Archive for September, 2017

Trump Waives through Jones Act

Friday, September 29th, 2017 by Vbhotla

In 2014 John McCain said ‘the power of this maritime lobby is as powerful as anybody or any organization I have run up against in my political career’. This week President Trump has had to face up against the shipping industry amidst mounting pressure to lift the 1920 Jones Act. The Act requires that ships going from American coast to American coast must be American- built, owned, flagged and crewed. Whilst the law gives strong advantage and security to American shipping firms, its critics have seen it as a hamper to free trade, unfairly inflating the price of shipped goods. Unsurprisingly such criticism has most notably been leveled by Hawaii, the US Virgin Islands and Puerto Rico, who claim to be disproportionately affected by the Act.

Earlier this week Trump appeared reluctant to commit to waiving the act, something he had previously done for both Florida and Texas, stating cautiously that ‘a lot of people who are in the shipping industry don’t want it’ lifted. However on Thursday the President issued a waiver for an initial 10-day period. How much it will help is unclear, most of Puerto Rico’s ports have been destroyed or disabled by Maria, along with 80% of the territory’s crop value, thousands of homes, and the island’s power grid. Port San Juan, one of the largest functioning ones, is packed full of containers full of food, water and resources but there is simply not the means to distribute the produce.

John McCain and others however have expressed the view that not wavering the Act would largely inflate the cost of the Island’s relief effort. McCain has long been an advocate of repealing the law, and Maria has clearly opened up the debate once again. Despite its critics, The Washington Examiner reported that among representatives of states with ports and strong shipping industries, the Act continues to maintain strong support, with the interests of the Shipping Industry strongly anchored by the Shipbuilders Council of America.

The Trial of Senator Bob Menendez: Bribery, Friendship or Naivety?

Friday, September 22nd, 2017 by Vbhotla

The on-going federal bribery trial of Senator Bob Menendez, expected to last up to two months, once again opens up the age old debate of when does a gift become a bribe? The trial of the New Jersey Democrat is centered on Menendez’s relationship with Dr. Salomon Melgen. Melgen, who made his fortune specializing in medical care, faces 18 counts of fraud and bribery. The multi-millionaire is alleged to have given the Senator flights, hotel stays and campaign funding in exchange for Menendez’s help with personal and professional issues.

The defense has focused on what they claim to be the genuine friendship between the pair, and therefore the non-political nature of Melgen’s gifts. Prosecutors have refuted this justification, asserting that friendship is no excuse for bribery, but the defense has maintained its focus insisting that ‘friendship is an absolute defense to bribery because when you’re friends and you do things for friends because they’re friends, there is no intent to bribe’. The trial has heard numerous anecdotes of evidence seeking to prove their close and personal relationship. The singling out of Melgen, the defense have even claimed represents an attack on the entire Hispanic American community.

In the mid 2000’s the uncovering of Washington’s most infamous lobbyist, Jack Abramoff, or ‘the man who bought Washington’, transformed the debate, as the country’s lawmakers sought to draw a clear line under the issue, the spotlight was put on lobbying like never before. The aftermath saw a hike in the legal penalties for those caught issuing freebies, and whilst rules prior to the scandal had barred lawmakers and senior staff members from accepting gifts worth over $50, the rules were rarely enforced. This changed, and lobbying firms were also put under new obligations to meet more stringent quarterly expense certification requirements, expanding on the existing requirements set out in the 1995 Lobbying Disclosure Act.

Obama’s Executive Order in 2009, saw an even further clamp down with a ban, barring minor exceptions, on the acceptance of gifts from lobbyists to Political Appointees. The alleged tradeoff between Menendez and Melgen, focuses on claims that Menendez lobbied on a Medicare billing dispute, in addition to a contract dispute involving another Melgen company. Beyond business, the trial has also heard former senior advisor Mark Lopes testify that Menendez put direct pressure on furthering the visa applications of Melgen’s two sisters. Whilst the defense may have sufficient evidence of the pair’s close friendship, prosecutors will continue to refute the relevance of this.

Rising Stakes Amidst the Fall Agenda

Wednesday, September 13th, 2017 by Vbhotla

In a previous Lobby Blog post, we discussed the ‘clogging’ of federal Lobbying Activity and the decline in registered lobbyists, amidst frustrations over a seemingly ‘dysfunctional’ legislative program. And with congress eight months into its session, failing to pass any major legislation, such frustrations were perhaps unsurprising. This week however, analysis from The Washington Examiner indicates a forthcoming surge in activity as business anticipates the fall agenda, set to focus in on the first major tax reform in over a decade, in addition to a looming budget.

Lobbyists are on track to spend more this year than any since 2010. If spending maintains the same pace, the annual figure will stand at over $200 million more than the previous year. Expenditure data from the Center for Responsive Politics show pharmaceutical and insurance lobbying dominated the first half of the year, but with the agenda shifting from healthcare to the broader business landscape, experts anticipate a burst in activity from business groups. Co-leader of Akin Gump, Hunter Bates, discussed that ‘with Republicans controlling the House and Senate, the business community has moved on to the offensive’.

The US Chamber of Commerce remained the biggest player this year (through June), with spending of $40 million, its 35 in-house lobbyists working on dozens of bills across an array of issues, from healthcare to energy policy. Meanwhile the National Association of Realtors came second, spending $21.1 million.

Big spending increases were seen by the National Retail federation, who spent more in the first half of 2017 than the whole of last year ($7.1 million). Vice president for government relations, David French reflected that whilst the group has stayed engaged in trade and healthcare, the figures represented a defensive campaign in which battles over a proposed new border-adjustment tax and a hiking of debit card fees, have dominated. Whilst Trump’s ability to achieve significant reform remains uncertain, it’s clear that across an array of industries, the coming months will see the business community engage in maximizing the potential for far reaching, business friendly reforms.

Trump’s Battle With Silicon Valley

Thursday, September 7th, 2017 by Vbhotla

The Trump administration’s announcement this week to wind down the Obama-led DACA program, affecting an estimated 800,000 who arrived in the US as unregistered children, has further exposed growing rifts between industry and Trump’s emerging immigration reforms. Whilst the announcement sparked an avalanche of social media criticism, unsurprisingly from vocal Trump critics such as Mark Zuckerberg, increasingly industry’s response is becoming far from reserved to the realms of Twitter.

With key tech giants Google, Amazon, Apple and Uber all spending record sums on lobbying federal officials, the new political climate has seen Silicon Valley extend its lobbying agenda away from merely tax reform, and towards a host of new issues from climate change, net neutrality and the case in point, immigration. Whilst headlines may focus on the ideological clashes of tech CEOs and President Trump, increased spending on immigration lobbying, reported by Bloomberg Government Data, indicates the practical significance faced by the industry.

Until this week, lobbying on the DACA program had broadly speaking been reserved for universities and colleges, the tech giants previously focusing their efforts on maintaining, and expanding, the H-1 B visa program. The program, designed to allow highly skilled tech workers into the US, has become integral to the tech industry, with Microsoft alone employing over 5,000 workers on the program. The group, an immigration advocacy group founded by Bill Gates and Mark Zuckerberg, has been a key driving force behind such efforts. In 2015, intensified lobbying resulted in a public clash, as Trump accused Zuckerberg and the tech industry of attempting to undercut US citizens through cheap foreign labor.

This week The Hill reported’s soliciting of signatures from key business leaders in an open letter to the White House. The letter, setting out opposition to Trump’s DACA stance, shows an increased mobilization, and willingness, of industry opposition and action against Trump’s immigration reforms. The huge social media platforms and public reach possessed by key tech players could also fuel growing grassroots advocacy movements that Trump may face ahead.