March 12, 2012

Team Obama hires lobbyist again, ethics be damned

Revolving-door lobbyist Steve Ricchetti, Vice President Biden's new top aide, exemplifies President Obama's farcical crackdown on lobbyists. Ricchetti and his K Street firm also embody another core trait of this administration: using big government and populist rhetoric to enrich politically connected companies.

Bailout recipients like General Motors and Fannie Mae have retained Ricchetti Inc. for lobbying, as have Obamacare beneficiaries like the American Hospital Association and drug companies. But the most illustrative example of Ricchetti's lobbying -- and how it melds perfectly with the Obama administration's governing -- was his campaign to save the death tax.

Ricchetti founded the Coalition for America's Priorities in 2005 and began a print and broadcast campaign in favor of preserving the estate tax, which Republicans were trying to permanently abolish.

The ads featured a Paris Hilton look-alike gushing over estate tax repeal. This helped frame the Democrats' attacks on pro-repeal Republicans.

"There is a big moral dimension," Ricchetti sermonized to the Christian Science Monitor in 2006, with lofty appeals to "basic fairness and equity" and "hard work."

Media outlets covering this pro-death-tax campaign typically described Ricchetti as "co-chair of the Coalition for America's Priorities," and a former Clinton White House aide -- omitting that he was a corporate lobbyist being paid to save the death tax by the life-insurance industry.

Life insurers profit from the death tax by selling estate-planning products. Also, life-insurance payouts, unlike inheritances, are not taxed.

The Association for Advanced Life Underwriting is a multimillion-dollar-a-year Washington lobby shop for the life insurance industry, and it was one of Ricchetti's big funders in his push to preserve the death tax.

Top AALU lobbyist Marc Cadin gushed about Ricchetti's efforts at a life-insurance trade conference in 2007. "[C]oming up with what's dubbed the 'Paris Hilton tax cut' was sure political genius," National Underwriter quoted Cadin as saying. "It provided [political cover] for politicians who want to be in the reform camp."

The Ricchetti family's "moral" crusade to save the life-insurance industry's favorite tax goes back to 1999 when Steve's brother Jeff was a lobbyist at the Podesta Group, the lobbying firm started by John Podesta, who was Obama's White House transition director. Jeff Ricchetti lobbied for the death tax on behalf of the American Council of Life Insurers, according to lobbying filings.

In 2001, Jeff and Steve formed Ricchetti Incorporated, with ACLI as an original client -- and death-tax preservation as part of its portfolio. Today, Ricchetti Inc. represents both ACLI and AALU, and is still fighting to save the estate tax, lobbying filings show.

Given the Obama administration's ample record of corporatist policies and populist rhetoric, Biden's hiring of Steve Ricchetti as "counselor" is fitting. But what about Obama's supposed "lobbyist ban"?

Candidate Obama said lobbyists "won't work in my White House," and he issued executive orders barring lobbyists in his administration from doing administration work in their old lobbying issue areas or involving their old clients.

Ricchetti's firm, within the past few months, has represented the American Bankers Association, multiple drug companies, the American Hospital Association, military contracting giant United Technologies, and the life insurers. The firm's issue areas, according to disclosure forms, include budget, energy, defense, banking, labor, and health care. What sort of counsel could Steve Ricchetti provide Biden while avoiding the issues that his firm is currently lobbying or recently lobbied?

No worries, the Obama White House explains, because Steve Ricchetti deregistered as a lobbyist in the fourth quarter of 2008, when Obama was elected. Sure, he still owned a lobbying firm last month, and his brother is still a registered lobbyist, but Obama's revolving-door regulations go back only two years.

Lobbyists are required by law to register if they spend 20 percent or more of their time on lobbying activities, but the Obama administration has not visibly enforced this requirement, as dozens of lobbyists have deregistered to evade the administration's rules on donors, bundlers, and hires.

So Steve Ricchetti can help craft laws and regulations affecting the banking, pharmaceutical, and life-insurance clients of his lobbying firm, and Obama's ethics rules say nothing about it. As a bonus, Ricchetti Inc.'s newest lobbyist is Jay Heimbach, Obama's former congressional liaison.

This is ethics, Obama-style: play the same revolving-door self-dealing game as every other politician, but compound the dishonesty by pretending to be above it all.

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