The Blue Dogs: Best Friends of Big Business

[Updates below – Ed.]

As the Obama administration attempts to overhaul the nation’s health care, energy, and financial sectors, it faces the growing leverage of the Blue Dog Coalition—the conservative, fifty-two-member faction of the House’s Democratic caucus—to moderate, or obstruct, its goals.

The Center for Public Integrity (CPI) recently published an investigation into the Blue Dogs and the money behind their rising power (emphasis added):

So far this year, the Blue Dog Political Action Committee is on track to shatter all its fundraising records; in fact, the total for the first six months of 2009 — more than $1.1 million — is greater than what was raised in the entire 2003-04 fundraising cycle. Furthermore, according to analysis by the Center for Public Integrity of CQ MoneyLine data, the energy, financial services, and health care industries have accounted for nearly 54 percent of the Blue Dog PAC’s 2009 receipts (up from 45 percent in 2004). . . .

In the 2008 cycle, their PAC received $508,800 from the health care sector (up 90 percent from 2005-2006 cycle), $451,500 from the financial services sector (up 371 percent from the previous cycle), and $238,300 from the energy sector (up 48 percent). In just the first half of 2009, the PAC all told took in $1,058,750 in contributions from political action committees. Health care PACs have already kicked in $297,500 to the Blue Dog PAC; energy PACs, $162,500; and financial services PACs, $134,500.

Democratic fundraising is up across the board, but there’s a reason why the Blue Dogs have been especially successful at pulling checks from the health, financial, and energy sectors: to stymie the building wave of reforms that big business doesn’t like and to protect or increase its federal subsidies and legal advantages.

Consider, for example, how the Blue Dogs fought for ethanol, the global-warming boondoggle that enriches the corn interests and
. . . (wait for it) . . . Goldman Sachs:

Sometimes the Blue Dog influence creeps into public view. This was the case as the House considered the climate change bill earlier this summer. Blue Dog [Collin] Peterson of Minnesota and some of his agriculture-sector supporters were not happy with the initial draft. As chairman of the Agriculture Committee, Peterson was particularly concerned about how the Environmental Protection Agency was going about regulation of renewable fuels such as ethanol. Peterson announced that he and his bloc of allies — including every Democrat on his committee — would vote against the bill unless the draft was altered to include protections for the industry. The leadership complied.

While the Blue Dogs took no official position on this bill, two facts are worth noting: first, 18 of the 28 Democrats on Peterson’s Agriculture Committee are Blue Dogs and, second, the Blue Dog PAC had — for the first time ever — received $4,500 in PAC contributions from the nation’s second-largest ethanol producer, Archer Daniels Midland (ADM), in the 2008 cycle. The Renewable Fuels Association, a trade association in which ADM is a key member, cheered Peterson’s efforts and backed the underlying bill. Colin O’Neil of the Center for Food Safety, which opposed the changes, said Peterson “was integral in formulating language in the bill and pulling the Blue Dogs and the ag community in.” Peterson and six other Blue Dogs from the Agriculture Committee voted for the bill when it reached the floor. The bill passed the House, 219-212; their votes were the margin of victory.

And while it may seem that this was a victory for the ethanol industry, it was also a victory for many in the financial services community. Goldman Sachs, for instance, has significant investments in advanced ethanol development. The firm was another new donor to the Blue Dog PAC in 2008 with $10,000, and also has been lobbying the climate bill.

There is one problematic aspect to CPI’s otherwise insightful article. The authors quote Billy Tauzin, former U.S. Representative, Blue Dog co-founder, and current president and CEO of the Pharmaceutical Research and Manufactures of America (PhRMA):

[The Blue Dogs have] helped foster much-needed bipartisanship and middle ground. … Above all else, they have consistently provided a moderating voice on Capitol Hill.

They don’t, however, mention the circumstances under which PhRMA hired Tauzin on January 3, 2005—the very day he left Congress—at a reported $2.5 million a year:

Two months earlier, Tauzin had played a key role in shepherding the Medicare Prescription Drug Bill through Congress, which had been criticized by opponents for being too generous to the pharmaceutical industry.

This link was explored at great length in an April 1, 2007 interview by Steve Kroft of 60 Minutes. The report, Under the Influence, pitted Rep. Walter B. Jones (R-N.C.) and Rep. Dan Burton against Tauzin and accused him of using unethical tactics to push a bill that “the pharmaceutical lobbyists wrote”. Their claim is supported by CSPAN video, the fact that it was the longest roll call in the history of the House of Representatives, and the 3 a.m. voting time. Along with Tauzin, many of the other individuals who worked on the bill are now lobbyists for the pharmaceutical industry.

UPDATE: Rep. Maxine Waters (D – Calif.) points out that it was Rahm Emanuel, Obama’s chief of staff, who recruited many of the Blue Dog Democrats during his tenure as head of the Democratic Congressional Campaign Committee.

UPDATE 2: The Washington Post followed up on CPI’s report today with a detailed look at the Blue Dogs and their role in the health-care debate.

The article notes that the Blue Dogs receive 25 percent more in contributions from the health-care and insurance sectors, and $63,000 more from the health-care sector than other Democrats, “putting them closer to Republicans in attracting industry support.”

The piece frames the issue around Rep. Mike Ross (D – Ark.), a favored guest at events funded by the health-care industry:

Rep. Mike Ross of Arkansas made clear that he and a group of other conservative Democrats known as the Blue Dogs were increasingly unhappy with the direction that health-care legislation was taking in the House.

“The committees’ draft falls short,” the former pharmacy owner said in a statement that day, citing, among other things, provisions that major health-care companies also strongly oppose.

Five days later, Ross was the guest of honor at a special “health-care industry reception,” one of at least seven fundraisers for the Arkansas lawmaker held by health-care companies or their lobbyists this year, according to publicly available invitations.

As the health-care reform debate continues into the fall, don’t forget that many of the Blue Dogs represent small states whose health-care markets are dominated by local monopolies. For example, Blue Cross Blue Shield controls 75 percent of Mike Ross’s Arkansas, where health-care premiums rose 66 percent between 2000 and 2007.

By David V. Johnson on July 29, 2009