Political Pressure Row Building in U.S.A.

Tennessee Democrat accuses top Bush adviser of undue influence in Internet gambling issue

From the CAP Newswire:

November 10, 2008 (InfoPowa News) — Political ethics and conflict of interest accusations feature in a new political row over Internet gambling brewing up in the United States last week. The publication Politico reports that Tennesee Democrat Representative Steve Cohen has accused a top Bush Administration adviser of applying “considerable political pressure” to benefit a former lobbying client.

Cohen has apparently asked White House Counsel Fred Fielding to investigate William Wichterman, a top political aide to President Bush, to ascertain whether he disclosed his “potential conflict of interest” in pushing the administration to implement new regulations to enforce the Unlawful Internet Gambling Enforcement Act.

Politico reveals that as late as March, Wichterman was a registered lobbyist with Covington & Burling, where he represented the National Football League, a vigorous opponent of Internet gambling, according to the Senate lobbying disclosure database. In that role, he worked on the Internet gaming laws, one of the league’s top legislative priorities.

The publication summarizes moves this year to draft regulations supporting the UIGEA, which was pushed through a late session of the 2006 Congress by Republican leader Bill Frist, attached to an unrelated but must-pass security bill (see previous reports). Federal goverment drafters have struggled since the Act was passed to come up with practical and specific regulations, which the government expects the U.S. financial services industry to enforce.

The lack of practicality and precision in the Act and the regulations — especially as regards what constitutes “illegal Internet gambling” — has triggered wide and diverse critical debate, Congressional hearings, legislative attempts to overturn or clarify the Act, and resistance from an already overburdened financial services industry to its proposed role.

On October 21st this year, Treasury officials submitted the latest draft of the proposed regulations to the U.S. government’s Office of Management and Budget, where it is subject to a 60-day review period and presumably further argument from interested parties.

Cohen’s request for an investigation of Wichterman highlights the efforts of the adviser and other White House officials in trying to rush rules changes through the administration’s normal approval process during the final months of the Bush presidency, reports Politico.

Wichterman and other backers of the UIGEA, like Republican Arizona Senator Jon Kyl, have been pushing the administration to enact the regulations before November 17, in the narrow window before the new Obama administration could reconsider or amend the regulations, according to insiders.

The Department of the Treasury and the Federal Reserve must sign off on the language of the law before the administration can implement it. There is a 60-day review process, so current administration officials want their recommended language to take effect before the next administration takes over.

In his letter to the White House, Cohen suggests Wichterman ” … has been a source of considerable political pressure to speed this regulation through finalization.”

As a former lobbyist with Covington & Burling, Wichterman represented the NFL, which, says the letter, ” … has been among the most vocal advocates for the proposed [UIGEA] rule and the underlying law.”

Opponents fear the OMB will push the regulatory changes through, even though administration officials testified before the Financial Services panel earlier this year that the law is too vague.

OMB needs the Federal Reserve to sign off on the new rules before the administration can implement them as law, according to people familiar with the implementation process.

Cohen asks Fielding whether Wichterman — who also worked for UIGEA proposer Senator Bill Frist before becoming a lobbyist — disclosed “to you or your office his potential conflict of interest on this matter.”

“If so, was he nonetheless allowed by the White House to work on this issue?” the Congressman asks, requesting that the White House counsel spell out for him the Bush administration’s policy on aides working in issue areas they covered as paid lobbyists.

Congressman Cohen wants to know if “there is a defined period during which employees who served as lawyers or lobbyists in the private sector must recuse themselves from matters affecting their former clients.”

The Tennessee Democrat also wants to know whether Wichterman plans to return to the lobbying firm now that the Bush administration is on the way out. He further asks for a catalogue of contact between the White House office of Public Liaison with Treasury, OMB, and the Federal Reserve.

The White House did not respond to a Politico request for comment on the Cohen letter.