Government Work Done, Tax Policy Writers Decamp to Lobbying Jobs
Posted July 8, 2018 7:59 p.m. EDT
WASHINGTON — Six months after Republicans pushed a $1.5 trillion tax overhaul through Congress, many of the most influential players who worked behind the scenes on the legislation are no longer on Capitol Hill or in the Trump administration.
They are now lobbyists.
The two-way street between lobbying and lawmaking is well worn in Washington. But after President Donald Trump’s campaign pledge to “drain the swamp,” there was some speculation that the special interests might be sidelined. And while the frenetic two-month sprint in 2017 to pass the tax legislation left some lobbyists marginalized, the businesses now scrambling to navigate the changes are increasingly recruiting the people who wrote it.
With the November midterm elections near, and the possibility that Republicans could lose control of the House or the Senate, staff members have additional motivation to move on.
“Companies are looking to better understand the legislation and potentially affect future changes, which is why they are snatching up top talent,” said Ken Spain, a Republican consultant who works on financial and tax issues. “With the uncertainty of the election looming, Republican staffers are quietly making themselves available to K Street while they can still demand top asking price.”
While they might not be household names, those who have decamped to the private sector played a major role in the passage of the most sweeping tax bill in three decades. More than a dozen people have already migrated this year, and more are expected to follow as the elections draw closer.
In June, the Clearing House Association, an advocacy group focused on financial regulation, announced that it had hired Shahira Knight to lead its new joint venture with the Financial Services Roundtable. Knight was deputy director of the White House’s National Economic Council and a close aide to Gary Cohn, Trump’s top economic adviser who left earlier this year. Marc Short, the White House’s legislative affairs director, is expected to leave in the coming months.
The Treasury Department has also lost top talent in the past month. Drew Maloney, who was the assistant secretary for legislative affairs and the agency’s chief liaison with Congress, will in August become the president and chief executive of the American Investment Council, the lobbying group for the private equity industry. And Jared Sawyer, Treasury’s deputy assistant secretary for financial institutions policy, has just started at Rich Feuer Anderson, a financial services lobbying firm. With little time left on the legislative calendar and more gridlock in store, some of these departing officials may feel that staying in government offers diminishing returns.
“If you think about administrations historically, a lot of what is accomplished is in the first year or 18 months,” Maloney said. “Many staffs spend years and never accomplish what we did at Treasury in a limited amount of time, between tax legislation, financial services reform, CFIUS reforms and sanctions.” He was referring to the recent rollback of some rules for smaller banks and the likely passage of legislation that would expand the ability of the Committee on Foreign Investment in the United States to block international mergers on national security grounds.
Staff members on committees in Congress have also moved on. Perhaps the most high-profile departure this year was Mark Prater, the longtime tax counsel of the Senate Finance Committee, who joined the tax advisory firm PricewaterhouseCoopers in June. In May, Brendan Dunn, the policy adviser and counsel to the Senate majority leader, Sen. Mitch McConnell, R-Ky., left to become a policy partner at the lobbying firm Akin Gump to focus on tax policy matters.
The staff of the House Ways and Means Committee, which started the tax-writing process, has experienced an exodus of its own. David Stewart, the committee’s staff director, left this spring to take a job in the public policy practice of the law firm Squire Patton Boggs. The committee also lost its coalition director, its general counsel, a speechwriter and several communications aides to lobbying groups like the Chamber of Commerce or to jobs in government affairs at companies like Microsoft and MGM International.
Administration and congressional staff members can often double or triple their salaries while working a fraction of their government hours by joining lobbying firms.
The migration from lawmaking to lobbying has occurred under both Democratic and Republican presidents. Congressional staff members often make the switch after the enactment of major legislation, and experts who chart the influence of money in politics noted a similar trend, perhaps to a lesser degree, after the passage of the Affordable Care Act under President Barack Obama.
“This year, the revolving door is particularly swinging out of control,” said Craig Holman, government affairs lobbyist at Public Citizen, an advocacy group that promotes lobbying reform. “The midterm elections are coming up, which many expect to not go well for the Republicans, and this is the ideal opportunity for Republican congressional staff and administration officials to be able to cash in on what they have been doing the last year and a half.”
Upon taking office, Trump made moves to strengthen some of the lobbying restrictions put in place by Obama. But Trump weakened other rules, including one that allows departing executive branch officials to lobby the administration informally, as long as they are not registered lobbyists.
Paul Miller, president of the National Institute for Lobbying and Ethics, said that this has led to the growth of a shadow lobbying industry, where former government staff members take consulting and advisory jobs that are essentially lobbying under a different name.
“They’re calling it something else and doing what they were doing anyway,” Miller said. He noted that the number of registered lobbyists has been falling in recent years. “The actual number of lobbyists has increased dramatically.” There is still plenty of lobbying to be done. Last week, Trump said that he wanted to pass another round of tax cuts this year, lowering the corporate tax rate further and making permanent the individual tax cuts that will eventually expire. The Internal Revenue Service is in the process of determining guidance on several provisions of the tax law that remain murky. Perhaps the most important one is who qualifies for the lower tax rate for “pass through” businesses — entities whose tax liability is borne by the owners on their personal tax returns.
The international side of the tax code is also due for more changes. Rep. Kevin Brady, R-Texas, chairman of the Ways and Means Committee, acknowledged in an interview on the Fox Business Network this past week that the speed of the passage of the legislation meant that fixes were needed.
“We threw major changes at the international side,” Brady said. “We didn’t have as much time to model them, analyze it. Now that we’re getting that feedback, we’re going to be making those changes.”
But critics of the Trump administration warn that the president is turning a blind eye to fact that lobbyists are becoming more entrenched under his watch.
“It’s going to cost the American taxpayer billions of dollars,” said Norman Eisen, the chairman of Citizens for Responsibility and Ethics and a former adviser to Obama. “These people are being brought into the special interest influencing industry in order to find ways to evade an already generous, excessively generous giveaway to corporations.”