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Relatives have 'inside track' in lobbying for tax dollars

Matt Kelley and Peter Eisler
USA Today

October 17, 2006

Members of Congress and their staffs are barred from using their positions for personal profit. But their spouses and other relatives can — and often do...

Lobbying groups employed 30 family members last year to influence spending bills that their relatives with ties to the House and Senate appropriations committees oversaw or helped write, a USA TODAY investigation found. Combined, they generated millions of dollars in fees for themselves or their firms.

USA TODAY examined the family ties between lobbyists and the 94 members of the House and Senate appropriations committees, as well as 250 top staffers who serve those members. Those committees control the federal government's purse strings, allocating hundreds of billions of taxpayer dollars each year.

No rules or laws prevent lawmakers or their staffs from being lobbied by relatives, and proposals to address the practice have stalled on Capitol Hill.

Neither lawmakers nor lobbyists must report if they are related to each other...

The newspaper found 53 cases in which relatives of lawmakers or their top aides worked at lobbying firms last year. In 30 instances, those relatives, or firms in which they are principals, sought money in the appropriations bills their family members or their family members' bosses helped write. Of those 30 relatives, 22 succeeded in getting specific language inserted in the bills that guaranteed money for their clients, USA TODAY found. Among them:

• Lobbyist Juliet Pacquing collected $60,000 last year from Rhode Island manufacturer TPI Composites, lobbying disclosure forms show. Her husband, Kevin Cook, is the top staffer for the House Appropriations subcommittee on energy and water, chaired by Rep. Dave Hobson, R-Ohio. In news releases, Hobson took credit for securing money for TPI to develop an Army vehicle similar to the Humvee but with lighter materials. The total: $4.5 million. Hobson said Pacquing's relationship did not influence him.

• Lobbyist William Clyburn Jr., received $60,000 last year from two consulting firms to seek federal funding for the Augusta, Ga., airport, disclosure forms show. His cousin is Rep. Jim Clyburn, D-S.C. In an interview with USA TODAY in July, lobbyist Clyburn said he secured $2.5 million for the airport after speaking with lawmaker Clyburn about having the money put into an appropriations bill. In September, a spokeswoman for Rep. Clyburn disputed that characterization. A day later, lobbyist Clyburn reversed his earlier statement and said he did not speak with his relative about getting funding.

• Lobbyist Holly Piper's firm took in $220,000 last year from e-Cavern, a company seeking federal funding to build an underground facility to protect financial information in a Kentucky cavern. Piper's husband is Billy Piper, chief of staff to Sen. Mitch McConnell, R-Ky., a senior member of the Appropriations Committee and the second-ranking Senate Republican. McConnell added $1.5 million to an appropriations bill for the project. McConnell's spokesman said Holly Piper's relationship had nothing to do with the senator's decision.

• A start-up lobbying firm co-founded by Cindy Young took in $40,000 last year for helping Dynamic Defense Materials win federal funding to develop new body armor for the military. Young's father-in-law, Rep. C.W. "Bill" Young, R-Fla., chairs the House Appropriations defense subcommittee. Rep. Young acknowledged that his daughter-in-law had set up meetings between him and her clients, including the defense contractor. Rep. Young included $1 million in his bill to fund the company's body armor project. He denied there was any special treatment.

...federal records show Rep. Hobson received a total of $8,000 in campaign contributions from 2005 through 2006 from Pacquing and executives at TPI, the company that hired Pacquing to lobby him.

"It pays to be related to a member of the appropriations committee," said James Thurber, director of the Center for Congressional and Presidential Studies at American University in Washington. "It shows a serious conflict of interest between those appropriators who are supposed to be appropriating for the public interest and their relatives, who obviously have special access to these individuals.

"In the balance of the public interest vs. private interest," Thurber said, "it seems the public interest loses again."

Lawmakers say they are not swayed by their family ties. That's the position of Florida Rep. Young, whose daughter-in-law Cindy Young is a partner in a small Pennsylvania lobbying firm that primarily serves defense contractors. Rep. Young said his daughter-in-law handles legal and business issues for the firm, but she has not registered to lobby Congress.

Last year, clients of Cindy Young's firm won $2 million in funding in the defense spending bill that her father-in-law oversaw. In one case, $1 million was directed to one of Cindy Young's clients, Dynamic Defense Materials, to develop body armor for the military. The money came in the form of an "earmark," a provision that lawmakers add to spending bills for an item or program that wasn't requested by the agency getting the money, or authorized by previous legislation.

Juliet Pacquing's husband, Kevin Cook, is the top staffer for the House Appropriations subcommittee for energy and water programs. The chairman of that subcommittee — the lawmaker who relies most heavily on Cook as a staffer — is Rep. Hobson.

During the past two years, one of Pacquing's main clients, TPI Composites, has received more than $500,000 in federal contracting work under programs funded by Hobson's energy and water appropriations bill.

Hobson also sits on the Appropriations defense subcommittee. In a defense appropriations bill, TPI got $4.5 million to help the Army develop a composite vehicle similar to the Humvee. In a news release, Hobson took credit for getting the money...

Pacquing acknowledged that she has lobbied Hobson for defense earmarks on behalf of TPI. "I don't lobby my husband," she said. "There's a conflict there."

Pacquing said her lobbying work relies on contacts she made in her previous job as a staffer on the Appropriations defense panel. Those clients, she said, are almost exclusively defense contractors. "I'm just a small fish," she said. "I don't know why you're talking to me."

Hobson said he was also unaware that TPI has a financial stake in programs funded by his energy and water bill.

"I didn't even know that the contracts were there or that (TPI) even dealt with Sandia," Hobson said.

TPI declined to comment. Executives with the company donated a total of $6,000 to Hobson's campaign in 2005 and 2006, federal records show. Pacquing gave $2,000 to Hobson in the same span.

Lobbyist William Clyburn Jr. said he sees no benefit to having family on the Appropriations Committee. The lobbyist is the son of Rep. Clyburn's first cousin, and Clyburn said he grew up calling the lawmaker "uncle." Rep. Clyburn is the third-highest-ranking House Democrat and a member of the Appropriations panel handling transportation projects.

Cedric Johnson, chairman of the Augusta (Ga.) Airport Commission, said that the board knew of the lobbyist's family ties to Rep. Clyburn but that he wasn't hired for his family connections. He said the board sought William Clyburn's help because they knew him from his days as a staffer for then-senator Zell Miller, D-Ga.

Regardless, Johnson said the board could not have won the $2.5 million for terminal improvements without the lobbyist.

In an interview in July — before the newspaper contacted Rep. Clyburn's office — lobbyist William Clyburn acknowledged that he discussed funding for the Augusta airport with his congressman cousin.

"There hasn't been anything that, 'Because Jim is your relative, you're going to get this or that,' " William Clyburn said.

Kristie Greco, a spokeswoman for Rep. Clyburn, told USA TODAY in September that the congressman and his cousin had not discussed the Augusta airport funding or any other business. "He doesn't lobby before the congressman," Greco said of William Clyburn. She suggested that the newspaper contact the lobbyist again.

The next day, in a second interview, William Clyburn reversed what he had told the newspaper in July. He said he discussed other matters with his cousin but had not discussed the Augusta airport funding with him.

Holly Piper, a former staffer to Sen. Mitch McConnell, R-Ky., married the senator's chief of staff just months after taking a lobbying job with a firm seeking appropriations for Kentucky clients.

Piper went to work for Bates Capitol Group, a Louisville lobbying firm with a client list heavy on Kentucky businesses. One company for which Piper sought money, is e-Cavern, lobbying records show.

As a senior member of the Senate Appropriations Committee, McConnell secured $1 million in federal funding for the facility in 2004, Piper's first year as a lobbyist for e-Cavern. In 2005, McConnell secured another $1.5 million for the project. In those two years, e-Cavern's annual lobbying payments to Bates Capitol climbed from $80,000 to $220,000. Last year, two of e-Cavern's top executives contributed $1,000 each to McConnell's campaign account.

McConnell spokesman Don Stewart said Piper's relationship to the senator's top staffer had nothing to do with McConnell's steering federal funds to the project.

Stewart said McConnell barred any lobbying contacts between Holly Piper and her husband after they were married. And a year later, in spring 2005, he expanded that policy to forbid anyone on his staff from having any contact with lobbyists who have a relative in the senator's office. Holly Piper has since left the lobbying business and declined to comment.

Unlike Congress, the judicial and executive branches have strict guidelines on nepotism and contacts with lobbyists and business interests, said Ronald Utt, a budget expert at the conservative Heritage Foundation think tank.

For example, laws bar executive branch employees from taking action affecting the financial interests of their spouses or minor children. Federal judges are required to remove themselves from cases affecting the financial interests of their spouses or minor children, or when lawyers or parties to the case are related to the judge. "It's particularly troublesome, because (Congress is) in an environment that has very limited, formal ethical standards to begin with," Utt said.

"The ethics of it are terrible," he said of the newspaper's findings. "It's getting to the point where no one bothers to hide what appear to be raging conflicts of interest."

Utt said it's "both impossible and preposterous" to believe that relatives who are lobbyists don't influence their family members.

Congress appears unlikely to act this year to address how lawmakers and their staff should deal with family members in the lobbying business. Congressional leaders have yet to set up a committee of House and Senate members to reconcile differences between the two pieces of legislation. Those differences must be resolved before a final bill can be voted on...

The Senate bill would bar all "official contact" with a lawmaker's office by a registered lobbyist who is an "immediate family member" of that lawmaker — a definition that includes spouses, children and certain in-laws. That bill does not address situations in which a lobbyist is related to a staff member.

The House bill is silent on the issue of lobbying relatives.

Currently, the only official pronouncement on the issue of family ties is an opinion by the Senate Ethics Committee. The committee recommended that a lobbyist related to a senator's chief of staff should not be allowed to lobby anyone in that senator's office. The opinion was never adopted as a rule. And it has no bearing in the House.
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Contributing: Paul Overberg