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Thursday December 06 02:26 PM EST

Racicot's Business Ties Extensive

By Marc J. Ambinder ABCNEWS.com

Marc Racicot, the president's choice to be RNC chair, has connections
to business interests, sparking questions from Democrats and good-
government groups.





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The man President Bush has chosen as his new Republican National Committee chair has a 
raft of personal connections to business and lobbying interests with big stakes in 
Bush administration policy, documents and interview
s with his associates show.

Even before Marc Racicot's nomination was cemented with a Wednesday Oval Office 
meeting, Democratic party operatives, good-government groups, and media watchdogs 
sprang into action, flooding e-mail inboxes with details of
 Racicot's lobbying efforts.

There's nothing illegal or unprecedented about a party chair continuing to work in the 
private sector � just some questions about appearances, and lots of partisan fodder, 
stirred up in some measure by the still-unannounc
ed arrangements between Racicot and the RNC about what type of outside income he'll be 
allowed to earn.

Racicot insists that he will maintain the highest level of ethics, and curtail any 
business dealings that might cause a conflict or embarrassment for the White House or 
the party. However, whether he will scale back or el
iminate direct advocacy of Congress and/or the Administration is not known.

Candidates with superior communication abilities � and a big rolodex of contacts � 
often take a big pay cut to join political parties. Given recent inquiries into the 
lobbying connections between parties and lobbyists, la
wyers nowadays tend to frown on direct, paid advocacy, particularly since the party 
chairs can recruit and assist candidates who might one day be in a position to 
influence appropriations and regulations.

According to lawyers knowledgeable with previous arrangements, many party chairs, co- 
chairs and operatives shift their responsibilities at their private sector firms, 
providing what amounts to strategic advice and openin
g doors for new clients, but not engaging in direct lobbying.

Top Democrats and Republicans are engaged in a quiet game of chicken, with Democrats � 
to the professed surprise of some Republicans � aggressively pointing out some of 
Racicot's recent business ties and publicly calling
his intentions to continue some of them improper. Among other things, Democrats have 
pointed out that conservative activist Bill Bennett turned down being RNC chair after 
he decided he thought it wasn't compatible with ea
rning outside income.

Democratic party spokesperson Jennifer Palmeri concedes that past chairs of her own 
party have worked simultaneously as lobbyists, but says that evolved ethics standards 
make this practice no longer acceptable. Republican
s suggest quietly and indignantly that they are ready to escalate this battle if 
Democrats persist, since many of Democratic chair Terry McAuliffe's past business 
dealings did not receive prominent media attention when he
 took office earlier this year.

He�s in Business

The Racicot-connected business bound to be on the list of Democratic talking points: 
Enron., the oil giant that filed for bankruptcy this week.

According to federal disclosure documents and published reports, Racicot lobbied 
politicians on Enron's behalf and talked with Vice President Dick Cheney on energy 
industry issues.

Federal disclosure documents show that Racicot has also worked on behalf of 
agriculture, electricity, mining, and transportation interests at Bracewell & 
Patterson. He is a federally registered lobbyist for the National E
lectric Reliability Coordinating Council; for railroad company Burlington Northern 
Santa Fe (BNSF); for Wheat Gluten, a confederation of wheat gluten producers; and for 
Quintana Minerals, a mining company.

Democrats are looking for evidence that Racicot lobbied Western state governors and 
legislatures on behalf of some of these interests, too, because he has not registered 
as a lobbyist with any states.

Racicot's work for the wheat gluten industry coincided with a favorable decision on 
its behalf by the Bush Administration. In June 2001, U.S. Trade Representative Robert 
Zoellick announced that his office would end quotas
 on foreign wheat gluten products, but give the industry $40 million to "help it 
maintain its competitiveness," according to a government press release. It is not 
clear what role Racicot played, if any, in winning this de
cision.

Trade Promoter

In October, the Bush administration appointed Racicot to help resolve a trade dispute 
with Canada over timber. American forest product companies had complained that the 
Canadian government unfairly subsidized the country'
s soft-lumber business in violation of World Trade Organization provisions. Though 
Canada denied the dumping allegations, the United States in late October imposed � 
with Racicot's guidance � a 13 percent tariff on Canadi
an timber imports.

Racicot's actions on several issues have won him approval from industry groups.

"Generally, he comes down on the right side of these questions," said John Simpson, 
president of the American Association of Exporters and Importers. "I would expect that 
that was one of the reasons why President Bush cho
se him." Corbin Robertson, president of Quintana Minerals, praised Racicot's selection 
as RNC chair. "I think he's a very, smart, honest, articulate guy." And as a lobbyist, 
he was effective. "We have significant interest
s in Montana," Robinson said. "As governor of Montana, he has deep understanding of 
that state and its needs."

On Sept. 11, the BNSF railroad company elected Racicot to its board of directors.

Patrick Hiatte, a BNSF corporate relations director, said that Racicot will continue 
to serve the company while serving as RNC chair. He declined to say what Racicot's 
specific tasks were or will be, and he wouldn't say h
ow much Racicot has been compensated.

"Marc Racicot has demonstrated that he has the highest integrity as two-term governor 
of Montana," said Kevin Sheridan, an RNC spokersperson. "He's caught the favor of the 
national Republican Party and the president of th
e United States in part because of his ethics."

Precedents for Lobbying

A number of top party officials � from former DNC chair Ron Brown to former RNC chairs 
Frank Fahrenkopf and Haley Barbour � have held private-sector jobs while serving as 
their party's public face. But they've differed in
 their level and type of outside work.

A national party chairmanship is a unique position. It is technically a private job, 
but affords it occupant access to members of Congress, the White House, and governors, 
and potential access to information and lobbying
opportunities available to only a few.

Brown's lobbying efforts struck watchdogs as particularly egregious. He remained a 
principal at the firm of Patton, Boggs and Blow; critics at the time alleged that 
Brown's access to the latest legislative vote-count info
rmation as DNC chair could have been helpful to potential clients.

Fahrenkopf worked throughout his tenure for the firm of Hogan and Hartsen. Barbour 
kept a stake in his lobbying firm, but didn't do any active soliciting. His firm 
temporarily dropped Barbour's name from their title as a
courtesy.

As RNC chair, Racicot would receive a salary of $150,000, but Racicot has said he will 
forgo any compensation from the party.

In 1992, before campaign finance and party ethics became a centerpiece of Washington 
investigative politics, the CPI released a study that showed that fully half of party 
chairs since the late 1970s had engaged in some fo
rm of corporate lobbying.

Still, as even Lewis acknowledges, the budget-conscious parties would have a tough 
time attracting top candidates for their chairmanships if they didn't allow them to 
augment their income.

While some Democrats have been stoking press interest in Racicot's current 
professional portfolio, Republicans counter that current DNC chair Terry McAuliffe has 
had several fund- raising and financial ties that have caus
ed controversy, including his ties to labor unions and fundraising for President 
Clinton's 1996 re-election.

Given the potential for bad press, party officials tend to be extra careful about who 
they talk to and what they talk about. But since leaders of both major parties have 
their hands in two cookie jars, they are reluctant
to highlight the other's alleged misdeeds.

"Except for some yammering do-gooders, no one complains about it," Lewis lamented.

ABC News' Mark Halperin and Elizabeth Wilner contributed to this article.

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