Darrell Issa's Team Includes Industry Insiders

WASHINGTON -- First as ranking minority member and now as chairman of one of the most powerful committees in Congress, San Diego Republican Darrell Issa has built a team that includes staff members with close connections to industries that could benefit from his investigations.

Issa took control of the House Committee on Oversight and Government Reform last month, and asked companies, nonprofits and industry associations for guidance on federal regulations. The committee, which includes 23 Republicans and 17 Democrats, has broad powers to investigate government and industry, and to issue subpoenas.

Issa's staff already has released findings sympathetic to industries bent on softening or eliminating certain government regulations. A preliminary report this month, for example, focused largely on Environmental Protection Agency standards and relied heavily on input from industry associations. Other standards the committee is targeting include new regulations on workplace safety and the financial services industry.

And some on Issa's staff know this territory from the inside.

Several have ties to billionaire brothers David and Charles Koch, who have made much of their fortune in oil and chemical businesses and have established a reputation as staunch small-government conservatives. Their influence through campaign contributions, lobbying and nonprofit groups--such as Americans for Prosperity, an activist organization with connections to the Tea Party movement--has become more pronounced since the shift in power in the House last November.

A Republican staff counsel for the oversight committee is the son of a lobbyist pushing for regulatory changes on behalf of big corporations. At least four other staffers once lobbied Congress for companies and industry associations. Another counsel worked for the Alliance of Automobile Manufacturers, which Issa recently asked for input on government regulations.

Gary Bass, a regulatory expert who has monitored government transparency and spending for nearly three decades as founder of the nonprofit, OMB Watch, said it's business-as-usual to see Congressional committees staffed with people close to entities they monitor -- no matter which political party is in charge.

But Bass said that Issa has gone a step further by actively soliciting input from the business community, making the connection of his staff to those same business all the more troubling.

"What you're going to see are regulations that are tilted in favor of those interests," he said.

Frederick Hill, spokesman for Issa and the oversight committee, declined to answer questions about the staff's connections to lobbyists, business interests, the Koch companies, foundation or nonprofits.

"I only have a short comment for you on this subject," Hill wrote in an e-mail. "The Committee makes all hiring decisions based on the ability of individuals to help the committee do its job."

Issa declined to be interviewed for this article, as did representatives of Koch Industries, the conglomerate that the Koch brothers control.

Dave Levinthal, spokesman for the Center for Responsive Politics, a nonpartisan nonprofit that analyzes campaign finance and lobbying data, said that Issa's oversight committee needs to operate openly and to publicly disclose any potential conflicts.

"If there is even a whiff of conflict of interest, it's important for them to be transparent and upfront about any interests that the committee or its staffers might have," he said.

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In mid-January, the Watchdog Institute, an independent nonprofit reporting center based at San Diego State University, obtained a list from majority spokesman Hill of 62 Republican committee employees in order to examine their work experience in light of Issa's ambitious investigative agenda.

The Institute also sought a list of Democratic staffers and contacted minority spokeswoman Jenny Rosenberg 11 times to obtain it. She only released the name of Staff Director David Rapallo.

The Committee on House Administration, which oversees the day-to-day operations of the House, released a list on Feb. 22 of all committee staff as of January, including more than 50 with the minority.

The Institute applied the same research standards to majority and minority staff members. Because the Democrats, however, haven't outlined an agenda akin to Issa's - aside from Friday's announcement to examine possible fraud in the mortgage industry - there wasn't a similar benchmark for the Institute to use to assess the backgrounds and corporate connections of the minority's staff.

Many among the minority are longtime Hill staffers. Some worked for government agencies, nonprofits or law firms. Others are former lobbyists with connections to labor, energy and the petroleum and chemical industries.

On the Republican side, more than three-quarters of the staffers have been hired since Issa took over as ranking member of the committee at the beginning of 2009. In most cases, the Institute did not identify connections to companies or industries with a stake in oversight investigations.

Among those that do have connections, some have ties to the Kochs.

One person completed a Koch Associate Program with the Charles G. Koch Charitable Foundationand coordinated a regulatory studies program at the Mercatus Center. The center, a think tank heavily funded by Koch and co-founded by Richard Fink, the executive vice president of Koch Industries, has a long history of advocating against government regulations.

Another staffer, Daniel Epstein, was at the Koch foundation and worked "together with Koch Industries Inc.'s assistant general counsel" before joining the committee as Republican counsel, according to a statement attributed to him in The Hill ((/)), a trade publication that covers Congress. Epstein did not respond to interview requests.

At least three more oversight staffers also have ties to the Mercatus Center, which counts twoKoch Industries executives on its board of directors, including Charles Koch, the chairman and chief executive of Koch Industries.

Catherine Behan, spokeswoman for Mercatus, defended its independence, saying that its research is not guided or influenced by any outside business interests.

"We don't do directed research," she said. "No one comes to us and says 'we want to do a study on X.'"

In the past three years, Koch companies reported spending about $40.5 million lobbying on behalf of energy and manufacturing interests. The companies lobbied significantly on Environmental Protection Agency regulations--which oversight committee staffers scrutinized in a recent report and were the focus of many industry responses to Issa's solicitations for guidance on regulations.

Koch Industries does not appear among the more than 150 letters Issa sent to businesses soliciting their input about onerous government regulations. But Koch Industries has lobbied against some of the same laws that many businesses said they objected to when they responded to Issa's solicitation.

A lobbyist named Barney Skladany Jr. -- whose son, Jonathan Skladany, is Republican counsel on Issa's oversight team -- also lobbied Congress on environmental regulations that industries identified as onerous in their responses to Issa's request. Among Skladany Jr.'s clients: Dow Chemical, Mortgage Insurance Companies of America and Volkswagen. Jonathan Skladany declined to comment, and his father did not respond to an interview request.

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Because of the oversight staff's connections to Koch Industries, the Watchdog Institute also examined Koch's campaign contributions to members of the oversight committee. Koch Industries has given more than $130,000 to sitting committee members since 2000, mostly to Republicans.

Current Republican committee members received at least $72,750 from Koch Industries in the last election. Most are freshman, who received at least $42,750.

Koch Industries began contributing to Issa's campaigns in 2008 and has given him at least $12,500.

Levinthal, of the Center for Responsive Politics, said the Koch brothers "have a portfolio filled with ways to influence the government."

"The committee at the end of the day may be more reflective of the interests that the company and its executives espouse," he said.

The oversight committee has made headlines consistently since Issa took charge, holding several hearings and issuing its first subpoena almost two weeks ago. (2-16-11) It also released responses from industries on its website.

In a Feb. 9 report, oversight staff explained that the committee is "uniquely positioned" to examine "barriers that stand in the way of job growth and economic recovery," saying the point is to "get Americans back to work."

The report recommended "additional scrutiny" of certain regulations, including EPA standards. The industry associations that provided the staff with input included at least two that count Koch companies as members.

Last year, as ranking minority member of the oversight committee, Issa was one of many committee members to cosponsor legislation -- lobbied on by Koch Industries -- opposing a decision from the EPA that would greatly expand the agency's authority to regulate air pollution.

Other interests also intersect on the oversight committee.

For example, an oversight committee counsel, Kristina Moore worked in the same office as Shane Karr, an auto alliance executive whom oversight staff interviewed for its report.

Moore did not respond to an interview request. A spokesman for the auto alliance said Karr declined to be interviewed.

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In February 2009, after Issa became the ranking Republican, he approved a trip to a Mercatus-funded retreat for his committee staff director, Larry Brady.

On his disclosure form, Brady, who did not respond to an interview request, cited the purpose of the trip: "Provide in-depth briefings on issues of relevance to oversight investigations."

That same month, the oversight committee brought on two alumni of the Mercatus Center as staffers -- including Moore, who returned to the committee after a brief stint at the Alliance of Automobile Manufacturers. The committee later hired at least two more Mercatus alumni.

Based at George Mason University in Virginia, Mercatus' activities overlap with the commercial and ideological interests of Charles Koch.

Mercatus received at least $7.6 million from the Charles G. Koch Charitable Foundation between 2006 and 2008, according to the most recent tax filings available online. The foundation did not return phone calls.

Mercatus' research policy states that "Mercatus financial supporters have absolutely no influence or control" over its work, and Behan said the Koch executives on the board have no influence either.

Still, Issa asked the Mercatus Center for regulatory advice in his recent solicitation blitz. In response, Mercatus outlined ways government regulations can hurt the economy.

Between Feb. 9 and Feb. 17, four Mercatus scholars testified at oversight committee and subcommittee hearings, including Veronique de Rugy, who was scheduled to speak at an exclusive Koch Industries conference in Aspen in June.
Koch Industries hosted another exclusive conference last month in Palm Springs--a semi annual event to discuss "strategies for combating the multitude of public policies that threaten to destroy America as we know it." 
Two Mercatus scholars, as well as FOX News' Glenn Beck and the Wall Street Journal's Stephen Moore, were on the agenda of speakers at the Aspen conference.

Tyler Grimm, a new oversight committee staffer, contributed to Beck's book "Arguing With Idiots," and was a research assistant for Moore, an economic columnist.

Grimm did not respond to interview requests. Beck's spokesman said he was not available for an interview.

Moore said Grimm was "a good economist" and a good fit for the oversight committee's staff. Moore also said he thought highly of Mercatus' work.

"I think they've got some of the best economists in the country and that they're fair and balanced," he said.