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Ethics Investigations Chill Fundraising

A recent leak that an ethics panel is investigating seven defense appropriators is expected to shut down Members’ fundraising prospects from the industry, which is typically a reliable source of campaign cash for their re-election campaigns.

“You will definitely see a pullback on fundraising,— a defense industry consultant said. “The fact that our clients are under so much scrutiny, they really have to watch it.—

The expected pullback on political giving by defense contractors in the months ahead comes in the wake of a Washington Post report last week detailing the investigation of 30 lawmakers by the Committee on Standards of Official Conduct. The Post also reported that five Democratic defense appropriators and two Republicans are being pursued for their alleged ties to the now-defunct appropriations lobbying shop PMA Group: Appropriations Subcommittee on Defense Chairman John Murtha (D-Pa.) and Reps. Peter Visclosky (D-Ind.), Norm Dicks (D-Wash.), Jim Moran (D-Va.), Marcy Kaptur (D-Ohio), Bill Young (R-Fla.) and Todd Tiahrt (R-Kan.).

According to the Post, the seven appropriators also are being investigated by the new Office of Congressional Ethics.

Following the report, industry consultants say defense firms and their contract lobbyists likely will go into hiding until the dust settles from Friday’s bombshell, potentially spelling trouble for lawmakers who appear reliant on K Street’s largess this election cycle.

Since Jan. 1, at least 20 Members have raised six-figure sums from the defense industry, according to the Center for Responsive Politics. Among House Members, Armed Services Chairman Ike Skelton (D-Mo.) may have the most to lose from the expected freeze.

To date, Skelton has raised $143,200 from the defense industry, tops among his House colleagues. According to the Post, Skelton was not included in the apparent ethics sweep.

Another lobbyist with a stable of defense-industry clients agreed that the immediate fallout from Friday’s report was a fundraising cease-fire. The lobbyist said the giving freeze will be particularly acute with small- and mid-size defense firms, whose fundraising proximity to some Members in the past has been the subject of investigations by Roll Call and other news outlets.

“All of these startup companies, they don’t want to pay a lot of money, but they have no problem making campaign contributions,— said the lobbyist, who would speak only on condition of anonymity. “You have many earmarks that are going to these small startup companies. … At a lot of these smaller shops, they were like, ‘I know how this works.’—

But as the Post’s report circulated around K Street, the lobbyist said there was an abrupt realization that the formula was outdated.

“It’s going to be tougher to get clients who normally would have no problem saying, ‘Sure we’ll host a fundraiser. What do we need to do?— the lobbyist said. “Now, they’re going to say, ‘I’m not giving to any Member right now.’ The individual companies, those folks are not going to be giving. They don’t want their names to be appearing in the newspaper.—

Another lobbyist, also speaking on condition of anonymity, downplayed the expected fundraising freeze, speculating that a small cadre of old-timers will likely defy the informal halt on defense industry political gifts given to influential lawmakers. For one, by putting away the checkbook, the lobbyist said, “you admit that you were doing something wrong.—

“Given that there isn’t anything wrong with it, if someone is a friend, I’m going to contribute to them,— the defense consultant added. “I don’t think that it’s wrong.—

But even before the Post’s piece, another defense lobbyist said some downtown shops had already adopted fundraising guidance warning its employees that federal investigators do not consider political donations a coincidence if they’re made during the earmarking process. And with fundraisers now likely out of favor, the source also expressed frustration that the last after-hours forum for the defense industry to mingle with lawmakers, may be gone.

“As lobbyists, we’re not writing checks for good government; let’s face it, we’re hired for access, and how are we now going to have access? Under [the Honest Leadership and Open Government Act of 2007], it’s the only way we can spend time with Members outside of the office because you can’t take them to lunch or dinner anymore.—

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