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With the Republican primary battle moving into Florida, Mitt Romney went on the attack against the winner of the South Carolina primary, Newt Gingrich.
At a debate in Tampa, Romney criticized Gingrich for advising Freddie Mac, the mortgage giant that backs housing loans around the country.
Gingrich has said he was never a lobbyist for Freddie Mac, a statement we’ve rated Half True. Gingrich never had to register as a lobbyist, but it appears he took pains to avoid being subject to the rules.
Romney said during the debate that Gingrich’s contract "was provided by the lobbyists at Freddie Mac." We decided to check it out.
Gingrich’s consulting group was retained by Freddie Mac in 2006. The Gingrich campaign released a statement in November addressing Gingrich’s work.
"To be clear, Speaker Gingrich did no lobbying of any kind, nor did his firm. This was expressly written into the Gingrich Group contracts. Instead, the Gingrich Group was hired to offer strategic advice to Freddie Mac on a number of issues," the statement said.
The statement said Gingrich advised Freddie that it was dangerous to buy mortgage-backed securities based on questionable home loans. He also told Freddie on how to lower prescription drug costs for its employees. Finally, Freddie Mac "was interested in advice on how to reach out to more conservatives."
On the evening of the Tampa debate, the Gingrich Group released its contract with Freddie Mac for the year 2006. That contract shows that the Gingrich Group’s primary contact within Freddie Mac was Craig Thomas, who is named in the document as Freddie’s director of public policy. Thomas was also a registered lobbyist for Freddie Mac in 2006.
The 2006 contract doesn’t appear to cover all the work that the Gingrich Group did for Freddie Mac. Bloomberg News reported that Gingrich received between $1.6 million and $1.8 million in fees from two separate contracts. The number came from unnamed sources, though, so we can’t independently confirm or refute it. The contract released before the debate in Tampa showed Gingrich Group was to be paid $25,000 per month in 2006.
To be a registered lobbyist, one has to meet a number of detailed rules laid out in federal law. One of the main rules is that a person has to register if he or she holds two or more meetings with elected officials or staff in any quarter of the year on behalf of a client. Also, lobbying activities must constitute 20 percent or more of the lobbyist’s time during any three-month period. (Want more detail? Read 27 pages of guidance on disclosing lobbying activities via the U.S. Senate website.)
Experts we spoke with and the research we reviewed showed the "strategic advice" category is a way of using influence without having to register as a lobbyist.
They said strategic advisers can do quite a bit for clients like Freddie Mac without acquiring the lobbyist label. They can stay at the client’s office and give their best advice on with whom to meet and what to say. They can give instructions to someone who is a registered lobbyist, again telling the lobbyist with whom to meet and what points to address. They can take their clients to meetings with groups that aren’t part of the government, such as grassroots political groups. They can even have one big meeting with an elected official to make a case for a client.
"There’s a lot of activity that ordinary people would think of as lobbying that doesn’t trigger the obligation to register as a lobbyist under federal law. Strategic advice is one of those kinds of things that doesn’t," said Joseph Sandler, an attorney with the Washington law firm Sandler Reiff Young & Lamb, when we spoke with him in December.
Sandler was one of four co-chairs of an American Bar Association task force that recommended changes to federal lobbying laws to improve disclosure and reduce conflicts of interest. One of its recommendations was that people who give strategic advice disclose their work under a new category of "lobbying support."
We should also note that people from both parties play this game. Former U.S. Sen. Tom Daschle, D-S.D., was a "policy adviser" at the lobbying firms Alston & Bird and DLA Piper. He had to answer questions about his work when President Barack Obama selected him to be U.S. Secretary of Health and Human Services. (Daschle ended up withdrawing over tax issues connected to another client giving him the use of a car and driver.)
"Newt Gingrich is certainly not alone among well-heeled political players who say they just offer consulting services or strategic advice -- without needing to register as lobbyists. But it's a stretch to claim that they aren't part of the influence game," said Michael Beckel, a spokesman with the Center for Responsive Politics, via email. The nonpartisan group monitors lobbying and campaign spending.
Romney said Newt Gingrich’s contract was with "the lobbyists at Freddie Mac." Gingrich provided strategic advice, a way of wielding political influence without having to register as a lobbyist. The primary point of contact on the contract was one of Freddie’s lobbyists. We rate Romney’s statement True.
NBC News/Tampa Bay Times, Republican debate, Jan. 24, 2012, accessed via Nexis
Center for Health Transformation, Gingrich Group Releases Freddie Mac Contract, Jan. 24, 2012
Center for Responsive Politics, Freddie Mac lobbyists, 2006
The Truth About Newt’s Relationship with Freddie Mac, Nov. 9, 2011
America Bar Association, Report on the Task Force on Federal Lobbying Laws Section of Administrative Law and Regulatory Practice, Jan. 3, 2011
U.S. Senate, Lobbying Disclosure Act Guidance, updated Dec. 15, 2011
Interview with Joseph Sandler of Sandler, Reiff, Young & Lamb
Interview with Michael Beckel of the Center for Responsive Politics
Bloomberg News, Gingrich Said to Be Paid About $1.6 Million by Freddie Mac, Nov. 16, 2011
The Washington Post, The Fact Checker: Newt Gingrich and Freddie Mac: Is he being misleading?, Nov. 17, 2011
The Washington Post, Gingrich case raises question: What is a lobbyist?, Dec. 7, 2011
Reuters, All of Washington lives in Newt’s swamp, opinion by by Jack Abramoff, Nov. 21, 2011
POLITICO, Lobbyists call bluff on 'Daschle exemption', July 26, 2010
Time magazine, Daschle's Problems: When Is a Lobbyist Not a Lobbyist?, Feb. 3, 2009
The Associated Press, Daschle withdraws as nominee for HHS secretary, Feb. 23, 2009
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