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House, and Senate, Calls

How lobbyists are doctoring the health-care debate

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Room 11 of the Statehouse, on the first floor and just across the corridor from the public coatroom, is big, maybe 50 feet by 25. Its high walls are adorned with somber portraits of former governors, the floor covered by a dark carpet with copper swirls vaguely resembling lily leaves. On a damp, cold, early spring morning, nine state senators sit around three mahogany desks set up horseshoe-style against the far wall. Roughly 80 wooden chairs take up much of the rest of the room, 34 of them occupied. The occupiers are of both genders, and range in age from mid-forties to mid-sixties. Most of the men are clad in suits or the blue-blazer-with-tan-or-gray-pants uniform of the respectable establishment. The women wear the female analogues thereof. Most of them sit quietly, waiting for the meeting to begin. A few hold notebooks, pens poised patiently above them. One has his laptop open. There's an air of anticipation in the room.

But that's not because the group is about to be entertained. This isn't show business; it's a joint session of the Senate's Health and Welfare and Finance Committees. The subject is health care, a roughly $3.5 billion enterprise in Vermont, representing some 16 percent of the state's economy. This is serious business, and the folks in the wooden chairs are not customers. They're lobbyists.

***

The word "lobbyist" has a pejorative edge these days. Just last week, the most famous lobbyist in America, Jack Abramoff, was sentenced to five years and 10 months in prison. Members of Congress tried to appear outraged over the power of these fundraisers, arm-twisters and persistent persuaders.

Thanks to Abramoff and some of his colleagues, the public now pictures a lobbyist as a finely coiffed fellow in a $2000 suit who takes members of Congress to fancy resorts and raises millions in campaign money from big-bucks clients, and who in return expects lawmakers to approve tax breaks, subsidies and exemptions from rules and regulations for his clients.

That is not quite the picture in Vermont. You don't tend to see $2000 suits or particularly well-coiffed heads in Montpelier, and Vermont legislators pay for their own vacation trips. Whatever lobbyists may do in Washington, Sacramento, Boston or Albany, N.Y., in Vermont they serve a necessary function. But necessary and productive, or necessary and obstructionist? The answer varies from one issue to another, and probably depends on where one sits and where one stands. Either way, it's clear that Vermont's legislature could not function without lobbyists.

"I don't think lobbyist is a dirty word," says Sen. Jeanette White, a Democrat from Putney. "They're helpful. They present different points of view."

She says that shortly after listening to a point of view she does not share. The presenter, during a 10-minute break that lasts half an hour ("We operate on Senate time," quips South Burlington Democrat Sen. James P. Leddy) is Duane Marsh, lobbyist for the Vermont Chamber of Commerce. He's trying to convince White of the virtues of individual health savings accounts.

"He likes them," she says. White does not; she worries that people "would put off care" rather than dip into their accounts. But she doesn't object to Marsh arguing his point.

"I've never had anybody try to twist my arm," White says. "They try to persuade me."

Persuading is about the only thing lobbyists in Montpelier can do. Even the most notable lobbying victory of recent years -- the drug industry's siege that defeated a Democratic plan to regulate the price of prescription drugs -- was based on argument, not coercion.

"They kicked our butts," says Rep. John Tracy, a Burlington Democrat and avid health-care populist. "They had a very strong presence here, and they're good at what they do."

But they did not threaten or promise, Tracy insists. The pharma lobbyists explained, debated and convinced enough legislators that the price-control plan amounted to excessive tinkering with the market system.

Before anybody gets misty-eyed about how Vermont legislators are morally superior to crass, corrupt officeholders elsewhere, let's understand why lobbyists in Montpelier cannot act as their counterparts might in Washington and certain other state capitals. This isn't about moral superiority; it's about money. More precisely, it's the relative unimportance of money in Vermont for political campaigns.

The typical member of Congress spends a million dollars getting re-elected; senators in big states can spend tens of millions. For example, according to the nonpartisan website Political Money Line, Sen. Kay Bailey Hutchison, a Texas Republican who is likely to easily win re-election this year, already has nearly $8 million in her campaign treasury. In California and New York, even some state lawmakers spend hundreds of thousands of dollars running for office.

So the lobbyist who drops into a Congressional office and mentions that he can raise several million dollars from his clients in the widget business if the congressman would look favorably on that bill exempting the widget industry from all environmental, labor and consumer protection laws, might get a positive response. Especially if the lobbyist suggests discussing the deal over dinner at a very fancy restaurant.

Most Vermont legislative races cost in the high four-figure or very low five-figure range, and Montpelier's most expensive restaurant is cheap by Georgetown standards. What makes campaigns expensive is television advertising, and that makes no sense for legislative candidates here. So it isn't as though a Montpelier lobbyist for International Widget might not be tempted to offer to raise half a million smackers for the campaign of a widget-friendly state senator; it's that the senator wouldn't know what to do with half a million smackers. No one needs that many lawn signs.

Not that lawn signs are free. Neither are brochures, postage for targeted mailings, gasoline to drive from one event to another, and professional experts to provide strategic advice. Campaigns do cost something. Even in low-cost, clean-politics Vermont, having more money beats having less. The side with more money can afford more lobbyists, who can spend more time persuading legislators, mobilizing allies, and talking to reporters, helping set the terms of the debate.

"Money is a factor," confirms Stephen W. Kimbell, who has been lobbying in Montpelier for some 30 years. He's a partner in Kimbell, Sherman, Ellis, perhaps the premier lobbying firm in the state. "It's de minimus compared to Washington and some other places, but it does count," he adds.

Every year, Kimbell says, he and other lobbyists are invited to the four legislative fundraising dinners -- one each for the Democrats and the Republicans in the House and the Senate. Implicit is the suggestion not only that lobbyists buy tickets, but that they urge their clients to do so as well.

"My general recommendation is to contribute modestly to everyone," Kimbell says. Whoever does not contribute, he suggests, "finds it harder to get a meeting" with legislative leaders, or the chairman of a committee considering bills the lobbyist and/or clients support or oppose. Contributing the legal maximum makes sense.

That isn't very much, after all. No one can contribute more than $300 to a state Senate candidate, $200 to a House candidate, or $2000 to a party or political committee. And that's per election cycle -- unlike the federal limits, which allow a contributor to give a candidate $2000 for the primary, even if the candidate has no primary, and another $2000 for the general election.

Furthermore, Vermont has a strong "sunshine law" requiring all lobbyists to disclose anything -- from lunch to tickets to the ball game -- worth more than $5 given to any lawmaker or other public official. Still, as Kimbell says, money can buy access, even in Vermont. Getting a meeting does not guarantee success, but not getting it comes close to guaranteeing failure.

***

Lobbying is actually a relatively big business in Montpelier. Otherwise there would not be 362 registered lobbyists -- by unofficial count as of May 2005 on the Secretary of State's website. These lobbyists are employed by 379 companies and organizations, which spent a total of $6,181,442, according to the Secretary of State's Lobbyist Employer Expenditures file.

Some registered lobbyists represent their own organizations. In the health-care arena, for instance, Bea Grause, president and CEO of the Vermont Association of Hospitals and Health Systems (VAHHS), lobbies on behalf of the state's hospitals, and the Vermont Medical Society employs three people to lobby on behalf of its 1500 physicians (out of 2500 in the state).

Then there are the pros: men and women whose job it is to represent companies or organizations with which they have no other connection. They are "hired guns" -- though many are choosy about their clients. Some of these lobbyists are also involved in the health-care discussion. Kimbell's firm represents Blue Cross/Blue Shield, which spent $130,343 in expenditures and compensation last year, though not all of this went to his firm.

The drug industry spent at least $188,218 lobbying in Vermont in 2005, and private, for-profit companies involved in health insurance spent at least $150,000.

In contrast, advocates for universal health care and a greater government role in providing it spent roughly $50,000 lobbying. That does not include the $77,481 spent by the Vermont Public Interest Research Group, which has a broader agenda than just health care.

In Vermont, lobbyists are not just advocates. In fact, they may not be primarily advocates. They spend at least half their time as reporters, gathering and disseminating information not to the general public but to their clients -- though some of them do so on websites anyone can read. In addition, they are de facto legislative staff, just about the only staff most legislators have. Without lobbyists providing information, lawmakers would be even more outgunned than they are by the governor and his relatively well-staffed agencies.

Legislators do have access to the Office of Legislative Council, with 14 lawyers, and the legislature's Joint Fiscal Office, with 11 policy experts. That adds up to one professional staffer for every six lawmakers, and not even the heads of those agencies, Bill Russell for the lawyers and Steve Klein at the Fiscal Office, argue that their services are sufficient.

"We all run around and do everything," Klein says. Russell notes that Vermont has perhaps "the least-staffed legislature" in the country. That means that the burden of analyzing and advocating falls on the lobbyists. One of the most interesting, if not entirely convincing, beliefs under the Golden Dome is that lobbyists give legislators objective analysis, regardless of the impact on their clients.

"This whole business is built on trust," says Jeanne Kennedy, an independent lobbyist. "Lobbying is about building relationships." Should she ever feed dishonest information to a lawmaker, her credibility would be lost, Kennedy suggests -- a sentiment echoed by her colleagues. The lobbyist who always plays it straight will be more effective in the long run.

Legislators seem to agree, regardless of their own political outlooks. "There are two lobbyists I rely on when I want to know the straight scoop," says Rep. Duncan Kilmartin, a conservative Orleans County Republican. One of them is Kimbell, a Democrat who was a senior official in the administration of Gov. Madeleine Kunin.

This mutual trust is not surprising. Like any collection of folks thrown together under one roof, the Vermont legislature and its auxiliaries comprise a community of sorts. The lawmakers, the lobbyists and the reporters who regularly cover state government get to know and, usually, like one another. They schmooze in the corridors, eat lunch together in the cafeteria, and swap rumors during lulls in the proceedings.

Yes, it's Democrats against Republicans, lobbyists for liberal causes against their conservative antagonists. But in another sense, it's all of them against the outside world. They're in the same business. They understand one another. No wonder legislators are inclined to accept what lobbyists tell them.

Yet everyone knows who butters what bread. It's a plain, unvarnished fact that a lobbyist cannot be a disinterested observer. Unlike a reporter, the lobbyist has an interest -- the client who pays the bills.

***

In the health-care debate, many legislators pay attention to emailed communiques semi-regularly issued by Jeanne M. Keller, of the Burlington-based consultants and analysts Keller & Fuller, Inc. (Craig Fuller is Keller's husband). Those reports are well written and well informed. But ultimately it is clients who pay for them -- in this case Business Research Services, a firm that connects small businesses with insurers, and the Vermont Association of Hospitals and Health Systems.

Keller's latest report supports the objections of both these clients to the Senate health-care bill. This doesn't mean that Keller was being disingenuous; the objections convinced senators to make some changes in the bill last week. Still, it may be easy for lobbyists to convince themselves that what is in their, and their clients', best interests is also the unalloyed truth. Without real staff to guide them, lawmakers remain at the mercy of hired guns, however honorable they may be.

Keller understands this. Sometimes, she says, when she appears before a legislative committee, she feels like a witness testifying in court, and before a jury that will choose whether to believe her, with "no neutral party" to evaluate what she and other lobbyists say.

The more complicated and divisive the issue, the more important it is to get that neutral advice. And no issue is more complex and divisive than health care, in which large businesses have huge investments at stake, and where ideologues on the left and right hold fast not only to their own opinions but to their own version of the facts.

Those changes made in the health bill last week, which may or may not have been all that important, illustrate some other truths about lobbying in Montpelier, and about the connection between lobbying and money. And they reveal what might be the underside of the lawmaker-lobbyist klatch that thrives under the Golden Dome: Like all communities, this one has its antagonisms as well as its friendships.

Health care is absurdly complicated, with its own jargon and conflicting assumptions, so there will be no effort here to explain the House and Senate bills in all their convolutions. For now, it's enough to note that one part of the Senate's original proposal would standardize the rules under which hospitals provide care for patients who can't -- or don't -- pay their bills. That was the provision changed last week, and the successful lobbyists in this case were not the giants of the corporate world. They were the lobbyists for Vermont's 14 nonprofit hospitals.

As major stakeholders in the discussion, and as "good people who do good work," as Tracy puts it, the hospitals' collective voice ought to be heeded, if not necessarily followed. They employ more than 10,000 people, account for more than 7 percent of the state's economy, and provide vital services to Vermonters.

In this case, the hospitals thought the Senate proposal to standardize the rules for non-paying patients would cost the hospitals money. John Franco, the Burlington attorney who helped write the Senate bill, says the hospital representatives were misreading the bill, and that it wouldn't have cost them anything. Says Bea Grause of the hospital association, "I don't see it that way."

It's not clear which one is right. But we do know who won: the hospitals, possibly because they had the better argument, but certainly because they had their troops lined up. At a hearing Thursday, hospital officials told senators they were unhappy about the proposal. No one who represented any constituency was making the case for the original Senate proposal. In fact, some of the lobbyists pushing for more expansive health care (as is Franco, but he wasn't there Thursday) disagreed with that proposal. No wonder the senators gave up on it.

That fight appears to be over. But the argument is not. And here is where the dark side of that state government in-group emerges. Like many grouchy old married people, some issue advocates never stop debating the same point, or attributing the worst motives to the other side.

Jeanne Keller asks whether some legislators really "wanted a bill that the governor would sign," and even whether lawyer John Franco has a covert agenda, "trying to collapse the private market and [have the state] take over the hospitals," which would explain, she believes, why he wrote that provision about treating patients who do not pay.

"Really paranoid," says Franco, who in turn notes that some hospital officials had been meeting with right-wing activists, and wonders whether the hospitals are "too committed to their ideological brethren" for their own good.

This dispute may seem petty and paranoid on both sides. But as is often the case with political paranoia, everybody might have a point. Even John Tracy acknowledges that some of his fellow Democrats might want Gov. Douglas to veto a health-care bill, as he did last year, perhaps thinking that such a veto would hurt Douglas politically.

Here some Democratic legislators and some health-care lobbyists are united -- and probably misguided. Polls show that health care is a major political issue, but largely because people are concerned about their own coverage. The folks who are passionate about universal health care are already voting Democratic.

Nor is Franco's conspiracy theory completely baseless. There are conservatives who harbor an active distaste for economic equity, and who oppose anything, including broader health coverage, moving in the direction of equality. The Vermont Association of Hospitals is not among them. Grause says she and her organization "want to move toward universal coverage," and disagree with those who think "the system just needs some market tinkering."

But over the past year, almost all the concessions in this debate have come from the political left. Even the most liberal Vermont lobbyists have given up the idea of a single-payer, state-run health-care system. The argument now takes place in the center-right, with legislators and lobbyists arguing over how to re-jigger the employer-based health insurance system.

Funny how, even in a structure in which money does not dominate, money tends to prevail.

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