Campaign finance lawyer Brett Kappel discusses loopholes in reform measures

With the House already having voted on ethics reform and the Senate taking the final steps to pass its own set of reforms, many Washington insiders are wondering just how much of an effect the new rules will have on the day-to-day interactions between lobbyists and lawmakers. During today's OnPoint, Brett Kappel, an attorney in the government relations and lobbying practice group at Vorys, Sater, Seymour and Pease, discusses the effect of new ethics rules. He talks about the corporate community's reaction to the new rules and discusses the importance of enforcement and oversight.


Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Brett Kappel. Brett is council in the government relations and lobbying practice group at Vorys, Sater, Seymour and Pease. Brett thanks for joining me.

Brett Kappel: Glad to be here.

Monica Trauzzi: Democrats to control Congress promising the toughest ethics reform in America's history. Do the proposals and legislation that we've seen so far live up to that original assertion?

Brett Kappel: Well they do. These proposals are the most sweeping changes that have been made in internal congressional ethics rules since the post-Watergate era. That said however, the pre-existing rules still apply and there are still plenty of opportunities for members of Congress to meet with lobbyists and other members of the public.

Monica Trauzzi: Can Washington really exist without favors from lobbyists? Do these reforms miss the point about how Washington works?

Brett Kappel: Well, I don't think it's so much a matter of favors. I don't think Washington could function without lobbyists because the function of lobbyists is to provide information to members of Congress. And these rules will change the social interactions between lobbyists and members of Congress without, I don't believe getting in the way of the proper function of lobbyists which is to supply information that members of Congress need in order to act on legislation.

Monica Trauzzi: Is the call for reform genuine? Are we going to see these reform measures passed and then a return to business as usual? There are going to be kind of side conversations and favors done on the side that no one finds out about.

Brett Kappel: Oh, I think they'll definitely pass. What has happened historically is that there's a cycle that tighter rules are passed. They're observed fairly strictly for a while, then there's a fall off of enforcement and things get lax, and then there's another scandal, and then the rules get tightened again. So, I would expect that, I expect that, I expect that completely that they will be passed, and they probably will be followed fairly strictly for a while because people are very sensitized to the issue now.

Monica Trauzzi: And you mentioned enforcement. There's been talk about creating an office of public integrity that would control and police behavior. But that probably won't pass as easily as the reform legislation has. Isn't enforcement the key though to ethics reform? If it's not enforced then it's like not even having it.

Brett Kappel: Absolutely. Whether it's enforced through an independent commission or an independent office or through the existing ethics committees, if there is not consistent enforcement very soon, people will no longer take the rules seriously. But, I think that you can have enforcement either through the committees as long it's a dedication to doing it, and the resources are put into it. Or, you could have it through an independent commission. Independent commissions have been adopted in 34 states that oversee the legislatures in those states, and hasn't been a problem in those states. We haven't had a problem with, I think members of Congress are concerned that if they create this independent commission it'll be something like the independent council was and you can have a runaway entity. But that hasn't happened on a state level. By and large, these commissions have operated fairly well to regular legislators and executive branch officials in those states.

Monica Trauzzi: Which of the reform measures stand out to you the most?

Brett Kappel: Well, I think the one that's getting the most notice of course is the ban on gifts which is really a ban on meals. So, there really will be no more free lunch. However, the ban prevents lobbyists from giving gifts to members of Congress, but the preexisting rules define gift in such a way that there are 23 different exceptions as to what's a gift. So, things that could be given to those subject to those exceptions will continue to be given and that includes campaign contributions, transportation to fundraising events, widely attended events. So, while we may not see, we won't see members of Congress going out to lunch with lobbyists anymore, there still will be receptions in which members of Congress, and congressional staff are invited and they'll be able to socialize because that still would be permissible under both the House and the Senate rules.

Monica Trauzzi: Another stipulation that's being discussed is the use of private jets. And I know a lot of members of Congress are not happy with that because they're saying they're going to end up losing time when they have to fly commercial. Is that a valid argument on their part?

Brett Kappel: It is for some members, particularly in western states, which are very large. And here again the rules are going to differ. The House rules have said that members can't use either personal funds, office funds or campaign funds to reimburse corporations for flying on these jets. So, it's effectively a ban. On the Senate side, Senators are going to be allowed to continue to use corporate jets but they're going to have to pay the full charter rate. So, what they will mean is that there will be a pretty serious financial disincentive for them to use these planes for long trips. But, I don't think they'll be done away with at all. I would imagine that they'll continue to be used for trips like up and down the east coast where the charter coast isn't that much greater than flying commercial.

Monica Trauzzi: How will the rule changes to earmarks change the way that Washington works?

Brett Kappel: Well, I think it's an interesting rule because it's self-enforcing. The Ethics Committee will have to tell members they can't offer this earmark. It sort of institutionalizes the straight face test. If you as a member want to offer this earmark and you can't do it without being able to get up in front of the public and seriously say that this project needs federal funds, then they just won't offer them. We'll continue to see earmarks but they'll be more along the traditional lines of highway projects and airport extension projects and not teapot use of them.

Monica Trauzzi: You mentioned the aspect of campaign financing earlier, and a lot of people are calling that a loophole in the legislation because lobbyists will still be able to raise money for Congressmen and also donate to political campaigns. Isn't that incentive enough for Congressmen to vote in a particular way, X number of dollars donated to their political campaign?

Brett Kappel: No. I don't think so. You know members have to raise so much money now to run that they raise it from a lot of different sources. And that will continue. People that keep raising money and of course obviously they raise money from their constituents and then they act on the issues that affect their constituents. What it will do is you won't see Abramoff activities where members are doing favors for lobbyists that have nothing to do with their home districts. Members are very sensitized to that now and if there is no legitimate reason for them to working on a particular issue, they're going to tend to shy away from it.

Monica Trauzzi: Have corporations and trade associations been reaching out to you for council on how these reforms are going to affect them on a day-to-day basis, affect that they're daily working?

Brett Kappel: Oh, absolutely. Yeah, the corporate community is very concerned that these rules are being enacted and they want they need to do to comply. I mean they don't want to inadvertently cross over these lines. And the gift rules in particular, are particularly broad because they ban gifts from, not just from lobbyists, but from any entity that employs or retains lobbyists. So, what that may mean is that a nationwide corporation which has a lobbyist, no one anywhere in the company can offer or provide a gift to a local congressman's local staff. So, they definitely want to know how broad the scope is. What internal procedures they need to develop so that they don't inadvertently run afoul of the rules.

Monica Trauzzi: So the learning curve stretches far beyond Washington.

Brett Kappel: Oh yes, absolutely.

Monica Trauzzi: What about the K Street lobbyists? Is there a feeling of worry, a sense that they're not going to be able to get done what they normally get done, what they would like to get done because all these rules are in place now?

Brett Kappel: No. I don't think so. I think you know the professional lobbyists, they'll adapt to whatever the rules are. And this isn't the first time that there have been changes in the rules. Before 1994, the Lobbying Disclosure Act there was essentially no reporting at all. And the lobbying community will adapt to whatever the rules are, and the existing exceptions in the rules will provide plenty of opportunities for lobbyists and member of Congress and congressional staff to get together informally or in social settings where they can talk business.

Monica Trauzzi: All right. It'll be interesting to watch. We're going to end it on that note. Thanks for joining me.

Brett Kappel: Thank you very much.

Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.

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