K Street goes to the defense of Charlie Rangel

By: Timothy P. Carney
Washington Examiner
Jul. 30, 2010

Every person accused of a crime or an ethics violation deserves a competent defense. Charlie Rangel's legal defense, fittingly, comes from K Street.

Two of the three firms providing legal counsel to Rep. Charlie Rangel, D-N.Y., in his pending ethics cases are lobbying firms. In fact, one firm, Oldaker, Belair & Wittie, conducts much of Rangel's political fundraising, while operating four different lobby shops.

But who's ultimately paying Rangel's legal bills? Mostly corporate and union political action committees along with individual lobbyists. Over the past six months, PACs and lobbyists have accounted for a majority of the money Rangel's campaign has raised this year, not counting transfers from Rangel's other fundraising operations (more on them below).

In turn, Rangel funnels his campaign cash into his legal defense. In 2009, three-fourths of Rangel's $2.16 million in campaign spending went to legal fees. The House Ethics Committee allows campaign funds for legal fees that are not "primarily personal in nature, such as a matrimonial action, or could result in a direct personal benefit for the Member." Otherwise, legal fees are a legitimate use of campaign cash because "the protection of a Member's presumption of innocence in such actions is a valid political purpose," the guidelines state.

That means any politically savvy donor who cut a check in 2010 to Rangel's reelection knew the donation was, in part, a contribution to Rangel's legal defense -- indeed, in the first two quarters of 2010, Rangel's campaign spent $655,232, with $230,749 (35 percent) going to legal fees. Zuckerman Spaeder LLP got biggest haul of Rangel cash -- $182,000. The firm had lobbying clients including one top drugmaker until last year, when the K Street legal shop de-registered as lobbyist.

Another lobbying firm defending Rangel is Oldaker, Belair & Wittie, pocketing $28,000 in legal fees so far this year. Oldaker's clients include Indian tribes, health care companies and financial organizations such as the Debt Buyers' Association. But the firm also houses two other lobbying firms: the Oldaker Group and the National Group.

The National Group's lobby clients include defense giant Lockheed Martin and other aerospace companies, as well as many universities and hospitals.

In the Oldaker orbit is lobbyist Michael Allen Andrews, a former Ways & Means staffer, now a Rangel donor. Andrews is registered to lobby for "National Health Advisors LLC," a lobbying operation launched by Oldaker and another K Street firm days before Obama's inauguration.

In a press release, Oldaker explained: "As the Obama Administration and the 111th Congress begin their work to reform America's health care system, the Washington DC-based joint venture offers lobbying and consulting services to companies needing to understand and impact the reform debate." Rangel's Ways & Means Committee was one of three with jurisdiction over the bill.

Oldaker lawyer Phu Hunyh is also the treasurer for a fundraising committee called the "Rangel Victory Fund." This is different from Rangel's principle campaign committee ("Rangel for Congress") and Rangel's PAC ("National Leadership PAC"). The treasurer of those two committees is Basil Paterson, father of New York Gov. David Paterson, a former union boss, and now a senior member of a law firm that also lobbies.

The final arm to Rangel's fundraising machine is the now-defunct Baucus-Rangel Leadership Fund. This was a joint fundraising committee Rangel set up with Sen. Max Baucus, D-Mont. What did they have in common? When they formed the committee, the two men had just become chairmen of their chambers' respective tax-writing committees. The committee held a fundraiser or two in 2007, pulling in cash primarily from New York City real estate developers and investors. The fundraisers reeked of auctioning off tax policy, or shaking down businesses vulnerable to tax changes.

Lobbyists are filling the campaign bank accounts that are paying these lawyers. Some high rollers on Rangel's donor lists are: Joseph Dowley, representing the Institute of International Bankers; Justin Gray, representing taxpayer-owned GM; Alan Wheat, representing Sanofi-Aventis and Roche; and Akin Gump lobbyists Robert Leonard and Jayne Fitzgerald, who represent Boeing, Bechtel, General Electric and Aetna. Lobbyists from Patton Boggs, the Podesta Group and Ernst & Young have also funded Rangel.

Check out the PACs giving to Rangel this year and you will see names like the National Bankers Association, Pfizer, New York Life, GE and Lockheed Martin. Lobbying firm PACs funding Rangel's re-election include Baker & Hostetler; McKenna, Long & Aldridge; Holland & Knight; and O'Melveny & Myers.

PACs and lobbying firms have given more than $120,000 to Rangel in the past six months while individual lobbyists have chipped in another $28,000.

All of these companies and lobbyists are savvy enough to know they're funding Rangel's legal defense. This is why politicians like Rangel benefit when K Street gains clout. Starting this week, we'll find out if K Street is powerful enough to save Rangel.
_____
Timothy P. Carney, The Examiner's lobbying editor, can be reached at [email protected]. He writes an op-ed column that appears on Friday.