Week of 8.25.06
A Steady Flow of Financial Influence
By Jerry Kammer
Close ties make Rep. Lewis, lobbyist Lowery a potent pair
Copley News Service
This article won a 2006 Pulitzer Prize. Reprinted with permission of Copley News Service
From powerful positions on the House Appropriations Committee, California Rep. Jerry Lewis has 'greenlighted' hundreds of millions of dollars in federal projects for clients of one of his closest friends, lobbyist and former state Congressman Bill Lowery.
Meanwhile, Lowery, the partners at his firm and their clients have donated 37 percent of the $1.3 million that Lewis' political action committee received in the past six years.
Such intertwining of public, political and for-profit business is legal. But because the relationships between campaign contributors, lobbyists and lawmakers are forged out of the public's view, they are not widely known or understood.
That could be changing as a result of the scandal that toppled Randy "Duke" Cunningham from Congress In the wake of the Rancho Santa Fe Republican's admission last month that he took $2.4 million in bribes from two defense contractors, there is growing concern about the Capitol Hill environment in which Cunningham prospered.
One of the defense companies that received federal contracts with Cunningham's support was a Lowery client. And some of the money was disbursed when Cunningham was a member of the defense appropriations subcommittee and Lewis was the committee chairman.
Washington is filled with lobbyists trying to get money for their clients. Some of the most successful are former lawmakers who trade on contacts with old colleagues and their understanding of legislative strategy.
The Lewis-Lowery relationship, however, is remarkable for the closeness and mutual dependence of the powerful appropriations chairman and the ambitious lobbyist, who served together on the appropriations committee from 1985 until Lowery left Congress in 1993. They've even exchanged two key staff members, making their offices so intermingled that they seem to be extensions of each other.
"Word is getting around that if you want to be close to Jerry Lewis, it's a good idea to be close to Bill Lowery," said a former Capitol Hill insider who asked not to be identified, saying he "cannot afford to make an enemy out of the chairman of the appropriations committee."
Lowery declined to be interviewed for this article. But a three-month investigation - based on examination of dozens of spending bills, lobbyist disclosure records, court records and reports by Lowery clients, as well as interviews with Capitol Hill veterans familiar with his work - makes clear that his lobbying success is based largely on his access to Lewis.
The son of southeast San Diego parents who ran a neighborhood hardware store, Lowery faced chronic personal financial problems throughout his congressional career. Now he owns a luxurious Capitol Hill town house and a riverfront estate in Southern Virginia.
Lobbyist Bill Lowery
For Lewis, the relationship has eased the burden of fundraising, which he calls "the last thing I want to do with my time."
Lowery, his partners and their spouses have contributed $135,000 to Lewis' campaigns and political action committee over the past decade, routinely giving the maximum allowed by law. Lowery also organizes and hosts Lewis fundraisers. And many of Lowery's defense-contractor clients contribute to Lewis as part of their lobbying strategy.
Taken together, they have contributed $480,000 to Lewis' political action committee since 2000.
Last year Lewis used some of that money to wow the Republican leadership with checks for $650,000 in "excess campaign funds" to help maintain Republican control of the House. In January he was given the coveted chairmanship of the appropriations committee, which oversees about $900 billion in federal spending. He called the honor "the highlight of my career."
Beyond their close friendship, the essential ingredient in the Lewis-Lowery relationship is earmarking, the congressional practice in which special projects, sometimes derided as "pork," are slipped quietly into the federal budget without public review. Some earmarks are added just before final votes on appropriations bills, so they receive no scrutiny or analysis.
Earmarks have more than tripled in the past seven years. In 1998, Congress approved 2,000 earmarks, worth $10.6 billion. Last year it passed 15,584 earmarks, worth $32.7 billion.
As the number of earmarks has grown, so has the number of lobbyists, some of whom specialize in appropriations lobbying. The nation's capital has nearly 35,000 registered lobbyists, more than twice as many as it had five years ago. They now outnumber the 535 members of the House and Senate 65-to-1.
Norman Ornstein, a scholar at the conservative American Enterprise Institute, a Washington, D.C., think tank, is alarmed at what he calls the "pernicious" effect of earmarking - the linkage of lobbyists, elected officials, earmark seekers and campaign finance.
"They all come together in a self-enforcing loop," he said.
Earmarking has drawn scrutiny since Cunningham pleaded guilty to taking bribes from two defense contractors - including Lowery client Brent Wilkes of Poway-based ADCS Inc. - who received earmarks with Cunningham's support.
Between 1998 and 2002, Wilkes paid Lowery's firm about $200,000 to lobby for his company's defense projects.
Ornstein calls the Cunningham scandal an extreme example of the consequences of the lobbyist-contractor-politician connection.
"We now have a situation where billions of dollars of federal funds are allocated not on the basis of where it is most needed and can be spent most effectively, but according to who's sloshing the (campaign contribution) money around so they can get the earmarks," Ornstein said.
"When you do that, then ultimately you are being very destructive to the society."
Rep. Jeff Flake, R-Ariz, said few lawmakers are willing to criticize the practice because so many have something to gain from it.
"They want to make sure their earmarks stay in the bill, so no one complains," Flake said.
Even congressional staff members can have a stake in an earmark, said Nathan Facey, who left the staff of appropriations committee member Marcy Kaptur, D-Ohio, this year to go to graduate school.
"Sometimes staffers know that if they can help a lobbyist's project get put into an appropriations bill, they'll be able to get a job with that same lobbyist, which will allow them to make a lot more than what they're making with the government," Facey said.
Lewis has vowed to slash earmarking as chairman of the appropriations committee. But at the same time he says earmarks play "a very positive role" because they meet specific needs in the congressional districts that receive them. The role of Congress, he says, is to evaluate White House budget proposals and make useful changes.
Representative Jerry Lewis
Photo: Michael Temchine
"That's why you get elected," he said in an interview at his Capitol Hill office, as his dog, Bruin, a Bichon Frise-poodle mix, lay curled at his feet.
Those who don't see the value of earmarks, Lewis said, are "way out of touch in terms of what we elected officials have to deal with year in and year out."
Wide Range of Clients
Lewis' willingness to sign off on earmarks has been a boon to Lowery's firm, now known as Copeland Lowery Jacquez Denton & White.
From 1998 to 2004, the firm's income more than tripled, from $1.58 million to $5.11 million, according to the Center for Public Integrity, a nonpartisan organization that monitors government ethics. It had 28 clients in 1998 and now has 101.
The biggest growth has come in the past seven years, as Lewis served as chairman of the defense appropriations subcommittee, then of the full committee.
Lowery's personal income expanded with his firm's influence, according to court records from his two divorces. During his first divorce, from Katie Brown in 1997, he was earning about $850,000 a year. When he and Melinda Morrin divorced last year, he testified he had earned "just under $2 million" in 2003.
His firm's client list now includes government agencies, universities and defense contractors across California, all looking for earmarked money.
The city of San Diego paid Lowery's firm $960,000 to seek federal funding for transportation, sewage treatment, summer youth employment and other projects between 1998 and 2002. A number of projects were funded.
This year the California state Senate became a client. The registration form filed by Lowery's firm says it will lobby for "a fair share of federal funds" for the state.
Minutes of a 1999 Redlands City Council meeting illustrate the reasoning of many Lowery clients. Councilman Kasey Haws urged that the firm be hired because "it is expected that (the cost) will be returned many times over in federal funds received."
The lobbying duties for Lewis' constituents were handled primarily by Jeffrey Shockey, who worked for Lewis, then Lowery, and now Lewis again.
When Shockey was with the Lowery firm, his clients included his alma mater, Cal State San Bernardino.
As word spread that millions of dollars in federal money were raining down on the CSUSB campus, Dr. Clifford Young, who oversees federal relations for the school, began receiving calls from other universities and from town and county governments across the Inland Empire.
"They were asking, 'Who are you using (in Washington)? What are they doing for you? How are they doing it for you?' I get a lot of those calls."
As word traveled, the cities of San Bernardino, Highland, Twentynine Palms, Victorville, Murrieta and Loma Linda signed on. So did San Bernardino and Riverside counties, along with the San Joaquin Council of Governments and several universities. Redlands, Lewis' hometown, wanted a hired hand in Washington, as did the University of Redlands.
Nearly all cashed in with earmarks.
San Bernardino County got $50,000 for a wading pool.
- The University of Redlands got $700,000 over two years for "technology enhancement."
- Twenty-nine Palms got $200,000 for a visitor center.
- The town of Yucca Valley got $100,000 for a civic center park and a half million dollars for a solar energy project.
Among the biggest beneficiaries was Loma Linda University, whose medical center got millions of dollars earmarked into NASA's budget for research projects. Since 1988 the small Seventh-day Adventist school has received more than $160 million in earmarks. Some Lewis staffers call it "Loma Lewis University."
The projects have earned Lewis the gratitude of his constituents, who during his 27 years in Congress never provided him less than 60 percent of the vote. He has become such an icon in his district that last year no Democrat stepped up to run against him.
San Bernardino City Councilwoman Susan Lien Longville told the local Sun newspaper about her gratitude for more than $1 million in Environmental Protection Agency funds that Lewis earmarked to create a lake.
"It has been the generous earmarks that Congressman Lewis has provided for us that has allowed us not to dip into the general fund or redevelopment fund," she said.
Her comment illustrates what is perhaps the ultimate political magic of earmarking. Local communities benefit while the cost is simply added to the national debt. Earmarking concentrates benefits and disperses costs.
A Close Friendship
In some ways, Lewis and Lowery are an unlikely pair.
Lowery, 58, has a boisterous amiability and loves to entertain a crowd with his bawdy humor. The affable and courtly Lewis, 71, has the temperament of an amused and supportive uncle.
The congressman and the lobbyist have celebrated birthdays together, vacationed together and often share meals at restaurants near their Capitol Hill homes. Lewis was the best man at Lowery's second marriage. Lowery emceed a gala for Lewis in Redlands last year. Their day-to-day contacts are made convenient by Lowery's special access to Capitol Hill.
As a former congressman, he can exercise at the House gym and walk onto the House floor. He has parking privileges near congressional offices for his 2004 Lexus, whose California license reads "U.S. Congress: C 41 r," reflecting that he is a retired representative of the 41st District.
Lewis and Lowery have often traveled together. In 1999, shortly after Lewis became chairman of the defense appropriations subcommittee, they toured the San Diego headquarters of Orincon, a defense contractor now owned by Lockheed Martin. Lowery was Orincon's lobbyist and sat on its board of directors. Lewis' political action committee got $47,000 from Orincon's executives between 2001 and 2003.
Lowery has cultivated relationships with the appropriations committee staff and with the staffs of some committee members. When the committee worked late one night to meet a legislative deadline, he sent the staff about $300 worth of sandwiches. When Cunningham's staff held its 2001 Christmas party at the Oceanaire restaurant near the White House, he paid the $1,800 bill.
The appropriations committee staff, meanwhile, has invited Lowery to birthday parties, going-away parties and baby showers. Over the years Lowery has become an active member of what Lewis calls "the Lewis family."
Joining the Lobbyist
When the Republicans won control of the House in 1994, Lewis was named chairman of an appropriations subcommittee that controlled the budgets of a long list of federal agencies, including the Department of Veterans Affairs, NASA and the EPA.
He won praise for cutting spending at those agencies. But he continued to find money for projects in his home district.
In 1999 Lewis became chairman of the defense appropriations subcommittee, which oversees more discretionary spending than any other congressional body.
He soon won praise from budget hawks for what ultimately was a losing battle to cut funding for the Air Force's F-22 fighter. Despite that early demonstration of fiscal toughness, earmarks in the defense bills exploded on Lewis' watch.
"We used to think that Mr. Lewis would be a champion for smart spending," said Keith Ashdown of the watchdog group Taxpayers for Common Sense. "But he brought us the biggest increase in defense earmarking in history."
Many of the earmarks went to clients of Lowery's firm, which grew even more prosperous when Lewis' principal defense-earmarks gatekeeper, Letitia White, joined the firm in 2003. White declined to be interviewed other than to say she chose the Lowery firm from among "five excellent offers."
Lowery had worked with White when she was on Lewis' staff, treating her to occasional meals and gifts of her favorite wine, Veuve Clicquot champagne. She often received him and his clients at her office, where they discussed the clients' earmark proposals.
At the firm, White quickly acquired a client roster of two dozen defense firms for which she seeks earmarks and other special treatment. In 2004 she brought in $1.44 million in lobbying fees.
White's husband, a former tobacco industry lobbyist, had switched to defense lobbying by that time. He began lobbying for earmarks after Lewis took charge of the defense appropriations subcommittee.
San Jose-based Tessera Technologies, which is working on a project to cool electronic components to make them more reliable, paid Richard White $180,000 in 2003 and 2004, according to his lobbyist disclosure forms. The project received $4.5 million in earmarks in those years.
This was a joint victory for the Whites.
Tessera's partner in the project is Clarkston, Washington-based Isothermal Systems Research. Letitia White was the company's principal lobbyist, and she billed Isothermal $120,000 for lobbying services in 2003 and 2004.
The Whites contribute heavily to Lewis and the Republican Party.
Since 2003 they have poured $30,000 into Lewis campaigns and his PAC. They also gave $40,000 to the National Republican Congressional Committee and thousands more to PACs established to retain Republican control of the House.
Lewis said he saw no reason to question Richard White's lobbying efforts. "He's one of the people I think the world of," Lewis said.
At the request of Copley News Service, budget watchdog Ashdown examined appropriations bills to see how Letitia White's clients have fared. Ashdown said he was astonished at her success in getting earmarks.
The overall success rate for earmark requests submitted to Congress is 1 in 4, Ashdown said. In baseball terms that's a .250 average.
"Letitia White is hitting about .600 or .700," Ashdown said. "She might be the lobbyist batting champion. If I were looking for an earmark, I'd hire her in a heartbeat."
Ashdown said White is cashing in on her relationship with Lewis.
"Special interests want to buy influence," he said. "People know that if you keep Letitia White happy, you keep Jerry Lewis happy."
Lewis strenuously disagrees, saying White's 21 years of service in his office hasn't won her special treatment.
"Frankly she carries her own weight," he said. "She's a talented person who works very hard."
Lewis said White, 47, is so dedicated to public service that she asked to rejoin his staff when he took the reins of the appropriations committee. But he said no, because he wanted White, whose husband is 25 years older than she is, to build some financial security.
"I said, 'Letitia, I'm afraid you shouldn't do that,'" Lewis said.
Joining the Lawmaker
When Jeffrey Shockey, 39, left Lowery's firm in January to return to work for Lewis, he accepted a salary of just under $160,000.
Although that puts him among the best-paid congressional employees, it's a big comedown from the $1 million or so he likely was earning as a prolific "rainmaker" for Copeland Lowery Jacquez Denton & White.
But the firm helped cushion the income drop by hiring Shockey's wife, Alexandra, as a subcontractor.
Alexandra Shockey, also a former Lewis employee, has her own lobbying venture, called Hillscape Associates. But Hillscape's address on federal disclosure forms is identical to that of the Lowery firm, where she keeps her office.
Both Shockeys declined to be interviewed, but in an e-mail Alexandra Shockey, 37, acknowledged that her client roster includes some of her husband's old clients. That means she is now lobbying congressional staffers who work for her husband - and she's doing it on behalf of her husband's former partners.
The Shockeys' attorney, William Oldaker, said the couple sought his legal advice about their working arrangement and he assured them they were complying with House ethics rules "in letter and spirit." He said the arrangement was disclosed to the House Ethics Committee "and Jeff has recused himself from any decisions involving any clients Alex represents."
That explanation did not impress Larry Noble of the Center for Responsive Politics, a campaign watchdog group.
"If what they are doing is appropriate, I think it reflects an ethics culture in the House that is blind to what most people would say are conflicts of interest," Noble said.
"People working for her husband are going to decide on issues that will affect her income and her ability to do her job, which in turn impacts on her husband."
Since 1999 the Shockeys have contributed more than $170,000 of their income to Republican causes, including $40,000 to Lewis.
Lewis views Jeffrey Shockey's decision to return to join the appropriations committee staff not as another turn of Washington's revolving door, but as proof of the idealism he says is characteristic of the Shockeys, the Whites and Bill Lowery.
"I'm very proud of the fact that these people basically are motivated by ... public service," Lewis said. "They didn't come to Washington to get rich. Instead, they came to Washington because they actually wanted to serve."
"They have attempted to make a serious contribution. And over time they have made a very serious contribution."
San Diego Union-Tribune researchers Denise Davidson, Erin Hobbs and Peter Uribe contributed to this report.