DNC Chair Put Lobbyists in Charge of Reviewing DNC Member Qualifications

For a political party whose platform calls for “sustainable economic growth, which will create good-paying jobs and raise wages,” the Democratic National Committee has appointed a lot of lobbyists for major corporations that oppose wage growth to its top committees.

Over one-third of the DNC’s Executive Committee and nearly two-thirds of the Rules and Bylaws Committee are registered as corporate lobbyists, work as corporate consultants, or have backgrounds in furthering corporate influence in politics, Sludge has found.

The share of corporate lobbyists is higher among at-large DNC members, who are put forward as a slate by the DNC chair and approved with a voice vote, than among the members who are elected individually by a state or caucus. Out of 67 at-large DNC members reviewed by Sludge, at least 20 have worked in corporate influence, including several prominent corporate lobbyists who were nominated by DNC Chair Tom Perez in a 2017 “purge” of reformers and members who had supported his rival, then-Rep. Keith Ellison. In addition, the majority of the 10-member Budget and Finance Committee are at-large members or party officers, and almost half of the Resolutions Committee’s 28 members are at-large members, put in place by Perez.

Article One of the Democratic Party Charter states that public officials shall “refrain from acting in their official capacities when their independence of judgement would be adversely affected by personal interest or duties.” However, multiple current and former DNC members told Sludge that the party does not observe any internal process for evaluating and discussing potential conflicts of interests of members with corporate clients — such as those on the Platform Committee, which on July 27 voted down amendments to endorse single-payer Medicare for All and the legalization of marijuana, among other progressive proposals.

One relatively higher-profile case considered by the Convention Credentials Committee, a larger body convened just ahead of the quadrennial national convention, came in 2016. In May of that year, then-chair James Roosevelt, a Massachusetts attorney and longtime DNC member, rejected a formal request by Sen. Bernie Sanders (I-Vt.) to remove former Rep. Barney Frank as chair of the Convention Rules Committee for being, with former Connecticut Governor Dannel Malloy, what Sanders described as “aggressive attack surrogates for the Clinton campaign.”

Between conventions, judging the legality of state elections for DNC membership and hearing challenges against state parties is the responsibility of the DNC Credentials Committee, which according to the charter “shall determine the validity of the credentials of those elected to the National Committee, and decide all challenges to the seating of such members.”

Just last month, Roosevelt chaired the virtual meeting of the Convention Rules Committee, which was met with complaints from Sanders delegates and DNC members who said the promised rules of order were not followed. An amendment introduced by Sanders delegate Brent Welder to ban corporate lobbyists from serving on the DNC was tabled without a vote, for example, and eventually voted down, 105 to 45, at the conclusion of the Convention Rules Committee’s virtual meeting. If the amendment would have passed and been approved by the delegates to the Democratic National Convention, the standing DNC Credentials Committee would likely first hear challenges on individual cases.

Sludge reviewed the Credentials Committee roster and found it contains several figures with backgrounds in advancing corporate interests and that at least 10 of its 28 members are at-large DNC members, meaning they were appointed by Perez. The DNC does not release the names of its committee members publicly, and over a dozen DNC officials and standing committee co-chairs have not responded to requests for comment for this reporting series; Sludge obtained a list of the committee members as of September 2019 from a DNC member.

The Credentials Committee is co-chaired by one corporate lawyer and one former bank lobbyist, and includes one prominent corporate lobbyist for Citigroup, Citgo, and other major corporations who was appointed to the committee by Perez. In addition, the committee contains an executive with the U.S. Chamber of Commerce, a past big donor to Republican Sen. Lindsey Graham, and the chair of the New York State Democratic Committee, whose delegation was key in throwing the closely-contested DNC chair election to Perez.

The People Who Oversee State DNC Elections

The Credentials Committee is co-chaired by the Hon. Karen Carter Peterson, DNC vice chair for civic engagement and voter protection and an elected DNC member from Louisiana. Since 2014, Peterson has been counsel at corporate law firm Dentons, whose energy clients include oil majors and which also represents insurance, real estate, banking and finance companies. Peterson is based in New Orleans, where Dentons’ longtime role as primary legal adviser to the New Orleans City Council and its regulation of energy company Entergy Corporation was questioned last year, over the firm’s closeness to the state Democratic party.

The Credentials Committee’s other co-chair is John Currie, chair of the New Jersey State Democratic Committee and a longtime partner in car dealerships, who in 1998 lobbied the federal government for bank First Chicago NBD Corp. regarding finance and bankruptcy issues. Currie is a partner in multiple General Motors new car dealerships in northern New Jersey. General Motors spent over $8.3 million in lobbying last year, contracting with a dozen outside firms according to data from the Center for Responsive Politics. The top bill discussed in its lobbying in 2019 was S.1094, which would expand the tax credit for new plug-in electric drive motor vehicles. GM has been lobbying to extend the credit since 2018, as President Obama’s major economic stimulus bill in 2009 set a cap of 200,000 cumulative electric vehicle sales before phasing down the tax credit, and GM reached that amount in April of last year.

Peterson and Currie did not respond to an email inquiry regarding how their committee addressed the potential conflicts of interests of some of its members, below, who lobby on issues like financial industry taxes and utility company regulation that could be significantly affected by the endorsements in the DNC platform.

Two Credentials Committee members who work in corporate lobbying and influence that have not been previously mentioned in Sludge’s DNC reporting series are as follows:

Manuel Ortiz

Ortiz is an at-large DNC Member affiliated with Puerto Rico and the founder of lobbying firm VantageKnight, which last year took in over $2.5 million in fees for representing ten federal clients, including Citigroup and Raytheon, according to the Center for Responsive Politics. From 2011 to 2016, Ortiz was a lobbyist with the major firm Brownstein Hyatt Farber Schreck, where his 2016 clients included private equity giant Apollo Management, Citgo, McDonald’s, broadband trade association The Internet & Television Association (NCTA), and T-Mobile. VantageKnight’s website advertises Ortiz unabashedly: “The New York Times has praised him as, ‘Puerto Rico’s go to guy in Washington,’ and CNN has touted him as, ‘one of Washington’s Powerhouse Lobbyists.’” Another headline, from a 2013 profile in Hispanic Executive magazine, touts Ortiz as “K Street’s Go-To Guy.”

In 2016 with Brownstein Hyatt, Ortiz lobbied for pharmaceutical company AbbVie on the Trans-Pacific Partnership, which President Obama signed in February of that year and then President Trump withdrew from the following year. From 2012 into 2016, Ortiz lobbied for Comcast on issues including “Net neutrality / Title II, FCC reauthorization” and “Internet governance.” This start date was around the time of widespread protests against two internet censorship bills, the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA) introduced in Congress in the last quarter of 2011. Under the Trump administration, the Federal Communications Commission (FCC) repealed Title II net neutrality law in December 2017.

With his own firm, Ortiz’s largest client in 2019 was Citgo, a subsidiary of PDVSA, the Venezuelan state-owned oil and natural gas company, bringing in over $1 million. Lobbying for the Puerto Rico Industrial Development Company, a government-owned corporation of Puerto Rico, brought in over $400,000. Ortiz also lobbied last year for CVS Health, regarding “accessible affordable options for quality pharmaceutical products,” and for military contractor Raytheon, on “legislation related to sales to Saudi Arabia and UAE,” among other matters. Lobbying for Citigroup, which brought in $120,000 last year, was disclosed as regarding “global operations and competition issues.”

From 2016 into 2017, VantageKnight lobbied for law firm Milbank, Tweed, Hadley & McCloy LLP on behalf of the Ambac Assurance Corporation on H.R. 5278, the Puerto Rico Oversight, Management, and Economic Stability Act. Ambac Assurance, a subsidiary of the Ambac Financial Group, provides financial guarantee insurance and was reported in 2017 to be “aggressively pursuing” loss mitigation strategies as a bond insurer of Puerto Rico.

Ortiz is one of ten members with corporate lobbying backgrounds appointed to the DNC by Perez following an Oct. 2017 “purge” of members who had supported then-Rep. Keith Ellison for chair or favored greater rules reforms and budget transparency. In addition to Ortiz, Perez’s picks also included News Corp. lobbyist Joanne Dowdell and Clinton insider and corporate lobbyist Harold Ickes.

Ortiz did not return an email inquiry for comment on how he views his DNC voting responsibility given VantageKnight’s lobbying clients, or why he thinks he was put forward to be an at-large member by Perez.

Rick C. Wade

Wade is and at-large DNC Member and the vice president of strategic alliances and outreach at the U.S. Chamber of Commerce, the largest and most influential business lobbying group in the United States, helping to create new business partnerships and counseling the organization on policy issues. Wade began his position at the chamber in January 2018, while also serving since 2011 as the principal of a global business consulting firm, The Wade Group, based in Columbia, South Carolina. Previously, Wade worked as president of the Harves Investment Group, which specializes in fostering US-China business relationships, and from January 2009 through June 2011 served as senior advisor and deputy chief of staff in the U.S. Department of Commerce. In the years before President Obama’s 2008 election, Wade’s LinkedIn profile says that he advised the candidate and the Obama campaign on policy and political matters.

The U.S. Chamber of Commerce spent over $77 million in federal lobbying last year, according to data from the Center for Responsive Politics, and has contributed nearly $437,000 to candidates this cycle through its employees and PAC. Its board of directors includes executives from member companies such as American Airlines, Honeywell, coal company Peabody Energy, Pfizer, and U.S. Bank.

One of the chamber’s major avenues of influence has been in outside political spending, such as in 2009 and 2010 when it received more than $100 million in “dark money” from the health insurance industry to undermine President Obama’s health care reform initiative. The resulting Affordable Care Act (ACA) passed into law in March 2010 without a public insurance option, which Senate Democrats dropped from legislative plans in late 2009 in the face of resistance from centrist lawmakers. Killing the public option was one of the Chamber’s chief goals.

In March 2019, the U.S. Chamber sent a coalition letter opposing the major ethics reform package, H.R. 1, passed by House Democrats days later, which would establish a public financing option for congressional campaigns and expand voting rights, among other measures. In July 2014, investigative journalist Lee Fang wrote a history covering the Chamber’s confrontational defense of “dark money” tactics for its aims, such as spreading denial of the global climate crisis by calling for a “Scopes Monkey Trial” on climate science.

In April 2019, Wade appeared at an Oakland Chamber of Commerce event sponsored by Comcast where attendees could hear his views on trade as a former Department of Commerce official and current VP of the U.S. Chamber of Commerce. In January, a Sludge review found that 94% of Comcast executives’ contributions to Democratic presidential candidates had gone to Biden, while his primary opponents Bernie Sanders had called for Comcast’s broadband internet monopolies to be broken up and Elizabeth Warren had called for aggressive antitrust action around tech companies.

Two more Credentials Committee members have been previously mentioned on Sludge in their roles as Executive Committee members.

Will T. Cheek

Cheek is a DNC member from Tennessee and a partner at Waller Law, whose website advertises that he “works in concert with Waller’s Government Relations team” to draft state and local legislation. Waller’s website showcases a large number of diversified client services in the areas of healthcare, financial services, private equity, and real estate. For example, the firm served as counsel to private equity firm Accel-KKR, which has over $7.5 billion in capital commitments as a partnership between venture capital firm Accel Partners and Kohlberg Kravis Roberts (KKR), the third-biggest private equity firm in the world. Waller Law represented bank holding company BancorpSouth in public offerings of $300 million of Subordinated Notes and $150 million of Series A Preferred Stock, and assisted Tri Star Energy in its acquisition of the fuel and other businesses of Hollingsworth Oil.

Waller Law is registered in Tennessee to lobby for the Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce, as well as professional services company Accenture — represented by a Waller Law government relations attorney, Catie Lane Bailey — and multinational drugmaker Novartis, among many others.

Belkis (Bel) W. Leong-Hong

Leong-Hong is a DNC member from Maryland and the founder and CEO of Knowledge Advantage, a consulting firm with clients that have included GE Capital Financial, Lockheed Martin, the Department of Homeland Security, and multiple federal financial contractors.

New York’s Crucial Backing of Tom Perez

Two years after Tom Perez’s narrow election as DNC chair on February 25, 2017, reports by journalist Ryan Grim in his 2019 book We’ve Got People revealed the instrumental role played by the New York delegation, then chaired by Byron Brown, a former state senator and current mayor of Buffalo.

On the first ballot of the February 2017 election, Perez received 213.5 votes — one vote shy of the 214.5 needed — to 200 for Ellison, who was backed by party leaders including Bernie Sanders, Chuck Schumer, Elizabeth Warren, and labor leader Randi Weingarten. (Roll calls of the first and second ballots are available online, hosted by The Wall Street Journal.)

On the second ballot, Perez edged out Ellison by a final vote of 235 to 200. As first reported by Grim, Perez’s victory was sealed by a “coup” from the delegation from Puerto Rico — in return for the DNC formally endorsing statehood for Puerto Rico, which is not typically a question for a political party’s chair to decide, the territory’s five delegates went to Perez.

Perez further secured his win with 18 of New York’s members on the second ballot, compared to six for Ellison, with one abstention. Three New York members did not cast a vote for chair on the first ballot, but voted for Perez on the second ballot: Rev. Leah Daughtry, who was later named by Perez to the DNC Rules Committee as an at-large member; Carl Heastie, speaker of the New York State Assembly since 2015; and U.S. Rep. Grace Meng (D-N.Y.), who has represented parts of Queens since the 2012 election.

In 2017, the New York Observer reported that several other state delegations’ DNC members switched their votes from Ellison to Perez on the second ballot, including Credentials Committee member Kat Hoang of Texas. In June 2019, Hoang, who is based in Austin, Texas, joined Beto O’Rourke’s presidential campaign as chief financial officer. Hoang did not respond to an email and LinkedIn inquiry from Sludge regarding whether she continued to serve on the DNC Credentials Committee while working for O’Rourke’s campaign, whether her position was raised to the committee’s co-chairs, or whether it was discussed in any process of ethics review.

Currently, the New York State Democratic Committee is chaired by Hon. Jay S. Jacobs, a DNC member from New York, who had been the state party chair from 2009 to 2012 and returned to the post in 2019 after being recommended by Cuomo. Jacobs is also Nassau County Democratic chair and a close ally of Cuomo, who appointed him to an important election law commission last year that made changes to rules regarding third parties and ballot access.

Another Credentials Committee member, Celina Vasquez of Texas, supported Perez over Ellison in January 2017 in his bid for chair. Vasquez is prominent in the Texas state party for founding Texas Latinas List, which describes itself as a progressive PAC.

A Committee Member Entangled With the FBI

Murat Guzel, a Turkish-American businessman based in Pennsylvania’s Lehigh Valley, was a Credentials Committee member and was co-chair of the National Democratic Ethnic Coordinating Committee as of the list Sludge obtained from September 2019.

In November 2019, Guzel was granted immunity to speak with the FBI about the case of a political donor, American venture capitalist Imaad Zuberi, who had pled guilty to charges of tax evasion, violating campaign finance laws, and failing to register as a foreign agent. Federal prosecutors also alleged that Zuberi offered six witnesses in his case more than $6 million to not cooperate with authorities. When he pled guilty in Los Angeles, Zuberi was to be charged with acting as an unregistered agent for Turkey and several other governments. Investigators examined a $50,000 check Zuberi gave to Guzel earlier last year, but little is known about the incident because Guzel has not answered questions from reporters.

In 2016, Guzel and employees of Nimeks Organics, his organic fruit company, donated $21,600 to Republican Sen. Lindsey Graham (S.C.), an outspoken opponent of the congressional Democratic agenda. Sen. Graham went on to block a Senate vote on a resolution in Nov. 2019 that would have officially recognized the 1915 massacre and explusion of Armenians carried out in what is today Turkey as a genocide.

Shortly after Graham’s move, the Armenian-American writer and activist Harut Sassounian published a column in the Armenian-American newspaper Asbarez drawing connections between campaign contributions to Graham by Turkish-Americans and lobbying by prominent firms such as Akin Gump on behalf of the Turkish government.

Guzel, a frequent large donor who has made hundreds of donations to Democratic committees nationwide, had also been treasurer of the Turkish American National Steering Committee (TASC). Guzel was alleged by Sassounian to be providing updates on his U.S. political activities to Turkish President Recep Tayyip Erdogan’s inner circle. According to a report last November by the London-based Investigative Journal, Wikileaks released an email in which Guzel wrote to Erdogan’s son-in-law, Berat Albayrak, that “to stand behind Erdogan and do whatever we can do against the evil powers is not just an act of compassion but rather an ‘Islamic obligation’ upon all of us” (p. 45).

Guzel did not respond to an email inquiry and LinkedIn message from Sludge as to whether he continued to serve on the DNC Credentials Committee or the ethnic council after he was granted immunity by the FBI last year, whether committee co-chairs or other DNC members were made aware of his talks with the FBI in the Zuberi investigation, or whether he is still a DNC member. Guzel is still listed as chair of the New Americans Caucus on the Pennsylvania Democratic Party website, and as a DNC member from Pennsylvania on Wikipedia’s list of automatic delegates.

Guzel deleted his Facebook account, which had featured numerous photos at fundraisers with Democratic leaders, after being contacted last year by the Associated Press, and a Twitter profile appearing to belong to Guzel seems to have been deactivated. But a Murat G. profile on LinkedIn still exists, with a prominent photo of President Obama and a biography describing the page’s owner as “the first Turkish-American to be a Democratic Party delegate.” The page includes a link to a defunct personal website in Turkish, which was archived by the Wayback Machine in July 2017.

The State of DNC Reform

As the DNC was exposed to have funneled over $82 million to the Clinton campaign during the 2016 presidential primary and then revealed to have hidden details of the arrangement, the DNC’s Unity Reform Commission of 2017 sought to increase democratic governance within the national party. The Unity Reform Commission was made up of 21 members, with ten selected by Hillary Clinton, eight by Bernie Sanders, and three by Tom Perez.

But during meetings of the Unity Reform Commission in December 2017, leading up to the adoption of the most-recent DNC Charter in August 2018, the party’s rules committee rejected a stronger ethics proposal from Nomiki Konst and other Unity Reform Commission members that would have required DNC members to recuse themselves from votes in which they had a financial interest. In July 2019, HuffPost reported that the DNC Rules and Bylaws Committee voted down a proposal by Unity Reform Commission member Dr. James Zogby to form an independently-elected financial review board.

The mid-2017 dismissal of a class-action lawsuit against the DNC, filed after the contested 2016 primary, reaffirmed that the DNC operates as a private corporation, with no enforceable claims to impartiality and no legal need to avoid conflicts of interest. For comparison, the IRS guidance for nonprofits requires a conflict of interest policy, stating that “A conflict of interest occurs where individuals’ obligation to further the organization’s charitable purposes is at odds with their own financial interests.” Conflict of interest policies for executives at for-profit companies like the DNC typically define conflicts of interest and lay out procedures for them to be addressed. Multiple DNC members have told Sludge that no such procedures are currently observed by the DNC.

Michael Kapp is a DNC member from California and chair of the DNC Youth Council who has staked out a position in favor of increasing transparency and promoting accountability among DNC members. Kapp told Sludge, “DNC meetings are not very transparent. Meeting information — time, date, and location — should be on an easily-discoverable webpage on the DNC website. Meetings of the Rules and Bylaws Committee, the Resolutions Committee, and the Credentials Committee should be live-streamed online.

“I would hope that the DNC would do more to require, or at least encourage, DNC members to provide at least an email address to be publicly accessible,” Kapp said. “DNC members do not even have complete contact information for many of our colleagues. That makes it extraordinarily difficult to connect with one another outside of twice-a-year DNC meetings. To encourage participation and collaboration, the DNC should create and maintain internal listservs for each DNC council and caucus. Right now, everything is maintained on an ad hoc basis by individual council and caucus chairs.”

Perez has said publicly he’ll serve through 2020, and if presumptive Democratic nominee Biden wins the upcoming presidential election, then traditionally Perez’s successor as party chair would be chosen next year primarily by the Biden political operation. In January, two top DNC finance officials, Daniel Halpern and Chris Korge, claimed responsibility for secretly approving a generous exit package for Perez and two of his top deputies, though Perez denied foreknowledge of the arrangement.

Over the past seven months of Sludge’s DNC reporting series, none of the half-dozen DNC officials emailed and messaged have responded to a request for comment from Sludge, and none of the DNC committee co-chairs emailed have responded to questions about how their bodies “adopts adequate policies and procedures with respect to … avoidance of conflicts of interest,” as stated on page 18 of the DNC Charter.

“Where does the power and the authority at the DNC really lay?” said Kapp. “Is it controlled solely by the chair with no oversight or checks and balances, or does it reside in state parties and grassroots Democrats? We need a DNC that not only listens to our voters and our base of activists, but includes these voices.”