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Silicon money: Industry follows familiar road with junkets

When technology companies pick up the tab, Congress members and staff travel first-class. Chart: Travel paid by companies

Declan McCullagh Former Senior Writer
Declan McCullagh is the chief political correspondent for CNET. You can e-mail him or follow him on Twitter as declanm. Declan previously was a reporter for Time and the Washington bureau chief for Wired and wrote the Taking Liberties section and Other People's Money column for CBS News' Web site.
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Silicon money: How do tech firms buy influence in Washington?

Industry follows familiar road with junkets

By Anne Broache and Declan McCullagh
Staff Writers, CNET News.com
March 29, 2006 4:00 AM PST

Las Vegas' posh Bellagio resort is home to five bars, seven "fine dining" restaurants and fountains gushing choreographed displays set to music every evening.

It also was home to a cross section of Capitol Hill last year: 13 congressmen, two senators and 65 congressional staffers, plus some spouses and children, got a free trip to the luxury resort, thanks to a technology lobbying group.

The Consumer Electronics Association, a trade group with $81.4 million in assets and a $48.3 million annual budget, footed the bill for the trips to the Consumer Electronics Show. Its members include such large companies as Best Buy, Denon, Kenwood, Samsung Electronics, Royal Philips Electronics and Apple Computer.

The Arlington, Va.-based association is hardly alone among technology organizations that try to wield influence in Washington by paying for travel, according to an analysis of congressional records by CNET News.com. In 2005, the technology industry spent more than $460,000 to shuttle Congress and staff members from four key committees to conferences, company tours, meetings with executives and an assortment of other events. Many were private sessions meant for a congressional audience--essentially excuses for off-the-record lobbying--which sought to influence the views of politicians and their aides on pending legislation.

"They have become more recreational and vacation trips, in nature, than official business trips," said Fred Wertheimer, president of Democracy21, a campaign finance reform group. "You don't find a lot of these trips going to middle America in the middle of the winter or to Florida in the middle of the summer."

"If the lobbyist can do everything but pay for the trip and can arrange for the company to pay for the trip, it's the same thing as if you didn't have any restrictions."
Fred Wertheimer, president, Democracy21

There is nothing illegal about free travel, as long as politicians disclose it. And the technology industry, overall, spends less on such trips than do other sectors: According to numbers provided by PoliticalMoneyLine, a company that tracks political spending, tech companies spent only about 3 percent of the $17.2 million on reimbursed congressional travel over a five-year period.

Nevertheless, the recent rash of Capitol Hill scandals--from the indictment of former House of Representatives majority leader Tom Delay to guilty pleas from Rep. Randy "Duke" Cunningham and lobbyist Jack Abramoff--has heightened scrutiny of the infrequently scrutinized practice of free trips in general. A $70,000 trip that DeLay took to London and Scotland was allegedly paid for by pro-gambling interests, and DeLay's $106,921 trip to South Korea has come under similar scrutiny.

To estimate how often technology companies pick up the tab for members of Congress, News.com analyzed the travel records of two Senate and two House panels that deal with Internet regulation and copyright matters--subcommittees that tend to be the most important for hardware, software and e-commerce businesses to influence. (A total of 81 politicians' travel records were examined; the analysis did not review travel reimbursements to members of dozens of other congressional committees.)

Critics of corporate-funded travel warn that the practice amounts to blatant influence peddling. When a company pays for congressional guests to travel to exclusive resorts or even corporate campuses, "those are not educational experiences; those are corporations trying to get something back for their buck," said Craig Holman, legislative representative for Public Citizen, a Ralph Nader-founded group that favors lobbying reform.

"(Trips to exclusive resorts and company campuses) are not educational experiences; those are corporations trying to get something back for their buck."
Craig Holman, legislative representative, Public Citizen

Especially, that is, when companies pay for first-class airfare and lodging. The National Cable and Telecommunications Association paid $4,465 for airfare, $1,146 for lodging, and $157 for food for Rep. George Radanovich to travel to San Francisco for one or two days last March, according to Radanovich's disclosure report. The California Republican is a member of the House telecommunications subcommittee.

Microsoft, which leads lobbying expenditures among hardware and software companies, is one of the largest spenders on government travel as well. On at least three occasions last year, the software maker sponsored trips for staff members of four congressional subcommittees to New York, Los Angeles and its Redmond, Wash., headquarters.

Microsoft declined to comment on the details of its junkets. "The high-tech industry is still a young industry, and our goal is to educate and hopefully get more to understand the importance of innovation, to see how the industry has grown over the last several years and to experience firsthand the exciting new technologies on the horizon," company spokeswoman Ginny Terzano said.

In their legally required filings about the Microsoft trips, congressional staff members described the activities as fact-finding excursions, policy briefings, company campus visits and "consumer sneak preview" meetings. In November, several staffers were invited to a launch of the company's new Xbox 360 game system, accompanied by a discussion of intellectual-property issues.

In April 2005, Microsoft paid to send one of its sometime legislative foes--Rep. Rick Boucher, a Virginia Democrat--to deliver a speech on telecommunications law reform in Redmond. Boucher has introduced bills that Microsoft opposes, including a proposal for taxes on certain instant-messaging services and another to rewrite the Digital Millennium Copyright Act.

Next page: Golf excursions not allowed 

It's been more than 11 years since the Library of Congress created the Thomas legislative site.

A 1995 law made lobbyist registrations available on the Internet, and the Federal Election Commission makes political spending information available through its Web site.

But one key database has never appeared online: travel reports revealing which corporations are subsidizing travel for politicians, their children and spouses, and congressional aides.

In the Senate, members of the public are permitted to review scanned images of travel disclosures, but only by going to Room 232 of the Hart Senate Office Building in Washington and using its computers.

Senate policy does not require those records--which are already online in PDF form--to be posted to the Web. (Congressional travel recipients have 30 days to file a paper form with the details after the travel takes place.)

The House's system is even more antediluvian. Finding it requires a trek along a dim hallway to a windowless room known as the Legislative Resource Center in the basement of a government building.

As a result, CNET News.com was able to examine congressional travel records only by combing through binders jammed with original filings at the Legislative Resource Center and by reviewing digitized images of paper records at the Senate's Office of Public Records.

Upon request, a Legislative Resource Center staff member will wheel out a metal cart containing at least a dozen thick binders, organized alphabetically by politicians' last names and crammed with copies of mostly handwritten travel disclosure documents. Researchers are permitted to peruse them only one at a time.

The recent spate of scandals may change things. One reform proposal backed by Sen. John McCain would require that travel information be made "available to the public over the Internet." Another bill, sponsored by Sen. Trent Lott, says those details must be "posted on the member's official Web site," though not added to a central database.

"It's really unbelievable that we have this sort of wholly inadequate system," said Craig Holman, a legislative representative for Public Citizen's Congress Watch, a liberal group that advocates lobbying reform. The organization has called for a centralized database containing searchable versions of all travel, lobbying and other disclosure documents.

--Anne Broache and Declan McCullagh

Silicon money: How do tech firms buy influence in Washington?

Industry follows familiar road with junkets

By Anne Broache and Declan McCullagh
Staff Writers, CNET News.com
March 29, 2006 4:00 AM PST

Las Vegas' posh Bellagio resort is home to five bars, seven "fine dining" restaurants and fountains gushing choreographed displays set to music every evening.

It also was home to a cross section of Capitol Hill last year: 13 congressmen, two senators and 65 congressional staffers, plus some spouses and children, got a free trip to the luxury resort, thanks to a technology lobbying group.

The Consumer Electronics Association, a trade group with $81.4 million in assets and a $48.3 million annual budget, footed the bill for the trips to the Consumer Electronics Show. Its members include such large companies as Best Buy, Denon, Kenwood, Samsung Electronics, Royal Philips Electronics and Apple Computer.

The Arlington, Va.-based association is hardly alone among technology organizations that try to wield influence in Washington by paying for travel, according to an analysis of congressional records by CNET News.com. In 2005, the technology industry spent more than $460,000 to shuttle Congress and staff members from four key committees to conferences, company tours, meetings with executives and an assortment of other events. Many were private sessions meant for a congressional audience--essentially excuses for off-the-record lobbying--which sought to influence the views of politicians and their aides on pending legislation.

"They have become more recreational and vacation trips, in nature, than official business trips," said Fred Wertheimer, president of Democracy21, a campaign finance reform group. "You don't find a lot of these trips going to middle America in the middle of the winter or to Florida in the middle of the summer."

"If the lobbyist can do everything but pay for the trip and can arrange for the company to pay for the trip, it's the same thing as if you didn't have any restrictions."
Fred Wertheimer, president, Democracy21

There is nothing illegal about free travel, as long as politicians disclose it. And the technology industry, overall, spends less on such trips than do other sectors: According to numbers provided by PoliticalMoneyLine, a company that tracks political spending, tech companies spent only about 3 percent of the $17.2 million on reimbursed congressional travel over a five-year period.

Nevertheless, the recent rash of Capitol Hill scandals--from the indictment of former House of Representatives majority leader Tom Delay to guilty pleas from Rep. Randy "Duke" Cunningham and lobbyist Jack Abramoff--has heightened scrutiny of the infrequently scrutinized practice of free trips in general. A $70,000 trip that DeLay took to London and Scotland was allegedly paid for by pro-gambling interests, and DeLay's $106,921 trip to South Korea has come under similar scrutiny.

To estimate how often technology companies pick up the tab for members of Congress, News.com analyzed the travel records of two Senate and two House panels that deal with Internet regulation and copyright matters--subcommittees that tend to be the most important for hardware, software and e-commerce businesses to influence. (A total of 81 politicians' travel records were examined; the analysis did not review travel reimbursements to members of dozens of other congressional committees.)

Critics of corporate-funded travel warn that the practice amounts to blatant influence peddling. When a company pays for congressional guests to travel to exclusive resorts or even corporate campuses, "those are not educational experiences; those are corporations trying to get something back for their buck," said Craig Holman, legislative representative for Public Citizen, a Ralph Nader-founded group that favors lobbying reform.

"(Trips to exclusive resorts and company campuses) are not educational experiences; those are corporations trying to get something back for their buck."
Craig Holman, legislative representative, Public Citizen

Especially, that is, when companies pay for first-class airfare and lodging. The National Cable and Telecommunications Association paid $4,465 for airfare, $1,146 for lodging, and $157 for food for Rep. George Radanovich to travel to San Francisco for one or two days last March, according to Radanovich's disclosure report. The California Republican is a member of the House telecommunications subcommittee.

Microsoft, which leads lobbying expenditures among hardware and software companies, is one of the largest spenders on government travel as well. On at least three occasions last year, the software maker sponsored trips for staff members of four congressional subcommittees to New York, Los Angeles and its Redmond, Wash., headquarters.

Microsoft declined to comment on the details of its junkets. "The high-tech industry is still a young industry, and our goal is to educate and hopefully get more to understand the importance of innovation, to see how the industry has grown over the last several years and to experience firsthand the exciting new technologies on the horizon," company spokeswoman Ginny Terzano said.

In their legally required filings about the Microsoft trips, congressional staff members described the activities as fact-finding excursions, policy briefings, company campus visits and "consumer sneak preview" meetings. In November, several staffers were invited to a launch of the company's new Xbox 360 game system, accompanied by a discussion of intellectual-property issues.

In April 2005, Microsoft paid to send one of its sometime legislative foes--Rep. Rick Boucher, a Virginia Democrat--to deliver a speech on telecommunications law reform in Redmond. Boucher has introduced bills that Microsoft opposes, including a proposal for taxes on certain instant-messaging services and another to rewrite the Digital Millennium Copyright Act.

Next page: Golf excursions not allowed 

It's been more than 11 years since the Library of Congress created the Thomas legislative site.

A 1995 law made lobbyist registrations available on the Internet, and the Federal Election Commission makes political spending information available through its Web site.

But one key database has never appeared online: travel reports revealing which corporations are subsidizing travel for politicians, their children and spouses, and congressional aides.

In the Senate, members of the public are permitted to review scanned images of travel disclosures, but only by going to Room 232 of the Hart Senate Office Building in Washington and using its computers.

Senate policy does not require those records--which are already online in PDF form--to be posted to the Web. (Congressional travel recipients have 30 days to file a paper form with the details after the travel takes place.)

The House's system is even more antediluvian. Finding it requires a trek along a dim hallway to a windowless room known as the Legislative Resource Center in the basement of a government building.

As a result, CNET News.com was able to examine congressional travel records only by combing through binders jammed with original filings at the Legislative Resource Center and by reviewing digitized images of paper records at the Senate's Office of Public Records.

Upon request, a Legislative Resource Center staff member will wheel out a metal cart containing at least a dozen thick binders, organized alphabetically by politicians' last names and crammed with copies of mostly handwritten travel disclosure documents. Researchers are permitted to peruse them only one at a time.

The recent spate of scandals may change things. One reform proposal backed by Sen. John McCain would require that travel information be made "available to the public over the Internet." Another bill, sponsored by Sen. Trent Lott, says those details must be "posted on the member's official Web site," though not added to a central database.

"It's really unbelievable that we have this sort of wholly inadequate system," said Craig Holman, a legislative representative for Public Citizen's Congress Watch, a liberal group that advocates lobbying reform. The organization has called for a centralized database containing searchable versions of all travel, lobbying and other disclosure documents.

--Anne Broache and Declan McCullagh

Silicon money: How do tech firms buy influence in Washington?

Industry follows familiar road with junkets

 Previous page

The biggest funders of tech-related trips last year were trade associations with well-attended annual conferences and large companies with generous lobbying budgets.

For total travel expenditures dating back to 2000, according to PoliticalMoneyLine, CEA and the National Cable & Telecommunications Association are among the 30 biggest spenders. Microsoft, AT&T and the U.S. Telecom Association were all in the top 100.

Last March, SBC Communications (now AT&T) ferried at least 17 congressional staff members to San Diego for a seminar that explored telecommunications policy issues. Lodging, food and airfare expenses generally cost about $1,500 per person for the jaunt, which lasted three or four days, depending on individual attendance.

AT&T wouldn't elaborate on the private meeting. "The telecom industry is rapidly evolving and technically complex. Therefore, we always strive to educate policymakers on the dynamics of our industry," spokeswoman Claudia Jones said. "Details of our activities are filed, as required."

Staff members, rather than the politicians themselves, were the most frequent recipients of funding last year. On average, they took as many as seven sponsored trips for every one accepted by their bosses in the Senate and as many as five such trips in the House.

"I don't think anybody would suggest 535 members of Congress have a comprehensive understanding of anything and everything they're going to legislate on. (These events should be) no-holds barred, where you're not trying to promote a viewpoint."
Bruce Josten, VP, U.S. Chamber of Commerce

Both the House and the Senate generally permit their members and staffers to accept free travel. They do, however, have to be active participants in the event they're attending--a speaker or roundtable participant is sufficient--or claim that attendance aligns with their "official duties." A spouse or child can also tag along at the private funder's expense.

According to the rules, politicos and their aides are allowed to accept only "reasonable" expenses for transportation, lodging and meals. That means that golf, tickets to the opera or other "recreational" activities are supposed to be off-limits, unless they're valued at less than $50. Even then, the annual cap for all gifts to a member or staffer is $100. Full disclosure of all such expenses within 30 days is mandatory.

Politicians and their aides aren't supposed to bill lobbyists for any of those costs--directly, that is.

So Jack Krumholz, Microsoft's director of federal-government affairs and one of the company's several registered lobbyists, cannot write the check for a politician's trip. Microsoft itself, however, can.

That amounts to a sizable loophole: Lobbyists are still able to orchestrate the trips, arrange sponsorship by companies and even accompany politicians on the plane.

"It's not a real restriction because it is invariably the company that is going to pay for the trip, not the lobbyist, so if the lobbyist can do everything but pay for the trip and can arrange for the company to pay for the trip, it's the same thing as if you didn't have any restrictions," Wertheimer of Democracy21 said.

Outright ban seen as solution
Advocates in Wertheimer's camp generally support an outright ban on privately funded trips. They say that if politicians really need to take an educational trip, the government should be paying their way.

At least five proposals have been announced that would curb this practice or require increased disclosure. One measure, offered by Senate Democratic leader Harry Reid of Nevada, would have banned nearly all privately funded travel. It failed by a vote of 44 to 55 on March 8.

Another proposal, drafted by Mississippi Republican Sen. Trent Lott, is awaiting a vote. It allows lobbyists to continue to buy meals for politicians or their aides, as long as they're disclosed, and it also requires that the names of registered lobbyists who came on a junket be revealed, except if it would "adversely affect national security."

Bruce Josten, a vice president at the U.S. Chamber of Commerce, said the travel system works only if it has balance. Corporations and trade groups should be allowed to sponsor educational trips, he said, but multiple perspectives on legislation should be included to be fair.

"I don't think anybody would suggest 535 members of Congress have a comprehensive understanding of anything and everything they're going to legislate on," Josten said. The important thing, he said, is for such events to be "no-holds barred, where you're not trying to promote a viewpoint."