Is the party over?
- By Alice Lipowicz
- Feb 09, 2006
So far, the talk is in whispers ? observations that recent office parties seemed less well-attended than usual, word that some congressional visits to corporate sites may be postponed until later this year.
In the hallways of Washington, corporate executives and IT industry folks are buzzing about the fallout from the Jack Abramoff corruption scandal and its possible chilling effect on their lobbying activities.
Abramoff, formerly one of Washington's top lobbyists, pled guilty in January to three felony counts and agreed to a reduced prison sentence in exchange for testifying against as-yet-unnamed associates. It's become one of the largest influence-peddling investigations involving Congress in recent years.
Democrats want a special prosecutor to handle the case because of potential indictments of members of Congress, high-level aides in the Bush administration, lobbyists and corporate executives. Members of Congress also are calling for immediate reforms to lobbying laws, although new Majority Leader Rep. John Boehner (R-Ohio) last week signaled he would prefer a slower pace.
Meanwhile, there's uncertainty. Many companies, including IT entities such as the Business Software Alliance, Microsoft Corp. and Unisys Corp., have hired Abramoff in recent years, and many more have hired his associates.
The mood is one of nervousness until the outcome is known. Until now, the focus has been on Abramoff's improper dealings with American Indian tribes, and it's unclear whether other lobbying clients may be named.
"What you're seeing is a classic, intertwined network of people and relationships. There are lots of little flags going up," said Larry Noble, director of the Center for Responsive Politics, a non-profit, nonpartisan Web site on political financing.
It seems probable that corporate executives will feel the heat if more bribing allegations are brought against Abramoff and others. "It takes two to be involved in a bribe," Noble said.
"Right now, there is a shadow," said Olga Grkavac, executive vice president of the Information Technology Association of America, Arlington, Va. "There is a natural air of apprehension."
In recent weeks, just as the Washington lobbying season begins, immediately after the president introduces the budget request, IT executives in Washington are being more cautious in inviting government officials and aides to corporate work sites and headquarters, dinners and special events until Congress clarifies lobbying rules, Grkavac and others said.
"We don't want to make plans that may have to change because of new rules," she said.
"People are hunkered down," waiting for the other shoe to drop, said Chip Mather, partner in Acquisition Solutions Inc., a government contracting consulting firm in Arlington, Va. "People have noticed lower attendance by government people at parties. It's the people in the trenches who are worried to death."
Mather, a longtime consultant in federal contracting, also said that anxiety about lobbying tends to be cyclical, rising with a crisis, then falling once attention has died down. He said tension is high because of the Abramoff investigation, and the guilty plea of former Rep. Randy "Duke" Cunningham (R-Calif.) for accepting gifts and bribes from a government contractor.
Cunningham resigned from Congress after admitting to receiving more than $2 million in cash, home payments, cars, vacations and other illicit payments from several un-named co-conspirators.
The San Diego Union-Tribune reported in June 2005 that a grand jury was investigating Cunningham's 2003 sale of his home to Mitchell Wade, president of defense contractor MZM Inc. of Washington. Wade bought the home for $1.7 million, but sold it several months later at a loss of $700,000, the newspaper said.
MZM was ranked No. 100 on Washington Technology's 2005 Top 100 list of the largest government IT contractors. Since the scandal, the company was sold and its name changed to Athena Innovative Solutions Inc.
The IT lobbying community in Washington generates millions of dollars a year, though no precise figures are available. That would include a large portion of homeland security, defense, computers and telecommunications companies.
The companies holding the top 10 IT contracts in the Homeland Security Department spent $46 million on lobbying in 2004, the last complete year available, according to figures obtained from the Senate Office of Public Records.
"There are 902 companies that have disclosed lobbying on homeland security," said Alex Knott, LobbyWatch project manager at the Center for Public Integrity, a nonpartisan group monitoring political financing.
According to government filings, Unisys in January 2003 hired Abramoff and others at the Greenberg, Traurig law firm, paying $640,000 through mid-2004. Unisys' largest contract with DHS at that time was a $1 billion IT contract with the Transportation Security Administration, awarded in August 2002.
"We've thoroughly reviewed our records with Greenberg Traurig, Mr. Abramoff's employer at the time, and find no reason to conclude that [Abramoff] performed any work related to that contract," said Lisa Meyer, Unisys spokeswoman. "We've had a long-standing relationship with Greenberg Traurig; in fact, it predated Mr. Abramoff's employment there."
In a July 2005 article, The Washington Post named Greg Baroni, president of Unisys global public sector, as one of the buyers of Signatures, Abramoff's restaurant in downtown Washington. Meyer said last week that Baroni has no financial interest in the restaurant, but she declined further comment. Baroni "has no involvement in it, whatsoever," Meyer said.
Microsoft hired Abramoff and lobbying firm Preston, Gates & Ellis LLP in 1998, 1999 and 2000, paying $780,000 for those efforts, according to Senate records. Microsoft officials declined to comment.
Software developers industry group Business Software Alliance paid Abramoff and other Preston, Gates lobbyists $320,000 from 1998 to 2000.
"BSA has had a long-standing relationship with the Preston, Gates law firm well before Abramoff worked there, and we still work with the Preston firm. Abramoff never played a significant part in the firm's lobbying for BSA," Diane Smiroldo, vice president of public affairs for the alliance, said in a statement.
Staff Writer Alice Lipowicz can be reached at email@example.com.