Time was, Washington lobbyists followed a certain protocol at political fundraisers. They’d drink the bourbon, eat a few crab cakes, surrender their checks and move on. Anyone familiar with the form knew better than to ask a lawmaker for a favor while money was on the table—that’s what the morning after follow-up call was for.
To Jeff Connaughton, former lobbyist, White House lawyer, and Senate staffer, the disappearance of that small restraint is not a good sign.
"It used to be verboten to bring up an issue at a fundraiser," said Connaughton in a recent interview. "Of course they’d call the next day. But, over the years, primarily because Congress is so pressed for time and the need to raise huge sums of cash, it’s literally become the Senator or Member going around the table, one-by-one, ‘What’s your issue?’ How can anyone feel good about how that must look to the American people?"
Connaughton takes aim at the political money chase, the role of lobbyists on Capitol Hill, and the infinite influence of the financial services industry in The Payoff: Why Wall Street Always Wins. The book, published [Prospecta Press] last September, also traces Connaughton’s personal story: from idealistic college student spellbound by a visit from Joe Biden to the University of Alabama, to jobs as a Biden fundraiser and staffer, to the Clinton White House, and then through the revolving door to cash in on his experience by co-founding one of the most lucrative bipartisan lobby shops in Washington.
Along the way he raised hundreds of thousands of dollars for Biden, Clinton and other Democrats, and made a small fortune for himself, acquiring the accoutrements of the successful lobbyist’s life: house in Georgetown, speedboat on the Chesapeake, bespoke suits, and a nagging sense that he was part of a corrupt system.
Over the decades, Connaughton remained loyal—if not close—to Biden; with a political allegiance that he readily admits was less out of personal affection than the certainty that in Washington one must be branded as close to a powerful elected official, and the Delaware Democrat would be a most lucrative connection. He worked on Biden’s 2008 presidential campaign; then, when Biden was named as Obama’s running mate, worked on the pre-transition team. Following the election, Connaughton served briefly as part of Biden’s vice presidential transition team.
But incoming President Barack Obama had launched, Connaughton wrote, an "anti-lobbying jihad," refusing to accept lobbyists into his administration (except for the ones he did accept, like Goldman Sachs lobbyist Mark Patterson, who served as chief of staff to Treasury Secretary Tim Geithner). As a consequence, Connaughton contemplated continuing his work at Quinn, Gillespie & Associates, where he could boast of close ties to a sitting vice president. But Ted Kaufman, Biden’s longtime chief of staff, who had just been appointed to fill out the rest of Biden’s Senate term, had a different idea and offered Connaughton a chance to go back through the revolving door, this time into public service.
In the foregoing months, Lehman Brothers had declared bankruptcy and the Dow had plunged. As Connaughton writes, "I was livid about the financial crisis and Wall Street’s role in it. Ted was too. The economy was imploding because of Wall Street excess (and likely: malfeasance), and in the run-up to the financial meltdown the ruling class in Washington had done nothing to stop it." They decided to spend Kaufman’s two-year term fighting to make Wall Street accountable for the crisis, and passing structural reforms that would prevent another one. So in 2009-10, Connaughton served as U.S. Senator Ted Kaufman’s Chief of Staff.
There were some small victories, but overall, Connaughton’s time in the Senate left him heartsick from the government’s failure to prosecute Wall Street fraud and enact financial reforms to protect Americans. He attributes much of this failure to the revolving door ("if you work your way up and become a key government official—in Congress or the executive branch," he writes, "you can start test-driving Porsches in your final weeks in office.") He also attributes the failure to our current system of funding campaigns, which gives tremendous clout to those, like the financial services industry, with the resources to make or break lawmakers and candidates.
It’s a system under which Connaughton got rich. While it’s impossible not to note that, like many political whistleblowers, Connaughton didn’t complain about the system until he had socked away a small fortune; it’s also impossible not to give him tremendous credit for his leap back into public service at a time when he could easily have cashed in on his relationship to Biden, and become one of the most bankable lobbyists in town.
Instead, he worked with Kaufman on Capitol Hill, trying his best to take on the financial giants. And then, at the close of Kaufman’s term, Connaughton left Washington. He moved to Savannah, Georgia, far away from Washington—which he writes, continues to "attract thousands of idealistic, energetic young people from across the country and lead[s] many of them to make compromises that [draw] them deeper into a corrupt system."
He recently appeared on an episode of PBS Frontline, "The Untouchables," during which he criticized Justice Department leaders. He continues to advocate for tougher financial sector regulations, and for lessening the impact of money in politics.
Connaughton spoke to Lab Fellow Sheila Kaplan earlier this month. The following is an edited version of the interview:
SK- Why did you write this book?
JC- "I’ve tried to lay my career for people to pick through it and draw whatever conclusions they want. It feels personal in some ways and in other ways it doesn’t. I felt the best thing I could do was write the most truthful account of Washington as I experienced it.
"I stayed away from using the word corrupt, because it’s not well-defined, and I can’t empirically verify it regardless (who needs to, as I think, on Wall Street issues especially, the thing speaks for itself). Instead, I trained my sights on myself, on what I called the "diabolical tugs" I sometimes felt during my career, and tried to be my own worst critic, as symbolic of how bad things have become in D.C. over the past 25 years."
SK- In your book, you call former Senator Christopher Dodd (D-Conn.) "Machiavellian," and raise questions about the influence of Wall Street donations on his policies.
JC- "It was just common knowledge that Dodd was using his Banking Committee chairmanship to help fund his long-shot presidential campaign. ...At the same time, in 2007, while Dodd and his family literally were living in Iowa as he campaigned, he chaired only four hearings that came close to touching on the brewing financial crisis issues." [The Center for Responsive Politics, which tracks campaign contributions from Federal Election Commission records, reports that securities and investment firms were Dodd’s number one donor, with $ 1,378,048 in contributions between 2005 and 2010. Dodd, now a lobbyist, declined to comment for this blog.]
"He was one of the most popular Senators. He’s a great guy, everybody likes him. That is part of the Washington story. There is this social glue that holds everybody together. …David Brooks once wrote a column about how the elites in Washington never police other elites, there is too much of a social consequence."
SK- You co-founded one of the first bipartisan lobby shops. How did it work?
JC- "It did stay sequestered, we never pooled our campaign contributions. The Democrats decided who they would do events for, and the Republicans did the same.
"There are corporations who for decades in Washington have been sprinkling grant money around. Not just to think tanks, but to every kind of advocacy group, not-for-profit, that you can think of; to develop the ability to have multiple points of entry into the dialogue.
"You constantly look for third-party validators. …[We would say,] ‘Who can we get that it is not the voice of the client to validate our point of view, or come close to our point of view, or deliver our message?’ You’d call them [academics] and the first question out of the academic’s mouth would be 'is this going to be a retainer situation?'
"Recently, I was talking to a senate democratic staffer who had just attended the Aspen ideas festival, and he was describing to me the kind of people who were there, who he had dinner with, all huge corporate money. …There wasn’t a single representative of consumer groups or public interest groups. He was on his way to the Democratic Convention, where he had been invited to all sorts of corporate-sponsored parties. These staffers often move through a corporate-funded bubble, and so it’s no surprise that they get more information from special interests than the public interest. And then the next phase of their career after working for Congress is too often to join the corporate bubble makers."
SK- Tell me about Obama’s anti-lobbying campaign, which you describe in the book. It didn’t seem to last long.
JC- "I thought it was a cynical and ineffective approach. He was demonizing lobbyists, who are just in the middle between special interests and government. Why can Obama talk to Bill Daley while he was at JP Morgan, and have dinner with Daley, take contributions from Daley, and eventually hire Daley to be his chief of staff, but not take money from or hire Bill Daley’s lobbyist? It makes no sense at all.
[Obama’s financial reform policies] "reflected the world view of Wall Street technocrats who had been brought in to the Obama administration from the beginning. This man who had been elected president on a change platform, when it came to Wall Street issues, was all about appointing disciples of Bob Rubin such as Larry Summers and Tim Geithner—the very architects of the financial crisis—and ensuring continuity with the bailouts and bank-friendly policies. It’s no wonder that reformers in Congress made such little headway, because these Administration officials were adamantly opposed to true structural reforms."
SK- On your first presidential campaign in 1987, you used what you called the "Amway" approach to fundraising. Tell me about that.
JC- "I think fundraising has long been about incentivizing captains to bring in sub-captains, and reward each captain, above a growing pyramid of fundraising totals, with greater access to the candidate and a more concrete connection to campaign leadership. It’s actually imperative to run a disciplined operation, one that keeps people motivated and incentivized that the more they do, the more recognition and access they’ll get…the more likely they’ll feel pride in telling their friends they have a genuine relationship with the candidate."
"Twenty five years ago, I’d practice my fundraising pitch on my sister, and it’s still a running joke between us. I’d say, 'Roger, for $50,000 I can get you dinner with the senator in his house. For $25,000, I can get you dinner with the senator ...not in his house. For $5,000, you and I can have lunch and maybe the senator will drop by… but I doubt it.' And yet people responded to this, to the idea that it’s far better to have dinner with the senator in his house than not in his house."
"I remember going to the 2004 Democratic convention in Boston. I was walking into one of the VIP events and I heard someone behind me muttering, 'I raised a million dollars for the campaign and I can barely even get to see Kerry. ...For Gore, if you raised half a million, you got treated like a king.'
"The best people, who can really raise money, are people who do business with a lot of subcontractors; people who have a rolodex of people they do business with, and you can imagine how the phone call goes. It is nothing about, 'Let me spend 20 minutes telling you the virtues of the candidate and 20 minutes on why I believe he’s going to win.'
"The conversation is 'Write me a check to Smith for president. Do it for me.' And the person on the other end of the phone is in no position to say no. If you had to actually convince someone your candidate would win and be a great president, in most campaigns you’d never raise any money."
SK- You were disappointed with Obama on money and politics issues?
JC-"A true reform movement can only come from a presidential campaign, and that is what is so historically disappointing about Obama. He did have a moment in time and represented a promise. …He couldn’t single-handedly get money out of the system, but he could have stood up to elite interests. Certainly when it came to Wall Street, he should have done that. After all, this was a devastating financial crisis that severely damaged the livelihoods of tens of millions of Americans. And yet, in my view, his abject failure to stand up to Wall Street has highlighted the power of money in D.C., and made even more people disillusioned."