Sponsored section - July 2007

In business to make good laws


How can private business influence government decisions? And should it? Those were two questions addressed by a panel of experts assembled by Winston-Salem-based law firm Womble Carlyle Sandridge & Rice PLLC: Walter Price, senior vice president for federal-government relations at Charlotte-based Wachovia; Jeffrey Lane, chief of staff for Sen. Ken Salazar, D-Colo.; Andy Moskowitz, legislative counsel for Sen. Richard Burr, R-N.C.; John Mashburn, of counsel with the law firm’s government-affairs practice group and former counsel to former Senate Majority Leader Trent Lott, R-Miss., and former House Majority Leader Tom DeLay, R-Texas; and Tim McClain, former general counsel for the U.S. Department of Veterans Affairs and also of counsel with the firm’s government-affairs practice group. The discussion was moderated by Arthur O. Murray, Business North Carolina’s managing editor for special projects, and held at Womble Carlyle’s Washington, D.C., office.

In what areas do you see the need for private-sector involvment in setting public policy?

Lane: Each congressional office has limited resources. We can always benefit from the more in-depth experience, background and expertise of representatives from the private sector.

Mashburn: We have research organizations to help us, but they don’t have the expertise of the private sector. One of your jobs is to evaluate both sides of an issue, because it’s not like you’re hearing from one side of the private sector — you’re hearing from all sides of the private sector. You have to decide where the truth lies.

Price: Members of Congress deal with hundreds of issues on a weekly and monthly basis, and it is very hard for them to keep track of everything. They rely on the private sector, trade associations and advocacy groups.

McClain: We experienced it at the other end, being responsible for implementing those laws. Any law needs to have input from the private sector to avoid unintended consequences.

Price: What happens here has a huge impact on what we’re able to offer to our customers, what kind of value we provide to our shareholders and how we’re able to serve our community. That’s why we put a great amount of effort into maintaining relationships here in Washington, making sure our North Carolina congressional delegation and members of key committees and their staffs are aware of how policies being considered have a downstream impact on our company.

Lane: Stakeholders and customers are constituents. Wachovia, for instance, happens to have a large presence in Colorado, so what impacts Wachovia in a negative or positive way impacts our constituents in a negative or positive way.

Mashburn: Sometimes legislation passes, and it has one effect in one state and, because of the nature of a state law, it can have a completely different effect in another state. Members on the Hill might not realize that distinction, but the private sector does. Many times, you’re on the cusp of passing something, and the private sector comes in and says, ‘Hey, did you think about this?’ You’d be amazed how many times nobody did.

McClain: Another major question is whether everyone in the same industry is treated the same under a law.

Mashburn: A lot of times, people don’t realize that the way they’re proposing to do something will give one company a leg up over another. If a company is not on its toes, it could end up unintentionally disadvantaged. It’s pretty difficult to get a law on the books, but once it’s on, it’s really hard to get it off.

Lane: We’re on the Senate Finance Committee, and there is a very arcane tax issue that has come up. The committee is considering closing a tax loophole. It’s attractive on the surface. But we were visited today by an association that explained the impact of it in great detail. I won’t get into the specifics, but without their expertise, it would have been very difficult for us to understand the effect of that proposal.

Mashburn: It’s not just providing information at the request of staff and members. A lot of the private representation is monitoring an issue, being alert enough to raise the issue while there’s enough time to change the language.

Lane: We really rely on the industry to monitor these things and come to us if they have a concern, because it’s simply not possible to anticipate all of that.

Price: One of the roles of industry is to help take complex issues and distill them into a digestible format. We’re talking about, especially in financial services, issues like hedge funds and derivatives and mortgage lending and those things.

Mashburn: Without the private sector, you probably wouldn’t have an informed vote. It would be pretty much everybody take whatever the committee said and vote that way, whichever member they trusted on there.

Is there an appropriate time for this input?

Moskowitz: There are better times than others. We’re never going to dissuade someone from representing his or her views to the senator; however, five minutes’ notice to offer an amendment is not always the best idea. A continuous dialogue is always key, just being reminded about what’s out there and hasn’t been fixed yet.

Lane: I mentioned that tax issue. That’s not the subject of any legislative proposal. It’s not formally on the agenda of the Finance Committee, but it is something that the industry is aware of and is coming to us early to explain.

Price: We can set out at the start of the year and say here are 10 policy objectives for Wachovia, but Congress is going to take the ball moving in an entirely different direction potentially. So we have to be nimble enough to pivot and then move in a separate direction based on the ‘issue du jour.’

How does the executive branch fit in?

Mashburn: There’s a lot of back-and-forth between the executive branch and the legislative branch, and the departments need the expertise from the private sector sometimes every bit as much as the Congress does. A lot of congressional legislation is fixing the interpretations that the executive branch has made of a previous law.

McClain: When major legislation comes up and gets assigned to its committee, in many cases that proposed legislation goes to the secretary of a cabinet department or the head of an agency asking for that agency’s view. That is where the agencies invite the private sector to come in. In my experience, especially in Veterans Affairs, the health-care industry would come in or the veterans-service organizations would come in and say we’re really opposed or we really like this particular piece of legislation.

How do you keep from being overwhelmed?

Mashburn: One way you deal with volume is by saying, ‘Don’t give me a 10-page white paper. Get it down to one page, because your issue is one of a thousand that I have to deal with.’

Moskowitz: An organized manner of collecting that information is important, too, because we do have a lot of visitors that come from our state, but we also have constituents that we need to represent that aren’t making trips to Washington and that will make phone calls and send thousands of e-mails a week. From a senator’s point of view, you would be most concerned with how it affects your constituents.

Mashburn: But the private sector can’t come up and throw an argument together. The quickest way for a company to hurt itself in Washington is to come up with either faulty information or deliberately misleading information. Very quickly, staff will figure out who those people are and say you can’t trust their information.

Price: The currency here is your integrity and the trust you build. If you’re not representing your company or your trade association or your clients effectively and honestly and openly, doors aren’t going to be open to you. Members of the staff and Congress trust you to be an honest broker in sharing information.

Lane: You rely on folks from industry to be obviously honest and straightforward and to give you not just their side of the story but also the correct side of the story.

How should private industry approach Congress?

Moskowitz: Industry representatives have to make it easy for the staff. The more organized and the more balanced they provide information that staffers can relay to their boss in order for him or her to make an educated decision, the better.

Mashburn: If they don’t, the likelihood that they’re going to get either the staff time devoted to it or particularly the member time devoted to the issue is going to be lower. Staffers want to be credible with their bosses, the members want to be credible with their colleagues and the public. The last thing they want to do is propose a public policy and find out that they’re all wet and that they were misled and that the staff allowed them to be misled.

Price: We have hundreds of issues that we care about at Wachovia on a daily basis, but we also try to be strategic. We’ll approach Sen. Burr’s office about issues that impact education or pension or retirement and Sen. Salazar’s office about issues that are being dealt with in the Finance Committee. You craft strategy based on the members and which committees they’re on or where their areas of particular interest are or geographically where the issue may be occurring.

McClain: Finding out where others in your industry are on an issue, and lining them up on one side or the other is going to give the little person or the smaller company a stronger voice.

Price: Tim makes a good point. I’m fortunate in the financial-services industry. We’re competitive as hell in the marketplace, but when it comes to policy, probably 90% of the time we work hand in hand and try to make sure that we’re coming to the Hill united in one voice.

Private industry gets stereotyped as not wanting any regulation. Any truth to it?

Mashburn: A lot of what the government does is keeping a level playing field. If the government weren’t out there maintaining that level playing field, it would be difficult for businesses to continue and not get wiped out by nefarious activities from their competitors. Antitrust laws are part of that process.

Lane: For the most part, private industry is reasonable. It is looking for a level playing field, and it’s our responsibility to provide that.

Mashburn: I’ve never seen a company come into Congress and say, “Give me a leg up on my competitors.” That’s not a winning argument.

How do government agencies view input from private industry?

McClain: Having to implement the actual law is tough. We talked about unintended consequences. Programs often are modified by a patchwork of laws. What you want to ensure is that the intent of Congress is implemented but that it does no harm to the ongoing program, unless the law is clear that it’s ending a program and starting a new one. It’s important, from an agency point of view, not only to get public input as the law is being drafted but also after it is passed. The agency needs to have input: If the law is implemented one way, how will that affect the industry; if it’s done another way, how is that going to affect it? Either way could be following the intent of Congress.

How do you determine intent?

McClain: There’s the law itself, but if that’s not clear, then we go to the conference reports. If that’s not clear, then we go to the Congressional Record, because speeches were probably made for most major legislation, and we will actually go to those to see if we can discern exactly what the intent of the legislation was.

Moskowitz: If you can’t find it there, then it goes to the courts, and no staffers want the bill that they worked on to end up in the courts.

Mashburn: I had a law professor who used to always say, “Why can’t Congress write laws more clearly than this?” When I first came to Washington, I was like, ‘OK, I’m going to do better. I’m going to write clearly.’ The trouble is, if you write it real clearly, you don’t have the votes. So you write it in a way that you kind of get there, and you do throw it to the executive branch to work out the competing interests. It allows somebody with more expertise to work out the details.

Lane: That’s an important distinction. I would distinguish clarity of intent and purpose from inflexibility, because you don’t want to be so precise that you don’t allow for there to be some input from the experts at the agency.

How do you keep the self-interests of private industry at bay?

Mashburn: People always present their case in the best scenario. Staffers learn a process. They don’t take what somebody says 100% on its face value. You want to get both sides of an issue, and staffers can basically use the private sector to help them do some of the research.

Moskowitz: Private industry’s viewpoint and briefing is just one of the factors that’s considered. You also have to think about the constituent who calls in on the telephone or the person that writes an e-mail or a letter.

Lane: There’s a healthy clash of ideas out there. We have consumer-advocacy groups and environmental groups that are very strong in their views, and they make their cases to us, as well as private industry. Sometimes there’s a general public interest that may not be specifically represented, and it’s our job to sort through that, but we understand that private industry is going to make its best case.

Mashburn: The manner of the presentation will affect the way you view whether or not what they’re telling you is accurate. If they are not professional in their presentation, you tend to discount the credibility of the information. If they’ve been remiss in how they’re presenting it, they may have been remiss in how they compiled it.

What's the difference in the role played by industry and trade associations and that of individual companies in the legislative process?

Price: The benefit of being a large diversified financial-services company is that we are members of a lot of different trade associations. We rely heavily on our trades to help us with the more global issues, so that in-house folks like myself can concentrate on issues that are of dire importance or that are the absolute priority for our company on any given day.

Are there times when the views within trade associations conflict?

Price: Sure. We certainly have had experiences where our trades have not agreed or taken the viewpoint of Wachovia. It’s tough for those trades when they have members that are in different positions. Oftentimes, they’ll just have to take themselves out of a policy debate.

Mashburn: A good example is the cable-TV association. Many of the companies in that association are also in broadcasting. Many of the members of the National Association of Broadcasters are cable-company owners. They’ve got competing interests. Sometimes the trade association is somewhat paralyzed. Then it becomes an imperative on the part of the individual members to present their viewpoint to Congress.

Lane: Although it can be difficult for trade associations to reach a consensus, it’s obviously helpful for us to be listening to one point of view so that we are able to evaluate the industry position. It’s hard enough to evaluate opposing points of view between a consumer group and an industry group, but when the industry itself is fractured, then you’re in the position of trying to figure out what their position is.

Are those disagreements common?

Moskowitz: Absolutely. In North Carolina there is a difference between the east and the west, and they will fight over barbecue style. So at each level you go to, you’re going to find differences. It’s our job to balance those.