Wednesday, September 02, 2009

Lobbying the Government-Industrial Monstrosity

The new millennium found Eisenhower's Military-Industrial Complex on steroids. It morphed into the Government-Industrial Monstrosity (GIM), encompassing much more than wartime implements. It gorged on intelligence, homeland security, education, health care, almost anything the monstrous general contractor touched. Lobbyists are the grease for the giant GIM machine. Consider the following cases:

Health Care:

Tenet Health & LifeCare Hospitals spent $1.8 million on lobbying in 2005 & 2006. Tenet hired Quinn Gillespie to lobby the Executive Office of the President on two items. They discussed the Stafford Act, the law allowing FEMA to respond to disasters. The firm also shared corporate governance issues with the White House. What return did they get on their lobbying investment? The hospital with 35 deaths after landfall got not one mention in the Bush Katrina Lessons Learned report. A year after the report's release, Jeb Bush landed a high paying spot on the Tenet Board of Directors.

LifeCare didn't need lobbyist to advance their case. Their new corporate owners, The Carlyle Group, had the ability to share their concerns directly with the Bush White House. Carlyle is a private equity underwriter (PEU) known for its political connections. (In the early 1990's President George W. Bush served on the board of CaterAir, a Carlyle affiliate.) Katrina investigator Frances Townsend granted the same courtesy, omitting any mention of LifeCare's 25 patient deaths and their 48% unit mortality rate post landfall.

Foreign Investment in the U.S.

In the second half of 2006, the Carlyle Group had the Federalist Group lobby the Commerce Department, Congress, State Department, Treasury Department and the U.S. Trade Representative on "issues related to CFIUS." The same lobbyists, now under Ogilvy Government Relations, continued their CFIUS push in 2007. They paid the firms $720,000 for services.

Why the interest in foreign investment in the U.S.? An outraged public ended the sale of U.S. port operations to Dubai Ports World in early 2006. Politicians clamored to stop the sale. The Carlyle Group wanted to sell two aviation affiliates, Landmark Aviation and Standard Aero, to Dubai Aerospace. Combined the companies had operations at 50 North American airports.

Landmark Aviation ponied up $560,000 in lobbying, while Dubai Aerospace kicked in $140,000. Carlyle mobilized up to $1.3 million to push the deal silently through Washington, D.C. They got their wish. Senator Chuck Schumer called the ports deal outrageous. His comment on 50 airports?

"This purchase is not as much of a security risk as Dubai Ports World," Schumer said in a statement. "If a thorough ... review is done and necessary safeguards are taken, the deal is unlikely to have problems in Congress."

A month after the deal closed, President Bush shared his concern over products smuggled through Dubai to Iran and Afghanistan.

PEU Connections

GTCR, the firm that sold LifeCare Hospitals to the Carlyle Group, is the same investor that purchased Landmark Aviation from Dubai Aerospace. Talk about trading greed fueled nightmares. GTCR's Chairman mentored Rahm Emanuel, Obama's Chief of Staff. Emanuel was in Congress during these deals. Lobbyists have to meet with someone. Did Rahm facilitate anything?

Corporate money-lobbyists-elected officials, the trademark of America's Government-Industrial Monstrosity...

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