Transcripts For CSPAN2 Today In Washington 20101231

rockefeller bill in some detail. i know i had to move along here. >> we will stay here until 4:00 last night. >> than i should have done that to our piece on the administrative procedure act. rulemaking advocacy really starts on the hill. and if you're sophisticated enough to understand rulemaking support you should be reading every piece of legislation you're interested in from the plans of a rulemaking is going to occur after the legislation is passed. as a matter of fact, which ought to do is look at the piece of legislation if you really want to be effective a as a precursor to rulemaking. as the enabler of rulemaking, as the limiting agent of rulemaking. i know that doesn't sound right, doesn't feel right, because we've all grown up thinking about congress and the legislative process. and that's the way we should think about it. but in effect what congress is doing is setting the stage for dozens if not hundreds, months if not years, if not decades of rulemaking that is going to follow. the other thing, i probably didn't spend enough time on, remember, congress in addition to not being technically knowledgeable, they are not pressure. they are no better than we are anticipating how the world will change a couple years after its statute is in this enacted. to react to these changes, the unanticipated changes in ways that you couldn't do if you had to rewrite the legislation every time an actual condition changed. so what are your opportunities when you are sitting in front of a statute that you think you have the opportunity to alter in a way that positions you well and your interest well? one is make this an incomplete language can be your friend or every time a critical statute, statutory term is not well defined, or every time the element of a public program is not described in detail, that's an opportunity for you to do it in the next stage of the process. vegas and incomplete language is a common characteristic of most contemporary legislation, for all the reasons we talked about. as you read that language you should be thinking how can the agency defined as in a way that is beneficial to the people i represent. and how do i position myself and provide them what they need to define it in that term. you might come to the point where you say to yourself, man, there's no way in the world vague language in this will help me. that's when you go to plan b. that's when you see if you can insert in the statute language that limits the ability of the agency to define it any differently than the way you want. now, let me say one other thing about preemptive language. you can also preempt parts of the process. you can also suggest that the agency that has been given responsibility to write the rule uses a certain kind of procedure to do it. i can't go into all the detail, but if it's not the classic what we call notice and comment rulemaking, there are other things that you can record the agency to do. you can require the agency and statute to conduct public hearings. and people do that all the time. you can require the agency to engage in something we call policy dialogue, which is a higher level of public hearing that requires the agency to sit down with interested groups and discuss what's possible and what might work. perhaps the most extreme thing you can do, although, oddly enough it happens in the department of education of all places more often than anywhere else, is required the agency to engage in something called negotiated rulemaking. which is a process in which the agency sits down and almost a collective bargaining mode with the affected interests, one of them being you. and to write a regulation the way you would negotiate a labor agreement, with a union. so, process and substance can be subject to preemptive language. the third is information requirement. let's say you're an environmental group and you have the best available data on co2 emissions as they affect wildlife habitat in north dakota. you would be astonished to read how precise the congress can be when it comes to telling an agency what kind of information it needs to collect in order to write a rule. in fact, a kind of information that the agency will have to consider definitive whether it rights rules. so if you are in possession of high quality information, you believe it's in the public interest to ensure the agency employs that information to the maximum extent possible, you can employ statutory language to require the agency to draw on your and your expertise. it's often very important, as a matter that sometimes crucial, which agency is responsible for implementing the law. sometimes it's obvious. you not going to give global warming legislation to the pension benefit guaranty corporation. but congress has been known to dip deep into agency structure and not just a, epa. epa and the office there. or its epa and, let's see, the office of oceans. the congress has the capacity to identify any bureaucratic agent. i mean, the old days back in this 90s, by the way, congress have been delegating authority for agencies to write rules since the first congress. this happened in the first congress. it will happen until there is no longer a congress. congress used to say the president will. then it moved to the president and the secretary will. now it's the present and the assistant secretary. if you feel you have got a friendly home within an agency, realizing of course these homes change, a lot, that's an opportunity as well. a very common, and this is one that finreg is operating under and health care reform, imposing deadlines on the agency in writing the rule. just like they did back in the clean water act, he was a for example, okay, the first wave of co2 for limiting emissions, regulations, will be the environmental protection agency 90 days after enactment of statutes. or 180 days, or a year or two years. now, deadlines are very much political statements. they position certain interests to exercise extraordinary authority. if you're imposing a deadline on an agency and that deadline is a severe, and, you know, the agency doesn't have the information it needs to produce the responsible regulation in 90 days, and you have that information, guess what? you become immensely influenti influential. and you might be an aggregate for the deadline. but remember this also. almost always unrealistic deadline leads to lousy rules, or rules that improperly dominated by the holders in one case of information. there's all kinds of procedural games you can play to impose a deadline, and then keep the door open for changing the rule or regulation after the fact. we will talk about some of those technical aspects later. deadlines cut both ways. if you're an interest that doesn't have information, but you have the capacity to develop, and, you know, your opponents do, and, you know, the agency can with regard to what it currently is able to manage by way of decision-making, and you're not going to advocate for a deadline. you going to let this thing run its course. it's really fascinating, i mean, and transport in particular the allegation of it is moving too fast. when you go to the agency and ask gains or someone like gensler, white helped you put this stuff up so quickly? he said every the statute if i don't put out in 90 days i'm in content. what happens if you miss a deadline? what it all the terrible things that can happen to you if it you miss a deadline? you get called up to go for a ritual beating, but you'll probably be called up to the hill for that anyway. . >> and finally a hammer provision. you don't see this referred to as much as you did in the '90s. a hammer provision is the congress saying, look, if you don't meet this deadline, ryan, this is what you're going to do instead. and the hammer is usually so draconian as far as the agency is concerned. they believe the hammer is a disincentive, strong enough disincentive for the agency to meet the deadline they have to. so on the hill -- you know, if you're on the fact that rulemaking will happen, that rulemaking is an arena in which you have to play, if you're going to be successful, the statute itself is the first place to start. then the attention shifts to the agency. and this is why -- this is why i think -- this is where the rulemaking process and the legislative process diverge in terms of the way they're conducted. in my view, the key to a successful participation in rulemaking is the highest quality information you can put together at a critical point in the process. and what is the critical point in the process? first and foremost, look, the empirical work on rulemaking is still very, very primitive. now, this is not a field where the social -- where the social sciences, particularly the policy sciences, have spent the time and effort that's needed to give us confidence in a scholarly sense about who influences rules and how but there's one thing that's out there, the earlier you're in, the earlier you are able to influence the process, the more successful you're going to be. you can't get any earlier than the statute, okay? but within the agency itself, it is at the moment of transfer of the statute to the agency. you need to have the capacity to track this stuff the way fedex tracks a box, all right? you need to know exactly where this things are and who has them. what type of information you need? you need five or six types. number one, you got to be impeccable on science and technology. i mean, that really is the currency of something like global warming, all right? you have to be very strong on impact. it's what abby mentioned earlier about cost benefit analysis. how much is this going to cost? what are the benefits going to be? and the rundown to the bottom here, who are the winners and who are the losers? 'cause high quality cost benefit analysis identify those with great precision. yes >> rulemaking, how does an agency deal with competing science? you know, especially in global warming? >> oh, listen, i mean, it's -- that is the crucial issue. it deals with it the same way any high quality decision-making process would. it's going to be the weight of the evidence. and it's going to lead i'm going to tell you to rules that are incomplete themselves. because they know it's a developing science. i mean, and they have to be able to build into a regulation the capacity to amend that regulation when the sign dictates but at the end of the day, just like a court of law, the agency is going to have to make a decision based on the weight of the available evidence >> can i probe on that? >> yeah, sure >> you got somebody like representative barton, smoky joe barton. [laughter] >> former chair of the energy and commerce committee who doesn't believe that we have global warming going on. and that we have something like that, it's natural. it's not caused by human beings. he comes and forces the committee to have an oversight -- an oversight hearing that really questions the scientific evidence, then we get into the politics of who do you trust? >> that's right. sure. and i'm going to come to bad to this >> no, we're going to loop back to congress but fundamentally, global warming is like -- i mean, take a look what the guys and women in financial finreg with financial products like attorney's fe derivatives. they were behind the curve they don't know what's going on and they are having to run as fast as as the industry does in developing the product. your point is well-taken. and that's where timeliness in becomes key because as the science is developing, how does the science get translated into a rulemaking process in real time? now, the key to that -- and i i don't mean this facetiously is the quality of programs like the one that goes on in the school of public affairs because our school of public affairs and the top schools of public affairs in the united states populate these agencies. so if you're coming out of an mpa or an mpp program with an insufficient program with regard to the fundamentals of statistics, which underlie a lot of the science of epidemiology, as far as the climate science is concerned, we don't turn out physicists or chemists but the policy analysts and the heads of these offices have got to have at least a literacy in these scientific fields in order to weigh the credibility of the evidence that comes in. the implementation and compliance information is often overlooked crucially important. how is the agency going to translate what it just rule as a rule into an operating program in the field? and you should be become as expert in that as you are in the technical content of the rule because you representing the people that you represent are either going to have to advise them on how to comply with the reg or if they are beneficiaries, to monitor the people you're trying to control to ensure they are complying with the law. so compliance and implementation are parts of the rulemaking process that really are just as important as the technical content. now, in the agency, it's all about relationships just like it is on the hill also. there's a set of political appointees who represent the president and his program. you should understand their role in the rulemaking process. then there are key officials in a wide variety of offices within the agency who can be crucially involved. obviously the program office, let's say the air office at epa at the rockefeller would be crucial. the senior personnel, most rules and regulations of the size we're talking about here are written in a team that consists of offices in this sort in an agency. led by a program office. representation from the policy office which is really the agency's equivalent to the cost benefit shop at the white house. the general counsel has a seat always because it is the general counsel who ultimately determines the appropriate interpretation of key statutory terms for the agency's leadership. just like our general counsel at aeu advises me, the general counsel at epa advises the administrator. how do i obey the law? the budget office interestingly enough can be very important because the budget office -- you know, rulemaking costs money. everybody sort of assumes that it's free. it's an expensive proposition to pull together the resources you need to write a rule. regional offices are the enforcement arm of most agencies. they're the ones who tell the guys in washington what you're writing is idiotic and here's why it doesn't work 'cause i work with this industry every day. i know how it's organized. you don't. listen to me. and then finally the communication staff. how do you think the average dry cleaner learns what the new wave of global warming rules mean for him or her? how many people have been to a dry cleaners in the last month? well, the rest of you should be probably, all right. but in any event, you walk into -- how many times when you walked into a dry cleaners and saw the federal register sitting on the counter? i mean, dry cleaning establishments of the united states are a major, major source of potential air pollution. they've got to learn what their requirements are. they are going to learn it through a variety of means but the most effective means often is the very organization that you're currently involved in. so how you're going to communicate requirements is crucial. the white house, all right, now you want to up the ante. you're not getting exactly what you need from the agency or you want some insurance. the office of information regulatory affairs, jeff weinberg spoke to you about this a little bit already -- it's in effect the eyes and ears of the president of the united states for what the president has determined is the most important rules under development in a given year. they review rules formally at the proposed and final rule stage, informally they are in constant communication through a desk officer or arrangement with the agency that's writing the regs. you have access to it just like all american citizens do but again, whatever you do will be open for public scrutiny. they, like the agency, need information. they have a lot of interest in cost benefit analysis since they're implementing executive orders that go back to the regular administration requiring benefit cost analysis on major regs. but they are also a source of potential inflow over the process. if you don't have any luck there, conceivably you could used domestic policy, the contacts you have, the trade office, the i.r. or national security agency if you have an international and global warming regs. you wait and see as this develops how quickly international competitiveness becomes a critical factor in the discussions. so you think you got to know about carbon, you think you got to know about secondary chemicals, what you really got to know about is what the balance of trade impact is often going to be on countries participating. and then finally, and then i'll wrap it up with this, you go back to congress. jim just mentioned a member decides global warming isn't what everybody thinks it is. it's something else. i'm going to hold a congressional hearing. i'm going to bring all the agency personnel up here. you don't have to be -- you don't have to hold extreme views to stimulate a hearing of this sort. the easiest way to stimulate a hearing is to tell a member of congress, look, they are moving too slow on this and there's no good reason for this. you need get them up here and get them focused. >> -- now that can easily morph about the direction the agency is taking. now, but step back a minute. now, remember, that's conventional oversight. what i didn't put up here is the rulemaking equivalent of casework. you got a particular point of view. you want that point of view at least listening to the agency. there's nothing quite as compelling as the agency hearing from a member of the appropriations committee or subcommittee that governs its budget that i, congressman smith, from connecticut, have a real interest in this rule and here's my interest. and you keep me informed about what's happening with this issue in the rulemaking. in effect, you the interest group are employing a member of congress as your lobbyist. you know, just like a member would chase a social security benefit for a constituent. they'll take this seriously as well. now, conventional oversight is of all the stuff that you've already heard and read about. the hearings can be very compelling. you've got the congressional research service. you've got the general -- the government accountability office up there assisting the congress. but we also have some really fascinating research that demonstrates how targeted appropriations language can be used to both stimulate and shut down rules that powerful interests would prefer -- well, in latter cases not to see the light of day. very specific language in riders attached to any one of of a number of legislative vehicles that tells the environmental protection agency you don't spend another dime on rulemaking associated with c02 emissions from public utilities in the upper midwest. end of story. you know, you start -- you lost the authority to spend public funds. if you can ride it for free, i guess you're on your own but it's very unusual that could happen. then there's an arcane piece of legislation which i hesitate even to spend a lot of time with, something called a congressional research act. excuse me, a congressional review act. that allows the congress to essentially veto a rule or regulation after its written if it's found to be incontravention of the statute and there's an elaborate process of how that happens. it's only been invoked once. as it happens it was invoked in the role when jim thurber's wife worked on the agency -- >> the agency not her. she thought it would be overturned. >> she's right. the only time in history -- the act has been around for 17 years. so i wouldn't put this high on your hit parade on your devices to go to work with. but conventional oversight and activating members of congress of rules under development are a real possibility and finally courts. you know, this is kind of your abandon all hope thing. it's really the last resort. you can sue an agency but not until the agency has written and published the rule. that's number one. number two, you have to have standing to sue, which means you got to show that you can or have been damaged. third, you got to present the agency with the kind of legal issue that a court feels competent to rule on, which in this day and age is almost anything, all right? and then finally, remember this. when you sue an agency, partial victories are not unheard of. but it's very rare for an agency to lose kind of a nuclear, you know -- agencies don't make those kinds of errors. what i'll conclude is the following, information is critical. as currency, it's more important in rulemaking than it is in any other phase of the public policy process in my view, all right? second, we're in an era where agencies are going to need that information from the outside more than they have ever needed it before. their own budgets for research are constrained. and they're going to become more constrained. there is a massive retirement of senior personnel underway in agencies. and that outflow of personnel takes some of the most experienced, most knowledgeable men and women out of the agency and guess where? they're not playing the banjo on a porch in west virginia in retirement, all right? at least not most of them. what they're doing is going to work for powerful interests. leaving the agency in deficit relative to its external competition if that's what you want to call it. so information is power. and the better -- the higher quality and in the public interest, the most objective that you can muster, the better off you're going to be. third, coalitions are king in rulemaking. just like they are on the hill. you don't know everything. nobody knows everything. but a network of well positioned interests that represent, yes, a broad political spectrum but also a very broad reach of information can be enormously powerful. and just like the hill. they don't -- these coalitions come together and blow apart very quickly. but don't -- don't ignore that. and then finally, just as a general admonition, i mean, i just think that the american people have no clue how powerful this process is. how perpetual it is. how it never stops. and how much of our lives, and the quality of our lives is determined by the quality of what is produced by it. so whatever you represent, whomever you represent, the public obligation you have, the ethical obligation you have to present information in honest and forthright ways can never be overlooked. so just like any other part of this public advocacy business, the ethics of information transfer in this world is critically important. so with that, i'll be happy to -- [applause] >> we went over a little bit but will you be willing to answer some questions. >> yeah, sure. go ahead, matt? >> with the use of our imposing a deadline, would lobbyists ever be afraid that they're going to shorten that deadline because they had the information that the agency needs but they wouldn't want to do that for fear that the agency wouldn't actually accept is that information or might come across competing information? >> yeah, i think by and large agencies are hostile to deadlines >> is that a popular tactic among -- >> they achieved an awful lot. i mean, i was surprised to the extent it was used in major legislation that was enacted in the last congress >> the deadline? >> yeah. i mean, the reason why -- you know, deadlines are -- i just don't think -- i think what they -- it's an understandable reaction to a crisis. we have to do something. we have to do something fast. typically, what an agency will do in a case like that, that differs from what is normally the case, is issue what's called a direct final rule. and this is something you have to be aware of. a direct final rule says, this ises the regulation. this is why we're putting it out as fast as we are. we are not allowing for public participation in advance. but we're allowing for public participation after it's written and published and if we need to change it based on public comment, we'll go back and do that. but i got to tell you, i haven't seen a lick of research yet on how often that happens, how often they actually receive public comment and how often they go back and make the change. but you're going to see that device used a great deal. and you got to be prepared for it which means you've got to be in even earlier if you're going to be effective. yeah? >> does have it to be through negotiated rulemaking or, of course, that could happen potentially -- >> the agency -- there is a general statute written in 1990 called the negotiated rulemaking act that allows agencies that use negotiated rulemaking. you don't have to have it identified specifically in a new authorizing statute. you can rely on that general statute. however, negotiated rulemaking is also not terribly popular with agencies because it does -- it tends to require them to cede authority to the group. now, in order to conduct a negotiated rulemaking, you have to issue a notice in the federal register inviting people who think they should be at the table. it's sort of like the federal advisory committee act. but once that happens -- we study -- a colleague of mine here and i studied at a set of negotiated rules out of epa. and, you know, we found by and large it's a pretty effective process. it's very time-consuming and it's very expensive especially for smaller interests, you know, you got to devote a good part of your organization of your life to it while it's going on but there's general authority to do it. >> the place like the fed, is rulemaking much different? >> well, you know, it's an interesting point. the fed issues rules that only a very narrow subset of the american people can either understand or participate effectively in. but the fed usually uses notice and comment process. but, obviously, they sort of define emergency. so the one thing to remember about all procedural requirements and rulemaking is they can be suspended in the time of an emergency or if the agency determines it's in the public interest. now, both of those can be scrutinized after the fact. but when an agency determines -- the classic is airline safety. i mean, if they discovered -- i don't know. what's the super jumbo jet that -- >> the dreamliner. >> not the dreamliner. the one that carries 5 or 600 people. when the engine blew out of that, it got people's attention, you know. and so there were immediate -- what they call air worthiness directives that were sent out of the faa on maintenance of that rolls-royce engine. i fly a lot and i read a lot of directives. this is the kind of thing where -- you shouldn't. don't read the air worthiness directives. you don't need to. >> every time i get on an airplane it seems like i just read an air worthiness directive about the model. >> we have time for one more question. >> one more, yes, sure, go ahead. >> what sort of transparency requirements exist in this rulemaking advocacy? 'cause like with lobbying there's the lobbying disclove -- disclosures on this? >> when you lobby the hill, jim and i have commented frequently about how astonishly few people seem to register relative to what they do. the more important transparency issue is on the information that you're providing the agency. and that's contained either virtually or physically in something called a docket. every time a rule is started, a docket is opened. and with the rise of reg.gov which is a website you probably ought take a look at, reg.gov. you can actually access all public comment that has been received on a rule, anything that's been filed on a rule. and traditionally agencies are very good about listing the meetings they've had. and they summarized the purpose of the meeting. now, you're not going to see all the give-and-take that occurred but the value of that is that if you're a business interest and you feel environmental interests have been -- have been too welcomed in an agency or vice versa, you then have a means of addressing that by getting involved yourself. but the rulemaking process is remarkably transparent. the problem is it's very labor intensive. i mean, it just takes a lot of work to get the information, you know, once you decide it's important. i mean, it takes a lot of work to do research on rulemaking in order to get the kind of detailed information you need to make some judgments. but it's a very open system. and i'm tell you, i think we're in a period where agency are going to be opened with participation by organizations c-span 2. >> well, jack obviously had got into a little bit of trouble in a context to which any of us but that it were of the view that there is no way she did not know and his partners did not know exactly what they were doing. the way they broke rules, either you could not read the english-language for you to intentionally. now there's a movie about him. kevin spacey called the casino jack. i don't intend to see it, but it's one in history. but there is a republic in the house but was forced to resign because of unethical and says. he recently was charged in the state of texas and was just convicted in the state of texas. former number two person in the house convicted of an interesting money laundering scheme of moving federal funds into state races and swapping dollars for various purposes, convicted by a jury. the democratic chair the house ethics committee was forced to step aside temporarily amid allegations of financial improprieties. a member of congress have been convicted of accepting untold dollars in bribes. he's now serving time. there's a circumstance involved in which this particular member ended up with $90,000 in his home freezer. it was found. and one of the interesting sidebars to that case was while this was all going on, he got reelected in indiana. he subsequently was lost the next times around she lost and he has been convicted. one of the interesting things was the question of whether or not the fbi could search his office on capitol hill, whether this was an intrusion of the executive branch into the workings of the congress. and that is still kind of unresolved, but they didn't need whatever they found their in order to convict him. a western congressmen was indicted for embezzling funds from a company which he controlled and put in $400,000 into his first campaign for election. the house ethics committee, which has been dormant for some time to finally have gotten a little bit of life to it. there's a new independent ethics investigating group, which i saw an article that the republicans are going to continue against existence. the idea is these are independent investigators to convicted allegations come either made to them for the pickup on their own family to investigation and then they turn it back over to the committee of congress, which is made up of members is to a strip of action should be taken. as result of this work, charlie wrangle, a dear friend of ours just paste so censure, a process by which he had to stand in the house while nancy pelosi led a series of allegations against him. the california congresswoman is also being investigated by this group. something went awry at the investigatory staff and they were suspended for equipped. this has to do with whether or not she cast votes relatives had assisted an organization of which are housed in head start. so that's kind of the current history. when we look at the longer history, i found lobbying as far back as the time of the pharaohs, the egyptian priests used to lobby the pharaoh about monotheism. the right to lobby has been guaranteed under the magna carta in june of 1215. 1619, the virginia house took it as a prerogative. colonial assembly saw themselves as custodians of popular rights, people with petition assemblies in hopes of testing its reach in the british parliament. 1765, right to petition was included in the colonial declaration of rights, mention the declaration of independence and of course the constitution. 1774, congress representatives were not there already by representatives of business interests are lapping on what they should do. 1787, during the tracking of the constitution, there were so many obvious that they locked the door of the homes which they were writing constitutions and did not keep a written record so nobody could find an advance on what they were doing. 1795 -- excuse me in the state of georgia tried to sell some land to the federal government. offer was ejected. the decided to sell to land speculators. legislation was necessary and this particular case was reported every single legislator was bribed. people were indicted in jail and the entire legislature was thrown out at the next election and language was added to the state constitution, which made lobbying illegal. it's to the constitution until 1945. what they did in the early 30s and early 40s i have no idea. 1833, president andrew jackson set out to undercut power of the national bank. and to do so, he started withdrawing federal deposits in banks. the president of the bank's was a fellow named nicholas biddle. and then oversee the following letter for a member of the united states senate. sir, since i have arrived here, i've had application to be concerned professionally against the bank, which i do kind of course although i believe my retainer has not been renewed for refreshed as usual. if it is worse than my relation to the bank should be continued, it may be well to send entertainers. naturally, i assumed this must be some ne'er-do-well member of the united states senate. lo and behold, jenna webster coming u.s. senator from massachusetts. i went back and look the other day and he ultimately saved a $10,000 retainer which is $833,000. not that for a single vote share. 1874, the supreme court turn on a claim by a lobbyist to suit a client for failure to pay. the court said the efforts for which the fee was charged were contrary with sound policy and good morals. 1875, the house of representatives passed a resolution that was enforced for one session. to require lobbyists to register by name and client. president wilson declared war on lobbyists. just leave it down there. does that create a problem for you? 1875, they passed one session. they registered and must be on the one session. in 1913 during this campaign he said the government of the united states is a child of the second interest. it is not allowed to do well. he declared that lobbyists were so thick in washington that you couldn't very in washington without seeing one of them. this actually ordered lobbyist to leave town. obviously we came back. 1928, the senate passed a law deregulation bill. it died in the house. 1929 the house passed the lobby legislation bill. it died in the senate. 1929, the senate censured one member for bringing a lobbyist into a closed meeting of the senate finance subcommittee running a tariff bill. 1936, senator hugo black of alabama got a bill passed in the house and the senate, requiring lobby legislation enclosure that died in the conference committee. first lobby registration act 1946, in 1954 supreme court decision made in effect this. excuse me. the basic structure that we're now dealing with and we'll talk with a little bit was originally passed in 1995 and restructured in 2007. 2009, president obama basically declared lobbyists persona non grata in his administration as to whether they can join the government at all. they made a couple of perceptions and one for hhs i believe come benefits and not come up obvious have not been allowed to serve in the government. if you look at a public attitudes, there's a 1966 book called the lobbies written by james deacon. he says in the minds of a good many americans that conjures up disruptive suggests a sinister character, sink into the house of congress coming trailing behind thousand dollar bills. to the cringing congressman desperately in need of ready cash to meet his own money, the overhead on his yacht and the demands of his lolita, this card producer in return for which the legislature sells the public down the river. after the vote of course, there's an clergy at the palatial hands of a beautiful washington hostess who is having an illicit affair with this or that prominent senator. there was a period of time in which washington during the days of capital was read by. it was not unusual that members of congress would go over for a bit of entertainment and their closer disappear after particular vote have been created and congress. there's a certain amount of history to our business. in january of 2006, 90% of americans believe that lobbyist gifts should be banned. 67% of the lobby should not be left to make political contributions. and for those of you who are looking up a very long report this just come up to the task that professor thurber has been involved in a number of others have been involved in, you will see some of these issues are starting to be aggressive report. in may 2006, 39% created a serious problem. in october of six, members or staff would have contacts with lobbyists while relatives, regarding government matters. and then came on congressman foley, who we remember had a series of affairs if you will with pages and that kind of brought corruption into the 2006 election. and there are many people who believe that the fact that democrats had such a good year in 2006 was an off shoot of that particular episode. 80% of americans believe that interest groups have more influence than do individual citizens. that is likely true. most individuals are part of those interest groups. and that's where it gets a little bit tasty. 75% believe that congress is largely owned by the public interest. they see an independent class of people apparently separate from the individual organizations that hire them. 81% think that is common behavior for lobbyists to arrive with congress. 41% believe their member of congress has taken bribes for lobbyists. in québec, 41% of people think their member of congress has actually taken a bribe. you talk about lobbyists in independent class. you may have noticed while president obama had a group of business people in about 10 days ago, maybe two weeks ago now, to talk about how they go forward in the kinds of things that corporate america needs as we try to build jobs or whatever. at the end of his closing remarks, he essentially said to them, cheat, you are awfully reasonable. why is it that your lobbyists on the hill don't take the same position so you take? i've not been able to find out whether he's being facetious, but the idea that these corporate leaders are going to tell the president exactly what they thought which was zero to nine. and lobbyists don't make up their own rules. they don't make up their own points. privacy hired to represent different point of view. but the points of view of the people that we represent. now i worked in this government as a lobbyist with this kind of transition to regulation, from information prefiling that most lobbyists don't file at all to the current regime of disclosure i lifted the transition of fundraising when i first came here and december 1966. there were no limits on contributions. there were no legislation, no disclosure. we did all of our work from the congressional offices. it was said on the phone by the hour, raising money -- it worked for senator mondale and people back home and around the country. everybody else did it. we did our planning or. that finally broke when a certain number from california decided to do the lobbies on the floor and folks decided that was taken a little too far. but it was a pretty common time and now you pretty much can't do anything in the offices they relate to the campaign. now the rules. we're going to talk about registration in terms of reporting is a lobbyist. we're going to talk about gets gifts and honoraria, making contributions to federal candidates and improper behavior as it could affect you or your client. that's an important thing to remember. you can get in trouble for violating rules and regulations, which a client can find very come at very embarrassing. generally speaking when you get caught up in one of these situations, you don't have a client for a very long time because the first thing monday was cut the cord to you. this series of handout but i think you have, one is a whole series of rules and regulations that are really shorthand version of what is a fairly good book. there is another sheep that local around in a minute. i added verbatim a number of the documents that the obama administration put out for several months in the administration, showing how they were limiting lobbyists have been in the government. so if you lobby congress, you have to register with the clerk of the house and the secretary of the senate. it is still the same thing. yet fail to registrations into reports of recorder with those two people. one of the things the report that tv is coming out that there be an independent office of at least a one time. i must say the burden is not particularly high anymore since you cannot file electronically. with the report you put the hadron went and had her another copy and send them off. you report quarterly. and who is it that has to file? if you are paid more than $2500 in a three-month period by some client, make to lobbying contacts, to expend more than 20% of your time for the client or company lobbying during the three-month period. we're going to get that because this has become one of the more interest in the in turn regulation. what constitutes life he? anything oral or written, communicating with legislature to legislative branch officials. modification of legislation, rules and regulations and anything that has to do with government? the time you start preparing for lobby is also against the 20% rule. so if you prepare a memo or the behind documents are going to work on the project are doing, those tomatoes time against 20%. but you may not have made any contacts. and so, while i'm working my firm now, just turns out in the last two years i have not made a single contact him the. i registered for everybody because that's what we do. nonetheless, certain lobbying is exempt public officials acting in the official capacity. if you're called to testify before congressional city that's not treated because you're not responding or stepping forward for them. officials include the president and vice president, which is all the assistance to the president, i would be very sorry the very stars the administration have appointed. political level of the various executive agencies are more detail in the handout. members of congress and their staff. interesting enough, the officers of those two bodies. if you have cause for lobby and secretary of the senate, even though he or she we know well -- [inaudible] [inaudible] >> at any rate, it's interesting you play what people don't think about much but they have a lot of influence and if you have a good relationship but maybe work there or had some contact, they can be particularly helpful. they're not going to go on a lobby for you, but they can do a lot of good names for you. you finally registration within 45 days of the first lobby contacts or agreeing to lobby. you fail quarterly reports, every 90 days at the end of the quarter. detailed information, subject matter, houses, lobbying, electronic filing is required. one of the interesting things, for example, if i were to go a month at the white house, i would note that the subject matter which i love you -- and i would note the white house incher sanely again in the aba report that they're doing now, i would indicate the suspect person at a lobby to the white house, which would change up rather dramatically, create a lap or need for record keeping. it's easy enough for me to remember that i would lobby the white house. every person, every conversation you've got to make sure the person is on your list reporting little more complicated. then one of the relatively new reports as filed pricier within 30 days at the end of the six-month period, so it's buried at the that the industrialized and beginning of january. and it's disclosure of political contributions made by lobbyists. so for example, if i controlled the political committee, some kind of pact which i did for many, many years, i would have to disclose every contribution that packed me to remember as a result of this committee which i was the treasury of for 20 years and i'm no longer the treasure. you have to disclose a certain number of contribution, but you have to file for what amounts to bundling. if you raise more than $15,000 in contributions, exclusive of you have to remember, that's also disclosed in these filings. there are certain nonpolitical event honoring members. so for example, if senator griffin invites me to an event for the children's and enhanced the honoree, i have to disclose my contribution to the children's and a connect it to its name. so increasingly what folks are trying to do with regulatory regime is to provide more and more information about the specificity of contact. what that leads to is the capacity of people to search even further for various kinds of connections and contacts. one of the things i liked most about this new report is that they are suggesting the lobbyists not to be allowed to contribute, which would be perfect. this is a sidebar. as a practical matter, on the average date of the session is up for tuesday's after the election. i'll get anywhere from two to 10 of e-mail solicitations to fundraisers. and very nicely, it wasn't until the friday of election week that i began receiving the solicitations for the 2012 election. fortunately for me i'm no longer making contributions. i'm changing my life. they very, very -- can be a very expensive proposition . quite frankly, 90% of us, more than half the members i've never talked to in terms of any business lives, just because the democrats and we like them and they're doing the job they've got to raise money from somebody and we happen to be convenient. but to touch briefly on the foreign registration. this is a little tricky. it's gotten better over the years. language is if you are acting for a foreign principal, you register with the department of justice. and this is a big deal. this is very different than registering with the house and the senate. you do this within 10 days of agreeing to become an agent and then every six months thereafter you have to fire a supplement. not for a long time, foreign interest was anything foreign. and i mean any business organization, and a foreign political party, certainly any foreign government. a number of years ago, that was changed so that you begin to get the opportunity to represent foreign companies, companies said that they were american companies. that is to say you still have to find a lobby registration act. you no longer have to file for them under the foreign registration act. and it has gone even further to the point where you know in many countries businesses are owned by the government. if the business impact is doing what amounts to what would i'll describe as ordinary business that committee, you also never have to disclose even though the government happens to be the principal owner of the business. the reporting activities are much more extensive. for example, you have to disclose and provide to department of justice every press release he put out. and you got a bunch of people who are more oriented to policing to the department of justice than you do in the average house and senate circumstances. again, one of the things the reporters trying to do is to create essentially an independent office that would be only involved is taking care of a lobby registration. then we have the gift rules. the basic investigate if you can't. but the biggest change for you and for me and pat and others like us than the old days and up to a few years ago, the gift rules essentially only apply to the government employee. so if you gave what amounted to an illicit gift to employee, thomas davis reached the bribery level, you can get nailed for it. but the employee was subject to whatever process you might be involved in. now lobbyists are also equally viable under the rule. so if you make about gift, the employee remains viable, the chernobyl are liable as well. gifts are defined as any gratuity, fever, discount, entertainment, hospitality, forbearance or anything of value. so there's very little. you can't even buy a ticket, for example. so let's say that the rule is 25 bucks and i've got a 50-dollar ticket to the baseball game. you think a federal employee -- i can give them $25 for for half a ticket essentially and they would give me 25 bucks and it's covered. that's not permitted. so it's a pretty explicit ban. ordinary people, non-lobbyists -- there's only about 15,000 of us, so everyone else in the world can make contributions to these people for up to $50 in the congress, up to $100 a year. the rules to the executive branch is even narrower than that. however, there are 23 exceptions which i'm not going to go through any great detail. they are always here. the most important exemption -- some of it is obvious, family members, et cetera. but to show you how the rule applies, not so recently, one of our friends got married. in order for people to get them wedding gift they had to get a waiver from the senate in order to accept the wedding gifts. and many still had to be in a circumstance where you had some kind of a personal relationship. but the personal relationship exception is the one thing most people thrive on. so there may be somebody, for example, we worked for many years in the senate would develop a social relationship. we've shared sunday dinners at each of our homes. you name it. we've given gifts for special occasions over the years back and forth. you can make the case in so far nobody has really been caught, if you will or prosecuted for violating that kind of a rule. we can no longer engage as a lobbyist in arranging any private travel for congress. he used to be there is a great deal. if your company that she represented on an airplane or rented an airplane and the member was going to go out to kansas city, for example, to speak at a convention for your employees, the lobbyists would pick a member of, take them and put them in the airplane, fly with them for whatever length of time and be with them in kansas city and fly back with him to washington. in the meantime your pain and honorarium. that's a pretty interesting way to go. yes? that's all over. that's the bargain. the executive branch rules are 20 bucks instead of 55 and $50 in a year. so it's pretty hard in this day and age to think of anything much beyond a cup of coffee or a role that i've uncovered by the rule. now, they're interesting exceptions for the gift will. so let's say -- let's talk about the kennedy center. there's probably some of the members of congress at the annual event. the bottom line to summer and the $35 range. how do they get their? well, they can get there if they are invited by the kennedy center or by the institution. so effectively what does happen is that say that my company buys the table and the table seats 10. after i pay for those tickets i take the six and get them back to the kennedy center. the kennedy senator then uses those tickets to invite members of congress. and our occasion it's a member that you know. but then again, people are relatively, increasingly careful. now the obama executive order obviously made a flat ban on gifts from lobbyists. you can't even give them a glass of water and ashes easy not to try. in the old days when i came to the senate, most teams members of congress received a certain amount of speaking honorary -- actually made the speeches and they would go and travel is way of supplementing their income. then the rule was imposed to stop by. the only thing a member of congress can do now is that if he or she decides to fly out to address a particular organization if you can except the actual travel as long as there's not more than one overnight involved. and you can designate that honorarium of up to $2000 be paid to any bona fide institutional organization. so if you can imagine, there's been a considerable decrease in the number of people who have -- make honorarium trips given the opposition there. the executive branch honorary role know how never to accept if it's totally unrelated to any person does in the government. [inaudible] >> there are rules for that. you can get it approved. [inaudible] >> it's very specifically treated. there is a set of regulations that govern populations. there are some rules around it, but it can be done. so the best example i can come up with of what would be acceptable as an honorary circumstance for a member of the executive branch is the following. if you take a nuclear physicist who happens to be the world's most significant birdwatcher, here she could speak to the audubon society for honorarium. it's not quite clear how much they could get, but don't be permitted under the executive branch rules. and when in doubt, there's only one piece of advice about his checker don't. and the thing to remember about all of these circumstances. there's not very many people have been prosecuted under these rules as a practical matter. but in the modern time of kind of ubiquitous media, there are all kinds of forms that you can't imagine what information gets out about some of these circumstances. so it's almost as if the ubiquity of the media has become its own enforcement agent because people don't want to be embarrassed. they don't want to be the subject of some evening news program. campaign finance. this is something you will all be exposed to if you decide to come into the lobbying business on the private side. the basic campaign finance rules that exist now are limit on the size of contributions that you can make to an organization and limits on the total amount of money that you can give. so the current limitation are as follows. the most you can get for anyone election to a member of the house or senate is $2400. and they will collect $2500 in the coming cycle. there is a cbi tail on it. so in a given primary and general election you could then give up to $4000 because you could get 2400 to each election. he can you five dozen a year to any political action committee. political action committees used to be organizations like emily's list. but now we have a new phenomenon called leadership pacs. and this is a circumstance where substantial members of congress and some not so substantial members of congress form a political action committee, which they basically control. now it's disclosed to the fec, money that flows through so it's not uncommon that one could get a call from the same fundraiser for a contribution to the political leadership pact as well as the campaign. or if you're going to make a contribution, they might say to you, would it be okay if you made it to the political action committee. but the one thing about that is it is all a very good at the end of the day, you can go and look at the fec records, which is one of the better systems around, put my name into it. you can go back a good 10, 15 years now and find out within 97, 98% ackerson e. because i've tried it a few times all the political i have made over that time. the other limit is an aggregate limit to how much you can give to other federal candidate and political action committees and a two-year cycle. that number is relatively large. $115,500. so -- there are people who do each cycle. matthau lemmon also has gone up over time through the cpi indicators and changes in the law. every contribution of over $200 has to be disclosed someplace. and increasingly, it's the act of having received contributions far more than the amount would be. so for example, you will see stories about the fact that some members of congress got from xyz industry $13,000 worth of contributions in their last campaign. but the story doesn't say if the campaign cost $4 million. so that $13,000 is a pretty small piece of the action. but again, it's all disclosed and it's generally used by media and sometimes if exceptions can be made, used by your opponents. now let me take you through a few other -- by the way, if you have any questions along the way, feel free. for all these years am i can usually remember where i am. there is -- if you work for the house and senate, senate particularly, you are barred for two years when you do from lobbying either of congress. if you work in the house, however, you are only barred for one year the house. so the senate roll tends to be a little more stringent. a house rule only applies to the members who worked with. the senate rule applies to every single member of the senate. for a long time, one of the great perks of former members who got into our business was they had access both to the members only jam long after they've been in office in this well have access to the floor. so a former member can wander onto the house or senate, something which none of it in this room at this particular stage would be permitted to do. that privilege has been taken away now for those members of congress, those two privileges who are registered lobbyists. my belief is, though i don't have anything definitive on this is that it was because members themselves were complaining about the fact that former members were standing with them in the locker room after a basketball game or whatever it is, talking to them about some client member. one thing about the gin. it is a place where a business is a business. and it's the two places where you really can't step away from the public at large. other people, et cetera. if you leave the senate or the house, you have to report the negotiations you have, relative to employment when you started. earmarks. a lot of information about earmarks. theoretically, we're going to see an end of earmarks in this congress. i would be willing to bet if we all came back here two years from now, we would find out that there has been some other device -- not illegal necessary for members with particular power and authority over agencies to make note. it was one suggestion i heard yesterday on the air that every member of congress would be required to publicly disclose any letter, which he or she wrote to many executive branch agency. so that what kind of get in the middle that practice. it's gotten kind of a bad rap. but in the name, earmarks are members of congress trying to get for the people in that district the advantage therapy appropriate by the federal government. that's what's important to remember about earmarks. there may be rare cases when something is actually added to legislation in terms of the amount of money. but basically the overall amount of pot has been created for the highway department is going to spend those funds. the earmark essentially permits a member to say you're going to spend one 10th of 1% of those funds of xyz. the other thing about earmarks is that it's not quite -- a lot of them are not what you might call public. they are there, but it's written in language. apart on 44th street in duluth will have a description of a facility in the place, which eventually if you want to go the idea of what could your longitude and latitude you could figure out where it was. but it tends to be somewhat cryptic. let me slip over to the executive branch, which i think tends to be one of the most interesting situations in terms of lobbying. most of our lobbying and the regulations about lobbying for a matter of being reasonably diligent about recording information and reporting it. and increasingly their organizations built out. so when pat and i started the lobbying business, we've a beginner firms. we still do, who prepare our lobbying legislation for us in the fourth. if we started a firm today we return to one of a dozen law firms and accounting firms that do this work. do we fill out a form or prepare information so that it's not particularly onerous, quite frankly to disclose. the thing that's always most important from my point of view -- because i've never been embarrassed about anybody it work for, is that everybody be following the same rules. so if i'm on one side of the oil and gas controversy and i am disclosing what i am doing, you may decide to people on the other side are better, nicer, whatever. that's fine. but the rules are just not that hard. and if you really make them a part of your life -- so when our firm every monday morning a form shows up at everyone of her our partner status. and as they go along during the week, doing a lobbying report for lack, they make a quick note. and for anyone is turned in, they take a quick look to make sure something is that falling between the cracks, but basically it is there. .. now executive branch employees are barred from lobbying the ogency of which th w the agency at which awardfter for tn years after they leave their position but if you're an ar assistant secretary of hhs you are barred from getting hhs for two years. the obama position is much more stringent. it is never the entire time they are in office. actually the clinton administration had a similar ban ban them and, as a result of that, the clinton administration rule is, if i will give you an example. i help the original head of epa, carol browner, prepare for her hearing. and i was then barred from touching epa for a year, so on behalf of a client or anything else, so it is not that it is necessarily new. other people have had some of the same kinds of restrictions. they just haven't been quite as public about it and to be sure these regulations have gone even further. essentially what the obama administration did i believe is that they decided to use the phrase federal eretz asked her to lobbyists as a metaphor for what is wrong with washington. they decided that the people in the country could understand that there was something not quite right and therefore that is what they did. you could not contribute to their campaigns, although if you are a spouse of a lobbyist you could contribute. and certainly they didn't hesitate to raise money for the people that hired me as their registered lobbyist. the point i want to come back to again and again is that we were registered lobbyists. up all the various players, we look at some of her presser thurber's writings and some of the work he has done in the number of people and persuasion industry which is in the tens of thousands. there were only 15,000 of us that were registered, maybe 16,000 at the height so it is not just everybody in the system. we are out there. we are totally unembarrassed about the fact we are representing somebody and reporting where we have had contacts in reporting the issues in which, in which we do and every once in a while you would get a question from some reporter who would check a registration and they would call and they would say you know i notice you are registered on behalf of xyz corp. and you were working on x and what were you doing for them? our answer is always the same, we would not tell them. whenever answer questions about clients but nonetheless it was there and if they decided the fact that i is a registered lobbyist was supporting a particular position on the health of xyz corp. and they thought it was relevant to the story they could put it in the story. but their role became the registered lobbyist could not have paid or senior positions in his campaign or any other position of influence which therefore include the transition but others involved in the efficacy business whether media folks are advertising companies, did not face a similar bar. you couldn't contribute to the transition. for those few that got into the transition, they had to agree quite appropriately that they would not lobby that particular department or agency for i believe it was a year after the administration had been in office. in january 20th, the day the president took office they put on the executive order that prohibited gifts from lobbyists. they made from the revolving door and regardless of what the words were the net result was, if you had been a registered lobbyist within the 24 months preceding the time he were to be considered for employment you are ineligible for that employment. if you read the language that was put out, it had much more to do with the substance of what you might have lobbied on so if you read the language, let's assume that i was an education expert or a health care expert and i would lobby on health care and i lobbied hhs. you would read the language to say that i couldn't lobby hhs. working in a place i had lobbied which had been hhs in a particular department but in this case you are barred from the entire government. the net result of this rule has been there a certain number of people we know who have gone about the business of cleansing themselves and that is to say they vary scrupulously stopped stopped -- they haven't violated any laws but they realized that a huge amount of what we do is not really reportable activity or registered activities. all the strategically went through four example is in a whole different category. so they have kind of decided, those folks have decided that there are -- and there are number of people. it has only been two years and i'm assuming some will make it at some point. the other part is that a large number of people, who registered as lobbyists because they thought it was the right thing to do in terms of what the lobby laws were set out to do have delisted, because now you are being penalized in a sense if you have every interest in government service for having been a lobbyist. so if you aren't required to be a lobbyist, and some people have actually gone through and had the registration change where they can prove documentation wise that they weren't lobbying, they just did it because they thought the spirit of the law was such that they had to do it. so the number of i think lobbyist has dropped by two or 3000 in this -- anybody know the exact number? we will talk about that. are there 3000? so, there is not much point in talking about what they said in the original documents because the basic rule is if you are lobbying, you can't. and then they went through and there is a whole variety of volunteer boards and commissions in the government in which a lot of people who are lobbyist and who have special expertise for members of and they basically had systematically not reappointed those people nor will they appoint a lobbyist to various boards and commissions. they have a revolving door rule. if you leave the government you can't lobby the government until such time as the administration is over and very similar to the rules that the clinton administration had. now, why have those of us who are registered lobbyists been chosen for this honor? i think there is a number of reasons. first of all, we are identifiable. on a quarterly basis we report publicly homely represent, the issue in which we are working, the house or -- the house of congress or executive agency we are contacting, how much we are paid, to whom we made political contributions, to whom we made charitable contributions that might be honoring a member and oh yes we have to literally sign statement that says we have not made any illegal gifts and one of the things that is interesting about that statement that it is a felony to mistake that just because any lie is a felony regardless of what it is. and as a practical manner the administration could not take on the people we represent. let's take for example the aarp. they have dozens of people representing, listed as in-house lobbyists. they have at least four consulting firms at the time, lobbying firms at the time that a check. you have various labor organizations who have lobbyist. we have all that business organizations, trade organizations represented by lobbyists. and you simply were not going to take on that group of people so again, using the fact that we register as a defining characteristic, that we were selected for this again, on her. repressor thurber has done a study which shows there is a whole lot of outside groups that are involved in the practice, so let's talk and you will see this is true, but if you look at the average lobbying campaign and you will -- i'm going to do this in shorthand that you will get this over the next several days. in a real campaign there is going to be some registered lobbyists. there is going to be a public relations firm. there is going to be in media advertising agency. there's probably going to be a grassroots firm. there is probably going to be a polling firm all of whom with the possible exception of the polling firm, all of whom have the specific responsibility to try and convince members of congress to vote in a particular fashion, whether it is asked by the organization or some coalition of organizations, whether it is the kind of press releases one gets filed. and, the rest of that group, which as i say far larger than the lobbyist group, are exempt from this, so what is happened increasingly is that public relations firms in particular have become the source of, in some cases, the kinds of information that lobbyist would develop. so if you are basically are a pr firm and basically are hired to run a media campaign, you would certainly never get close to the 20% rule no matter how many contacts he made with members of congress seeking information are suggesting whether it is absolutely legal, not violating any rules and that is why again in the aba proposal they vote -- they have proposed limiting the 20% rule and i think there is a much smaller number to be involved. so that you really, to start to begin to bring into the fold more and more people. they also have a separate rule that talks about the fact that those organizations which are part of the broader lobbying campaign have to be disclosed. now they might be disclosed by the registered lobbyists as part of his or her report but again, their effort and a lot of it has to do with the lobbyists, some of whom were involved in this group although the largest number of these are academics and practicing lawyers in that particular study -- to begin to say okay, it if what you want is transclosure and if you want disclosure everyone not to be disclosed. and make the point, disclosure will never interfere with your business if you do your business legitimately. i have been doing -- i first registered as a lobbyist in 1981 and if you wanted to do the woro do for a couple of weeks you can go back and find that every person i have registered for, every act, every subject matter and -- there is only the house, senate and the government so there's not much definition in that particular part of the report. but it is all out there. so basically i think besides the fact that it may be obvious to you i think their position is unfair, it has led to less transparency. and hopefully some changes will occur that will re-provide some of that transparency. another question that comes up is whether there should be a difference in the treatment of lobbyist for so-called business who are private interest and charitable organizations. my instinct is if one could come up with a good reason for it, charitable organizations, the red cross, the cancer society, whatever, if they have lobbyist, perhaps you should not be required to follow all of the same rules. i don't know about a very big difference quite frankly one way or the other but if someone could figure out a reason to make some distinction between charitable organizations and business organizations i wouldn't be particularly offended by that. and besides all of them have c-3's have specific limits on the amount of money they can spend on charitable activities. and, i would like to list for you -- this was quite a while ago and it made a list of all the people i could think of who lobbied. so i mentioned earlier the ancient egyptian priests. english barons did that which was permitted under the magna carta and as i mentioned you can find it in the declaration of rights, the declaration of independence, under the constitution, doctors, lawyers and nurses all that it. truckers to do with 18 to 30 will -- when all these truckers came from the united states and simply closed on washington. you couldn't get anywhere because they filled up the streets. you couldn't even arrest them. they were just truck to truck to truck to truck and made for quite a scene. the farmers did the same thing only they brought tractors. fbi agents picketed the white house, lobbied essentially in the white house because they were opposed to certain pardons that were being granted. mother stated in a march on washington. seniors do to protect social security and medicare over time. native americans marched across the country and set up a whole residential area in the mall. poor people of camps on them all. the following people were registered as foreign agents. dean acheson, thomas duly, joe louis the fighter and fdr junior. there are many many more. president lobbies all the time. when he is sitting in the white house in the oval office calling members of congress he is lobbying. members of congress do it to each other into their staff and among their staff. supreme court justices do it if you can believe it. lobby on one subject, the size of their pay. and reporters and columnists and editorial writers, they all do it. they do it through their expressions of their words whether it is printed or on television or on blogs or whatever. essentially they are trying to make something happen by expressing their point of view. now there was something touched on earlier on this whole question of campaign money, and behavior. i would be remiss if i tried to tell you that there are some people who give because they are looking for some action or lack of action quite frankly. and i believe it is true that if you are, a substantial fund-raiser for someone, you can at least get access for them on a very regular basis. but quite frankly, i don't know if any particular circumstance in which i can say to you that an individual member of congress congress -- obviously there have been some circumstances that i talked about earlier where people have done some things and like any system, there are mostly good apples but there are some bad apples. but i think they are not really being moved because of the contributions. and if you think about it, if you are the chairman of the agriculture committee and you are from iowa to boot, people who are in the agriculture industry aren't going to support you because they believe your position. they want you to stay there. i just don't think campaign money changes results at the end of the day. now, it gives me a choice between representing someone who has got 10,000 employees in a house member's district and the ability to contribute any amount that might be possible and that might be legal, i will give you the employees any day because that is something which members to respond to. they respond to the economic circumstances of their districts. there are people that press to the edge. there are people that we called ethically challenged. we talked about some of them earlier. what i think what you should be comfortable about is, you can't operate in a way that will make you personally, let alone being legally not in any trouble but be personally comfortable. and you do that by being mindful of the appearance as well as the actual propriety of what you are doing. it is one thing to follow the rules and lord knows that is the baseline, but if you think about how something looks and the appearance of something, do you modify it in a way that affects the appearance of how it looks? if you do with the substance of the politics and the issues being considered, you can select your clients carefully. in our firm, there are people for war one reason or another or industries for one reason or another we decided not to represent. you can make those choices. it is all about values. and i think that the current atmosphere, lobbying is going to be a little tense for a wild but it is not going to go away. i mean, the amount of information that members, even executives don't have time to deal with, that organizations and individuals who have an interest in the rules they are going to make are going to continue to look for people on the outside to try and deliver those messages. finally, i have what i call, and you have a copy of this i call my 7r's in dealing with the congress and executive branch that have come up over time. so i'm going to go through them quickly. first of all something i mentioned several times regulations. he will it to yourself into your clients to understand what the rules are and to follow those rules. number two, show respect for the members and the process and the institution. keep in mind that they got their because a bunch of people decided that they should represent them here. something which in the main probably none of us will ever do. running for public office i remind people is a little bit like being what happens in grade school. every x number of weeks you take on this report card, as i remember it, and it has grades from your teacher and theoretically you are supposed to it signed by your parent or your guardian and then you bring it back. the signature is their way of essentially saying i've seen this report card about my child. that report about you that is seen by the teacher, the parents and you and maybe not even your parents sometimes if you decide to push it to the edge a little bit, if you are a public official and you go on the ballot, specially for the first time after you have been elected or anytime for re-election, you are stepping up to giving a report card on the if you are guessing are estimating, tell people, i am guessing and i have an expression i use called the web and i've often used it. it is a wild guess. they have asked me question. this is the best i can tell you but they know i'm making a guess. i try tried to mag it might as guess and tell them why i am guessing that but the point is there is nothing worse in terms of your relation is a member to provide him or her with a bad piece of information which they then use in a conversation with one of their colleagues on the floor and this issue is being discussed and then it is found out in the information that you had. make sure that every member understands when you approach him or her the political that are involved in them taking this position. now you say why do you have to tell people you know what the downside might be for them? they will find out or got any good member is going to find out because they are going to check if there is any kind of controversial issues so you might as well be upfront and tell them that politically there may be some problems with this. because it is going to come up anyway. engage in what i call rep are today. this town is built on human relationships. it runs on human relationships. you can talk about all the rules and talk about filibusters and holds an rules or whatever it is frankly it is relationships of people trusting one another, feeling good about one another. keep in mind that most members are voting most of the time on issues in which they are not experts. and which they may not think it is very important, so if what you are trying to do is save the everglades and that is your great cause i promise you most of the members from minnesota do not have that high on their lists. and the same is true if you are trying to save something -- the boundary waters canoe area in northern minnesota and into canada. so, having these relationships and so if a member kind of things you are good person and your organization is a good organization and you have a point of view, they will give you careful considerations. and then finally, remember to say thank you. whether or not a person does what you have asked them to do or don't do what you have asked them to do, to never hurts to say thank you and it is not by some gift. it is a thank you, it is a note or some expression that lets them know that you appreciate what they have done. so my bottom line is you can operate as a lobbyist effectively within the rules, the benefit of yourself and your clients, you sleep very well. anybody have any questions? yes. >> for me it has made me think twice of any regulations about moving into lobbying because they also have an interest in possibly serving in the government and public service in the future so do you think these new regulations about the two-year period before moving in the government will remain in effect and if so what are your suggestions on how to approach that if you have an interest in government? >> i think that so long as the obama administration is empowering from my point of view i hope it is for eight years, these rules will not change. the people who recommend the president they be enforced may all be gone, but there is no way to back away from those rules. >> let me ask -- are their designated positions in which the lobbying or even --. >> while the words talk about certain places if you have been a registered lobbyist you can't go, it is blanket. so if you are lobbying, he lobbied the health department you can't work in the war department. with one exception as we know that the deputy secretary was a lobbyist. so that is something you are going, in this next six years you will essentially be giving up if you become a registered lobbyist. whether you remain with the next president will be up to the next president. i don't see this kind of regulation. i suspect we are going to have more regulation of lobbyist but i would be surprised if it is this kind of regulation and what we will get is more, if you worked a particular area, that you can't work in that area for some period of time. unless you work in an area that is totally different. >> there is a waiver to, right? >> yes, the seven waivers. the government had 600 political appointees i believe. about 600 had to be confirmed. you would be surprised the number of people who have gone and not inappropriately, especially people in big corporate organizations where they just threw in -- everybody and as lobbyist and never lobbied and went back and prove that they had never lobbied so those lobby rules have changed and so they can be eligible to go into government. >> do you think it is possible there will be restrictions on campaign lobbyists? >> the truth is i have never thought about that. i don't think so. because if that were the rules, then nobody that ever worked in your campaign could ever come into your government and that is pretty much a common path. nobody seems to think it is wrong that you supported someone and aren't otherwise disqualified. >> one thing the reasoning is that allows them to be -- on lobbying is media advertising or grassroots person working the same campaign is the lobbyist, literally but you can come in. you know the rationale behind this? >> i think the rationale was purely that the federally registered lobbyist with a definable class of people. there was no if's comments or buts about it. you don't have to define somebody or describe their activity or look at their activity. were you registered? you are disqualified. >> so you think that definition would include a grassroots person our media person? >> i think it is something like the aba task force were to actually be implemented the huge numbers of these folks would be "implicated." yes. >> would you like to see that happen? [inaudible] >> yes, i would. all i ever want is a level playing field. put in any rule you want as long as everybody is playing by the same rules. >> i think the backend rules made eminent sense that if you are in government involving or being able to explore your experiences to your own advantage i think there is real reason to have a cooling off period map or. my concern and i'm glad to have that -- i think that is in the public interest i believe. what i don't get is why not more broadly -- because there are many positions within the government that have nothing to do with lobbying but where you have no restriction on the day after you leave, then you can materially benefit from the experiences you just had. i think that should be more broadly applied and not let anybody cash on on what is going on so i would encourage them to go further. >> if they actually get this report turned into a piece of legislation, to see how many lobbyist, registered lobbyist i could recruit to be pro bono lobbyist on behalf of this legislation and i bet it would be in the thousands. [inaudible] >> you have got to stop basically. you have got to stop so a couple of people in a literally have not made a single contact on the hill for two years because one of, one of kind of the sub rules is that once you have registered there are certain limitations on how quickly you can get out of what you have to do in order to not be registered so i don't want to suggest there are lots and lots of people but there have been goodly numbers of people and you can tell who they are by the level of their activity and trying to get into government. you say, how could you possibly think you could get in? they say well, haven't registered. i haven't lobbied and i haven't registered. what do you do? well, i build coalitions. and by the way i'm not suggesting for one second that those people are in fact violating the rules, and if i were 60 instead of 71, i would probably think about doing the same thing. finding a way to go into government because all of us, especially once you become what i will call economically secure, government is great. it is a great thing to do. and quite frankly, far more people that end up in the lobbying business have their government experience first and their lobbying experience second so the question you raised more often than not it happens with a few people that have been around for quite some period of time but more often -- when you think about the number of people coming off the hill and a limited number of firms there are, the number of interesting jobs, you know it is a relatively narrow pool. >> they are doing the work because they are not in government anymore. >> i mean there are 2000 staff people in the house who lose their jobs at midnight on january 4. >> they are not all going to be lobbyist. >> that is for sure. [applause] .. [applause] >> thank you. thank you, everybody, for coming. i hope you can all hear us. i know some of you can't see us, but rest assured, we are here. i'm going to say a little bit more about tom. he's from the heartland. i'm from the coast. he was born in cincinnati, went to st. xavier high school in cincinnati. like me, did some time in the carter administration, and he's not just a lawyer in private practice. his firm, founded by leon due pray who's a great legendary reformer, political figure, labor lawyer in chicago who died last year at the age of 101, he was tom's mentor. now that firm, now that firm is called dupre, schwartz and bay began, and tom is its leader. and rahm emanuel, if he gets to be mayor of chicago, he'd better with look over his shoulder, because tom may be coming after him. but most of us know him as a writer, and a wonderful, wonderful writer he is. back when i was editor of "the new republic," the high point of my month or year was when a new tom geoghexan piece came in. his books should be read for pleasure as well as enlightenment. there's a character in them very much like tom who tells the story. that character's a little more hapless than the real tom, i think. and this one, were you born on the wrong continent, it turns out to be extremely timely. because back when, back when, during the cold war when communism was the enemy and the social democracies of continental europe were mostly members of nato and our allies, the american right tended to overlook their her sighs. -- heresies. they didn't stress the fact that these were european socialists. but once communism collapsed and went away, thanks in large part to the efforts of social democrats in europe among others, now the new enemy here in our politics is socialism. even democratic socialism. social democracy. you see the signs of the tea party that say, there's a sign that says, it has pictures of hitler, lenin and obama. hitler, national socialism, lenin, marxist socialism, obama, democratic socialism. if only. [laughter] so, tom, why is european socialism a menace to america? >> rick, i think european socialism is the way out of our problems. and i wrote this book in despair was i thought at -- because i thought at the time social democracy was about to vanish from the earth, that the u.s. model was supreme. larry summers was going to da southeast to pump it up, and so a lot of this book is starting out in the 1990s and trying to explain why i thought this was the fair system and, in the long run, the only kind of system that would work. with the germans were good at doing all sorts of virtuous things. this had to look in the long run. it turns out that this book is a little prescient. our model turns out to not be very responsible, and there seem to be two models in the world. one is authoritarian capitalism in china and stakeholder capitalism -- call it european socialism or whatever you will -- in europe. our version doesn't work. and i wrote this book because i feel that in a world where we're facing this choice now between an authoritarian capitalism a la china and some other parts of east aiz cra and democratic capitalism or stakeholder capitalism, this is the system. we've got a lot to learn from the germans, so that's why i wrote this book. kind of. >> yeah. but aren't they going down the tubes over there? isn't everything falling apart? i mean, they never do any work. [laughter] >> yes. well, the great thing about germany which i, you know, i have a couple of basic facts that i use to explain this interest of mine in germany of all places, the most boring part of europe. they're tied for number one or they have been number one in export sales abroad since 2003, tied even with china. only 82 million people. and while chinese and americans work until they drop and americans get less and less out of it, you know, the germans have seven weeks off, all this vacation. it's like they're doing it with one hand tied behind their back. so we have to figure out how to do it without working so darn hard. and that's what i, is the other reason that i think this german model is so fascinating. how can they do it without working harder? >> well, yeah, that's my question. [laughter] >> we do work harder. and it, we don't get anything out of it. it's, it's not working harder, obviously, it's working smarter, and that sounds like some sort of ad agency thing, but i think what is important is that the u.s. has failed to adopt the basic, the two basic things that the germans do really well. number one is human capital over there has some control over financial capital. by that i mean they've got workers on the board who don't dictate the decisions. i'm interested in germany as a union side labor lawyer. and i'm interested in it because going over the whole planet earth, i say this country has the most worker control of any economy in the world. now, that's very little relatively, but it's way ahead of anybody else. and that fact has helped influence the way capital gets developed. and it also hurt germany for a long time because people didn't want to invest in germany because they didn't like co-determination, they didn't like workers on the board, they didn't like dealing with works councils. the second thing that they do smarter than us is they've got a center left and even a center-right party. think in terms of mercantilism. that the country should not be in debt, that the country should sell more than -- or at least be able to earn its own way in the world, and that it does matter whether you're exporting in some or sort of effective way. in the u.s. we have republicans and democrats that seem not to care about that. so the combination of this worker control and a leadership class that really is concerned that the country pay its way in the world, i think, make all the difference. those are two of the things that really -- >> so why did you pick on germany? wasn't sweden good enough for you? whether yeah. well, the problem with sweden and denmark is they're kind of city-states. and even germany's this big ramshackle kind of place, and it's 82 million people, and it's big. the other thing about germany that really interested me, rick, was as a writer -- and i use that term loosely, i really feel that i'm a lawyer just a writer occasionally -- as a writer germany's such a great subject. here it is wig, it's the biggest exporter in the world, in some ways the most successful, it's got this wonderful democratic stakeholder capitalism, and nobody writes about it. they write about sweden or denmark or scandinavia where the worker control isn't as great, and everybody else wants to write about france if they have any interest in europe at all. even tony's books which are wonderful are really about french social democracy. germany is just boring. nobody cares about it, nobody's interested in it, and as ronald ray began said -- and it's one of the two things that he said that i really agreed with -- you know, pick out an area where you don't have any competition. for a writer writing about germany, in america at least, you have no competition. the field is clear. [laughter] so that's the reason i picked it >> well,house german social democracy so different from french, and what are the, what are tony jug's arguments? how do they compare to yours? >> well, tony judd's book is wonderful, and you should buy it before you buy mine, "were you born on the wrong continent," and besides, he's tony judd. this is more like die depressions into my travels and so forth. but he's defending, if you read what he's writing, he's much more interested in defending state ownership than public own errship. -- ownership. and the germans have less of that partly pause after world war ii, the british and french and americans decided they didn't want a strong germany. and germany was never unified to begin with. you know, the popes have always battled, so they don't have a strong central government. what has been interesting about their version of social democracy and so important for us is that they figure out a way to empower people. that's the real dividend. it's not just this chicken in every pot, but it's the opportunity to stir the pot, to put people into, quote, office. whether it be works councils or co-determine boards. i had these visions which i tried to describe in the book about being on many town tapetop, you know, where they bring in people and train them. these are just ordinary people, like people in this room. you know, the unions swoop you up on this mountaintop, and you go through this seminar. it's like the kennedy school for new people in congress, how to exercise your power. these are just ordinary, working germans who have been wrought into the political process -- brought into the political process and told, you're responsible for other people. you are a political leader. you've got power. and they keep, you know, flushing people in and out of this so that at any given time in this country, there are all these people who have run for office, actually, and held it and made decisions about when people are going to go home to work, who gets fired and who doesn't. it's so important in a welfare state to give people a sense that they're responsible for it. >> you know, oscar wilde said the trouble with socialism was too many meetings. [laughter] and it sounds, it sounds like this is awfully, an awfully demanding system for workers. when people run for works councils, do they run -- how do they do it? do they run on party lines? do they campaign? can they be reelected? do they have term limits? >> there are term limits, and a lot of people do it all the time. but i, you know, a lot of people go in the and out and do it for a little while. one of the interesting things i found was the people in management, you know, people who were like me, you know, they'd gone to universities and some of the times they were lawyers. one of my best friends in germany is a lawyer. and just casually mentioned that once, you know, when he was in his 0s, he was on a works council. he ran, he got elected, now he's in management. he still has his union card. you know, it's, it's a lot better than a union summer, you know? which is what our equivalent is here in the united states. what i liked about it and what i think is so wonderful about it is that here in this country it's unthinkable that you would have a high school graduate on the corporate board of a major global corporation. and there it happens i don't want to say -- it happens a lot, you know? these in terms of the supervisor ri boards. my favorite example which i give in the book is this nascent global bank that was just starting up, and i asked a young banker about co-determination, how it worked. he said, well, elle finish i'll tell you how it works, the guy who waters the plants, he's on the corporate board. the other thing i think about is they can't hold the meetings in english which is the global language because this guy only speaks german, so everybody has to go at the pace of the gardener on the corporate board. i just think that's wonderful. it's very democratic. >> so they actually have to -- that'd be a hard crowd to explain derivatives to then, wouldn't it? >> yeah, i suppose it would be. i think it's probably somebody who might have a very good intuitive sense of who's going to make a good boss and who isn't. >> well, it would be an advantage to have somebody there who was saying, i don't know what you're talking about, can you make that a little clearer. you mentioned that, like you, i was in the carter administration. i knew nothing about the energy, and i was in the energy department. i was the most valuable person there because i would say questions like, what is natural gas? and people would walk out of the meeting and say, that was such a profound question. you got right to the root of it. [laughter] >> then, is it going to survive? do you think -- what is the trend line for the german model? is it heading down? is it heading up? is it heading sideways? >> i think it's heading up. at the moment, you know, of course, it's an enormously painful and stressful for the germans to be optimistic -- [laughter] you know, i quoted this fellow at the end, gunther who was in the labor of ministry saying that co-determination is their biggest export. when i got into this, what interested me was i describe being in the laundromat and reading this new york times story about the social charter provision. that provision said that corporations operating have to consult workers about basic decisions affecting the firm, and, of course, john major was against it, and kohl was battling for it. why? well, because it would make a huge difference for the fate of the german model if they couldn't impose this model on the rest of europe. that is, because all the capital would go to the anglo american side where they can, you know, run wild and do whatever they want. i thought that the reason concern -- and i still think -- the reason germany got into trouble in the early 1990s and this decade is that investment didn't go there. it went to new york, london, to the casino sort of activities of our respective models. and germany was relatively starved of outside investment because those shareholders and capitalists did not like co-determination. they didn't like that thing. the financial times, the economists editorialized against it, they disliked it, and they were interested in bringing it down. and that's kind of why germany got into trouble. but now it's kind of proved its worth, and the balance is shifting. i don't know whether it's going to survive or not, but i hope it does. >> well, how broad is the political consensus for it? is there -- what do the various parties think, and is the ftc which is part of the governing coalition, are they, are they kind of a tea party thing? are they completely against co-determination in the german model? >> you know, my brother was saying the fdp, he said, you know, you think they're so right right wing, but compare today what the united states is, even they are on the left. you know, they're no friends of co-determination, and there are plenty of people in germany at the time i was writing it -- remember, germans felt they were falling behind britain and the u.s., and they weren't getting the money, and they were becoming -- it wasn't the u.s. getting ahead, it was the u.k. getting ahead that just riled them. there were plenty of people calling for a change in that. but, you know, one of the great things about agenda 2010 and whether it was right or wrong, and this is what an spd person said to me. the great thing about the cutbacks in the pensions and scaling back of the welfare state in germany that the greens put into place is that it shut everybody up, you know? and it kind of removed this clamor for changing the german model in some way. and his point was, well, you know, we kept co-determination, we kept the system during a period when it was really in peril from the right. yes, we scaled back, but we did it to save things. the system is in place, and it's stronger than ever. i just think it's going to be, i think the european model and the german model in particular even though everybody is ready to write it off at any moment as they have ever since i got out of college in 1971, europe is collapsing, europe is collapsing, europe is collapsing. i think at least for the next few years it's in pretty good shape, you know, as a system. so -- >> now, what's the relation -- you, like me, are on is accessed with -- obsessed with process and political structure and the impact that it has and where, you know, we're comrades in the struggle against the filibuster. >> yes, we could talk about that -- >> and even getting rid of the senate. >> yes. and that too. >> and i'm surprised that there isn't more in this book, actually, about how the german political structure, the relationship between this economic model, this industrial model that they have and the political model that they have. >> well, there's a little bit about it in the there. you know, i've written about the constitution of the united states so much in the last two books and the senate, i'm depleted on the subject. as, you know, and i've made this point in other things that i've written as you know. but it's in this book too. the post-1945 constitutions that were adopted in europe really reflected the new deal. and they put into their constitutions what the new deal could not put into the constitution because it was too hard to amend the constitution here. right to employment, right to health care, right to education. all of these things that ought to be in the -- including right to privacy -- ought to be in this our constitution but aren't. they have that, and it keeps the system from going off the rails so that there's, you know, you can talk about scaling back the welfare state, but there's a constitutional limit on scaling back the welfare state because people have constitutional rights as social citizens. that's really important. the other thing that's important is that they have, you know, one person, one vote. and i don't want to go into all my tirades about the american system and the senate and the way it blocks any kind of majoritarian change, but you get majoritarian change. now, why is majoritarian change so important? you know, americans here and many people on the left politically are against it because they say the tea party will get in, and they'll take away gay marriage and all of this. that's a concern. [laughter] but it's, it shouldn't be the major concern because, you know, what the europeans miss is that the changes that the left puts in when the left gets into power, when it has majority, are irreversible. so if you bring back the right to unionize, you're just going to flip the character of the cub in a way that's a better safeguard than having somebody in the senate and have people more and more ail yep mated from the political system. the way that you provide -- and i believe in the bill of rights. i'm a good liberal. i'm a lawyer in court, the first amendment is extremely important. we ought to have more rights in the constitution. but the ultimate protection of the liberty of the people and progressive values is majority rule. to get these moments in, when you have a real socialist government or a new deal government in power that makes these irreversible changes like extending social security, extending medicare, i mean, if we went to single payer in this country, we'd never go back. if we brought in a right to organize, it would change the united states forever. you know, extending the tax cuts for the rich, you know, i don't want p to extend the tax cuts for the rich. but if it happened, if right got into power and it happened, that's reversible. that's why we should have majority rule, and that's what the europeans have in one form or another, plus they have proportional representation which has its bad side because it gives power to a neo-nazi group in sweden which now has reached the 5% limit, and that's very disturbing. on the other hand, you get some real voices on the left, like in germany which i don't favor, i'm not a links person be, but i'm kind of glad it's there to give a hard time. i'm glad that the green party is there to give a different take on the kind of germany they want to have. >> well, britain has majority rule, too, of a sort. >> but no pr. >> no pr. and, of course, they can have minority governments that have majority power. but isn't, isn't accountability as much a factor here as majority rule? in other words, a government can enact it program and then it can be judged on that program. it can be, the people can get rid of the government where we don't seem to be able to get rid of the government, possibly because we have too many of them. i mean, they have unitary government. >> well, i'm for the federal system, and i'm for bicameral legislatures. i just believe there has to be one person, one vote. i do believe in a kind of check and balance. i think it's a good thing that the united states has. i believe in courts. i don't want majorities to run wild in the street. >> how do those social rights get enforced in the german system? are there -- is there a court that hands down decisions that then the elected plan. -- >> oh, yes. very activist court. i mean, in some ways more activist than here in the united states in that, you know, they look at laws. for example, is this law going to hurt the family or help the family? you know, they have to look at that under the constitution. and, you know, is education free or not free? well, that's a case that goes to court. and there are all sorts of constitutional checks on the system, and i think these constitutional checks, the social rights are very important. i didn't write about this that much, but i refer to it vaguely. and, you know, rick, i could have written another 400 pages in this book. [laughter] and be -- i think we made the right decision to keep it the length that it was. >> i was actually able to read it. >> yeah. but it's tempting to write another 300 words because there's so many fascinating aspects of this. but one of the things that is part of the constitution that is not formally part of the constitution but it's really important is this labor model. you know, i mean, the fact that people are -- there is the formal constitution, and then there's this extended constitution. and i am really more interested in this book, in the extended one. you know, the works councils, the co-determined boards because i really think that the accountability of parties to the electorate, as important as that is, it's not as important as pulling people in and making them responsible for the decisions themselves. and learning in some ways the trade-offs. you know, one of the things that is bad about the american system is that because none of us have any kind of power, we end up being very irresponsible in the way we talk about it. and we say irresponsible things. it, one of the interesting things about germany is they have plenty of irresponsible germans there and people who say all sorts of crazy things, but so often you're pulled into the system. at least compared to america. and, again, i'm focusing on the labor side. and you do have to make decisions, and these aren't just people who are in the elite. i mean, it's -- one wonderful thing about this, you know, in the united states we have 27% of our adult population has bachelor's degrees of one kind or another. that means that, you know, 33% -- pardon me, 73% of the population is just walking around either with no high school degree at all, or just a high school degree. you aren't aware of their presence here. i'll tell you, you're aware of the presence of high school graduates in german culture. you're just aware of it. partly because of the labor structure, and partly because the unions were so important in bringing people in and getting them to act rationally and actually make trade-offs, something the sbd is really so good at doing. that's just absent here. >> now, what's the downside to all this? who loses in this system? >> um, it -- the people who have lost in this system are the growing number of high school grads who are cut out of it, who don't have really decent jobs. for the time being, and i think this is going to change, you know, it's very male-dominated for cultural reasons. but i think the germans more and more are trying to do what the french are doing in terms of child care and family and, you know, at the end of the day, you know, in which country -- france, united states or germany -- is it possible for a woman to rise to the highest position in the land? well, the answer is germany. i think, i think that's a temporary thing that is changing very, very rapidly. but what is more disturbing are the people who are out of what they call the system, you know, who don't have these high-skilled jobs. and so the question is, well, what to do about that. and there's an easy answer. and the answer is to do what we do which is just have more environmental waste, more fraud and cheating and be everything else that drives up our gdp. and especially, i mean, you look around new york city, you can see the answer to the german problems which is security people. we have more crime here. this and that and the other thing. for the germans really to get, pull these people into the system and eliminate unemployment and so forth, it's to have more servants. and i don't know that an egalitarian social democracy can survive if it's creating more and more jobs where people are serving other people in a kind of personal serving capacity. and that's something i tried to get into a little bit in the book too. it may be a good thing that they have a little unemployment. >> they've got a long way to go before they catch up with us, and that's true. >> yeah. >> i want to turn to you out there. and, please, if you've got a question, i guess -- i don't know how we handle the microphone problem. is there a microphone? please, just identify yourself and make your question or comment. >> and we're happy to talk about the u.s. senate at great length up here, rick and i if anybody -- [laughter] >> before you ask that question, maybe -- i don't know if you know the answer to this one, tom. but the german constitution, essentially the german political constitution, formal constitution, wasn't it kind of written under american auspices? >> well, the germans, some germans deny it, but, you know, all these constitutions were heavily influenced by the u.n. charter for human rights which was an eleanor roosevelt/franklin roosevelt project. and they were heavily influenced by the war aims of the allies because the allies were the occupying powers. what were the war aims? they were the four freedoms. what are the four freedoms? it's the new deal, you know, it's the goal new deal. you know, the great thing about germany, it's a project in some respects. and i understand the way in which, you know, the sbd is the oldest political party in the world. what's the difference between the democratic party and the sbd? you walk in the, and the sbd headquarters are in berlin, and you see a picture of karl marx. you don't see a picture of karl marx at the democratic headquarters. so they've got their own traditions, but the allies and u.n. charter for human rights and the american idealism, and it was america that was the social democracy when europe was fascist. we were athens when they were sparta. you know, that's -- the imprint of the united states is on the german model. that's why it's so -- >> those europeans should be kinder to their dear old american granddad then. >> yeah. >> in your comments you mentioned a couple of your ideas that you included in your ten commandments in the nation about labor and the left and what we should be doing. one of them had to do with unions. and for the u.s. you included a civil rights approach including the right not to join. >> yes. >> and a lot of your friends are appalled by this notion, and i wonder if you can tell them how that works in this germany. >> well, you don't have to be a union member in germany. it's all volunteer. and one of the great things about -- >> you mean it's open shopsome. >> yeah, it's open shop. and a group onperson turned and said to me, is that what you're proposing here in the united states? yes. that's what sweden has, germany has, france has, it works for them, and i think it ought to be tried here. there are two problems with -- well, there's a problem with lay labor in america. and my friend steve holmes has a friend, albert hirschmann, who's made this point. either you've got to give people a voice in running the organization, or you've got to give them the exit so that the organization has to, you know, pid for their loyalty -- bid for their loyalty all the time. as a union side lawyer, i love labor. i'm trying to do everything possible to bring it back. but there's no real voice. it's not democratic. and there's no exit. you can't get out of it. you know, once you're in it, you're in it. you have to pay dues in most situations or the equivalent of dues whether you like it or not, and that's why putting in a union is such a un-american act, because people are in there, they can never get out. my proposal is relate 'em out. if they don't want to have to pay, don't make them pay. because if unions really want to hold on to this money, they're going to do whatever they can to bind people to that organization including giving them power. i mean, you know, the german unions, i think, are much more accommodating to works councils not only because they work, but because it's a great way of binding people to the labor movement. giving them power so that people feel they have to go to labor, and they want to go to labor, and labor's always thinking up new marketing schemes which is wonderful. you know, we don't talk about international global justice enough, so we could get a lot of union memberships that way. it's, i think it's, i think it's wonderful that -- >> wouldn't that have to be part of kind of a grand bargain where it'd be legal to organize the union? by which i mean it wouldn't be a corporation just following it fiduciary responsibility to blatantly disobey the law and then pay whatever piddling fine ten years later that involved. >> right. well, that's why i wanted more than that which is i wanted to give people the right to join a union the way you have -- and be free from discharge or discrimination the way you're free from discharge or discrimination based on race or sex or gender or handicap or anything else. and allow employers to opt out of that liability if they enter collective bargaining agreements with unions where people are free to pay the dues or not pay the dues. i think you've got -- we live in a very individualistic country, and europe has a much more individualistic labor operation than we do. it makes no sense. the collectivist model here which was fine in 1933 when, you know, when -- when there really was a left in this country and even -- [inaudible] that era is gone. so i think we have to have something much more individualistic in this very, very individualistic age. but i think it could work. >> anyway, we've got to try something. >> [inaudible] when we do things, could it be the outlook of the corporations that take the long-term approach and they're not thinking about getting to the next quarter, each quarter is to maximize the profit and then, you know, quit with the -- you know, resign from the company with the higher stock options and, you know, pay as little taxes as possible? i mean, is the german outlook, because the german outlook is in the long term and then as you said invest in human capital and that's why there's no rust belt in germany as there is here? >> yeah. and i should say that, you know, rick mentioned that i was from the midwest. the midwest, as a mid westerner, i'm especially fascinated by germany because it's not just that we're the rust belt out there, but we're the part of america that ought to be selling abroad, and we're not. and so what is it about the german corporation that makes it attractive? i'm not sure that it's -- you know, i used to belief the long-term thing -- believe the long-term thing, and i still think there's a lot to that, and it's probably a cultural thing as much as thing else. i mean, we're america, we believe in the fast buck. but the bigger problem right now is not that our executives think in the short term, it's that they loot the companies, and they aren't accountable to anybody, and they are constantly, you know, at war with their own work force. i think that's a bigger problem. and so many corporations that i've seen in my career as a union lawyer, so many corporations shut down in chicago, they move away from the $26 an hour jobs down to the south. it's not globalization, it's the nationalization of the economy that's killing us. they get the people for $8 an hour. things are fine for about two or three years. the products are crap. they don't sell abroad anymore, and the companies go belly up. and nobody cares because at this point they've made gazillions off it, and they've put the money into derivatives, and they're now into banking instead of manufacturing. that's the dynamic in the united states. it's not, it's not just long term versus short-term outlook. but i think there's a lot to what you said. >> we don't have any -- in china they have engineers on the to lit bureau or we have -- there seems to be not as many friends, for instance, why the bell system works so well, the telephone, oh, because we have telephone men and women on the board whereas it's, again, it's not people knowing exactly -- people not manging things, people that are running the companies don't know -- they're more into making deals and, as you mentioned, derivatives. the whole financial casino economy. >> well, again, it's accountability. like rick said at the beginning, you know, there's either the authoritarian capitalist model, you know, where if you screw up as a ceo, the chinese government takes you out and shoots you. [laughter] there's -- we aren't going to do that here. i mean, there was a bigging op-ed in the times today. it's hard to imagine. barack obama's going to take people out and shoot them? i don't think so. [laughter] there's our shareholder model which has no shareholders anymore because these people are all dispersed, they're all in mutual funds. i mean, dodd-frank has put in some things where you can nominate an outside directer, but it's not going to make the ceos accountable. >> [inaudible] >> say that again? i'm sorry, i couldn't hear you. >> siemens, i understand, made an agreement with the -- >> yeah. >> -- not to outsource all the work. >> for which they were heavily -- >> this was only a few days ago. >> for which they were heavily criticized in the financial times. there are all sorts of escape clauses in that agreement. but, heck, they entered it. it's a responsible thing, and it does change people's outlook at the top. you know, well, we will try to keep jobs for people. >> she's next. >> hi. i was interested in talking about the political structure and really, to me, like, the elephant in the room is campaign finance reform in a way. i'm just curious if we're going to change anything in terms of this authoritarian capitalism. for me it seems like another authoritarian capitalism model in america. what -- how is it -- i'm just kind of curious how does that translate in germany? like, i was curious, like, how is there an issue in terms of, like, donations and how much industry controls the government. >> i have to punt on that because i'm not familiar with the campaign finance laws in germany. and, or the amount of money that's in the system. i do know this much, it's one of the many aspects of germany i didn't cover in this book. and i covered quite a few. i do know this much, they have a career politician class. so it's not like the united states where although there are occasional errant exceptions, this guy was the defense minister -- i've forgotten his name -- who's got a ton of money. but the politicians, a, don't make a lot of money, and they're in it for life, you know? so you never stop being a politician. you've gone to the opposition, you sit somewhere. and it's quite different from the u.s. and it's not as, you know, wide open in terms of campaign finance. but i -- up until citizen united came down, i would have said that campaign finance is not really the significant issue in the united states. the real significant issue, as we saw during the obama administration, is that we don't have majority rule. you can't get things through the senate. you can't have a social democracy because it's so easy to veto anything that comes close to that in the united states, and it started with the senate enslavery, and it went up to jim crow and right into the anti-union american model we've got today. it's all of the piece. i mean, you can go back to 1789 and 1787 and fast forward up to the present. we need to change the constitution. >> i'd be interested in hearing what you have to say about the german education system and how school students at a very young age are separated into college-bound or trade-bound and how this can end up being a fairly racist approach to education. in, well, i lived in germany for a long time, and i tutored minority students from turkey or syria, morocco, and it seemed as if they were just completely programmed to head into very low-paying jobs. and there was nothing that they or their families could do at any point in their lives to change that. >> well, you know, i mean, there's three tracking systems. so there's, one is into the universities. the other is into the vocational schools, and the third is other. you know? and the real problem is who gets into other. >> [inaudible] at what age that's decided? >> well, it's not -- those aren't permanent decisions. there is some back and forth. well, i can only tell you what people told me. you know, it's, it's -- you may have a different experience of it. but the tracking in the united states is, you know, also rigorous. i'm representing right now the chicago teachers' union in the chicago public schools. you want to talk about tracking system? come on out to chicago. i'll show you a tracking system. and it's far more brutal than what the germans have. but there are people who go the other way, you know? and i was, i mean, maybe this is just sort of urban legend in germany, but i was told by many germans about cases where -- and i was mentioning my good friend. his sister was an example of someone who leaves the university track and goes into the vocational/educational track. i mean, you can end up as landscape architect, jeweler, all sorts of things that we have for college graduates. so the other thing about the tracking system, and if you are a college graduate, you end up in a college job whereas in the united states, you know, you go to college, you end up in $60,000 in debt, and you get a job as a nurse or a cop which is not regarded as a college job exactly over there. i think that the thing about the german education system is not so much that the tracking is worse than it is over here although i, you know, i think it is rigged up for the benefit of the middle class and the upper middle class and the professional classes, but is that any different from anywhere else in europe or the united states? what's different about germany and really, really interesting is how little education there is. i mean, you know, i started to think about 27% college graduates, what is it in germany? 15%. 15. and, you know, the associate degrees, they really have underinvested in education. it's very bad. they probably spent too much money bailing out the e.u. and east germany. they haven't put enough into their schools, and it's a terrible, terrible thing. but what is interesting about it is that they are the, you know, by god, they are the most competitive, you know, high-wage, developed country in the world today. i mean, they're -- here's barack obama, you know, getting out there saying how are we going to be competitive in the world, it's education, education, education. well, let's look at the model of the country that's the most competitive. whatever the secret of the german success is, it ain't education because they're not doing it on the scale they are or should. that tells you something about the role of education in making a country competitive in the world economy, and it tells you something about the democratic party whose only strategy for raising people up and becoming more competitive is education. look at germany. that is -- there are all sorts of reasons to push education. i'm all in favor of it. i don't want anyone to think i'm against this or getting high school training or so forth. but shoveling more and more people into college and piling up debts on them, you know, it's not going to make us, get us out of debt as a debtor country. >> i'm sorry. but i would like to add, though, that i didn't see the turkish students ending up taking part in any of, in any meaningful part in society. >> well, i, you know, that's -- it's an anecdotal sort of thing. you know, i asked if you walk around a city like berlin where i spent a lot of time, you probably see more entrepreneurs that are turkish than german, i mean, people running small shops of one kind or another. and i describe a march on may day, and i thought the german one was going to be all white, you know? and it's really -- i hope this isn't me. how awful. i thought i turned it off. this is like what happens in court. [laughter] i describe that quite a bit in the book. and, again, it's berlin. it's not west germany. but i could have been back in south chicago. i mean, there weren't african-americans, but the range of skin color of the people who were working, and, you know, i hate to say it about south chicago or berlin, but the number of people whose shirts were tucked out and, you know, just, you know, going off to have a beer, it was so much like the steel workers that i knew back in the '70s and '80s that i just burst out laughing. and, you know, again, i'd say it's more true about berlin than other places, but there are -- at the end of the day, there are two things that really strike me about the immigration system. and you could, you know, talk about how difficult it is, and it is difficult. but, number one, there are probably more foreign-born persons in germany than in the united states living there and, second, what really, i think, is fascinating is the e.u. labor mobility. i mean, if we had people coming in from other countries the way they did, i mean, i just think the -- sorry, i can't seem to turn this off. if we had people coming in from other countries the way the germans and other europeans did, you know, there'd be enormous social tensions here in this country. i just think unthinkable. i mean, they're serious in italy. they don't seem to be nearly as serious in germany as in others places. but one of the reasons i picked germany is because as an american i didn't want to deal a lot with race and immigration problems. i think of all the places in europe -- france, the netherlands, italy -- things in germany are least difficult and stressful. and the final thing i'd cite is this poll that the financial times did. it was in the financial times last week. they did surveys of countries, america, germany, france, england, you know, and the question was -- [laughter] i don't -- i just can't get it off. now it's off. the percentage of people who say immigrants have made things worse, highest in britain. i forget where the other countries fall. united states somewhere in the middle of the pack, and germany's below the united states. not much below, but it's below. so, you know, there are plenty of people in germany who think they've made things worse, but, you know, relative to the united states and certainly relative to britain it's not, it's not the worst country. >> we have time for one or two more questions. >> i understand your book is the result of research over the last 20 years, yes? >> since 1997. >> are yes. but in those 20 years much has changed in the world. we have big countries' economies in the asia. for the future, which model will have a better chance to survive or even hold up against china, india -- the american or the german model? >> which model is going to survive? well, i've sort of given my opinion. i think that -- i don't know the answer to that, but i don't, i think that the united states has reached a point where the shareholder model that we have which isn't really a shareholder model anymore, it doesn't work. something has to replace it. now, we may come up with something new on our own. but between the alternatives of an authoritarian model and a stakeholder model, i think it makes more sense to go to a stakeholder model. so i think the european model has a lot to teach us. i mean, look at our problems right now. we can't, you know, we're in a recovery, and we have more unemployment than ever. we have companies that have money stashed away, and they aren't hiring workers. they downsized, and they're keeping downsized. we have alternatives like siemens which has just made this guarantee that workers aren't going to lose their jobs. i mean, you know, a democratic society ought to be opting for a corporate model that reflects the values of the democratic society in some way. so i just think if alternative in the end, if corporate model here is broken and can't be fixed and if alternatives are east asia or central europe, you know, china or germany, how can we not be pushing for the german model? now, you may -- the other thing about the german model that i think is really important and that i haven't talked about and didn't talk about enough in the book, if i could go back and write this book again, i would make a much, much bigger point about this. is the whole notion of consumption, you know, germans don't consume enough, etc., etc. and the importance of not consuming, you know, in the years ahead, of developing an economy that isn't going to waste and pillage the earth because we are going to hit limits. the interest in germany about not just the stakeholder form of capitalism, but in being green. you know, the germans haven't solved these problems. they have injustice, growing poverty, inequality, all of that. but the level of the debate about things like environmental constraint, corporate accountability are just way ahead of where we are in the united states. and while they have all sorts of , you know, they, they're roiling too with all the problems of globalization. at least the quality of the debate there is a lot better. so i believe that the answer to your question is that in some way that i can't put my finger on but i just believe out of more kind of human optimism than anything else, that co-determination in some form or another will become an export even across the atlantic. >> then that, that -- we have to rethink or we have to reeducate the political thinking here. we're from idealistic concept to a more social orientation. is that what i understand? >> well, you'll never change individualism in america. i mean, we're always going to be individualistic. but, yes. and i think the democratic party has to change. and the two things they have to do is realize how important it is to stop telling their base which is largely high school graduate that they have no future just because they're high school graduates and figure out some way to give them a future and to adopt the kind of responsibility that the political class has in germany for making sure that the country isn't running a huge deficit. i'm talking about a trade deficit, not a budget deficit. to be a little more her can sillist and a little less blase about whatever happens. so those are -- >> and strike down the filibuster. >> and strike down the filibuster. >> thank you. >> question? >> one more? >> it strikes me that what you're talking about in the german model is more cultural and, you know, values-centered than any other political considerations or anything like that. that's just what's coming through in what you're saying. and the other thing i want to ask is i thought germany was having a big problem because their population doesn't spend money? was that not a problem? >> yes, that is, that's regarded as a problem here in the united states. >> seems to me to be tied up in the whole model that you're -- >> it is tied up with the whole model, yes. so your question is, your question i understand it is the corporate model is really based on all these cultural things -- >> it seems. that's what i'm -- >> i wrote the book for just the opposite reason. it doesn't seem to me to be based on cultural reasons. i think that the laws change the culture and that, you know, germany's a great example of that. so, for example, look at communism in east germany. here they took depression character and, you know, tore it to bits. everything we guard as, you know, west germans look upon east germans now as just a bunch of slackers, you know, don't want to work and this and that. and these were the prussians who used to terrify them. so it's -- i really think that the whole point of what i was writing about, you know, americans coming in after world war ii and putting in our system to a largely-fascist culture and putting workers on the board and putting in the all these new deal values changed the culture there tremendously. and the fact that we lost unions and that these new deal laws were eviscerated changed the culture here tremendously. so, sure, it's cultural, but you can change the culture with the set of laws that you put in. and as to their not consuming enough, i think that's one of the fascinating things about germany, that they're so prosperous without this excess consumption which drives everything in the united states. and we can't keep chewing up the countryside and engaging in the kind of waste and fraud and environmental pillage that we have as a way of propping up gdp. there must be ot

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