From: Corporate Crime Reporter – corporatecrimereporter.com
The Life of a Corporate Lobbyist
by Russell Mokhiber
Steve Wehrly worked for more than 25 years as a corporate lobbyist in Washington state and Washington, D.C.
He represented beer companies (Miller Brewing), insurance companies (Safeco Insurance), tobacco industry (smokeless tobacco council), and casinos (Muckleshoot Tribe).
Wehrly was successful. He saved tens of millions of dollars for his clients.
If he couldn’t save them money, they wouldn’t have hired him.
“I really like the policy argument side of politics,” Wehrly told Corporate Crime Reporter in an interview last week. “But to a large extent, the huge amounts of money spent on politics by everybody — by corporations, professions, individuals — is because they think they will get something from it. Safeco wasn’t about to spend the amount of money they spent on politics unless they thought they would get something from it. If you didn’t get something from it, they wouldn’t spend it.”
How did he get the job done for his clients?
Let us count the ways.
For the smokeless tobacco industry, Wehrly says he helped defeat a law that would have prohibited sampling of chew tobacco.
“There was legislation that would have banned sampling of chewing tobacco in the state of Washington,” Wehrly recounts. “In fact, I turned the banning of sampling of chewing into a pre-emption of state law so that no local government could ban sampling of chewing tobacco, either.”
Is that still law?
“They finally repealed that law when one of the Senators contracted cancer. They passed the bill for him,” he says. “Sampling was much more important to chewing tobacco than to cigarette tobacco.”
You could actually sample it in the store?
“No this was for rodeos and race car tracks and all kinds of outside venues,” Wehrly says. “The fellow in the chewing tobacco council told me — if we can get a person to use one whole can of tobacco, that person will likely be hooked.”
Those were mostly younger people?
“Yes,” he says. “Mostly younger people. And for a lot of younger people, the first can is difficult. It gets messed up in your gums. You end up swallowing some. So, you have to use a whole can. But by the time they get done with a can, then they are pretty adept at spitting and not swallowing the chewing tobacco.”
Wehrly also lobbied for the Washington Public Power Supply System.
“This was back twenty-five years or so ago,” he relates. “You had these public power companies who had invested billions of dollars in the WPPSS nuclear plants. They were five nuclear plants — three of which were never built, but ended up being paid for. And two of which were built, but neither of them, I don’t believe, are in existence today.”
“During the WPPSS build up, when they were financing WPPSS, they issued public bonds to build the plants. Most of the public power systems in the state of Washington participated in this. And they all had to take the documentation for these bonds before the boards. And the boards were supposed to review thousand of pages of bond documents. And of course, they never actually read them. They were just all for it. And when the whole thing broke down of course, the people who had bought the bonds sued.”
“And one of the laws they sued under was the Washington blue sky law. That’s a securities law that prohibited certain activities. And it made directors of public corporations liable if they violate certain provisions of the blue sky laws. At one time the standard for violation of the blue sky laws was scienter — knowledge that you are doing something wrong. But at the time that the WPPSS bonds were issued, the law had actually been changed to negligence. If you were just negligent in what you were doing, you could be held liable for damages.”
“I went to the state legislature and got them to pass a bill that changed the standard for violation of the blue sky law from negligence back to knowledge, back to scienter. And we made the law retroactive — back until before the WPPSS people started issuing those bonds. I think it was ten years — ten or eleven years. We passed the bill. We got Governor Booth Gardner to sign it. And those claims in the federal court damages case for violations of the state’s blue sky laws were ultimately dismissed.”
“The U.S. District Court overturned the law we got passed. They said it was “gross manipulation of the legislative process.” They said — we are not dismissing any claims based on this law. The defendants appealed. And the Ninth Circuit Court of Appeals reinstated the law and ruled that the law which we got passed was a legitimate exercise of the state’s lawmaking authority.”
When the lower court said it was “gross manipulation of the legislative process,” they meant it was gross manipulation by you and your clients, right?
“Yes,” he says. “Sure. I did it. I got it passed.”
After Wehrly described his victories for casinos, tobacco, beer and insurance industry, we asked him whether he has any regrets.
Yes. The sampling of chew legislation he has regrets about. He doesn’t think he’d do that again. But he wants to get back into the business.
He’d like to be a lobbyist against the insurance companies and for a national single payer health plan.
“It would depend on the organization,” he says. “I would do it for single payer. I don’t think I would feel comfortable working for the insurance industry again. I could work for the casinos or the alcohol industry again. I know how the insurance industry operated and what I had to do. And I’m not sure I would want to do that again.”
Why are you speaking out and why are you writing a book about it?
“I don’t hide what I’ve done,” he says. “I’ve said many of these same things when I’ve been interviewed by corporations and associations.”
“From the time I was at Safeco, I have always paid extremely close attention to the law. I’ve always been very careful to keep myself out of trouble and out of the newspapers.”
© 2013 Corporate Crime Reporter
Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter. He is also founder of singlepayeraction.org, and editor of the website Morgan County USA.
blog – 10/15/13
6. As predicted in this blog six months ago, despite getting a standing ovation from his caucus as the House capitulated and ended the shutdown, John Boehner will probably relinquish the gavel as Speaker of the House – either by deciding to retire before being removed by his own fellow Republicans at the start of the 2014 congressional session or in November, 2014, by the voters, who may take away the current Republican majority in the House of Representatives in the 2014 elections.
Boehner has done his damnedest to get something out of this for his caucus. But he failed. Neither tea partiers nor regular Republicans want to go back to their districts to face voters who will be reminded constantly to blame John Boehner “and the Republican candidate” as leaders of a failed strategy.
Even if Boehner stays (and he may not want to), Republicans are facing real electoral problems in both tea party districts and “moderate” Republican districts. Possibly including in Boehner’s Ohio district if, as rumored, he doesn’t run for reelection
In tea party districts, extremists are already facing primary challenges, some from the very Republicans they beat in primaries in 2010 or 2012 and some from ambitious moderates who are perhaps state legislators, school district directors or local government officials. In district where “moderate Republicans” have survived previous primaries, tea party Republicans are promising to challenge incumbent Republicans who “abandoned true conservative principles,” giving Democrats an opening to pick up independent voters who now are decisive in local and national elections. Plus, primaries require major spending that might better be spent against their general election opponents.
Whoever wins will have spent the primary season being pilloried as an extremist by their moderate opponent or as an apostate RINO (Republican in name only) by their tea party opponent (which charge will require the RINO in the primary to campaign as a conservative in the primary and a moderate in the general. Then he or she (you can bet there will be a record number of women running for Congress in 2014) will face a Democrat in the general election (quite possibly a woman) who will paint any Republican as a supporter of the government shutdown and debt ceiling fiasco.
Granted, many of these races will be in safe Republican districts. But Democrats only have to win 17 Republican-held seats in 2014 to regain the majority. Republicans won 60 Democratic seats in 2010, then lost 10 in 2012.
The question is not whether the Republican brand has been damaged by the shutdown fiasco, but how much.
7. My other prediction of six month ago – that Spokane Congresswoman Cathy McMorris Rodgers would emerge as a possible Vice-Presidential candidate in 2016 – is a lot shakier after the recent debacle. Rodgers, a member of Boehner’s leadership team, was often seen, and sometime spoke, at Boehner press availabilities during the shutdown. Those photos and videos would now be a real problem for Rodgers, who quite possibly could move up in House leadership. My new darkhorse vice-presidential candidate: Jon Huntsman.
8. As a lobbyist who represented insurance companies and health care providers in Olympia and D.C. for 30 years, I am impressed that the insurance industry left no recognizable fingerprints on their involvement in the fiasco of the last three weeks. A successful strategy or tactic gets bonuses and more clients; failure, especially if it’s public, gets a lobbyist fired.
So now, after doing everything they could to repeal or defund Obamacare (and defeat or delegitimize Obama), some insurers and their allies (Heritage Action, Freedom Works and Americans for Prosperity are three) have started to distance themselves from tea party conservatives. Some business interests are now supporting less-conservative challengers to tea party conservatives they helped elect in 2010 and 2012. One very dangerous result for tea party Republicans in 2014 is that political action funding will now dry up for tea party Republicans in contested primaries.
From numerous news reports, we know that Speaker Boehner didn’t think the Obamacare-motivated shutdown tactic was a good idea from the get-go. But since Obamacare was passed and signed, the insurance industry and their allies have spent hundreds of millions of dollars to try to repeal, defund or at least amend the signature achievement of Obama’s presidency. When insurance company executives (or any corporate or association executives) spend that much money on a project, they don’t give up easily. And their lobbyists have stuck their necks out, telling their employers, “We can do this. Boehner listens to me.”
During the thirty years I lobbied in Olympia and D.C. for the insurance, health care provider and tobacco industries (and others), business lobbyists used tactics analogous to the shutdown numerous times – usually to stop tax increases, but often to advance particular bills that clients “had to have.” In most cases, the leadership of both parties would do what they could to help. In all cases, at the very least I was given full opportunity to talk with leadership behind closed doors about the issue and how to handle it.
Insurance company and corporate health care lobbyists would have had “five-minute” direct access to Boehner and other key Republicans (including tea party leaders) at every stage of the fiasco. Lobbyists know that absolutely anything is possible if you “have” leadership on their side; they, like their superiors, never give up.
The insurance industry hates Obamacare even more than Social Security, Medicare and Medicaid. All four programs, to insurers and many other Americans, are essentially “socialist” ideas that redistribute wealth and extend government power over business – and threaten the existence of health care insurance as we know it.
Health insurance providers know they cannot compete with government: they think, correctly, that the exchanges are nothing more than a stalking horse for “single payer,” the Canadian system, or “medicare for all.”
My first lobbying supervisor, the corporate general counsel of a very large national insurance company, told me early on that the company was basically an investment company, not an insurance company. Insurance premiums provide cash flow, he told me. The cash flow is invested, and corporate profits (and the executive’s income) are dependent on earnings from investments, not on how much the company makes from retailing insurance contracts, which are highly regulated.
To increase cash flow (and thus, the size of the investment portfolio), insurance companies must increase their premium rates. To increase rates, which must be approved by insurance regulators, companies must show regulators that health care costs have increased. Insurance companies thus have no incentive to keep health care costs down and every incentive to have health care costs rise, which is exactly why they keep increasing year after year after year (and why doctors became rich).
One important reason the crisis of the last 90 days happened is that insurance companies want to insure healthy people; another is that insurers don’t want to insure everyone. (This is also why insurance companies were so opposed to mandatory auto insurance, even though mandatory insurance laws require everyone to have insurance.)
9. Another perilous prediction: the jig is up on government-by-crisis; no more shutdowns. Don’t expect Republicans to do much about the rest of Obama’s agenda (except perhaps the farm bill, which has strong Republican support for its corporate agriculture and rural development giveaways), but the polling horror for Republicans the past month ensures that they won’t try it again next year.
4. Congressman Rick Larsen and Senator Maria Cantwell didn’t really do anything spectacular to convince then-Secretary of the Interior Salazar to get President Obama to sign the paperwork designating the thousand acres of islets, reefs and lighthouses as the San Juan Islands National Monument.
They just did their jobs – and proved once again that there is more than one way to get things done in government.
When Republicans took control of the U.S. House in 2011, Larsen must have known the legislative route for a National Conservation Area bill (the legislative equivalent of a national monument designation) would be a dead end. Even the good working relationship he has with Alaska’s Congressman-for-Life Don Young (R-Fort Yukon) wasn’t going to be of much help when Doc Hastings (R-Pasco) outmaneuvered Young to be named Chairman of the House Natural Resources Committee.
In another time, before the current less-government thinking took control of Congress, Larsen probably could have gotten a hearing, if not a vote, from Hastings, but the kind of comity that once prevailed between the two parties (especially between members of the same state delegation) has dissolved into a “don’t even bother asking” attitude.
Because Cantwell is a subcommittee chair on the Senate Energy and Natural Resources Committee, she was a natural for Larsen to partner with on the Conservation Area bill; she successfully got then-ENR Chair Bingaman to hold a hearing, but enactment was still a long shot.
From the beginning, Larsen and Cantwell must have pursued Presidential-designation of the National Monument under the Teddy Roosevelt-era Antiquities Act. Because many National Monument designations have been controversial (some have even resulted in bills being introduced to limit the size of Monuments to 5,000 acres or less), the full support of the Interior Department was necessary – and that was achieved at least in part because Cantwell’s committee is the budget authorization committee for Interior. (“Authorization” authority is held by the relevant standing committee; actual “appropriation” is handled by the Appropriations Committee.)
When Cantwell successfully prevailed upon Salazar to visit NW Washington in early 2012, that was a signal to everyone that the monument designation was on track. Even though Doc Hastings went public with objections to the designation, Larsen and Cantwell persevered: Obama signed the Executive Order on March 25, 2013.
(Hastings’ principled stance against the National Monument may end up costing him politically. His bill to create road access to the top of Rattlesnake Mountain in the Hanford Reach National Monument was passed earlier this year by the House. Its fate in the Senate Energy and Natural Resources Committee is uncertain.)
The National Monument episode not only shows that there are multiple paths to getting things done in Congress, it also illustrates one reason why Republicans are so intent on winning the presidency in 2016.
5. Ironically, the off-year election year for Hospital District Commissioner in San Juan County, which is usually about as exciting as the election of Cemetery Commissioner, will probably get statewide media attention, and may get national attention.
The issue which may put the election in the national news is Attorney General Bob Ferguson’s opinion that public hospital districts must comply with Washington law on reproductive rights, specifically RCW 9.02.100 and related sections, approved by the people as Initiative 120 in 1991. Also, acccording to RCW 9.02.150, “No person or private medical facility may be required by law or contract in any circumstances to participate in the performance of an abortion if such person or private medical facility objects to so doing.”
Whether the right to an abortion (or any reproductive service) trumps RCW 9.02.150 may be a question to be decided in court. Any legal wrangling that ensues will certainly also involve Article 11 of the state Constitution, which states, in part: “No public money or property shall be appropriated for or applied to any religious worship, exercise or instruction, or the support of any religious establishment.”
The AG opinion was written in response to a written request by Sen. Kevin Ranker that referred to the contract between the Hospital District 1 and PeaceHealth, the owner and operator of Peace Island Hospital and Medical Clinic. The contract, which provides about $1 million per year to Peace Island, is silent on provision of reproductive services, which under Initiative 120 includes abortion and birth control.
Up until now, the hospital district has deflected the issue, but the commissioners may be forced into a more definitive position if Monica Harrington and her cadre of reproductive activists continue to apply pressure.
The election will be contested by former County Councilman Howie Rosenfeld and longtime San Juan Islander Mark Schwinge. Both have been asked by The Journal to address the issue.
by Steve Wehrly
1. The Journal has given me this opportunity to write my own commentary. These comments do not represent the opinions or positions of the Journal. Positive Politics is my opinion. And please don’t mistake my opinion for news – although you will find items that are not reported in the news.
Think critically about both the ideas and the expression of this commentary. I invite you to flay my logic or correct my writing; neither is faultless. I only ask that you attach your name to your opinions. Anonymous, belligerent and stupid comments will be deleted.
2. There has not been a politician in the State of Washington since I became involved in 1980 who practiced positive politics more authentically than Booth Gardner.
When I decided to title this column “Positive Politics,” I wasn’t thinking about Booth. I should have. He was both personally and politically positive, and clearly the best Governor the state has had during my time in politics.
Booth’s death brought back great memories of the 80′s, when I was lobbying for SAFECO Insurance, then for alcohol, tobacco, chiropractic and telecom clients during Booth’s two terms of office.
I met Booth in 1983 on Vashon Island through his long-time friend, then-Senator Mike McManus, who knew Booth at UW and got involved with him in central Seattle organizations dealing with kids – and sports.
Booth and his family spent summers and weekends on Vashon Island (where I bought a house with Peggi Bailey the spring before I met Booth). He had a Kennedyesque compound on outer Quartermaster Harbor, just down the South-facing beach from Al Rosselini. Lots of tennis and pick-up basketball – and waterskiing. An occasional beer or glass of wine. (Booth wasn’t fond of alcohol.) Some political talk, but not much. Booth was not that interested in politics (he hated asking anybody, even the Legislature, for money): he was interested in doing.
It’s been said by others: he was the kind of guy you just wanted to be friends with. He was shy, but extremely competitive at tennis or basketball – or politics.
I wasn’t Booth’s friend, however. Like many people in politics, Booth had few close friends. He probably subscribed to Harry Truman’s famous bon mot, “If you want a friend in Washington, get a dog.” In fact, Booth and Harry Truman had other similarities, including being underestimated.
Once again, “Johnny, we hardly knew ye.” One of very few politicians I’ll miss.
3. Rep. Cathy McMorris Rodgers of Spokane, fourth-ranking Republican in the U.S. House and now a frequent spokeswoman for Boehner, Cantor and the Republican leadership, will become, if she wants to, a leading candidate for Vice President on either a Rubio or Christie 2016 ticket.
She was underestimated in the Washington Legislature, but rose to be Republican leader in the state House in 2002 after having been elected in 1994, which political wonks remember as the year of the woman – and the year that Newt Gingrich, Dick Armey and Tom (“The Hammer”) Delay took over the U.S. House majority, a majority at the center of CMR’s career.
CMR became the first woman Minority Leader in the state House for two reasons: she would not compromise her (or anybody else’s) conservative principles and she practiced positive politics. I have not been privy to the working of the present U.S. House Republican Caucus, but I would bet that Cathy rose to her position as Republican Conference (i.e., caucus) Chairman with the same formula.
I met her the day she was sworn in in 1994 and have remained friendly (but not “friends” – see above) with her since. She’s personally confident, easy to talk with, and doesn’t aggressively push her policy positions or her personal views on issues.
She was elected to Congress is 2004, became vice chairman of the House Republican Conference (the official name for the House R caucus) in 2008, and chairman of the Conference in 2013.
If you don’t think Republicans will nominate a woman for Vice President in 2016, think harder.
Unless Hilary’s health deteriorates (have you noticed that conservative commentators and bloggers love to talk about “How she looks”?), she will be nominated in 2016. Without a woman on the ticket (and probably without Christie at the top of the ticket), Republicans will face a defeat of epic proportions – including loss of the majority in both houses of Congress.
Republicans may still lose the presidency again in 2016, if Hilary runs or not, but a Chris-and-Cathy ticket could keep the conservative base intact, attract men (and some women) to vote for the charismatic Christie (who I predict will weigh under 240 pounds by 2014 and under 225 pounds by 2016) and women (and some men) to vote for a “true conservative” Rodgers.
If you’ve been paying attention, you’ve seen Rodgers standing beside or behind Boehner, Cantor and Whip McCarthy at R leadership post-ups, and you’ve seen her speaking for the caucus on numerous occasions, including responding to Obama speeches and Saturday morning talks.
And, if you watch C-SPAN, you would have seen her as the House floor manager of the Violence Against Women Act, a bill she had opposed previously. She presented VAWA on the floor and voted for on final passage. She handled that bill professionally on the floor, first trying to substitute the House version (which did not mention LGBT women), then moving the full Senate-passed version to final passage. She did this despite having a majority of the House R caucus opposed to the final version that she voted for.
Don’t be surprised to see her move up, possibly to Majority Leader, when Speaker Boehner resigns his speakership late this year or early next. The really conservative House R wing (the so-called “Tea Party” caucus) are leery of both Cantor and McCarthy: they may demand that one of their own (and CMR’s one) be Majority Leader.
Also, don’t be surprised if she becomes the first in House R leadership to support, or at least ratchet down the rhetoric on, same-sex marriage rights. You’ll know she’s running for something – and it won’t be against Patty Murray. (CMT can sing a different same-sex marriage tune for positive reasons: encourage monogamy and commitment; provide stable, loving homes for children; promote adoption by committed LGBT couples rather than abortion.) And, if she’s interested in being on the ticket, she just might announce for President.