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<DIV style="MARGIN-LEFT: 1em; MARGIN-RIGHT: 1em"><A
href="http://www.latimes.com/news/nationworld/nation/la-na-kstreet30sep30,0,1685864.story?coll=la-home-headlines">http://www.latimes.com/news/nationworld/nation/la-na-kstreet30sep30,0,1685864.story?coll=la-home-headlines</A><BR>
<H4>THE DELAY INDICTMENT</H4>
<H1>DeLay Helped Cement GOP Ties to Lobbyists</H1>
<H2>His pressure helped turn business groups into a key part of the party's
political machine.</H2>By Tom Hamburger and Peter Wallsten<BR>Times Staff
Writers<BR><BR>September 30, 2005<BR><BR>WASHINGTON — Whether or not Rep. Tom
DeLay (R-Texas) returns to power, few industry lobbyists in the nation's capital
are likely to forget the lesson he once taught the electronic manufacturers:
Support the Republican Party — or else.<BR><BR>That industry felt DeLay's wrath
in the fall of 1998, when one of its leading trade associations hired a Democrat
as its top lobbyist. DeLay and his staff temporarily blocked one of the
industry's favorite measures from coming to a vote.<BR><BR>His slap at the
Electronic Industries Alliance led to a private reprimand from the House Ethics
Committee, and even some Republicans called his approach heavy-handed. But DeLay
was not deterred. <BR><BR>And the beleaguered former House majority leader has
left a lasting mark on the capital: turning the Washington lobbying
establishment into a critical cog of the Republican political
machine.<BR><BR><FONT color=#0000ff>Seven years after the dust-up with the
electronics group, many on K Street — home to Washington's network of business
associations and lobbying shops — believe they can no longer divide political
contributions evenly between the parties. Instead, they see their success in
Congress riding more on how hard they work to provide money and political muscle
to the Republican Party and its quest for a long-lasting conservative
majority.<BR></FONT><BR>Although DeLay's indictment this week on a Texas
campaign finance charge renews questions about the ethics of mixing corporate
interests and electoral politics, his well-cemented relationship with business
is likely to benefit the GOP into the future.<BR><BR><FONT color=#ff0000>"DeLay
deserves credit for bringing about a significant change" in the way Washington
works, said Richard Hohlt, a veteran lobbyist for banking and other interests.
"It takes a whip and a chair to control K Street, and DeLay had both and used
them," said Hohlt.<BR></FONT><BR>"He was the tip of the spear," said Stuart Roy,
a former DeLay aide who now works as a consultant. "Before we were in the
majority, the Republican leadership was reticent" to go too far in telling trade
groups what to do, he said. "Now it is the mind-set of the leadership: If you
are supposed to be pro-business, that should be reflected in your political
giving and your political activity."<BR><BR>Indeed, although DeLay's indictment
Wednesday forced him to step down, at least temporarily, as House majority
leader, the same view of K Street has been adopted by the person replacing him
in that role, Rep. Roy Blunt (R-Mo.). Blunt was assigned by DeLay several years
ago to take over the monitoring of K Street, and some lobbyists say he has
surpassed DeLay in getting businesses to mobilize on behalf of the conservative
agenda. <BR><BR>The revolution in corporate behavior began with the Republican
takeover of Congress in 1994, when DeLay was among the most outspoken of several
GOP leaders demanding that business groups support the party — not only by
contributing to Republican campaigns but by helping GOP leaders round up voters
and selecting party faithful to run trade associations. <BR><BR>When the
National Assn. of Securities Dealers hired a former Clinton administration
official, John Hilley, as a vice president in 1998, DeLay told the industry
publication Traders Magazine that the hiring was a "very big mistake."
<BR><BR>"For an organization to hire a highly partisan Democrat gives me great
concern, because I won't deal with such organizations," he said. (Hilley stayed
and was later promoted.)<BR><BR>Now, prominent Republicans head some of the
city's most influential trade groups: Former Michigan Gov. John Engler leads the
National Assn. of Manufacturers, and former Commerce Secretary Don Evans, a
friend of President Bush, runs the Financial Services Forum. Marc Racicot, a
former Montana governor who was once chairman of the Republican National
Committee, leads the American Insurance Assn.<BR><BR>Lobbyists who have their
offices in the glass-and-steel buildings that line K Street say that DeLay's
effort has had real impact. <BR><BR>Many of the Republicans who have taken
lobbying and trade association jobs recently owe their positions to GOP
benefactors in Congress. About two dozen former DeLay staffers work as
lobbyists. In these jobs, they often have access to funds they can use as
donations to campaigns and conservative causes. The corporate world also
supplies contacts in congressional districts that can help Republican candidates
with grass-roots campaigns.<BR><BR>The Bush administration has sought to take
advantage of these ties in building unified support for judicial nominees, the
president's Social Security proposal and, more recently, immigration overhaul —
issues that in the past did not draw much trade association activity. DeLay and
other GOP leaders used business contacts to push for passage in 2003 of the new
Medicare prescription drug benefit, which was a priority of the pharmaceutical
industry.<BR><BR>Before Republicans won control of the executive and legislative
branches in 2000, Washington lobbying had been studiously bipartisan.
Contributions from many industry groups were close to evenly divided between
Republicans and Democrats.<BR><BR>But DeLay and his allies had been working
several years to change that. To keep pressure on businesses to shift toward the
GOP, DeLay and his allies in 1995 compiled a list of the 300 or so largest
business-affiliated political action committees, along with a breakdown of their
campaign donations by party. Lobbyists were told their ranking, and DeLay
pressed those low on the list to give more to Republicans. Over time,
contribution patterns changed.<BR><BR>The accounting profession, for example,
gave more than half of its campaign donations to Democrats in 1994. So far this
year, 71% has gone to Republicans, according to the Center for Responsive
Politics, a nonpartisan research organization. The insurance industry increased
the share of donations to Republicans from 55% to 68% in the past decade. Energy
interests increased the share going to Republicans from 64% in 1994 to 75% a
decade later. <BR><BR>To monitor business hiring in Washington, DeLay and
conservative activist Grover Norquist launched the "K Street Project," which
tracks K Street jobs and who fills them.<BR><BR>Norquist assigns a full-time
staffer to keep up with hiring changes, which are then posted on a website. This
week, for example, the site says that a liquor manufacturer has tapped a new
corporate affairs chief who has made contributions to Democrats, including
Senate Minority Leader Harry Reid (D-Nev.). A separate item reports that a
Washington lobbying firm has promoted an executive who had donated to the
Bush-Cheney 2004 campaign fund.<BR><BR>Norquist said House and Senate GOP
leaders consulted the database to review hiring decisions by K Street
firms.<BR><BR>There are cases when firms hire Democrats for top jobs. But they
often pay a price.<BR><BR>Last year, conservatives fumed when the Motion Picture
Assn. of America hired Bill Clinton's former Agriculture secretary, Dan
Glickman, to run its Washington office. Afterward, Republicans removed
tax-relief provisions for the film industry from a pending tax bill. Later,
Glickman hired prominent Republicans, including a senior aide to House Speaker
J. Dennis Hastert.<BR><BR>The electronics alliance in 1998 learned there was a
cost to hiring a former Democratic lawmaker, but it was not fatal to the
alliance's interests. Its legislation eventually passed, and it kept the
Democrat as its top lobbyist.<BR><BR>A campaign finance activist, Fred
Wertheimer, president of Democracy 21, agreed that DeLay's approach had
penetrated deeply. <BR><BR>"It is a reality in the psyche of Washington
lobbyists," he said. <BR><BR>But Wertheimer said he believed the indictment of
DeLay and a separate investigation of a DeLay friend, lobbyist Jack Abramoff,
could lead to an abrupt change in that way of thinking. <BR><BR>DeLay's efforts,
he said, "have institutionalized a process of public officials demanding private
companies hire lobbyists of their choice, and lobbyists must be required to pay
in return. But that system under DeLay's leadership has become so blatant and
brazen that I do not expect it to last in its current form."
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