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January 11, 2009
David Warsh, Proprietor


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Gzing! Gzing! Gzing!

Before the next chapter of American political history unfolds further, it is worth thinking back a little on the one that is coming to a close.  An unusually good elucidation of some crucial developments of the past thirty years appears this month as So Damn Much Money: The Triumph of Lobbying and the Corrosion of American Government, by Robert G. Kaiser.

 

Ostensibly, the book tells the story of a highly successful but little-known entrepreneur named Gerald S.J. Cassidy — the man who, for all practical purposes, in 1975 invented a new kind of business, Congressional “earmarking,” and turned it into a vast – and troubling – new industry.

 

More broadly,  So Damn Much Money relates how money got the upper hand in politics, becoming the basis of  “the one big arrangement that came to define modern Washington: the mutually dependent relationship that evolved in the years after 1975 between members of Congress and the ever-growing tribe of Washington lobbyists.”

 

Kaiser, a longtime reporter and editor at The Washington Post, including seven as managing editor, is one of the most distinguished newspapermen of his generation. He started out as a copy boy at the Associated Press during the Kennedy administration, served as a Post correspondent in Saigon and Moscow, and ranged widely as a member of its national staff. His books include Russia: The People and the Power; and, with Leonard Downie, The News About the News. Forty years of newspapering have made him an extremely fluent storyteller and an expert finder-outer. (I should note that he is a long-standing friend.)

 

In 2004, Kaiser called on Cassidy to announce his intention to find out everything he could about him; to that point, the lobbyist had remained mainly in the shadows. At some point, Cassidy began speaking frankly about his business to his inquisitor, one high-ranking insider to another – not so surprising, for the Post functions as the operating system for Washington’s political class, and it is natural for someone who has achieved as much as Cassidy, at least someone of a certain sort, to crave the recognition and understanding that the paper has to bestow, even at the cost of its approval. A couple of years ago, Kaiser put up as a series on the newspaper’s Website an early version of his story in 27 daily parts; and, after a short-lived web-based battle with Cassidy himself, which produced in turn  still more cooperative reporting, sat down and wrote the book. The result is a wonderfully complete and fair-minded account.

 

Cassidy was born 1940, the son of a self-reliant practical nurse with a shakey marriage; she moved him and his three sisters from house to house in Brooklyn and Queens throughout his childhood. The Holy Cross fathers who took over his education in high school set him on the path he traveled thereafter:  sandlot football, Villanova College, Cornell Law School, with plenty of bumps along the way. “Very good values were conveyed there,” Cassidy told Kaiser: “You can be self-seeking as long as you take care of others.” His presidential candidate in 1968 was Eugene McCarthy; his hero was Brooklyn Dodger second baseman Jackie Robinson.

 

Even though Cassidy had long since decided he wanted to be rich, he spent his first two years out of law school with South Florida Migrant Legal Services, in Fort Myers – many young men and women did that sort of thing in those days as acts of idealism or social justice. It was there in 1969 that he met his future partner, Kenneth Schlossberg, a staffer for the US Senate’s Select Committee on Nutrition and Human Needs, and Schlossberg’s boss, Sen. George McGovern (D-S.D.). Within months, Cassidy was working for the committee.

 

The 1960s were something of a golden age for the US Congress, Kaiser writes. Its members knew each other well and often cooperated across party lines on legislation aimed at issues deemed to be of national importance, hunger among them. There were lobbyists and fixers, but they tended to be magisterial figures:  former Roosevelt adviser Thomas (Tommy the Cork) Corcoran and former Truman adviser Clark Clifford.

 

The “spirit of the age” involved extending the role of government into many new and unaccustomed realms:  health care for the elderly through the Medicare program, childcare for the disadvantaged through Project Head Start; civil rights for black Americans; cleaner air and water mandated by the Environmental Protection Agency; safer jobs supervised by the Occupational Safety and Health Administration; federal aid for crumbling cities; cost-of-living adjustments for Social Security payments aimed at eliminating poverty among the elderly.

 

Cassidy, who had previously never thought of going to work in Washington, took to the culture instantly.  Among his first tasks: making Catholic schools eligible for the school lunch program.  He wrote speeches for McGovern’s presidential campaign. After the South Dakota Democrat lost the1972 election to Richard Nixon, Schlossberg and Cassidy left their Senate jobs to form a firm – a consulting firm, according to Schlossberg, a lobbying firm, according to Cassidy.

 

The big break came in 1976, when a charismatic Frenchman named Jean Mayer called up Schlossberg, with whom he had worked on nutrition issues. Mayer, a physician and biologist who had recently been named president of Tufts University, outside of Boston, wanted to raise the profile of the old Yankee college and its loosely-connected downtown medical and dental schools. Could the Schlossberg-Cassidy firm figure out how to create a Human Nutrition Center and a School of Veterinary Medicine that would catapult Tufts into the league off academic health centers along with nearby Harvard? “I don’t know what I can do,” Schlossberg replied, “but for $10,000 I’ll take a hard look.”

 

Cassidy took over the project. He found a precedent of sorts, a law that had authorized a nutrition center in North Dakota.  He discovered that Thomas P. (Tip) O’Neill JR. (D-Mass.), soon to be Speaker of the House, had a soft spot in his heart for Tufts:  he lived nearby and had played football on its fields as a kid. Rep. Silvio Conte (R-Mass.), O’Neill’s friend, was enlisted; so was Sen. Edward M. Kennedy; and, in due course, so was Jamie Whitten (D-Miss.), a closet liberal whose chairmanship of the House Appropriations Committee had been threatened briefly when O’Neill took over as Speaker. The first appropriation was for $2 million, to explore the feasibility of a nutrition center for the Department of Agriculture, administered by Tufts, located in Boston’s Chinatown.

 

Years later, Schlossberg told Kaiser:

Well you can imagine something like that falling into your lap. It’s like being at the casino and pulling the arm on the one-dollar machine with a million-dollar payoff and seeing the thing go Gzing! Gzing Gzing! It didn’t take me more than two seconds to start to have my own wheel in my own mind go Gzing! Gzing! Gzing!

The School of Veterinary Medicine followed, though the deal required similar appropriations for Washington State University and a rival school at the University of Pennsylvania. Next came a pair of well-funded “intercultural centers” – one for Georgetown’s University’s School of Foreign Service, the other for Tuft’s Fletcher School of International Law and Diplomacy. (Sol Gittleman, longtime Tufts provost, provides a fascinating perspective on these events from the other side of the deal in An Entrepreneurial University: The Transformation of Tufts, 1976-2002.)

 

In hopes of derailing the new practice of “earmarking” appropriations, Sen. Edward Brooke (R-Mass.) called hearings in September, 1977 – instead, his star witness, Boston University president John Silber, testified that the Tufts-Georgetown strategy was a good one (“national survival” was at stake) and soon after hired the Schlossberg-Cassidy firm to lobby for his own ambitious plans to catch up to Harvard and surpass it (Brooke was not only a BU graduate but was on the university’s board). Meanwhile, Cassidy signed up the Ocean Spray cranberry cooperative in southeastern Massachusetts as a client, offering to win access to school lunch programs for its cranberry juice, despite its high sugar content.

 

“This was now a lobbying firm,” writes Kaiser. “Gzing! could have been the company motto.”

 

By the early 1980s, Cassidy was advising an Ocean Spray political action committee.  Rep Tony Coelho (D-Calif.), newly appointed chairman of the Democratic Congressional Campaign Committee, was among its first recipients. Next came the inevitable falling out, in which Schlossberg, after his partner bought him out, returned to a quiet life in Brookline, Mass.. Republicans copied the methods of the Democrats. Political consultants and professional fundraisers joined the fray.

 

And so a story that begins with Tip O’Neill proceeds by nicely-documented steps and ends with Tom DeLay and Jack Abramoff.  The National Association of Home Builders provide a coda: in early 2008 the organization scandalized Washington by suspending all PAC contributions after Congress dropped tax breaks for new housing construction from the Bush administration’s first stimulus bill – until the House of Representatives capitulated seven weeks later.

 

There have been many skeins in the earmarking saga, many innovators. But at the center of the story is Gerry Cassidy, the poor boy from Brooklyn, who amassed a fortune of more than $100 million by devising a new kind of business, helping colleges and universities seek government money for their ambitious expansion plans, that grew eventually to include more than 1,100 clients,  including 24 of the 50 largest American corporations; coalitions and trade associations; public and private utilities; financial institutions; health care providers; state, city and county governments; international corporations; and foreign governments – all of them seeking special consideration, usually in the form of earmarks.

 

Of Cassidy, Kaiser writes: “His timing was perfect. Just as he took his big plunge in 1975, the stars were aligning in fortuitous ways. Not only was the federal government more important in the life of the country than it had ever been, but a newly invigorated entrepreneurial spirit was abroad in the land.”

 

Also in 1975, Bill Gates left college to found Microsoft; MCI founder William McGowan began cooperating with the US Department of Justice on the antitrust suit that led to the 1982 breakup of AT&T; Congress deregulated Wall Street commissions; Michael Milken started a department trading high-yield (junk) bonds at Drexel Burnham Lambert; Rep. James Robert (Jim) Jones (D-Okla.) began the staff work that in 1978 led to a capital gains tax cut which precipitated a torrent of venture-capital investment; and Arthur Laffer, in conversation with White House deputy chief of staff Dick Cheney, drew a picture on a cocktail napkin to illustrate his argument that marginal income tax rates were too high (according to the late Jude Wanniski).

 

Who changed the tenor of American life more?

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