Mrs. Daschle, Big Business Lobbyist/Daschle: No Conflict, Won't Release Tax Returns

Linda Hall Daschle, wife of Senate Majority Leader Tom Daschle (D.-S.D.), has lobbied since 1997 for some of the U.S. government’s largest contractors.

According to federal lobbying records, Mrs. Daschle represents Boeing and United Technologies on Capitol Hill, even as these interests depend on her husband’s official acts in the Senate for their federal contracts.

The income Mrs. Daschle ultimately derives from her clients also enters the Daschle family budget, improving Sen. Daschle’s finances as he considers actions that will affect these clients. The exact amount Mrs. Daschle earns from her lobbying activities remains unknown, since Mr. Daschle told Human Events he will not make their joint tax return public.

Mrs. Daschle, a former top Federal Aviation Administration official, has lobbied for Loral Space Technologies, which was awarded a nearly $1-billion FAA contract when she served as FAA Deputy Administrator.

In addition to these companies, two major airlines, three airports, and aviation manufacturing interests, Mrs. Daschle represents or has represented pharmaceutical company Schering-Plough and the American Trucking Association (see chart, page 3).

Mrs. Daschle’s lobbying activities as Senior Public Policy Director of the law firm Baker, Donelson, Bearman and Caldwell have received only a small amount of press scrutiny, save for an account in the liberal Washington Monthly earlier this year. Her lobbying activities surfaced again last week because of a controversial proposal before the Senate to lease military aircraft from Boeing—a client of Mrs. Daschle since 1998, according to federal records.

Dan Crippen, director of the non-partisan Congressional Budget Office, has estimated that the Boeing lease plan would cost the government $37 billion for the use of 100 Boeing 767s over a ten-year period. The deal is controversial because, according to CBO estimates, the outright purchase of the same airplanes would cost only $25 billion, and they could remain useful for 20 to 30 years.

Sen. John McCain (R.-Ariz.), the leading critic of the leasing deal, has called it "war profiteering," and charges that the deal "has nothing to do with national defense and everything to do with taking care of Boeing."

Sen. Daschle has not made any public statements on the Boeing lease plan, but must, as Senate Majority Leader, decide whether and when to schedule a vote on the matter, since McCain pushed an amendment through the Armed Services Committee that may doom the deal.

But regardless of the merits of buying or leasing Boeing aircraft, the fact remains that Sen. Daschle, in his official capacity, cannot help but make decisions by which his wife’s clients may gain or lose millions, or even billions, of dollars. In the case of some of the major government contractors Mrs. Daschle represents, Sen. Daschle’s official acts could ensure or undermine their future economic viability. In the case of Boeing, for example, the Senate will consider the re-authorization of the Federal Export-Import Bank by the end of May. (See Human Events, May 13, 2002, "House Saves Enron’s Federal Partner.") Boeing perennially receives more than 40% of the bank’s funds.

Sen. Daschle told Human Events last week (see box) that because Mrs. Daschle voluntarily chooses not to lobby his chamber of Congress, he does not consider it a conflict of interest for her to represent interests that depend on his official acts. "My wife doesn’t lobby in the Senate at all," he said. "So she has limited her activities to the House, and I think that’s appropriate."

In a written statement e-mailed to Human Events that was not completely responsive to the questions asked (see page 8), Bob Bauer, Mrs. Daschle’s counsel, said, "Mrs. Daschle does not accept any suggestion that she cannot pursue this independent career, which preceded her marriage to Senator Daschle." Bauer also pointed out that the wives of several Republican lawmakers also have careers of their own, some in lobbying.

Meanwhile, the income Mrs. Daschle derives from her clients directly improves the senator’s family finances.

Sen. Daschle told Human Events that he and his wife filed a joint tax return this year, but said he would not release copies of the return. Most senators do not release their tax returns unless they are running for President. (Daschle’s name has been floated repeatedly as a potential presidential contender either in 2004 or 2008.)

Because senators’ financial disclosure forms require officeholders to give the value of their income and assets only in very broad terms, Senate records reveal only that Mrs. Daschle makes "over $1,000" per year lobbying the House of Representatives and executive agencies on legislation and federal regulations. Clients for whom Mrs. Daschle is listed as a lobbyist have paid her firm approximately $5.8 million since 1997—although that number is also only a rough estimate, since the federal lobbying law requires that lobbying firms estimate their fees from each client to the nearest $20,000 every six months. On their 2001 financial disclosure form, the Daschles reported that their publicly traded assets (primarily mutual funds) were worth between $197,000 and $730,000.

Neither the Daschles nor the Democrats are alone in exploiting lax congressional lobbying laws that critics say overlook prima facie conflicts of interest and situations involving an appearance of corruption. Unlike limited and fully disclosed campaign contributions, lobbying fees for family members can translate into personal wealth for elected officials themselves.

The wives of Senators Jeff Bingaman (D.-N.M.), Byron Dorgan (D.-S.D.) and Tom Harkin (D.-Iowa) have all served as lobbyists, although of these only Ruth Harkin lobbied for government contractors. Senators John Breaux (D.-La.), Orrin Hatch (R.-Utah) and Ted Stevens (R.-Alaska) have lobbyist sons, and the aunt of Sen. Mary Landrieu (D.-La.) lobbies for a health care interest.

According to a recent ruling by the Senate Select Ethics Committee, dated Sept. 22, 2001, any senator who passes out campaign key chains to constituents in his Senate office is violating ethics rules. But a senator does not violate ethics rules or any existing law if he receives personal income—not just campaign contributions—from businesses that have an interest in federal legislation through the lobbying paycheck of a wife or other household member.

In Mrs. Daschle’s case, the law allows her to take on as paying clients corporations that received contracts from the FAA, or were regulated by the FAA, when she was a high-ranking official in that agency. President Clinton signed an executive order in 1993 banning his top political appointees from lobbying their own agencies for five years. In a written statement to Human Events, Mrs. Daschle’s counsel Bauer pointed out that Mrs. Daschle had avoided lobbying her old department—Transportation—years after she left government—a fact borne out by her lobbying records.

But there was nothing illegal, even during that "cooling off period," in her lobbying for Loral before the House, after she, as Deputy FAA administrator, was involved in the decision to give the company a $955 million air traffic control contract in May 1995. Mrs. Daschle left the FAA at the end of January 1997. Her firm’s midyear 2000 lobbying report, filed Aug. 14, 2000, listing Loral as a client, is signed by Mrs. Daschle. In the section of the report where the firm was instructed to name "each individual who acted as a lobbyist" for Loral, the firm listed Mrs. Daschle and three others. It says that the firm contacted both the House and Senate on Loral’s behalf, but notes that Mrs. Daschle voluntarily refrains from lobbying the Senate.

Defenders of the current lobbying system argue that it would be unfair to exclude legislators’ family members from high-powered and high-paying lobbyist jobs on the Hill.

"It’s wrong to punish someone merely because they are married or related to elected officials," said Gary Ruskin,of the Congressional Accountability Project, a group co-founded wtih Ralph Nader.

Ruskin disagreed with the notion that lawmakers should avoid apparently or potentially corrupt familial arrangements. Instead, he argued, actual corruption must be found and investigated in each case, after the fact.

Ron Utt, a Heritage Foundation Senior Research Fellow, rejected Ruskin’s contention, arguing that the current system leaves the door open for corruption. "Congress has pretty much exempted itself from all of the rules, procedures and transparency that they subject everyone else to," he said. In contrast to the laxity of laws governing Congress, Utt pointed to the strict ethics rules governing federal employees’ conduct. "I can’t even buy a bagel for an official in an executive branch agency," said Utt.

Citizens, Utt said, should not even have to worry about whether their elected officials are using public acts to do private favors. Because of the Daschles’ arrangement, some uncertainty may exist, for example, as to how large a role Sen. Daschle played in drafting the massive airline bailout after September 11. The bailout benefited several of his wife’s clients.

Others argue that there is a difference between a member’s wife or relative who is an employee of and lobbies for only a single company– allowing the member to recuse himself on votes that involve that company– and a lobbyist such as Linda Daschle who lobbies for a variety of clients and can take on a new one at any time.

Lobbying reform will be difficult to bring about, though, since congressmen and senators may have to abandon their own financial interests to impose it on themselves.

In the meantime, Utt said, public scrutiny is the only defense. "You just have to embarrass these people," said Utt.

Daschle: No Conflict, Won't Release Tax Returns

At a May 14 press briefing, Daschle told a reporter it would be "a very serious ethical violation" if the Republican Party used a White House photographer or government property in offering contributors a photo of President Bush taken on September 11. Immediately after Daschle gave this answer, Human Events Assistant Editor David Freddoso asked him if it was a conflict of interest for his wife to lobby for major government contractors and whether he would release the joint tax return he and his wife file detailing the income she receives from that lobbying. Here is a transcript of the exchange:

Reporter: Sir, do you think it’s appropriate that Republicans are selling photographs of President Bush fielding calls on September 11 in—as a fundraising technique?

Senate Majority Leader Tom Daschle (D.-S.D.): Well, I don’t have all the information yet. As you know this story just broke this morning. But I think that, clearly, there would be a very serious ethical violation were White House photographers or any government property involved in this affair. We’ll have to get more information before we comment more publicly on that.

Human Events: Sir, Sen. McCain [R.-Ariz.] has criticized a proposal for the Air Force to lease Boeing 767s. Isn’t it a conflict of interest for Mrs. Daschle, the wife of the man who sets up every vote in the Senate, to lobby for major government contractors like Boeing?

Daschle: Well, my wife doesn’t lobby in the Senate at all. So—she has limited her activities to the House, and I think that’s appropriate.

Human Events: Senator, did you and your wife file a joint tax return this year? And if so, will you release it?

On Thursday, May 16, Human Events Editor Terence P. Jeffrey and Assistant Editor David Freddoso left a set of questions on the voicemail of Linda Hall Daschle, wife of Senate Majority Leader Tom Daschle (D.-S.D.). The questions pertained to her lobbying activities. (See cover story.) Jeffrey and Freddoso also sent the questions to her directly via e-mail. Later that day, Human Events received an e-mail response made on Mrs. Daschle’s behalf by Bob Bauer.

Here is the e-mail exchange between Human Events and Mrs. Daschle and her representative:

We just left a message on your voice mail asking questions relevant to stories we are working on (deadline this afternoon) about your lobbying activities. For your convenience here are our questions in writing:

1) Isn’t it a conflict of interest for you to represent and derive income from government contractors when your husband is responsible for scheduling votes relevant to their government business?

2) Do you consider it a conflict of interest for you to represent companies who received contracts from the FAA under your watch as Deputy and Acting Administrator?

3) How did you secure Intelli-Check as a client? Did you approach them? Or vice versa?

4) What did you do for Intelli-Check? Did you set up meetings on their behalf with any government agency or official in the Administration or the legislature? Did you make any contacts with such people on their behalf? If so, whom did you meet with, or contact?

5) Would it be a conflict of interest for First Lady Laura Bush or for the Vice President’s wife, Lynne Cheney, to lobby for government contractors?

6) Would it have been appropriate for Laura Bush or Lynne Cheney to lobby the federal government, after September 11, on behalf of a company marketing an "anti-terrorism" device?

Your questions assume generally that Linda Hall Daschle’s independent professional life has generated some ongoing "conflict of interest," because her husband is a member of the United States Senate and its Majority Leader.

Mrs. Daschle does not accept any suggestion that she cannot pursue this independent career, which preceded her marriage to Senator Daschle.

Mrs. Daschle has, however, addressed any potential conflict by adopting a policy, which exceeds the requirements of conflict-of-interest rules or requirements, of not representing clients in the United States Senate. In other words, rather than avoiding any lobbying of her husband and his office, she will also not lobby any other Senator, their staffs or Committees. This policy is noted on each of the reports she files pursuant to the Lobbying Disclosure Act. Moreover, you should be aware that unlike other Republican spouses of high-level office holders, such as Rebecca Cox [wife of Rep. Chris Cox], Ms. Daschle signed a pledge not to lobby for [sic] her former agency for four years. [Editor’s note: The Clinton Administration had a five-year ban on lobbying one’s former agency. Then-Rebecca Range left the Department of Transportation in 1987, not to lobby but to join the Reagan White House.]

Spouses and even children of both Democratic and Republican elected officials have been recognized to have the right to pursue independent professional careers, as Lynne Cheney has. We note, for example, Mrs. Phil Graham’s [sic] service on the board of Enron following her tenure on the CFTC, which had regulated the company, and while her husband served as Chair and Ranking Member of the Senate Banking Committee. Elizabeth Dole directed the Red Cross, which receives substantial federal assistance, while her husband served in the Senate as Majority Leader, and Elaine Chao headed the United Way while her husband [Sen. Mitch McConnell] served as Chair of the Rules Committee.

In some cases, spouses have seen fit to adopt some limitations to avoid actual or perceived conflicts, as Linda Hall Daschle has done in declining to represent clients before the United States Senate and pledging to avoid any lobbying of her former agency, the FAA, for four years. Other spouses have not addressed the issue at all or have declined to adopt such measures.

These facts do not appear to have informed or influenced your questions. Perhaps your reporting will now take on this broader perspective. If it does not, then the suggestion of partisan bias—rather than objective "newsgathering"—will be inescapable.

As for Intellicheck [sic], Ms. Daschle was approached by the company and pleased to assist in their desire to demonstrate their identity verification technology to the aviation industry and the federal government.

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Photos of Daschle using federal resources for campaign fundraising!

It's wrong to punish someone merely because they are married or related to elected officials," said Gary Ruskin,of the Congressional Accountability Project, a group co-founded wtih Ralph Nader

This Ruskin guy is just plain stupid--or shilling for Dasshole.

The D's wife (uh, they do sleep together occasionally, correct??) can certainly find a job that allows her to practice law where she dosen't have to lobby. We wouldn't want her to suffer now, would we? Campaign reform? Congressional ethics? Yeah, right.

Another reason why Loral CEO Bernard Schwartz has given several millions dollars to the Democrat party. His stock is trading at 66 cents today. Down from over $25 a few years ago.

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