The X-Ray

[Swamp Stories] 1. Cashing In

Episode Summary

How special interests in Washington overcame conservative opposition to pass the largest social welfare program in a generation. Guests: Former Heritage Foundation President & Sen. Jim DeMint (R-SC) Former Rep. Zach Wamp (R-TN-03) Meredith McGehee, Executive Director, Issue One

Episode Notes

In 2003, PhRMA and other special interests in Washington overcame conservative opposition in Congress — including then-Reps. Mike Pence (R-IN), Jim DeMint (R-SC), Jeff Flake (R-AZ), and others —  to pass the largest social welfare program in a generation, Medicare Part D (the prescription drug program). But what nobody knew at the time was one member of Congress in particular was cashing in and preparing to walk through the revolving door to work for the pharmaceutical industry.


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Episode Transcription

Weston Wamp: I'm Weston Wamp and this is Swamp Stories, brought to you by Issue One. 

We all share the same frustration, that our nation's Capitol, one of the most revered places in the world, the home of the greatest experiment in self-government has become referred to cynically as "the Swamp" by both Republicans and Democrats. So why is it that we have no confidence in the people who we elect and reelect to represent us?

This first episode is about a single night in Washington that cost my generation trillions. Because Big Pharma lobbyists wrote a bill and politicians from both parties thought they could turn it into a political victory. But none of this is a sob story because there are solutions and this country has overcome much bigger problems than Washington's current dysfunction. And I believe we can do it again. If you'll hear me out, I think you'll agree.

One of the things that unites us is that whether you're a Republican or a Democrat or you want nothing to do with either party, we all want the process to actually work for us. As a quick introduction, I grew up in East Tennessee and spent a lot of time in DC, as the son of an influential eight-term member of Congress. A couple of years after my father left office, I ran for Congress and I was one of the youngest candidates in the country. And what I didn't learn growing up around politics, I learned when I tried to take a congressman's job.

Male Reporter Voice: Editorials in today's Times and Free Press, take the representative to task for the ads. The latest was a campaign mailer that portrays his opponent, Weston Wamp, burning a passport.

Weston Wamp: If I hadn't seen it before, it was at that point that I saw the underbelly of Washington politics. Once we pulled even in the polls, the attacks like that didn't stop. And I'm still trying to figure out where they were going with the whole burning a U.S. passport thing. But I'll tell you this, by the time you're trying to explain to senior citizens in East Tennessee what Photoshop is, you're already losing.

And so having been immersed in politics as a kid and then seeing it from the outside as a young businessman, I've thought a lot about what it will take to get our broken political system working again. One of the consistent themes throughout this series that you'll catch onto pretty quick is that the good guys aren't red and the bad guys aren't blue, nor vice versa.

It's one of the most important lessons that you learned growing up around politics. In fact, I'd argue that the way the main political parties do business, has a lot in common.

Donald Trump: I will tell you that our system is broken. I give to many people before this. Before two months ago, I was a businessman. I give to everybody. When they call, I give and you know what? When I need something from them two years later, three years later, I call them. They are there for me. That's a broken system.

Bernie Sanders: Let's ask why it is we pay, by far, the highest prices in the world for prescription drugs, and your medicine can be doubled tomorrow and there's nothing that the government can do to stop it. You think it has anything to do with the huge amounts of campaign contributions and lobbying?

Weston Wamp: So what I'm going to try to do is tell stories that help shine a light on exactly what screwed up. And in my experience, as a kid going campaign stop to campaign stop to a candidate who came within a percentage point of unseating an incumbent member of Congress, I've learned over and over again that a lot of this does, in fact, come down to the money.

Today's story is about how nearly 20 years ago, the largest special interests in Washington overcame conservative opposition, including Mike Pence, Jeff Lake, and Jim DeMint, to put in place the largest social welfare program in a generation that you're still paying for. It's the real-world consequence of money buying influence in our nation's capital and sticking me and you with the bill.

So when we take a look at a really important issue like money and politics, let's not be naive. It's not like one party likes money and the other party doesn't. Both parties have the same problem, and that's a good thing because, in order to fix it, we're going to have to work together.

So let's get started. This is episode one, Cashing In.

Before we jump into the story, let's get something straight: money is a required part of politics. It takes a huge amount of money to run for office. And why is that? Well, unfortunately, campaigns a lot of times are just glorified popularity contests with big advertising budgets. So whoever's got the most money, buys the most TV ads, the most Facebook ads, can put the largest team on the ground to go and knock on doors, the most mail pieces in mailboxes.

You get the picture here. If you've got more money in your campaign, you're more likely to win. And once we've established that it takes a lot of money to communicate with hundreds of thousands of people in a congressional race or potentially tens of millions of people in a Senate race, then we can begin to take a closer look at why the flow of money in Washington is so problematic because now we're beginning to understand why so many different organizations, corporations, or even high net worth individuals are able to buy such influence with our elected officials.

The way I see it, there are really two elements of why money and politics matter so much. One is philosophical and the other one is more practical.

The first is this, the essence of 1776 was summarized in a few profound words: all men are created equal and endowed by their creator with certain unalienable rights. Those words represented the seismic shift that was underway. Our founders had set in motion a world in which everyone's voice matters, but today, the billions that are spent in our elections threaten that cornerstone of our Republic, and it feels more and more like ordinary people's voices are lost in all the money.

Now the second part of this is less philosophical, but it's just as important and it's very practical. When money buys any group, any individual, any corporation to the front of the line, and they get what they want or their voices heard more, or God forbid, they directly influence legislation, that's just not a good way to run a country. Remember, the people in Washington always try to tilt the tables in their direction. That's really what this whole story comes down to. So let's dive into it.

It's the story of the night of, or, or should I say, the early morning of November 22nd, 2003. An exposé in a DC newspaper recounting the harrowing political maneuvers of that night referred to it as "The Night the Clocks Stood Still". It was the night they expanded the prescription drug program, and some would say was the gateway to Washington's addiction to deficit spending. And admittedly, it's an outsized example of just how awry things can go in Washington when you've got politicians up for reelection, big money, trying to tilt the tables, politicians retiring, and in this case, a lot of really tired people in the wee hours of the morning just wanting to go to sleep.

So let me set the stage for you. As you'll remember, George W. Bush barely won the presidency. It all came down to Florida, hanging CHADS, and the Supreme court. But he still didn't win senior citizens in Florida. And so after 9/11 and historic high approval ratings, by 2003, the president was trying to figure out how to prepare for reelection, as was his entire political apparatus.

By 2003, both political parties had developed some consensus that Medicare should cover at least a portion of the cost of prescription drugs, not just hospital stays and doctor visits. Where there wasn't agreement is on how the cost should be contained. And part of the reason is you'll find in this story is because a few Republicans, at least in this window in history, had been lobbied pretty effectively and in all likelihood, had some nice promises for what was next in their career if they played along with Pharma.

As you can imagine, Karl Rove, the guy George W. Bush referred to as 'Boy Genius', the man with the plan. He saw an awesome opportunity here, especially if his Republican president could be seen by voters as leading Republicans to solve this problem and deliver prescription drugs for all seniors on Medicare.

It was a perfect plan until some real conservatives step forward and basically called the question as to what the motivations were here and what the long-term consequences would be. The leaders of this band of brothers who, basically said there's no way we're going to let this happen were some guys who are still pretty well known: Jeff Lake, our current Vice President, Mike Pence, and Senator Jim DeMint, who is quite a legend in conservative circles.

Jim DeMint: It really goes back to George Bush and Karl Rove. And Karl Rove was looking at the polls and said, "You've got to win seniors.” So you've got to do Medicare part D. You've got to win the soccer mom, so you've got to do "No Child Left Behind". It was just a poll-driven administration.

Weston Wamp: There was a chessboard being managed at the White House, and certainly some willing players in the Congress all the way up to leadership. How in the world did a vote this important with consequences that are this long term, they're basically permanent, how did it end up going down at three o'clock in the morning? Why not just wait until the next morning, the next week?

Zach Wamp: You know, Vince Lombardi once said, "Fatigue makes cowards of us all."

Weston Wamp: If that voice sounded like mine, but not exactly like mine, that's because that was my father, Zach Wamp, who was there for all of it and who was part of the small group of Republicans who insisted on voting no.

Zach Wamp: The way they went about it was just the worst I've ever seen. I still, it's surreal to think back on that moment because I can remember the pressure came. Normally a vote is 15 minutes with a two minute grace period, and if you want to vote a determined way, you should just vote as soon as the thing comes up, vote and get out of the way.

Weston Wamp: This isn't a social hour, it's a pressure session. If you're not done voting, then they assume your vote is up for grabs.

Jim DeMint: Because if they stayed on the floor, what happens? Weston, you have to just imagine this as if we're sitting in our chairs. As you're sitting in a chair, uh, you've, you've voted, you might be chatting with someone and all of a sudden four or five people come and stand so close to you, you can't stand up.

And they keep talking to you and the freshmen are particularly susceptible at the time, to earmarks. They'll come in and say, "What you need back home? What do you need DeMint? You need $5 million for a bridge? A new road?” They start throwing things, "What do you need? You need to be on a committee?"

Zach Wamp: “Are you really a Republican? Are you going to give the president his victory? Or you going to give our majority this victory? Are you going to, you know, sell out to the other side?”

Weston Wamp: So imagine the scene. A lot of the most respected members of Congress have left and gone to sleep.

Zach Wamp: They didn't bring the vote up to like three in the morning. Three in the morning and we'd been on the floor for all day all night, everybody's tired.

Jim DeMint: It was the longest I'd ever seen him hold a vote open, but they had promised President Bush they were going to pass this.

Weston Wamp: The White House thought that a second term might hang in the balance. Republican leadership would have a ton of egg on their face if, in this extraordinary moment, when they've gone to all these lengths, their plan was derailed by a bunch of hardcore conservatives who didn't think this was the way you should run a government.

And let's not miss at all just how big the bill was. This thing was a monster, 445 pages.

Zach Wamp: This wasn't just a run-of-the-mill benefit. This was the largest entitlement increase in a generation. It was a cash cow to the pharmaceutical industry, and it was very controversial heading into the final vote.

Weston Wamp: Medicare Part D, prescription drugs for Medicare, was a game-changer. Its political implications were enormous. The lobbying entity, Pharma, that had been working on this thing for months and months stood to gain in an extraordinary way. The promises that they had made, who knows how significant they were.

Republican leadership sent their staff canvassing the Hill, trying to find anybody they thought might change their vote. Offering God knows what, in order to make this thing a reality.

Zach Wamp:  What I didn't realize when I heard the doorbell ringing an hour and 45 minutes later, was it the whip team was coming to our house and trying to get me in another member who had voted no and went home. They were trying to get us to come change our vote. We did not answer the door. I just rolled over, put the pill on top of my head, went back to sleep.

Weston Wamp: All the while the house was still in session. The vote was open. The clock was at zero, but the Speaker and the Republicans refused to gavel it down and end the vote. Conveniently, the C-SPAN cameras were turned off. Nobody really understands why to this day. So the country was in the dark in more ways than one.

Dennis Hastert: On this vote, the Yay's are 220 and Nays are 215. The Conference work is agreed to.

Jim DeMint: Unfortunately, a few freshmen stayed on the floor and we heard the next morning that some of them had gotten some earmark money to change their votes and, um, now we have a government prescription plan.

Weston Wamp: Like all good stories, this one's got a villain. Or maybe a few, but one that stands alone and it's not Karl Rove, it's Billy Tauzin. To this point, I guess this story does reflect poorly on Republicans and not so much Democrats, but here's what's funny.

Billy Tauzin, who as far as this story is concerned, was the Chairman of the Energy and Commerce Committee, a Republican from Louisiana, got elected to Congress as a Democrat. That's right. The villain of this story is both a Democrat and a Republican.

President George W. Bush: Billy Tauzin of the House of Representatives did great work on this bill. [Applause]

Reporter: Just six weeks after that prescription drug bill was signed into law, Tauzin began discussions with the pharmaceutical industry to become its chief lobbyist in Washington.

Jim DeMint: That's called ‘cashin' in.’

Weston Wamp: Jim DeMint calls out the way the swamp works in a way that not a whole lot of high profile, former senators will.

Jim DeMint: Yeah, I think we've changed some of the ethics rules, like you have to wait longer now. Because people really were taking votes that were obviously designed for what they were going to do the next year when they left here, and there's a lot of staff. That's why we train staff and place staff up here who are just waiting to cash in.

They will guide their members to do this and that, endearing themselves from people Downtown. And they'll leave of $60,000 a year job and take a half a million dollar a year job.

Zach Wamp: What we found out later was that Billy Tauzin, was going to go to work for the pharmaceutical industry for a really healthy, hefty annual paycheck.

Weston Wamp: It's really no wonder that the Sunlight Foundation has referred to Tauzin as a 'poster boy for the mercenary culture in Washington'. Within just a few short months of accomplishing a job well done on behalf of his former political donors and the lobbyists who helped him write the Prescription Drugs for Medicare Bill, the former Republican and former Democrat Congressman announced he was retiring from Congress and would be taking a senior job at pharma with a sweet salary of $2 million a year.

Zach Wamp: Lobbying is the world's second-oldest profession, and everybody knows what the oldest is.

Weston Wamp: Even on a night where our country is entertaining a new entitlement program, you've got members of Congress motivated by money, their next job, the next election. All of these things, money in politics matters.

And one of the points that's lost here, at least to me as a young conservative, is that. It's impossible to govern a country to be good stewards of taxpayer dollars, in our case, to ever address federal deficits or push back on the debt if we're not aware of what the outside lobbying interests are doing and what they want, because let's be honest, 99% of everybody who lobbies the Hill once funding sustained, new funding, or funding increased

Jim DeMint: Everything in Washington pushes the wrong way. If you vote against any kind of spending, you're going to get grief from here, you're going to get grief from back home because every program has a constituency. The only way to be popular up here is to keep voting for spending.

Weston Wamp: That's just not going to work in the environment we're in. The stereotype is that liberals have more of a concern about money in politics because of their distrust of corporate institutions, and that's fine. But I think there's a different and equally important concern that conservatives should have about what lobbyists, what the pay to play system, what the transactional nature of Washington can mean as far as ever wrapping our arms around a runaway federal budget.

Zach Wamp: Again, this is a major part of the $22 trillion worth of debt we have today is this one bill, the one midnight raid, on your generation.

Weston Wamp: Without a discerning eye for who wants what, what they're willing to pay for it, what the cost is of that campaign contribution, given which legislation is moving through your committee or onto the house floor. If you're not paying attention to how these things are all interconnected, then it doesn't matter what your political persuasion is or, like I said earlier, what your personal set of priorities are, they aren't going to be addressed in a system that is this broken, that is this heavily influenced by money.

Jim DeMint: Well, you know, you're being taken for a ride and it's happening more and more, where the bills don't go through committee and have a lot of markup and you have weeks to look at it and offer amendments. What these bills do is they just kind of come out of the blue and they often call it a manager's amendment. You might have seen some version of it, but you don't really know what's in the bill.

No one knew what was in Obamacare, most of the major spending bills now, they just pop out of the toaster right at the end of the year. But like you said, it's normally senior staff and the lobbyists in a backroom writing a bill. Dodd-Frank was the same way. I mean, the, the people who caused the financial crisis wrote the doggone bill that bails them out even today and put community banks, a lot of them out of business.

Weston Wamp: Looking back, one of the most unbelievable parts of this bill, is that Republicans actually got convinced by the pharmaceutical industry to not allow the federal government to negotiate drug prices for Medicare. All told, we're coming up on about a trillion dollars of our national debt that can be directly attributed to that night.

Zach Wamp: Washington's out of control and their special interest are still run in the tables. And when people talk about draining the swamp, nothing has been done in 20 years to drain the swamp. In fact, the swamp is worse than it ever has been today.

Weston Wamp: And that's really what gives gravity to what a teachable moment this is for all of us, whether we're elected officials or just stakeholders with the interest in our government functioning properly, the consequences are real, and the impacts and the effects of money in politics are very real.

But I don't want you to be hopeless because like I promised, every story we tell doesn't lead to a dead end. There are plenty of solutions. We've got all the tools in our tool belt. And as it relates to the challenges that were pretty well demonstrated that November night in 2003, I turned to Meredith McGee, the executive director of Issue One, one of the top nonpartisan political reform groups in the country.

And a woman who I get to work with very closely to talk through what some of the realistic solutions are that will push back on Washington's transactional nature. The reality that we've described on this episode, that if you've got money, then you can buy quite a bit of influence. And if you play your cards right, you might even be able to write a bill for yourself.

Meredith McGehee: So if you go through and say, ‘where are the most egregious problems’, I would start with this role between lobbyists and their role in the campaign finance system is one of the things that you could do relatively easily. And it'd really begin to start taking away this transactional relationship. I had a member of Congress, a very conservative Republican member of Congress, tell me that when he first got to Congress, he was shocked that one day, he went into a committee meeting in which they were working on marking up a bill, and that evening he went to a fundraiser where all of the people that were going to be affected by that bill were ready to give him money.

He said, "I felt, I felt like it was dirty. I felt like I needed to take a shower because of the connection between what I was doing in committee and the money I was getting from these people. That night was just a pure conflict."

Weston Wamp: I spend a lot of time talking to young members of Congress and their chiefs of staff, and they'll tell you that nothing has changed. Lobbyists are still the easiest way to raise money. But they know that strings are often attached.

Meredith McGehee: Again, it doesn't mean lobbying is either bad, it's constitutionally protected. It means that you need to build some space in between the lobbying activity and the collecting of all this campaign money, not just what lobbyists give. That's kind of a drop in the bucket.

What they do is obviously they organize all their money from their clients; they bundle as well. So that's one of the rules. So that's a fixable thing and it's fixable within the constitutional jurisprudence that we currently have.

Jim DeMint: We're just looking for people now who are willing to come up here and realize we're on an unsustainable course. There is no comfortable way to change that course, and you're going to have to fight and deal with being unpopular if you want to save our country.

Zach Wamp: Of course something can be done. We fought through a lot more difficult challenges than the ones that we face today as a nation, but there has to be compromise and there has to be courage. Just simple limits on things can go a long way. Full transparency can go a long way. Higher expectations will help, but I think we can limit the amount of influence financially that these special interest have.

Meredith McGehee: Can it be fixed? That's a difficult question because again, I don't think the nature of democracy that it's ever fixed. Is it broken? Absolutely. Is it dysfunctional? Yes. Is the partisan warfare far over the edge of a healthy democracy? I think it is. Can it be fixed in the sense that can the American people kind of renew the compact so they have between the people and their government? It's essential because we'll lose it.

This is like you have to kind of get in there and be in the arena, and then you can own your democracy, but you only get the democracy that you deserve and if the American people want a better democracy, right? They have to kind of put up the sweat equity. But they don't want to do it if the system doesn't seem fair. And so making the system fair is part of the struggle to make democracy work so the citizens have confidence in it.

And there are a lot of things that can be done to make the system better. “A more perfect union.” That's the key phrase, not a perfect union. “A more perfect union.”

Weston Wamp: Next week, we're going to dive into an age-old tradition that is equal part Republican and Democrat on Capitol Hill, and we'll hear firsthand accounts of how it really happens. I grew up around it, but in the business world, there's only one word to describe this story: Extortion.

Thanks for listening to Swamp Stories, presented by Issue One, the country's leading political reform organization that unites Republicans, Democrats, and independence. To fix our broken political system, please subscribe to the podcast and share it with your friends. Even better, rate and review it on iTunes to help us reach more listeners. You can find out more at

I'm your host, Weston Wamp. Thank you to executive producer, Ethan Rome, producer William Gray, and editor Parker Tant from Swamp Stories was recorded in Tennessee, edited in Texas, and can be found wherever you listen to podcasts.