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Published on Sunday, April 22, 2007 by Los Angeles Times

Obama's Refusal of Lobbyists' Money Has its Limits

by Dan Morain

WASHINGTON - While pledging to turn down donations from lobbyists themselves, Sen. Barack Obama raised more than $1 million in the first three months of his presidential campaign from law firms and companies that have major lobbying operations in the nation's capital.Portraying himself as a new-style politician determined to reform Washington, Obama makes his policy clear in fundraising invitations, stating that he takes no donations from "federal lobbyists." His aides announced last week he was returning $43,000 to lobbyists who donated to his campaign.

But the Illinois Democrat's policy of shunning money from lobbyists registered to do business on Capitol Hill does not extend to lawyers whose partners lobby there.

Nor does the ban apply to corporations that have major lobbying operations in Washington. And the prohibition does not extend to lobbyists who ply their trade in such state capitals as Springfield, Ill.; Tallahassee, Fla.; and Sacramento, though some deal with national clients and issues.

"Clearly, the distinction is not that significant," said Stephen Weissman of the Campaign Finance Institute, a nonpartisan think tank that focuses on campaign issues.

"He gets an asterisk that says he is trying to be different," Weissman said. "But overall, the same wealthy interests are funding his campaign as are funding other candidates, whether or not they are lobbyists."

A relative newcomer to national politics, Obama stunned the political world by raising $25.7 million in the first three months of the year, all but matching money raised by his main rival, Sen. Hillary Rodham Clinton (D-N.Y.).

Obama attained the lofty mark even as he decried the fundraising system. In his Internet appeals for small donations, Obama played up populist themes of reform.

"It may sound strange for a presidential candidate to launch a fundraising drive that isn't about dollars. But our democracy shouldn't be about money, and it's time our campaigns weren't either," he said in one such pitch.

In another e-mail seeking money, Obama decried the "special interest industry in Washington" and warned it would spend more money than ever to "try to own our political process."

"We're not going to play that game," the e-mail said.

Obama spokesman Bill Burton said Obama instituted the ban on lobbyist money in reaction to public anger over the Jack Abramoff lobbying scandal. Burton also acknowledged the policy has its flaws.

"This ban is part of Obama's best effort to address the problem of money in politics," Burton said in a statement. "It isn't a perfect solution to the problem and it isn't even a perfect symbol. But it does reflect that Obama shares the urgency of the American people to change the way Washington operates."

Obama said in his first-quarter financial report that he received money from 104,000 donors, twice as many as Clinton, suggesting a disproportionate number of small contributions. But the Campaign Finance Institute said Obama still received 68% of his money from donations of $1,000 or more, compared with 86% for Clinton.

Rules for lobbyists

Lobbyists generally are paid by corporations, unions and other interest groups to shape public policy by making regular contact with government officials. They must register with both houses of Congress, and make public disclosures identifying their clients and the amounts they are paid.

Some of the most influential players, lawyers and consultants among them, skirt disclosure requirements by merely advising clients and associates who do actual lobbying, and avoiding regular contact with policymakers. Obama's ban does not cover such individuals.

For example, partners from the Atlanta-based law firm Alston & Bird donated $33,000 to Obama in the first 90 days of 2007.

Alston & Bird has a large lobbying division in Washington. It billed its clients nearly $3.9 million in 2006, ranking 35th among Washington lobbyists. Alston boasts on its website that it offers clients "unique experience with how policy is made" and knows "the people who make it: government and agency officials; members of Congress and their staff."

Obama kept $2,300 donated by Alston's Tom Daschle, the former Senate Democratic leader. Daschle, located in Washington, is neither a lawyer nor a lobbyist. He is a consultant.

According to Alston's website, Daschle advises "clients on issues related to all aspects of public policy with a particular emphasis on issues related to financial services, health care, energy, telecommunications and taxes."

Daschle did not return phone calls.

While refusing money directly from federal lobbyists, who get their income from clients, Obama takes money from those clients. In the first quarter of 2007, he accepted a combined $170,000 from Goldman Sachs and Citigroup, two financial services giants that have numerous issues pending in Washington and spent a total of $4.6 million on lobbying in 2006.

Power provider's largess

Obama's biggest single source of corporate money - $160,000 - came from executives at Exelon Corp., the nation's largest nuclear power provider, and its subsidiary, Commonwealth Edison, an Illinois utility.

Exelon spent $500,000 to influence policy in Washington last year. Although Obama took no money from Exelon's Washington lobbyists, he accepted $1,000 checks from lobbyists John P. Novak and James Monk of Springfield. In Springfield, Novak represents Exelon., and Monk is president of the Illinois Energy Assn., a trade group that represents Commonwealth Edison.

Monk and Novak said they do not lobby in Washington. But their clients care about federal issues, including where to store nuclear waste and what restrictions to place on coal-fired plants.

"I'm not going to second-guess his policy," Novak said. "I think it is appropriate for me to support a presidential candidate from Illinois."

Lobbyists from other states also gave Obama money. In California, Obama accepted $2,300 from a partner whose lobbying firm represents AT&T, United Airlines and the Recording Industry Assn. of America in Sacramento.

In Tallahassee, Obama held a fundraiser attended by several statehouse lobbyists, taking checks from lobbyists for trial attorneys, the insurance industry, fast-food chains and sugar cane growers. State and federal issues often are related, as noted by the law firm Akerman Senterfitt, whose Florida-based members donated $7,000 to Obama. On its website, Akerman notes it combines Tallahassee connections with "an involved federal political action committee" to provide its clients "with an enviable level of access."

"If you cannot be completely pure, is it worth it to be partially pure? That seems to be debatable," said political scientist Bruce Cain, director of the University of California Washington Center, based in the nation's capital.

"We cannot say his policy is completely meaningless," Cain said. "But it doesn't insulate him from interests."

On May 2, Obama is scheduled to attend a $2,300-per-ticket breakfast 10 blocks from the Capitol. The hosts include 22 lawyers. Although they are not federal lobbyists, three in the past have been registered lobbyists; they all work at firms that have Washington lobbying operations or hire outside lobbying firms to contact lawmakers.

Lobbyists at the law firms where the lawyers work billed lobbying clients a combined $19 million in 2006, according to PoliticalMoneyLine. Clients include defense contractors, energy producers, healthcare interests, pharmaceutical manufacturers and tobacco companies.

One lawyer co-hosting the Obama event has represented companies fending off litigation over toxic waste cleanup, and another represents employers on affirmative action requirements, force reduction and early retirement programs, their firms' websites say.

Attorney Robert Sussman, one of the organizers, said in an interview that he was a registered lobbyist until recently, when he decided to help Obama raise money. So that he might do so, he said, the campaign requested that he drop his registration.

"This is a policy that they felt would be consistent with their values and their beliefs. I take no position on the wisdom," Sussman said. "I decided whatever small inconvenience that was created [by ceasing lobbying] was more than outweighed by helping the candidate."

dan.morain@latimes.com

Times staff writer Peter Wallsten contributed to this report.
Copyright 2007 Los Angeles Times

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