Tuesday, February 21, 2023

Railing against the rail lobby

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By Caitlin Oprysko

Presented by

bp

With Sam Sutton and Daniel Lippman 

POLICYMAKERS CALL OUT RAIL INDUSTRY LOBBYING: Transportation Secretary Pete Buttigieg lashed the rail industry over the weekend for its “vigorous resistance” in Washington to increased safety measures that have come under the spotlight following the Feb. 3 derailment of a Norfolk Southern train carrying hazardous chemicals in eastern Ohio.

In a letter to Norfolk Southern CEO Alan Shaw on Sunday, Buttigieg teased a series of new regulations that the department plans to issue and warned the industry that “the future must not resemble the past” when it comes to lobbying to water down various rail safety proposals in recent years.

— “Rather than support these efforts to improve rail safety, Norfolk Southern and other rail companies spent millions of dollars in the courts and lobbying members of Congress to oppose common-sense safety regulations, stopping some entirely and reducing the scope of others,” Buttigieg wrote, arguing that resulting legislation “undermined the ability of USDOT” to enforce new braking requirements ultimately withdrawn during the Trump administration.

— The same day as Buttigieg’s letter, Ohio Sen. Sherrod Brown lamented the influence of corporate lobbyists in general in an interview on CNN’s “State of the Union.” “Something’s wrong with Congress and administrations listening too much to corporate lobbyists,” the Democrat said, complaining that when policymakers “put all these regulations on the table about safety, about worker safety, community safety, the environment, consumer protections, and, at the behest of lobbyists, far too often, they weaken those laws.”

— This morning, DOT said it plans to issue new rules on train brakes “and is also calling for action from Congress and the firefight rail industry,” POLITICO’s Tanya Snyder reports. “DOT says it will pursue rulemaking on high-hazard flammable trains and electronically controlled pneumatic brakes.”

— The department also “called on Congress to increase maximum fines for rail safety violations from the current $225,455 cap, which the agency called ‘a rounding error’ for profitable companies” such as Norfolk Southern, whose “exceptionally profitable business” Buttigieg highlighted in the letter to Shaw and which has spent millions of dollars on lobbying and campaign contributions along with its trade associations.

— One of those trade groups, the Association of American Railroads, urged caution following DOT’s announcement. The group’s president and CEO Ian Jefferies warned that regulators’ response should be dictated by the outcome of a National Transportation Safety Board investigation into the derailment.

— In his letter to Shaw on Sunday, Buttigieg appeared to anticipate that response from industry. “While we do not yet know what the NTSB investigation will conclude regarding what caused the derailment in East Palestine,” he wrote, “we do know that these steps that Norfolk Southern and its peers lobbied against were intended to improve rail safety and to help keep Americans safe.”

Good afternoon and welcome to PI, and a thank you (and big congratulations!!) to Hailey Fuchs for filling in again on Friday. Send tips: coprysko@politico.com. And be sure to follow me on Twitter: @caitlinoprysko.

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NRA’S TOP LOBBYIST DEPARTS: Jason Ouimet, the head of the National Rifle Association’s lobbying arm and PAC, “told The Reload on Tuesday he is stepping down. Ouimet, who has run the NRA’s Institute for Legislative Action and the Political Victory Fund for nearly four years, said he is leaving to join a consulting firm,” Shumaker Advisors, per The Reload’s Stephen Gutowski.

— “Wayne LaPierre, NRA Executive Vice President, said Ouimet is leaving ‘to pursue other opportunities.’ He thanked Ouimet for his service to the NRA and said the group doesn’t have any news on his replacement. ‘We wish Jason all the best with his new endeavors, and know he will continue to be a strong advocate for the Second Amendment,’ LaPierre said in a statement published to social media shortly after The Reload broke the news.”

— “The resignation comes as the NRA faces mounting problems that threaten its future. The group has lost more than a million members since accusations of financial impropriety were leveled against LaPierre in 2019, which has led to a dramatic drop in revenue. The same accusations have entangled the group in a years-long legal struggle that could see LaPierre and other NRA leaders removed from their positions.”

— “Ouimet was promoted to head of ILA after Chris Cox, the group’s previous top lobbyist, was forced out during a leadership fight in the wake of the corruption allegations. The 2019 internal chaos saw the removal of Cox, then-president Oliver North, and longtime treasurer Woody Phillips among others.

— “The organization has shed nearly a dozen dissenting members from its 76-member board of directors and cut hundreds of employees since the fight began, but LaPierre has remained Executive Vice President. … Now it’s losing another key piece of its operation in Ouimet, who had been with the group for nearly 20 years.”

BINANCE ENTERS THE D.C. FRAY: The world’s largest crypto exchange would like Washington to know that it knows it’s in trouble, Sam writes in Morning Money. Market regulators across the globe have been circling Binance and its billionaire founder Changpeng “CZ” Zhao for years.

— The Justice Department is reportedly investigating possible violations of sanctions and money laundering rules. As federal agencies move to crack down on lightly regulated crypto markets, Binance — which is roughly five times larger than its nearest competitor by volume — is under pressure.

— Even some of the crypto industry’s biggest allies on the Hill are alarmed, and the barrage of damaging headlines and regulatory threats — along with lawmakers’ palpable anxiety over Binance’s market power, which was amplified by Zhao’s role in FTX’s collapse — has finally forced the company to elevate its lobbying presence in Washington.

— Binance recently inked its first external lobbying contracts with Hogan Lovells and Ice Miller Strategies — both previously represented Binance.US, a separate exchange owned by Zhao that serves U.S. traders — and also joined the Chamber of Digital Commerce, a crypto trade association that counts Fidelity Investments, State Street and Visa as members.

Patrick Hillmann, Binance’s chief strategy officer, told Sam the new strategy was an acknowledgement that it could no longer avoid direct engagement in crypto policy battles in Washington. He also conceded that doing so would require owning up to some major mistakes; including that it failed to fully verify the identity of its customers — a basic requirement for any financial company — during its first two years of operation. Hillmann and company spokespeople said those problems have been addressed.

— “These inquiries are obviously very serious, but the investigators have been very forward and collaborative. We’re willing to do what is necessary to build back trust in our platform and the industry more broadly,” he said.

JENNER & BLOCK ADDS ANOTHER JAN. 6 COMMITTEE STAFFER: White-shoe law firm Jenner & Block has added another alumni of the shuttered House Jan. 6 select committee. Heather Connelly, a former Adam Schiff aide who helped with the panel’s depositions and worked with members to draft their lines of questioning, will be a senior policy adviser in Jenner’s government controversies practice group and chief of staff to firm Chair Tom Perrelli.

— Connelly is the latest in a stream of former Jan. 6 staffers to land at major law and lobbying firms around town, which have been preparing clients for months for House Republicans’ ramped up oversight agenda and must now also contend with Senate Democrats’ newly obtained subpoena powers.

— Connelly is at least the fourth former Jan. 6 aide to land at Jenner & Block. Marcus Childress, an investigative counsel on the panel, joined the firm in November, and the committee’s special litigation counsel Michelle Kallen joined in August. Committee staff assistant DJ Williams joined the firm as a practice assistant at the end of last year, according to his LinkedIn.

— Jenner also recently hired Josh Hsu, a former counsel to Vice President Kamala Harris, and lured Emily Loeb back to co-chair the government controversies practice after serving as associate deputy attorney general in the Biden administration.

— “It was a pleasure to work with Connelly while serving the Committee and I’m thrilled that she has joined Jenner & Block,” Childress said in a statement, adding that Connelly’s “knowledge of the Hill and national policy environment will be an asset to clients as they navigate the quickly evolving legislative landscape at the federal and state level.”

IF YOU MISSED IT OVER THE LONG WEEKEND: “Months before Republicans took back the House last fall, high-profile MAGA activists were preparing a power move,” Grid’s Maggie Severns, Steve Reilly and Anna Deen report.

— The right-wing think tank Conservative Partnership Institute has dropped “tens of millions of dollars on a real-estate-buying spree to create ‘an expansive campus of buildings’ in the heart of the nation’s capital and to operate an exclusive, luxe retreat on Maryland’s Eastern Shore where right-wing activists and lawmakers can hunt wildlife, play tennis and devise ways to ‘save this country from the leftist onslaught.’”

— “Though former president Donald Trump’s own political future is in doubt, the Conservative Partnership Institute, whose leaders include ex-Trump chief of staff Mark Meadows, Trump elections lawyer Cleta Mitchell and former Tea Party senator Jim DeMint, is pursuing an aggressive expansion.”

— “The group appears to be quietly buying up properties, often in off-market transactions, Grid has found — apparently using a network of anonymous shell companies registered in Delaware to conduct the purchases.”

— “In all, Grid traced nine D.C. properties purchased in the past 14 months by seven LLCs sporting bland monikers like Clear Plains, Hudson and Newpoint. A CPI executive is listed on paperwork for the entities, and the locations of most of the property purchases correspond with CPI’s ‘Patriot’s Row’ plans. CPI bought Camp Rydin, which comprises 2,200 acres near Cambridge, Maryland, for over $7 million, apparently using the entity ‘Federal Investors, LLC,’ the purchaser listed on state property records.”

Jobs Report

— The International Republican Institute has named Patrick Quirk vice president for strategy, innovation, and impact. He was previously senior director for strategy, research and the Center for Global Impact.

Frank Russo has joined the CPAC Foundation as associate general counsel and director of the foundation’s Prosecutors and Law Enforcement Advisory Council. He was most recently director of government and legislative affairs at the National District Attorneys Association.

Patricia Gibson is now senior consultant at Guidehouse. She most recently was project director at Cogent Analytics and is a Trump SBA alum.

David Johnston is now a political vice president at Poolhouse, per Morning Score. He’s an NRCC alum.

Michael LaRosa is joining Facts First as a senior adviser. He’s a former press secretary for first lady Jill Biden.

Matt Jackson is now director of government affairs for the Global Business Alliance. He previously was chief of staff for former Rep. Carolyn Bourdeaux (D-Ga.).

Sydney Thomas Stubbs is now comms director for Americans for Prosperity. She previously was communications director for the Joint Economic Committee minority staff.

Dana Bailey is now chief operating officer at the Center for Law and Social Policy. She was previously senior director of finance at the National Association of Chronic Disease Directors.

New Joint Fundraisers

Alford Victory Committee (Rep. Mark Alford, NRCC)
MIKE FLOOD VICTORY FUND (Rep. Mike Flood, High Water PAC, NRCC)

New PACs

AMERICAN EXCEPTIONALISM PAC (Super PAC)
BLAC PAC (Super PAC)
Cryptocracy (PAC)
ITServe Alliance, Inc. PAC (ITServe PAC) (PAC)
Meatball (PAC)
New Order Pac (NOPAC) (Super PAC)
Olsson Inc PAC (PAC)

 

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New Lobbying Registrations

Association Of Immunization Managers: Association Of Immunization Managers
Holland & Knight LLP: Hms Associates (On Behalf Of The Exploratorium)
Holland & Knight LLP: Pallet Pbc
King & Spalding LLP: Preludedx
Lewis-Burke Associates, LLC: Photonis
Ml Strategies, LLC: Energizer Holdings, Inc.

New Lobbying Terminations

A10 Associates, LLC: Transtar Autobody Technologies, LLC
Balance Public Relations & Strategic Solutions Inc: City Of Corpus Christi
Frinzi & Associates: Hudson Clean Energy Partners
Holland & Knight LLP: Reforma Strategies LLC (On Behalf Of East-West Bank)
Morris J. Amitay, Pc: Victims Of Terrorism - East Africa
Mr. William P. Blair Iii: Musical Arts Assn/Cleveland Orchestra
Mr. William P. Blair Iii: Ohio Educational Television Stations(Oets)/Ohio Alliance Public Television(Oapt)
Subject Matter (Fka Elmendorf Ryan): Chamber Of Progress
Subject Matter (Fka Elmendorf Ryan): Grail
Subject Matter (Fka Elmendorf Ryan): Paradigm
Subject Matter (Fka Elmendorf Ryan): Softbank
Subject Matter (Fka Elmendorf Ryan): The Majority Group, On Behalf Of The Connected Commerce Council
The Edw Group: Tougaloo College
The Outlaw Group: American Tinnitus Association

 

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