More than one year after the World Health Organization’s announcement that coronavirus constituted an international pandemic, economists, international law enforcement agencies, non-governmental organizations, and anti-corruption campaigners are bitterly cognizant of the cost. Put plainly, COVID-19’s toll can’t be measured in loss of life alone, and though some are slowly embarking on the slow road to normality, political life has changed in developed nations. Specifically, the corruption, abuse of power, and countless scandals stemming from the comingling of politics and money, which together cast a long shadow over 2020 – they will all become realities in post-pandemic life, unless we regulate the industry quickly.
The rapid reaction required of governments for the procurement of products and services to fight COVID-19 created hugely lucrative contracts for companies all over the world. In many cases, the probability of profiting from procurement appears to have hinged on a business’ proximity to power. Those without immediate relationships within Congress or the Senate scrambled to find a lobbyist. The United States’ Coronavirus Aid, Relief, and Economic Security Act (CARES) released $2.2 trillion U.S dollars in federal aid, and a further mitigating unknown was the 2020 presidential election. Against the backdrop of Donald J. Trump’s presidency entering its final year, and the possibility of a Biden Administration approaching in 2021, communicable illness had already shuttered thousands of businesses across the country, with death rates climbing ever higher. The choice was fortune or failure—in a year where many SMEs were struggling to survive.
Now the pandemic’s toll in the developed world is slowing thanks to the arrival of effective vaccines and the use of track-and-trace technology. But to return to normal life without instigating significant change in public transparency would be tantamount to a tragedy. Proportionate to their means, the poorest in all societies have paid most for their governments fight against coronavirus. They have also been exploited the worst, and have lost the most—in pecuniary terms, and in loss of life. Communities of color, Americans who already suffer from pre-existing health conditions, and groups without access to health insurance, will also lose more, still, over the course of their lifetime. The vast sums of sovereign debt accrued by the United States in 2020 could well impact the interest rates their children pay at commercial banks, or push college fees still higher. Even the utility of college could prove doubtful. The economic contraction predicted has led some analysts to confidently predict that youth unemployment may exceed 60% in future years. The intergenerational cost of COVID-19 requires explanation to these Americans—particularly if lobbying contracts led to a single cent being squandered.
Lobbying—or the opaque practice of utilizing influence to win procurement contracts worth billions of dollars—has always been a controversial subject. In 2020, what once seemed scandalous, the Mueller Probe or Jack Abramoff for example, started to look tame. As the world unraveled at the seams, US lobbyists made millions—if not billions—of dollars. Profit disclosures published on April 20 under the U.S Lobbying Disclosure Act show that—thanks to the CARES Act, and an additional $2 trillion U.S Dollars sought by Biden to improve infrastructure—life has never been richer on K-Street.
As The Hill reported the same week, “the top lobbying firms in Washington were nearly neck and neck in revenues between January and March, with Brownstein Hyatt Farber Schreck gaining the edge over Akin Gump.” The former earned $12.52 million in the first quarter of 2021, while the latter performed best in Washington, with a take home of $12.53 million. In remarks to Bloomberg, Rich Gold, who leads the public policy and regulation group at Holland & Knight, called the coronavirus pandemic “a once in a decade moment” for business. “This is just going to be another one of those years where it’s just going to be front-to-back incredibly busy. Lots of business, lots of new entrants in town, lots of existing associations and companies will be arming themselves,” Gold said. “It’s a feeding frenzy.”
Holland and Knight have, themselves, reported lobbying fees of $7.4 million U.S Dollars in the first quarter of the year. While remarks like these may sound remarkably callous, the industry’s proponents would argue—on some occasions correctly, even—that an overburdened and bureaucratic democracy would simply cease to function without K-Street’s time and expertise. The place of a good lobbyist is to explain a specialist product or project to a layman law-maker—so that the client’s product alleviates time-constraints on law-makers who may lack specialist insight, and simultaneously benefits the public interest. In some cases, firms with specialist teams may be able to offer real public good, via expertise absent in the House or Senate. Yet as transparency watchdog Public Citizen illustrates in its report “Covid Lobbying Lollapalooza,” 2020 saw clients enlist predominantly GOP-aligned firms to bid for federal funding with “clients touting technology and non-pharmaceutical health products in response to the coronavirus pandemic.” Approximately 40 individuals with close ties to President Trump are detailed here—but the most notable is perhaps Brian Ballard of Ballard Partners.
Described amongst Washington’s most powerful lobbyists by Politico in 2018, Ballard made press in March 2020 when Mother Jones became first to identify that the former Trump fundraiser was beginning to do good business with coronavirus clients. Ballard’s company is small, but returned $5.3 million in the first quarter of 2020. In the Mother Jones article, Dan Friedman reported that NanoPure told Mother Jones that in hiring Ballard, along with his associate Sylvester Lukis, a former Health and Human Services Department lawyer, it hoped to get swift EPA approval to sell an aerosol mist spray that was claimed to be able to kill coronavirus, as well as germs, bacteria, and other viruses in hospital rooms, hotels, and other enclosed spaces. Steve Gareleck, the CEO of the South Carolina-based firm, told Mother Jones that NanoPure’s “system and solution will be able to save a lot of lives,” but due to its delivery mechanism—by aerosol mist—the product needed EPA approval. With new pandemic processes in place to expedite such requests, Gareleck added that the trick for his small firm was ensuring that it could quickly obtain studies which showed the product was safe to present to decision makers. Gareleck paid Ballard $30,000 to commence work, but the fee swelled to $65,000 in the second quarter of 2020, with a further $65,000 payable in the third. Gareleck’s total spend to obtain approval was thus $160,000—a sizable sum for most mid-sized business owners. Yet for a man in Gareleck’s position, a fee of this size to pitch for government EPA approval with the big leaguers seems relatively small. Gareleck’s history in commerce is at best controversial. As the subject of at least three prior lawsuits in which he is accused of corporate negligence, fraud and a litany of corporate governance debacles, it seems remarkable that Gareleck met the basic due diligence criteria necessary to bid for federal relief to expedite an EPA application. Current lawsuits against Gareleck and Nanopure filed in Florida allege that Nanopure and Gareleck’s technology either doesn’t actually perform as advertised or that they misappropriated technologies from another company to fraudulently enrich themselves. The most recent suit brought by a technology’s owner in Florida seeks damages for allegedly committing wire fraud by Gareleck and others, as well as, reverse engineering the proper owner’s technology to procure contracts throughout South America and Saudi Arabia. Some might argue that exceptional times call for unusual allies—a ploy adopted by the United Kingdom’s Prime Minister Boris Johnson, who used this tack to justify exchanging personal text messages with James Dyson—in which the prime minister promised to “fix” the engineering firms’ tax problem provided that they could supply public hospitals with a key technology to treat COVID-19. Gareleck, who has not been convicted of any crime and lawsuits are ongoing, and his lobbyist Ballard, are examples of why we must regulate the industry so it exercises basic due diligence and best practices, especially during the COVID-19 pandemic and its aftermath.
No one really expects lobbying to be totally ethical, but it’s time to change this, especially if we are to retain any dignity as a democracy. A forensic examination of pandemic response by K-Street, Brussels, the European Union and London reveals questions about the businesses, and businessmen that dived into the “feeding frenzy” of the early months of the pandemic—particularly when pitching their products and proposals to legislators. As in the United Kingdom, the revelation that fast-lane procurement deals were handed to businesses marred by failure and litigation, with no experience making products to fight diseases—but ample access to political power—will only entrench themselves in post-pandemic life if we fail to react while the memory the pandemic, and its costs, remain fresh in the mind of the public.
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