Cashing in: Lawmakers subsidize businesses, then work for them

Reuters

Article Highlights

  • This is the way of Washington. Use public power to subsidize an industry, then go to work for that industry.

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  • In the 2009, Sen. Dorgan published a clean-coal study, calling for $110B to $450B in gov. support over 25 years.

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Byron Dorgan, when he was a U.S. senator, directed taxpayer money to clean-coal research. Elizabeth Gore, Dorgan's chief of staff at the time, registered last week as a lobbyist for the clean-coal industry.

This is a standard way to make it in Washington: subsidize an industry with taxpayer money, and then cash out to take that industry's money as a lobbyist or consultant.

Dorgan was chairman of the Appropriations Committee's energy subcommittee late last decade. In that role, he championed funding the Illinois-based "FutureGen" program -- a massive demonstration project in "clean coal" technologies, such as capturing and storing the emissions of coal burning, or making coal burn more cleanly.

In 2009, Dorgan announced a separate $3.66 million in federal funding for "clean coal research and development" at the Energy and Environmental Research Center at the University of North Dakota.

In the fall of 2009, Dorgan published a study on clean coal, calling for $110 billion to $450 billion in government support for clean-coal over 25 years. Dorgan's report suggested "Annual Appropriations...; Investment Tax Credits; Production Tax Credits/CO2 Sequestration Credits...; Direct Cash Payments; Federal Loan Guarantees," and a "Federal Financing Bank" to subsidize clean coal.

As Dorgan fought to save FutureGen, won the $3.66 million earmark and developed the study advocating hundreds of billions in subsidies, Gore was his chief of staff. In September 2010, in Dorgan's last few months in the Senate, Gore joined the lobbying firm Brownstein Hyatt Farber Schreck.

Last week, Brownstein Hyatt filed a lobbying registration on behalf of the American Coalition for Clean Coal Electricity, which had long lobbied for all of the positions Dorgan advanced. Gore is one of the lobbyists on the account, according to the filing.

There's no reason to posit bad motives. If Dorgan and Gore think clean coal is good for the environment and the economy, then it's natural that they (as big-government Democrats) would subsidize it. Also, Gore is probably happy to get paid to support an industry she thinks will help the country.

Finally, there's nothing out of the ordinary about Gore's path. This subsidize-them-then-work-for-them maneuver is standard operating procedure in Washington.

Judd Gregg, as a Republican senator in 2008, played a central role in crafting and passing the Troubled Asset Relief Program -- the Great Wall Street Bailout. When he retired, Gregg called TARP "the most significant thing that's happened in the last 5 to 10 years."

In late May, Gregg took a new, very lucrative job as head of the Securities Industry and Financial Markets Association -- the largest lobby for Wall Street.

You can find similar stories anywhere you look.

After helping craft the 2003 bill expanding Medicare to subsidize prescription drugs, House Commerce Committee Chairman Billy Tauzin announced he was retiring from Congress. Before his term even finished, Tauzin, a Republican, had taken a job as top lobbyist for the drug industry group, Pharmaceutical Research and Manufacturers of America.

A decade later, the congressmen, Hill staffers and administration officials who shaped and passed Obamacare followed the same path.

Take Liz Engel, who was the White House's health-care liaison to Capitol Hill during the crafting of Obamacare. The final bill made federal subsidies available to abortion providers. Engel, after helping pass Obamacare, became a lobbyist at Glover Park Group, where her first registered lobbying client was Planned Parenthood, the nation's leading abortion provider.

Obamacare created a federal subsidy for long-term care, such as nursing homes. One Ted Kennedy aide, Connie Garner, played a central role in drafting that provision. A few weeks after the bill passed, Garner announced she was leaving Congress to become CEO of a lobby organization supported by "aging, disability, unions and providers" to help implement the program. Of course, "providers" means the long-term care companies which would pocket the subsidies. (Obamacare's long-term-care subsidies have since been repealed.)

Lobbyist Bill Delahunt used to be a Democratic congressman. Last year, the New York Times reported on the various interests paying lobbyist Delahunt that Congressman Delahunt had once enriched with earmarks and the like.

"[T]he Delahunt Group," wrote the Times's Eric Lichtblau, "stands to collect $90,000 or more for six months of work from the town of Hull, on Massachusetts Bay, with 80 percent of it coming from the pot of money he created through a pair of Energy Department grants in his final term in office."

This is the way of Washington. Use public power to subsidize an industry, then go to work for that industry.

 

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About the Author

 

Timothy P.
Carney
  • Timothy P. Carney helps direct AEI’s Culture of Competition Project, which examines barriers to competition in all areas of American life, from the economy to the world of ideas. Carney has over a decade of experience as a journalist covering the intersection of politics and economics. His work at AEI focuses on how to reinvigorate a competitive culture in America in which all can reap the benefits of a fair economy.


     


    Follow Timothy Carney on Twitter.

  • Email: timothy.carney@aei.org

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