Exile on K Street (Page 2)

By Jeremy Scahill

This article appeared in the February 20, 2006 edition of The Nation.

February 2, 2006

Of all ASG's activities, its military contracting work could bring it the closest to the recent spate of lobbying scandals. Among ASG's select group of military-oriented clients is major GOP fundraiser Brent Wilkes. Wilkes was a "Bush Pioneer" who raised more than $100,000 for the President and served as the finance co-chair for the Bush campaign in California. More recently he won himself a new title--"Co-conspirator No. 1" in the Cunningham criminal investigation. He gave more than $630,000 in contributions and favors to the disgraced legislator, who pleaded guilty in November to taking $2.4 million in bribes in return for steering military contracts toward select companies. For years Wilkes has raked in tens of millions in taxpayer dollars doing what could arguably be done at Kinko's--digitally scanning old paper documents for the military. Of course, it is presented in more sophisticated phrases, like "automated document conversion." In addition to flights on his plane, Wilkes doled out more than $840,000 in contributions to over thirty Congress members and candidates. In turn, over the past decade Wilkes's companies, including Automated Document Conversion Systems (ADCS), were awarded some $90 million in military contracts.

CLARIFICATION: After noting that "it is a federal crime for a departed senior Congressional staffer to lobby his former boss for one year after leaving," this article highlights the case of Patrick McSwain, who served as chief of staff for former Congressman Randy Cunningham. The article quotes Alex Knott, head of the Center for Public Integrity's LobbyWatch, saying, "There's a strong chance" that McSwain violated federal law by lobbying Representative Cunningham immediately after leaving his staff in August 1999.

McSwain points out that under the applicable law, it is only Congressional staffers who make at least 75 percent of the Congress member's basic pay rate during any sixty-day period in their final year of employment who are precluded from lobbying their former bosses. While Congressional pay records indicate that McSwain, as Cunningham's highest-paid Washington staffer, received compensation above that level in the period immediately prior to his termination, the excess was apparently attributable to accrued vacation time, which does not count toward the 75 percent threshold. Accordingly, it appears that McSwain was not legally precluded from lobbying Representative Cunningham.

The Nation regrets any misimpression that may have been created as to the legality of McSwain's activity. The fact that it may have been legal, however, doesn't make it right. We continue to find the spectacle of senior-aides-turned-lobbyists exploiting their insider connections in Congress to be unseemly and antidemocratic.

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There are several tales, told by Pentagon insiders, of Wilkes becoming outraged at the suggestion that another company would be awarded a contract for document conversion. In 1999 Wilkes's possessiveness caught the eye of the Pentagon Inspector General, who, according to the Washington Post, concluded that the contracts were granted through "irregular procedures." Assistant Deputy Under Secretary of Defense Louis Kratz told the paper that he had requested the probe after both Cunningham and Wilkes had called him pressing for the release of funds for ADCS. "Kratz said he had never before experienced anything close to their 'meddling' and 'arrogance.' " According to Kratz, Wilkes "implied that it was his money."

A Nation investigation has revealed that, before Wilkes hired ASG to help him grease the Congressional wheels, he enlisted the services in September 1999 of a rookie lobbyist named Patrick McSwain. It was an interesting choice. Until August 1999 McSwain was Duke Cunningham's trusted chief of staff. It is a federal crime for a departed senior Congressional staffer to lobby his former boss for one year after leaving. A review of Congressional lobbying records indicates that the day after leaving Cunningham's staff, on August 9, 1999, McSwain registered as a lobbyist for defense giant General Dynamics, which received $33.2 billion in contracts from 1998 to 2003--mostly no bid contracts. On the registration form, McSwain specifically indicates his intent to lobby on the Defense Appropriations Bill of 2000. Cunningham had enormous control over that bill, serving not only on the Defense and Appropriations committees but also on the conference committee reviewing the bill. Alex Knott, head of the Center for Public Integrity's LobbyWatch, says, "There's a strong chance" McSwain violated federal law. "It would have been extremely hard to lobby on a bill that went before Representative Cunningham in so many areas and not have any correspondence with him or his staff," he says. A month after his departure from Cunningham's office, McSwain signed up, as his second client ever, Wilkes's ADCS. And it was that same year, 1999, that Wilkes, flush with contracts won largely through his greasing of Cunningham, came into serious money, buying two new homes, one for $1.5 million. Did his new lobbyist--former chief of staff to his sugar daddy--have anything to do with this? It is hard to imagine that he didn't. On his personal web page, McSwain boasts of his deep connections in Congress, "the personal and professional relationships with senior staff members that are a necessary part of any successful government affairs effort."

McSwain went on to found the high-powered GOP lobbying firm Northpoint Strategies, along with his successor at Cunningham's office, Trey Hardin. According to the Center for Public Integrity, from 2002 to 2004, Northpoint's revenues made a whopping jump from $160,000 to $2.4 million. Its number-one client? The heavily Bush-connected Carlyle Group-United Defense, which paid the firm more than $1 million in 2003-04. Number two: the Titan Corporation (of Abu Ghraib fame).

If McSwain's exploits are not on the radar of those investigating the broad network of individuals connected to Cunningham and Wilkes, they should be.

About Jeremy Scahill

Jeremy Scahill, a Puffin Foundation Writing Fellow at The Nation Institute, is the author of the bestselling Blackwater: The Rise of the World's Most Powerful Mercenary Army, published by Nation Books. He is an award-winning investigative journalist and correspondent for the national radio and TV program Democracy Now!. more...
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