The lobbying money pit
Political class wealth redistribution (Part 2)
Last week we reviewed a U.S. congressman’s compensation package. As lucrative as that may seem it pales in comparison to a lawmaker’s earnings potential after he retires and passes through the revolving door. The Center for Responsive Politics reports that in 2013 the public and private sector paid $3.24B to registered lobbyists, which doesn’t include unreported, under-the-table expenditures; legal or otherwise. Considering there were about 12,300 registered lobbyists in 2013, each lobbyist generated on average over $262,000 for herself or her firm. Not a bad living on top of a congressman’s retirement package. However, that doesn’t provide the complete picture. Former Congressman Dave Hobson offers an insightful example of the taxpayer subsidized largess that flows to elitist politicians after they leave Congress. Mr. Hobson’s congressional termination report places his personal net worth at $3-$10 million, and that doesn’t include any personal wealth redistributed to family and friends. You may ask how a career public servant on a public servant’s salary accumulates that legally? The answer is, normally they don’t and in Hobson’s case OCGJ can prove it. In any case, this week we’ll take a look at Dave Hobson’s lobbying activity since he left congress.
Hobson left congress in January, 2009, but a while back Congress passed a law mandating a cooling off period before a retiring congressman can lobby congress on behalf of private or public clients. They have to wait a whole twelve months before they can start collecting a paycheck for peddling their influence on the other side of the revolving door, and in January 2010 Mr. Hobson kicked it into high gear. Understand a lobbyist gets paid for steering our tax dollars toward his clients with absolutely no regard for efficiency or value added to the public good. Of course Dave Hobson and other former politicians turned lobbyists behaved this way while they were in congress, but as lobbyists they get paid much more. Hobson was especially adept at earmarking PMA Group clients. You may recall an earlier post where OCGJ revealed Dave Hobson and Steve Austria, Hobson’s successor, received illegal contributions from PMA, but did not return them. Paul Magliochetti, PMA’s Founder and President, served time in federal prison for illegally bundling campaign contributions to Hobson, Austria and dozens of others. Other than John Pugliese, one of Magliochetti’s co-conspirators who committed suicide after the investigation went public, all the PMA lobbyists walked away, free to spread citizen class tax dollars around to friends, family and political class insiders.
In 2010 Hobson formed CBD Advisors which reported a mere $560,000 in lobbying revenues through June 2014. For his fellow lobbyists at CBD Advisors, including Barb Schenck, former State Director for U.S. Senator Mike DeWine, that barely covers walking around money. But if you dig a little deeper into mandatory public disclosures, we see that Hobson and other lobbying firms he worked for reported over $14 million in revenues. That included Welch Resources who billed $30,000 a month to Woolpert, Inc., a defense contractor that received a $1.6 million earmark from Dave Hobson before he left congress (Source: T.W. Farnam, “7 ex-lawmakers now lobby for groups that got earmarks, report says,” January 27, 2012).
The impact of no-value-added earmarks and wealth redistribution defined by kick-backs and pay-to-play politics goes way beyond the greed and hubris of elitist politicians. It also steers scarce resources toward unproductive activities and away from more pressing requirements, including support for our veterans who often endure extreme sacrifices in serving the Republic. Some estimates put the homeless veteran population at 25 percent. That’s a tough pill to swallow when we see billions of tax dollars going to enrich ex-politicians turned lobbyists and their political class cronies.