Dick Cheney- Corporate Criminal

Cheney aide now lobbyist on energy
By Susan Milligan and Maud S. Beelman, Globe Staff and Globe Correspondent | April 25, 2004

WASHINGTON -- The executive director of Vice President Dick Cheney's energy task force, whose closed-door meetings with industry executives enraged environmentalists and prompted a Supreme Court showdown this week, became an energy lobbyist just months after leaving the White House, records show.

Andrew Lundquist, a native Alaskan who worked on Capitol Hill for both his state's senators, shepherded the development of the administration's energy policy as executive director of the National Energy Policy Development Group, a Cabinet-level task force chosen by President Bush and headed by Cheney.

When the task force completed its work, Lundquist stayed on at the White House as Cheney's energy policy director, leading the vice president's effort to turn the task force's work into law.

Then, a day after leaving government service, he opened a consulting business. Nine months later, Lundquist was a registered lobbyist for companies that stood to benefit from the energy policy he helped craft, according to 2003 lobby disclosure records reviewed by the Globe.

Lundquist's corporate clients -- who paid him more than $300,000 in 2003 -- included:

Japan's Toshiba Corp., which is seeking to build a small, new-generation nuclear reactor in Alaska and would benefit from the administration's proposed extension of laws reducing corporate liability for injuries or death caused by nuclear accidents.

British Petroleum, which stands to benefit from a $16.3 billion Alaskan natural gas pipeline that was promised government loan guarantees worth $2 billion in the pending energy legislation.

Kennecott Energy Co., a coal-mining concern in Wyoming that would benefit from a plan to loosen proposed mercury pollution rules for coal-fired power plants.

Duke Energy Corp., which helped secure a provision inserted in the energy legislation repealing a Depression-era law banning public utilities from making speculative investments, a law intended to protect rate payers from costly bankruptcies.

Lobby records show Lundquist served as the energy task force executive director from Feb. 1, 2001, to Sept. 30, 2001, then stayed on as Cheney's director of energy policy from Oct. 1, 2001, to March 26, 2002 -- during which time he worked with Congress as it drafted the landmark energy legislation, the nation's first comprehensive energy policy in more than a decade.

The resulting bill stalled in Congress in late 2003 after a Democrat-led filibuster, but proponents have resubmitted it for further consideration this year.

Lundquist's behind-the-scenes role as policy coordinator, vice presidential aide, and ultimately as a lobbyist for energy companies highlights some of the concerns that have led consumer groups to seek the opening of the task force's records.

Environmental groups contend the task force met with companies seeking benefits under the bill but did not grant equal access to people challenging those positions.

Cheney has refused to release the records. When a federal judge agreed to allow some records to be reviewed in the discovery process, Cheney did not comply, pushing the case all the way to the US Supreme Court, which will hear it on Tuesday.

Meanwhile, another environmental group, the Natural Resources Defense Council, drew on the fact that Lundquist was paid by the Department of Energy to seek his task force records under the Freedom of Information Act, which covers the department. When a court ordered the records released, the administration again refused, putting Lundquist in the middle of the administration's battle over the secrecy of its energy dealings.

As both cases move through the court system, Lundquist's lobbying reports, reviewed by the Globe, provide one of the few windows into the process surrounding the making of energy policies that could affect the nation for decades to come.

Government ethics law prohibits a former senior government employee from lobbying his former department or agency for one year.

''The purpose of this one-year 'cooling-off' period is to allow for a period of adjustment to new roles for the former senior employee and the agency he served, and to diminish any appearance that government decisions might be affected by the improper use by an individual of his former senior position," explained a February 2000 memorandum by the Office of Government Ethics.

Lundquist's position qualified him as a ''senior" government employee, according to documents reviewed by the Globe, but the lobby reports do not make clear whether he contacted his most recent former offices -- the White House and the Energy Department -- within the one-year prohibition.

Lundquist registered as a lobbyist as of Jan. 1, 2003, nine months after leaving the White House. In the filings, he named both the Executive Office of the President and the Energy Department as targets of his lobbying, along with the Senate, House, and Environmental Protection Agency.

The disclosure forms cover lobbying activity over six-month periods. So it is not clear when exactly Lundquist lobbied the Executive Office of the President and the Energy Department between Jan. 1 and June 30, 2003. He would have violated the law only if he approached them during the first three months of that period.

Lundquist, 43, declined requests for an interview, and said in a statement, ''I wouldn't have considered lobbying the vice president or the Department of Energy within a year. It just didn't happen."

Cheney spokesman Kevin Kellems said he could not say when Lundquist lobbied the Executive Office of the President, adding, ''the EOP is a huge place."

By the time Lundquist left the White House, the negotiations over the 1,200-page energy bill had switched to another of his former work venues: Capitol Hill. As a former staffer to the chairmen of both the Appropriations Committee and the Energy and Natural Resources Committee, the panels most critical to shapers of energy policy, Lundquist was uniquely positioned to lobby Congress for specific provisions in the highly complex bill.

At that time, Republican senators and congressmen were working behind the scenes to craft a bill acceptable to GOP majorities in both houses, and to the administration. And rather than simply melding the House and Senate versions of the bill, as is the usual practice, the conference committee was adding provisions that had appeared in neither version of the bill, making access to the process even more crucial than usual.

Lundquist offered a bonanza to potential clients: he had been involved in crafting the overall policy in the White House, he knew how to write legislation, and he had longstanding contacts with the people who would be creating and voting on the final package.

But Lundquist's quickly shifting roles, combined with the secrecy of a process that environmental and public interest groups could not penetrate, leaves many government ethics specialists concerned.

''Certainly, it's not in the spirit of the law, and it certainly looks like a serious conflict of interest and a classic case of revolving door," James A. Thurber, director of American University's Center for Congressional and Presidential Studies, said of Lundquist's role. ''It has the perception that he's taking advantage of his public service for personal benefit and for the benefit of his clients. And, of course, that's what this law is about. It's about keeping people from taking advantage, immediately taking advantage of their public service, for private gain. That's what I mean by the spirit of the law."

The Lundquist Group is based in a posh office building perched kitty-corner from the Capitol. Other lobbyists are in the building, including Joe Allbaugh, a close friend of the president, with whom Lundquist shares an office suite.

''Since many of these tenants make regular trips to lobby their powerful neighbors across the street, we're proud to think of the 15 custom elevators that we fabricated for the building as the first stage in the journey towards the creation of new laws," the Gunderlin company, manufacturer of the building's elevator cabs, states on its website.

As of Jan. 1, 2003, according to the records, Lundquist was representing five energy-related companies. In addition to Toshiba and Duke Energy of Charlotte, N.C., they were Ion America Corp., a fuel cell technology company, and Real Energy Inc., a combined heat and power company, both based in California; and TXU Corp., an energy company headquartered in Dallas. Lundquist stopped representing Duke and Real Energy later in 2003, the records show.

Later that year, he picked up Kennecott, BP, and the state of Alaska.

Lundquist and his colleagues -- Kjersten Drager, who also worked on the White House energy task force, and Howard Useem, who worked with him on Capitol Hill -- lobbied primarily on the comprehensive energy bill. Drager and Useem declined to comment.

In all, The Lundquist Group reported receiving about $330,000 in lobbying income in 2003. The figures are rounded to the nearest $20,000 or listed as ''less than $10,000," so precise amounts are not available.

Lundquist was one of an army of lobbyists and could not claim sole credit for items that made their way into energy legislation or federal regulations, but his clients fared well, according to a Globe review of their legislative agendas.

The state of Alaska won a legislative battle to run a natural-gas pipeline from Prudhoe Bay in the north down to the Alaskan-Yukon border, and secured a commitment of federal loan guarantees worth $2 billion. The energy bill specifically prohibits running the pipeline west-east through Canada, a shorter route that investors say would also be cheaper.

For Duke Energy and Real Energy, Lundquist's reports state that he was lobbying on the Public Utilities Holding Company Act of 1935, a statute that restricts the kind of investments utilities can make. Power companies have been fighting for years to get the law repealed, and the energy package does just that.

But some consumer advocates insist the law is needed to avoid huge energy monopolies and to keep the flow of energy secure.

''The only thing between us and an oil, electric, and natural gas cartel is PUHCA," said Lynn Hargis, a former energy industry lawyer who now works for Public Citizen, a consumer group.

The industry contends the law, which also includes a host of other regulations and controls, actually damages the reliability of the energy supply by limiting investment.

''It's long been viewed as a fairly antiquated and unnecessary statute that has outlived its usefulness," said Peter Sheffield, a spokesman for Duke Energy.

Lundquist represented both TXU Corp. and Kennecott Energy on mercury emissions issues, according to the lobbying records. Both the administration's ''Clear Skies Initiative," which is languishing on Capitol Hill, and pending EPA regulations would weaken a negotiated agreement on the emission of mercury, a pollutant found to cause fetal damage and other health problems, and delay the compliance deadline for rules controlling mercury pollution.

Coal and power companies want the rules eased because of the cost of cleaning up sites that are saturated with mercury. In the highly competitive electricity market, an easing of the cleanup rules would boost the entire coal industry.

''As a coal company, the power plants are our business; that is 99.5 percent of our business. It was strategically very important to us," said Patricia Britton, a Kennecott vice president, in explaining the company's interest in power plant emission rules.

Ion America did not respond to Globe inquiries, but Lundquist's lobbying report lists renewable energy funding and fuel cell/hydrogen funding among topics on which he lobbied. The pending Senate energy bill would provide $2.1 billion to develop hydrogen fuel-powered cars.

Toshiba paid Lundquist $80,000 in 2003 to lobby on nuclear issues, as well as to ''promote advanced nuclear reactor approval & construction," his filings show.

Toshiba, a leader in Japan's nuclear power industry, hopes to build a small, new-technology reactor in Galena, Alaska, said Doug Rosinski, a Washington, D.C., attorney representing the Alaska town of 700.

While the reactor is not mentioned in the energy legislation, Toshiba would benefit from provisions in the bill to extend liability protection to new plants.

Further, Lundquist's extensive Alaska connections would be helpful to Toshiba in its efforts to gain support for its reactor, said staffers on Capitol Hill. Efforts to reach Toshiba in Tokyo and New York were unsuccessful.

Lundquist also lobbied for British Petroleum on the Alaska natural gas pipeline. BP, which is involved in oil production in Alaska, has natural gas sitting on top of its oil reserves that could be sold if it could be transported, said Anna Aurilio, legislative director for the Massachusetts Public Interest Research Group, or Masspirg.

Aurilio said she finds the revolving door between policy making and lobbying deeply unfair.

''The bottom line is he represented the interests of the White House, and now he's representing their interests outside the White House," she said.

Stuart Gilman, president of the Ethics Resource Center, a nonprofit research group, and a former senior official at the US Office of Government Ethics, said the Lundquist case raises concern about appearances, regardless of the legality.

''I think you always, as a public official, need to worry about the appearance," he said. ''Being insensitive to that ultimately leads to a great deal of cynicism on the part of citizens."

Marc Shechtman of the Globe staff contributed to this report.

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