasury Department official now on staff at the Peterson Institute for International Economics, put it to Politico, "These sanctions are a bonanza for K Street."
|Breaux, left, and Lott during a recent TV appearance|
Enter former U.S. Sen. John Breaux. A recent federal disclosure shows that Breaux and a longtime congressional colleague, former Senate Majority Leader Trent Lott, were hired by Gazprombank GPB, a subsidiary of Russia‘s third largest bank, which in mid-July was added to a Treasury Department list of Russian firms barred from debt financing with U.S. businesses. According to the filings, Breaux and Lott - the former was a (conservative) Democrat in Congress; the latter a Republican - are the top lobbyists for the firm Squire Patton Boggs and were hired to lobby on "banking laws and regulations including applicable sanctions."
Reports of the arrangement first disclosed by the Center for Public Integrity were met with widespread criticism. Breaux, however, told The Times-Picayune on Sept. 9 that he and Lott are not lobbying on behalf of the Russian bank and they were merely asked to determine whether Congress might take any action against Gazprombank. The former senator added that he filed the lobbying disclosure "out of an abundance of caution."
Breaux‘s denial aside, the deal would mean handsome paychecks for the Crowley native and his Mississippi counterpart and would likely net millions for the firm, which was created in June of this year following a series of mergers that began with the acquisition of the former senators‘ own lobbying firm, Breaux Lott Leadership Group, formed in 2008. (The name Boggs should be familiar to Louisianans of a certain age: A founding partner is Thomas Hale Boggs Jr., son of former Louisiana Congressman Hale Boggs, who died in a plane crash in 1972, and Congresswoman Lindy Boggs, who succeeded her late husband and served six terms of her own in the House before her death last year; Boggs Jr.‘s sister, Cokie Roberts, is a well-known television political commentator.)
The Treasury Department was guided in its decision to sanction Gazprombank by the Permanent Court of Arbitration, an intergovernmental group in the Netherlands that ruled Russia should reimburse shareholders of the former oil company Yukos $50 billion after Yukos‘ assets were seized by Moscow and transferred to Gazprombank.
So, depending on whether one trusts federal lobbying disclosures, the Russian bank turned to the biggest player on K Street, Squire Patton Boggs.
"This seems like an illustration of the adage that money has no country,‘" says Pearson Cross, head of UL Lafayette‘s Political Science Department. "This case stands out, in particular, for the juxtaposition of two illustrious and powerful former congressmen with such a troubled and seamy enterprise as Gazprombank."
K Street is, of course, a real place: a thoroughfare in Washington, D.C., that is home to think tanks, lobbying firms and trade groups. But it‘s also a metonym for lobbying in general, and the corrosive effect the so-called "revolving door" - member of Congress one day, lobbying members of Congress the next - has had on American politics and federal policy.
The contract between Squire Patton Boggs and the Russian bank didn‘t escape the gaze of media.
"There was a time when such activity would be labeled treasonous. Now it‘s called lobbying," opined the editors at one Connecticut daily.
Regardless of whether he‘s actively lobbying on behalf of a Russian bank, the affable Breaux, who made a reputation for working across party lines during three terms as a senator and seven terms as a Louisiana House member before that, epitomizes as well as anyone the revolving door culture of the Beltway.
Within months of leaving the Senate for private life in 2005, Breaux was back in the halls of Congress as a lobbyist. That was before rules were put in place in 2007 requiring former House members to wait a year and senators to wait two years before lobbying.
The public hand-wringing about the revolving door got new life recently when former House Majority Leader Eric Cantor, a Virginia Republican, unexpectedly lost a primary challenge then, not unexpectedly, announced he wouldn‘t finish out his term and had instead taken a job with a Wall Street investment bank that - you guessed it - does a lot of lobbying on Capitol Hill.
There‘s a reason "too big to fail" has also meant "too big to jail." Lobbying.
"This is a well-worn storyline: Young guy goes to Congress, climbs up the ladder, assumes power, leaves and goes to work for a seven-figure salary lobbying his buddies on the Hill," wrote The Sacramento Bee in an early September editorial. "This scenario is played out so many times in so many pernicious ways that it‘s no wonder the voters regard Congress as a rigged blackjack table."
Firebrand Democratic Sen. Elizabeth Warren of Massachusetts didn‘t mince words when she told Yahoo! News that former solons like Cantor and Breaux "head straight out into the industry, not because they bring great expertise and insight, but because they‘re selling access back in to their former colleagues who are still writing policy, who are still making laws."
"I just think this is fundamentally the wrong approach, and I think it‘s - it worries me about what happens if people in government are looking for that next job ... that ultimately infects whatever it is that they‘re doing, and I just think this is wrong," Warren added.
In fact, Cantor, Breaux and Lott are in good company: Some 300 former members of Congress are now registered lobbyists. But lobbying for a Wall Street investment bank or California produce growers is one thing; lobbying for a shady Russian bank is another.
As UL‘s Cross puts it: "It makes one wonder if Squire Patton Boggs has any standards for client representation, or, do they just take all comers?"