Sen. Max Baucus, master of revolving door, heads for the exit

Reuters

U.S. Senator Max Baucus (D-MT), chairman of the Senate Finance Committee, gestures as he discusses the healthcare reform bill during a news conference on Capitol Hill in Washington, September 16, 2009.

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  • If Sen. Max Baucus, like most senators who retire, lands on K Street, he'll be among old friends. @TPCarney

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  • Sen. Baucus was an important lawmaker in crafting Obamacare, tying policy-making to his K Street network. @TPCarney

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The retirement of Max Baucus, D-Mont., chairman of the tax-writing Finance Committee, means that the Senate will soon lose an office that served as a training ground for future lobbyists and a style of lawmaking based on granting special favors.

"K Street's Favorite Democrat," liberal writer Ari Berman dubbed Baucus in the Nation magazine a few years back. Berman wrote that "between 1999 and 2005 Baucus, along with former Senate majority leader Bill Frist, took in the most special-interest money of any senator. He tops the list of recipients from business PACs. And only three senators have more former staffers working as lobbyists on K Street."

Baucus has had a storied career, too long to recount in this column. But here are some highlights from recent years:

When Democrats took over the House and Senate with the 2006 election, Baucus took the Finance Committee gavel, while New York Democrat Charlie Rangel assumed the gavel of the House counterpart, the Ways & Means Committee. The two promptly formed a joint fundraising committee called the Baucus-Rangel Leadership Fund.

What do these two men have in common? Only this: Both control tax-writing committees, and both in 2007 were talking about changing tax law. It's hard to see the Baucus-Rangel joint fundraising account as anything other than a tip jar for the bartenders serving up tax breaks. Big donors included mostly real estate developers and executives from big banks such as Goldman Sachs, Bear Stearns and Bank of America.

If a lobbyist missed the Baucus-Rangel fundraiser in New York in March 2009, he could catch up with the Finance chairman at "Camp Baucus" -- his annual summertime fundraiser at Montana's Big Sky Resort, where lobbyists can enjoy golfing, fly-fishing, and schmoozing with the chairman away from Washington's prying eyes.

Baucus was the most important lawmaker in crafting Obamacare, and in that effort, he tied policy-making to his K Street network and the Democrats' fundraising efforts.

The Obama White House, early in the process, directed drug lobbyists to deal directly with Baucus, the New York Times reported. The most important meeting may have been on April 15, 2009, featuring top drug lobbyists, Baucus' chief of staff, Jon Selib, and Obama's top adviser, Jim Messina -- the industry's point man in the White House and an acolyte of Baucus.

Tellingly, the meeting took place at the headquarters of the Democratic Senatorial Campaign Committee. The drug lobby made out like bandits in the final Obamacare bill and ran millions of dollars in ads supporting the legislation and defending Democratic senators whose re-elections were jeopardized by their yea votes.

Many of the most influential lobbyists on Obamacare were former Baucus staffers. David Castagnetti, an old Baucus chief of staff, lobbied for America's Health Insurance Plans, Pharmaceutical Research and Manufacturers of America, Merck, Humana, AstraZeneca and a dozen other health-sector companies.

Read through the K Street phone book, and you'll see plenty of names of Baucus alumni. For starters, there's the juggernaut Mehlman Vogel Castagnetti. Cauthen, Forbes & Williams, an appropriations and health care firm, has former Baucus aide Jeff Forbes as a partner. The Parven Pomper lobbying firm, focusing on trade, was founded by ex-Baucus man Scott Parven (and has since been acquired by K Street giant Akin Gump).

Baucus' top health care aide during the Obamacare process was Liz Fowler, formerly the top lobbyist for insurance giant Wellpoint. After the bill passed, Fowler joined the Obama administration, and then she cashed out again to pharmaceutical giant Johnson & Johnson.

The clients of Baucus clients generally did well in Obamacare, and they generally gave money to Baucus' campaign and his Glacier PAC.

The same story has played out in tax-code debates in recent years.

Recall how General Electric famously paid near-zero corporate income tax in 2011 on $5 billion in profits. GE tax lobbyist and Vice President Peter Prowitt is a Baucus alumnus. Baucus last summer shepherded through the Finance Committee a bill extending many corporate tax breaks, including a provision on which GE leans heavily, sheltering overseas financial subsidiaries from U.S. corporate tax.

Baucus adviser-turned-lobbyist Shannon Finley represented the wind lobby, which won extension of its Production Tax Credit in Baucus' 2012 tax extenders bill.

These lobbyists and their clients contribute to Baucus' campaigns and his Glacier PAC.

"He runs an old-school machine," a Republican K Street lobbyist told me for a column earlier this year. "They all work him for five or 10 years, and then they go downtown. They all help him get re-elected. They're all incredibly loyal."

If Baucus, like most senators who retire, lands on K Street, he'll be among old friends.

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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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