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The Hillary loophole.

Political spouses have a fight to work. They don't have a right to influence-peddle

Over the last few years, the House Sergeant at Arms' quarters may have edged out Brock Adams' office as the tawdriest place on the Hill. Forget the two and a half years of GAO warnings that the House bank had gone haywire. In addition to over-drafting $104,000 worth of his own checks, Sergeant at Arms Jack Russ, a protege of Ways and Means chairman Dan Rostenkowski, had an aide arrested by the Capitol Hill police as a bachelor-party prank, allegedly ran a private business out of the House stationery room, possibly commanded his police force to wiretap members, and still found time to spread the rumor that Speaker Tom Foley was a closet case.

With opportunities like those, the tiny office's full-time auditor should have had a dream job-an expose a day. But oddly enough, the auditor didn't find much. Or maybe it's not all that odd. For most of 1990 and 1991, the job was filled by one Chris Downey, wife of Rostenkowski's Ways and Means colleague, Tom Downey. As her husband and 330 other members bounced checks, she took home about $35,000 a year as auditor until she was promoted to assistant to the Sergeant at Arms, at $40,000. Her professional experience immediately before coming to the House was operating a Capitol Hill pizza parlor.

Scholars of the bank fiasco should be forgiven for missing this low-profile auditor. She wasn't regularly listed in the staffing reports Congress is required by law to publish. Plus, explains the new Sergeant at Arms, Werner Brandt, she wasn't really an auditor. What did she do for her salary? Her chief duty was presiding over the refurbishment of The Macethe House's four-foot silver and ivory ceremo - House wives

You'd think Chicago representative William Lipinski would have enough to worry about, with his district's spiraling crime rate, crummy schools, and constituents' proclivity for burning crosses on front lawns. But a primary obsession of this Public Works and Transportation Committee member over the years has been securing federal funding for a rail line through southwest Chicago to Midway Airport. The Chicago Transit Authority (CTA), one of the chief beneficiaries of the project, has been appropriately grateful for his largesse: Shortly after the rail line received several hundred million dollars in federal startup funds, CTA awarded a one-year, $44,000 lobbying contract to Lipinski's wife.

Rose Marie Lipinski has, by all accounts, an IQ well into the three digits. Four years ago, she graduated from law school. But when CTA officials were asked what other virtues justified the creation of a new lobbying post in her honor, they came up with a rather limp rationale: She was a longtime resident of Chicago. In 1991, shortly after Ms. Lipinski was hired, the CTA received an additional $13.4 million in federal discretionary funds for the Midway airport project.

A working-woman issue? "I don't think anybody ever saw her do anything," laughs Natalia Delgado, a lawyer for Genner & Bloch and former CTA board member. "She never reported to the board on anything."

Minor scandal? Apparently not: Our definition of propriety has "evolved" along with wives-of's occupations. When Billy Carter was hired as a lobbyist by the Libyan government way back when, he became an instant symbol of incipient corruption. When The New York Times' credible account of Hillary Clinton's intervention in the Arkansas S&L deal was published, on the other hand, she became a symbol of unfair press persecution. Yet the breadth we give to wives-of's careers isn't just a fuzzy matter of public acceptance. In some cases the approval is official. Before Rose Marie Lipinski began lobbying her husband's committee on behalf of CTA, the Lipinskis queried the only institutional watchdog on these matters, the House ethics committee, and received its okay.

Our willingness to tolerate such questionable arrangements may stem from a strange confluence of old- and new-school thought on working women. To the dinosaurs, wives' jobs simply might not seem all that important; why not provide some harmless pastime for politics' gracious ladies? To the younger and more enlightened-many of whom are, or are married to, women who work-it's something else.

While Billy Carter's hiring by Libya couldn't possibly be construed as an equal rights issue, Rose Marie Lipinski's hiring can. "It's tricky business," says Congresswatch's Michael Waldman, explaining why his good-government group, like Common Cause, doesn't monitor spousal conflicts. No good liberal wants to impinge upon a woman's right to work.

Of course, conflict of interest is a notoriously slippery concept. As ethics committee members surely rationalized in the case of the Lipinskis, the extra income paid to the wife was likely to have no effect on the husband's voting: Lipinski has never been averse to pork (although his wife's contract might inspire him to work a little harder for the project). The harmony of interest is not so neat in the case of New York representative Norman Lent, ranking minority member of the Energy and Commerce committee. One of the hot issues before his committee is legislation affecting the Baby Bells, which are fighting newspapers and the cable industry over control of online data services. But those papers and cable operators aren't likely to get much help from Lent, whose wife lobbies for one of the biggest babies, NYNEX.

One could argue that NYNEX was indifferent to Ms. Lent's connections when hiring her. But one might also note that another member of NYNEX's lobbying team is former representative (and telecommunications subcommittee member) Tom Tauke. One might also argue that Ms. Lent can't be blamed for possessing those connections if she doesn't actively use them. Yet Energy and Commerce staffers observe that while Ms. Lent actively lobbies her husband's colleagues, she's seldom seen on the Senate side, where her name is not quite so effective a calling card.

Washington is a sophisticated place, fully capable of distinguishing the arriviste from the arrived. But wife-of status may be an advantage even when all the credentials are in order. In February, as debate over the Higher Education Reauthorization Act raged, legal aid lawyers representing students went head to head with the Student Loan Mortgage Association (Sallie Mae) over whether students should be liable for school loans when trade schools' promises turn out to be fraudulent. (Sallie Mae, which packages and resells millions of those loans, believes students should still pay.) Money politics being what they are, the legal aid folks were already woefully outclassed. But when they met with the staff of the House Education Committee, which is chaired by William D. Ford, they faced another disadvantage: Sallie Mae was represented by Ford's wife's firm, Williams and Jensen.

A conflict of interest on Ford's part? Not officially. The Sallie Mae account is handled by a lawyer a few doors away from his wife's office. And Mary Whalen was a lawyer long before she was a spouse.

But to deny the impact of being lobbied by your wife's firm is to deny a fundamental political truth: connections matter. That's why a defense contractor recently slipped Armand D'Amato $120,000 to lobby his brother, the senator, according to a federal indictment. And that's also why lobbyist Tom Boggs-the Patton, Boggs, and Blow partner and consummate son-of-is one of the most powerful people in Washington.

That's not to say that such influence is wielded vulgarly:

Hire me because my husband/mother/daughter chairs a key committee. In fact, most people blessed with access carefully carve out a window of deniability. Boggs never lobbied his mother's Merchant Marine Committee, while Hillary Clinton refuses a cut of her firm's earnings from state business. Those small sacrifices help distinguish politics' savvy access-holders from the unembarrassed, and slightly embarrassing, Barbara Lents, but they don't close all doors. Indeed, it's as a softer form of currency that access really works.

At Akin Gump or Williams and Jensen or Little Rock's Rose law firm, partners have subtle ways of letting their social wiring show, for good reason. Clients value access to powerful people, and being able to demonstrate that you have it increases the total take of the firm, and thus the worth, and perhaps the salary, of the connected. While putting a precise price on wifely access is as futile as quantifying grace, an imperfect way to gauge it is to look at a woman who lost it. In 1987, when Pamela Kostmayer was married to a popular Pennsylvania representative, her PR firm, Kostmayer Communications, boasted an institutional client list that included Allied Signal, Monsanto, and Levi Strauss. At the time, Pamela Kostmayer publicly complained (as political wives often do) that her political scruples were actually hurting her business. Today, after the divorce, her business is primarily "grassroots." "I'm not into the Hill anymore," Kostmayer explains gamely, insisting her new practice is doing splendidly.

Of course, access isn't just a fiction people create to drum up business or accumulate power. It requires a fairly chilly definition of marriage to believe Norman Lent's feelings towards the Baby Bells aren't affected by his wife's interests, or that John Dingell's thoughts about the United Auto Workers haven't evolved over years spent with his wife, a GM executive and heiress to the Fisher Bodies fortune. And if you think Phil Gramm can read with wide-open mind the pile of GAO reports criticizing his wife's Commodities and Futures Trading Commission, well, you probably aren't still married.

Some of the great moments in spousal influence-peddling don't require a Rhadamanthine sensibility to arouse indignation-like when Antoinette Hatfield accepted a $55,000 fee from Greek businessman Basil Tsakos for "interior decorating advice" while her Oregon-senator husband was urging federal funding for Tsakos' $12 billion oil pipeline, or when Betty Wright, wife of House Speaker Jim Wright, received an $18,000 salary from a Texas investor who had sought favors from her husband. (What did she do for the money? Not much of anything, investigators concluded.) Nevertheless, even those actions have been gingerly defended along feminist lines.

"I understand the opportunities for power-couple corruption," Ellen Goodman said with distaste after Betty Wright was busted. "But is this to be a new line of ethical inquiry: What does your wife do for a living? Is she really doing it?"' Given the temptations, indeed it should. What Goodman seemed to elide was that in both the Wright and Hatfield cases, the object was apparently to encourage a politician to act out of private interest. Had the payments to the wives not been brought to light, the cost to society may have far greater than the loss of income and professional traction to each woman. (Although that's not saying much; it's apparently still rather cheap to buy off a wife.)

In the case of Hillary Clinton and the S&L, the lopsidedness of the career/public-interest equation is particularly clear. Had she forsaken the opportunity to represent the insolvent institution while it sought state approval of a new fundraising scheme, she might have lost a few thousand dollars' worth of billable hours. Instead, the funding scheme was approved, the thrift failed, and the federal government was forced to intervene, leaving taxpayers with a far bigger bill.

Clearly, some political spouses have benefited, knowingly or not, from their connubial connections, and the public has paid a price. But to congressional spouses and their defenders, even pointing out potential conflicts or profiteering is likely to be perceived as sexist. "Men don't get this scrutiny," charged Ruth Harkin recently, "because it is assumed they deserve their success, but somehow a wife doesn't."

Harkin's right: There is a double standard here. But it's not the one she had in mind. When Tom Harkin announced his presidential candidacy and then stumped for months, Legal Times, National Journal, Congressional Quarterly, and the major newspapers usually deputized to keep an eye on influence-peddling shenanigans didn't think to investigate Ruth's work for agricultural clients at Akin Gump-a firm notorious, thanks to partner Robert Strauss, for elegant insider-trading. But when Pat Schroeder merely considered running for president, Legal Times raked the career of her husband, a partner at Kaplan Russin & Vecchi, over the coals. (He came out clean.)

Married ... with influence

Better yet, consider former San Francisco mayor and California gubernatorial candidate Dianne Feinstein, whose husband is affluent money manager Richard Blum. Instead of printing soul-searching columns about Blum's right to his own career, the San Francisco, Oakland, and Los Angeles papers have marshalled reporting teams to comb his records for conflicts for a decade. Although the investigations have occasionally veered toward zealotry, the premise is perfectly sound: Public interest requires that potential conflicts of interest be explored.

"Blum's business clearly has benefited from the union and the networking opportunities," concluded the Los Angeles Times censoriously-and accurately-after a review of Blum's myriad business partnerships in 1990. The same could probably be said of the careers of Hillary Clinton, Ruth Harkin, Chris Downey, Barbara Lent, and other political wives. It isn't. Still, what's most interesting about the Blum case isn't the conclusions the media drew. It's what the media brought to light: no megascandals, simply the fact that Blum worked for hotel and insurance interests vying for multimillion-dollar contracts with the city of San Francisco.

Making that information public didn't deal a fatal blow to Feinstein's political career, nor should it have. Rather, public awareness of her vested interest surely made Feinstein a lot more careful, and perhaps more equitable, as she voted on those issues. Was that unfair to Feinstein and Blum? It would have been far less fair to the public not to know that a generous city redevelopment contract was going to a partner of the mayor's husband.

That's exactly the kind of information we don't have on many political wives. While federal criminal law prohibits executive branch employees from taking actions that benefit their own or their spouses' financial interests, Congress has exempted itself from that law. And it's also awarded its spouses generous exemptions on the financial disclosure forms members are required to file. For instance, congressmen must disclose where a wife gets her money, but not what she does nor how much she earns for doing it. (How much did Chris Downey make? Salary," responds her disclosure report helpfully.)

Meanwhile, don't look to the House and Senate ethics committees to initiate investigations of potential conflicts; they simply wait, delphically, to be asked. And they don't get asked very often. Between 1977 and 1987 (the latest date available), the House ethics committee gave careful consideration to dozens of questions concerning donations of doughnuts and trinkets to congressional staffers, but only two questions involving the propriety of spousal careers. In both cases, the committee left the determination of potential conflict of interest to the members and spouses themselves.

Is there a better way to protect public interest, one that doesn't condemn spouses to the kitchen? Sure there is-and Congress had a hand in coming up with it in 1989, when Carla Hills was appointed U.S. Trade Representative (USTR) and her husband's career came under scrutiny. A former SEC chairman and managing partner at Latham Watkins who represented a Japanese trading giant, Roderick Hills wasn't happy about rearranging his professional life. But Washington politicians, faced with the alternative -allowing the spouse to represent interests whose fates were controlled by his wife-and freed from fear of being called sexist, could see pretty clearly which claim weighed more heavily on national interest. By the time of Carla Hills' confirmation, Roderick Hills had agreed to terminate all business relationships that might pose a conflict of interest, promised to keep the USTR apprised of his planned business activities, and agreed not to take on any new clients without the approval of the Office of Government Ethics.

In a climate where even mentioning the uxorial advantage comes off as piggish, demanding strictures on wives' abilities to influence-peddle will surely harrow a few politically correct politicians. It might - sorry, Ms. Clinton, Ms. Downey, Ms. Harkin, Ms. Lipinski, Ms. Lent-even hamstring a few lobbying or government careers. But if true equality for women is the goal, an equal deference to the public interest doesn't seem an unreasonable thing to ask.
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Title Annotation:Hillary Clinton
Author:Boo, Katherine
Publication:Washington Monthly
Date:May 1, 1992
Previous Article:Substance abuse.
Next Article:SMASH.

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