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Max Baucus Alumni Network in Demand as Tax Reform Nears

When Sen. Max Baucus warned recently that lawmakers will “slay some sacred cows” to accomplish tax reform, K Street was listening.

Seeing a major rewrite of the nation’s tax laws on the horizon, lobbyists have been taking meetings with the Montana Democrat’s aides, who in turn have quietly been reaching out to stakeholders. It’s all part of what one downtowner referred to as the “pre-process.” And it’s a series of interactions that, no matter the outcome of the November elections, puts lobbyists with ties to the Senate Finance chairman in high demand.

The six-term Senator’s network of aides-turned-lobbyists isn’t limited to tax issues. Baucus is taking a leading role in the handful of matters that have potential to move this year, such as a bill to normalize trade relations with Russia and an extension of highway and transit spending. His committee also has jurisdiction over major aspects of the health care overhaul.

“They have access and expertise,” Sheila Krumholz, executive director of the nonpartisan Center for Responsive Politics, said of Baucus’ downtown allies. “They understand how the whole beast works, but they also know the kind of approach that someone like Baucus might take. So that’s gold.”

Jon Selib, Baucus’ chief of staff, said his boss’s ties to K Street take a back seat to his home state.

“The only inner circle that Max Baucus has is Montanans,” Selib said.

Baucus’ inner circle on K Street, according to numerous sources, includes Jeffrey Forbes, a former Finance panel staff director who is a lobbyist at Cauthen Forbes & Williams, and Capitol Counsel partner Shannon Finley, who was a Baucus political adviser. Nicholas Giordano of Washington Council Ernst & Young is another tax lobbyist who is close to his former boss, lobbyists said. And ditto for former trade advisers Brian Pomper of Akin Gump Strauss Hauer & Feld and Timothy Punke, who is a partner with Monument Policy Group.

In addition, Baucus has dozens of other ex-aides who lobby, including Mehlman Vogel Castagnetti’s David Castagnetti, K&L Gates partner Michael Evans, Dawn Levy O’Donnell of D Squared Tax Strategies, Elmendorf Ryan lobbyist Pat Bousliman and Jay Driscoll of Cauthen Forbes.

Selib and numerous K Streeters working on tax reform say they expect Baucus’ team on the Hill to keep an open door when it comes to the debate.

It’s an issue that in many instances will pit business interests against one another, with industries protecting favored tax deductions whose loss could result in a life-threatening blow to their bottom line.

“We want to have an open process, a public process where we can hear from everybody,” Selib noted.

Lobbyists said that the message from Baucus, who publicly discloses his daily schedule, and his staff is similar to the Senator’s comments last week to the Bipartisan Policy Center.

“We know tax reform won’t be easy,” Baucus said. “When favorite tax breaks disappear, someone will always be unhappy. But that’s the wrong way to look at it. The right way to look at it is to focus on results.”

While a big tax rewrite is unlikely before the next Congress, that hasn’t stopped K Street from laying the groundwork with Baucus. Even if control of the Senate flips, putting the Montanan in the ranking member seat, he will still play a crucial role.

“In order to get a tax reform deal that doesn’t have disastrous economic effects, you’re going to need a bipartisan coalition,” said Elaine Kamarck, who co-chairs the Reforming America’s Taxes Equitably coalition. “Even if he’s not actually chairman, he will be the leader of that coalition in the Senate.”

Sen. Orrin Hatch (Utah), the panel’s top Republican, has been intently focused on a June 26 primary for his seat and is not likely to work closely with Baucus on tax reform until after that contest, according to lobbyists.

Baucus is not up for re-election until 2014. But his Glacier political action committee has an event scheduled for this weekend at Big Sky Resort in Montana, a favorite spot for the Senator’s fundraising. Gatherings often feature fly-fishing and golf in the summer and skiing in the winter, said lobbyists who frequent the jaunts.

Lobbyists, according to data compiled by the Center for Responsive Politics, have been Baucus’ fifth-most-generous donor base during his career, behind only lawyers and law firms, securities and investment, insurance, and health professionals.

His roster of donors is a who’s who of K Street. In addition to his own alumni network, Baucus has collected checks from such lobbyists as the Duberstein Group’s Michael Berman, Steven Champlin and Brian Griffin; Joel Jankowsky and former Rep. Vic Fazio (D-Calif.) of Akin Gump Strauss Hauer & Feld; former Rep. Richard Gephardt (D-Mo.), who runs the Gephardt Group; the OB-C Group’s Larry O’Brien; Gerry Cassidy of Cassidy & Associates; Lindsay Hooper, Joseph Mikrut and Jonathan Talisman of Capitol Tax Partners; Merribel Ayres of Lighthouse Consulting Group; and Tarplin Strategies’ Rich Tarplin, among others.

The RATE coalition’s Kamarck said Baucus may need to keep tax reform close to the vest.

“He seems to have a very sure-footed strategy here,” she said. “If you start letting dribs and drabs out there, every special interest comes out on your head.”

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