Public Citizen Challenges New Republican Party Chief to Answer Questions Related to Potential Conflicts of Interest

July 24, 2003

Public Citizen Challenges New Republican Party Chief to Answer Questions Related to Potential Conflicts of Interest

Public Needs Reassurance That Corporate Clients of Former K Street Super-Lobbyist’s Firm Will Not Have Access to President, Congressional Leaders

WASHINGTON, D.C. – Ed Gillespie, newly appointed chairman of the Republican National Committee (RNC), should publicly disclose his full financial and professional relationships with his lobbying firm to avoid even the perception of a conflict of interest, Public Citizen said today. A letter to Gillespie from Public Citizen outlined a series of questions that he should answer to make certain there is a “clean break” between his new position and his firms’ partners and clients.

The lobbying firm that Gillespie co-founded in 2000, Quinn Gillespie & Associates, has grown into one of the capital’s most lucrative lobbying shops, in part because of Gillespie’s strong ties to the Bush administration. Since its founding by Gillespie and former Clinton White House counsel Jack Quinn in 2000, the firm has reported $27.4 million in lobbying-related income through 2002. Some of America’s largest companies are or have been clients of the firm.

Public Citizen’s letter to Gillespie noted that he has said he will not accept a salary from Quinn Gillespie, but he has failed to tell the public whether he will have any other financial arrangements. For instance, if Quinn Gillespie is a partnership, will he have the right to any profits either while serving as RNC chairman or on a deferred basis after his term is completed? If the firm is a corporation, what will he do with his shares and what percentage of the firm does he own? Will he have health insurance, pension and any other benefits paid for by the firm? If so, what are the costs per year for them? Is the firm going to change its name to remove his name?

The letter asked that Gillespie clarify his ongoing relationship with the firm. What contacts will he have with those who remain at the firm? What contacts will he have with the firm’s past, present and future clients? Has he given instruction to staff at the RNC to assure that his firm and its clients do not use his position as head of the RNC for their advantage?

The letter was signed by Joan Claybrook, president of Public Citizen, and Frank Clemente, director of Public Citizen’s Congress Watch. Among other things, the letter stated: “Your extraordinary new access to the President, to his closest political advisers, and to Republican leaders in Congress, as well as with rank-and-file members, make it possible for you to provide special treatment for clients of your firm. Therefore, to prevent even the appearance of a conflict of interest, we ask that you publicly disclose your full financial and professional relationships with the Quinn Gillespie firm.”

 

Last month, Public Citizen released an analysis of Quinn Gillespie’s efforts on behalf of a slew of corporate clients on legislation to undercut consumer rights and increase the power of big business. Drawn from federal disclosure forms, the analysis shows that:

  • Gillespie has worked to keep national energy policy in lockstep with the wishes of Enron and other energy giants. Quinn Gillespie earned $700,000 from Enron in 2001 alone to lobby the White House on the electricity crisis on the West Coast. The administration aggressively supported Enron’s position against re-regulating electricity markets. Gillespie also channeled money from DaimlerChrysler and Enron to his 21st Energy Project, which bought print and television ads in July 2001 to promote the administration’s energy plans, including blocking any increase in fuel-economy standards.
  • PricewaterhouseCoopers paid Quinn Gillespie $1.35 million from 2000 to 2002 to lobby against increased oversight of the accounting industry. PricewaterhouseCoopers – which was fined $5 million by the Securities and Exchange Commission in 2002 for repeated accounting irregularities, including improperly auditing millions in fees paid to its own consultants – tried to limit restrictions on consulting and other services that an accounting firm could offer its clients. Effectively, Quinn Gillespie was trying to water down accounting reforms in the wake of an unprecedented wave of corporate fraud.
  • The U.S. Chamber of Commerce paid Gillespie’s firm $860,000 from 2000 to 2002 to lobby for the so-called Class Action Fairness Act – legislation that would benefit corporations by moving lawsuits from state to federal courts, where it is more difficult to certify class actions and delays result from large case backlogs. All told, the firm has collected at least $1.12 million to lobby for this anti-consumer bill.
  • After helping set up the Commerce Department as part of the Bush transition team, Gillespie returned to his practice and immediately began lobbying on behalf of clients with business before the department. Gillespie helped secure tariffs against foreign competition for the “Stand Up for Steel” coalition and USEC Inc., the country’s largest supplier of enriched uranium fuel to nuclear power plants.
  • Tyson Foods paid Quinn Gillespie $440,000 in 2002, in part to downplay federal charges against Tyson for conspiring to smuggle illegal immigrants into the United States to work at its poultry processing plants for lower wages than it paid legal workers. The firm also lobbied on “wage and hour” issues for Tyson following a Labor Department lawsuit against Tyson seeking $300 million in back pay owed to workers.

Other clients of Quinn Gillespie include DirecTV, Microsoft, SBC Communications, Verizon and Viacom. Click here to view Public Citizen’s letter to Gillespie and report on the firm’s clients.

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