Lobbyists are shaking their heads over an apparent ploy by the homebuilders’ lobby to freeze its political action committee (PAC) contributions to lawmakers until they come to the aid of the troubled housing sector.
The move, which the National Association of Home Builders (NAHB) announced last week, has prompted dismay on K Street, in part because it buttressed the popular image of lobbyists tying contributions to votes.
{mosads}“A lot of lawmakers are going to get uncomfortable at this point dealing with Build-PAC,” said Craig Holman, the campaign finance lobbyist for ethics watchdog Public Citizen.
Some lobbyists, perhaps concerned about the strong whiff of quid pro quo with which the NAHB’s action seemed to taint all of K Street, downplayed the effectiveness of the move.
“It’s not going to make a damn bit of difference,” said one senior business lobbyist, who said that the $10,000 limits on contributions to candidates’ campaigns were too low for such a threat to have any bite.
A spokesman for the National Association of Realtors, Mary Trupo, said her group had no opinion about the NAHB’s move except that “it’s not a tactic that we would take.” She added, “We continue to support members who have been supportive of the housing sector.”
“I’m embarrassed by what the homebuilders did,” said one lobbyist, who characterized the NAHB’s move as “inappropriate behavior.”
NAHB did not return a call seeking comment for this story.
The homebuilders had cause for disappointment with the economic stimulus package signed into law last week.
They had lobbied hard for a provision expanding firms’ ability to trim their tax bills by using recent losses to offset prior years’ profits. They also wanted a provision to lift caps on mortgage-revenue bonds issued by states and municipalities.
They got neither, after the two provisions had passed the Senate Finance Committee but were stripped from the final Senate bill. That prompted a tersely worded statement from the lobby’s president, Brian Catalde, that said all disbursements from NAHB’s Build-PAC, a top-10 PAC, would stop “until further notice.”
The move stunned many. “These kinds of threats are beyond the pale,” a spokesman for Majority Leader Harry Reid (D-Nev.), Jim Manley, said. Even Catalde, in his statement, called it an “extraordinary action.”
Holman argued that the group likely narrowly avoided triggering a probe by the Justice Department by not mentioning any particular legislation in its statement announcing the freeze of political donations. Instead, Catalde wrote, “Congress and the administration have not adequately addressed the underlying economic issues that would help to stabilize the housing sector and the economy going forward.”
Had the statement tied NAHB’s contributions to specific legislation, Holman said, that would have created the same basis for investigation that resulted in the jailing of disgraced lobbyist Jack Abramoff.
The tactic could backfire, some argued, if lawmakers grow reluctant to accept any NAHB donations in the future for fear of appearing as though they would be beholden to the lobby.
So far, however, lawmakers have not shunned the group. Within days of NAHB’s threat, Reid introduced legislation to help the housing sector. In addition to provisions aimed at helping troubled borrowers, the bill contains the two measures sought by the homebuilders.
“I’m a little surprised Reid offered that package so quickly, “ Holman said. “I would think they would be putting some distance between them and the homebuilders because of the aura of quid pro quo.”
Manley said Reid was in no way influenced by the housing group’s move when he introduced the housing bill. He pointed out that the tax provision sought by the NAHB, known as the NOL carry back, along with the revenue-bond measure, had both passed the Senate Finance Committee.
“Sen. Reid felt this was a sensible part of a stimulus bill for the housing sector,” he said.