The Metropolitan
Corporate Counsel
Volume II, No. 3
© 2003 The Metropolitan Corporate Counsel, Inc.
March 2003
Panel: The Capitol Hill Agenda - Working with Republicans in Washington
The Editor interviews four
leading Republican lobbyists with extensive ties on
Capitol Hill and with the
Bush Administration all of
whom work for Preston
Gates Ellis & Rouvelas
Slade
Meeds LLP: Slade Gorton,
Gorton
Of Counsel, Roger A. Morse,
Senior Government Affairs Analyst, Dennis
Stephens, Government Affairs Counselor,
and Steven R. Valentine, Partner.
Editor: I know each of you has literally
decades of experience in Republican
politics. Tell us about your backgrounds.
Gorton: I was a United States Senator
from Washington State for 18 years. I
served on a number of committees including: Appropriations; Budget; Commerce,
Science and Transportation; and Energy
and Natural Resources. During my time in
the Senate I chaired Appropriations Subcommittees on Interior and Aviation, and
the Commerce Subcommittees on Consumer Affairs and Aviation. I also was a
member of the Republican leadership as
counsel to the majority leader. Before being elected to the Senate I served as the
Attorney General of Washington State. I
was recently appointed to the Commission
investigating the September 11th attacks. I
have been with Preston Gates almost two
years.
Valentine: Before joining Preston Gates,
I had a 16-year Federal government career.
I am a veteran of the Reagan and first Bush
Administrations, where I served as a
Deputy Assistant Attorney General at the
Justice Department. I also served in the
Senate as Legislative Director and General
Counsel for Senator Bob Smith of New
Hampshire. I also was Chief of Staff to
Roger A.
Morse
Dennis
Stephens
Senator John East of North Carolina and
Chief Counsel of the Senate Judiciary Committee Subcommittees on Courts and Separation of Powers.
Stephens: I have been at Preston Gates for
over seven years. I began working in Washington in several departments of the Reagan
Administration including the Presidential
Personnel Office. I then worked on Capitol Hill for former Majority Leader Dick
Armey as his top tax and budget staff person. I also worked for several other Republican Members of the House.
Morse: I worked for 19 years in the House.
I was Majority Leader Tom DeLay’s Legislative Director and also worked for Representatives Frank Wolf of Virginia and Van
Hilleary of Tennessee. At Mr. DeLay’s request I also headed up the Republican
Study Committee and the Conservative
Staff Meeting, a group of 100 conservative House staff that develops action items
on conservative policy matters. I also was
privileged to lead a team of Republicans
to Florida to help in the recount fight.
Editor: The Republicans now control
both Houses of Congress as well as the
Presidency. First the Presidency. What
does this mean for corporate America?
Gorton: Even though the election showed
we still have an almost evenly divided electorate, the shift in the political landscape
was dramatic. This Administration, at this time, will
be developing and proposing much of the national
agenda. I can tell you from
extensive personal experience that this President is
Steven R.
playing an extremely acValentine
tive role in pushing for legislation to advance that agenda. Obviously
Congress will shape and add to whatever
they send to the Hill. But then post enactment, it’s back to the Administration to
implement the law – to fill in all the myriad
details that can have dramatic consequences for companies.
Stephens: Corporate counsel need to understand that the pro-business Republican
leadership in the Administration and the
Congress provides an enormous opportunity for companies to get important issues
resolved. This is the time to reach out and
get involved in Washington.
Editor: What about Republican control
of Congress?
Morse: In the House the Republican leadership can and will play an important role
in making sure that priority legislation gets
passed. I would say that that the emphasis
will be on governmental reforms that will
permit corporations to move ahead and
succeed.
Gorton: In the Senate the Republicans
control the Committees and schedule the
votes. That is a significant advantage.
Valentine: Because the Democrats have
the power to filibuster, the Republicans will
ordinarily need 60 votes to pass legislation. But the Democrats can’t filibuster
every bill, or even very many bills, and the
Republicans have procedural weapons at
© 2003 The Metropolitan Corporate Counsel. This article is reprinted with permission from The Metropolitan Corporate Counsel.
their disposal as well.
Editor: Are taxes really a hot issue for
the 108th Congress?
Gorton: Absolutely. A tax bill will pass.
The portion of the tax debate generating
the greatest interest is whether dividends
should be largely tax-free on the basis that
the corporation has already paid a tax.
Valentine: This is a great example of how
the Republicans will use their power to
consider the tax bill under rules that will
prevent a filibuster. Republicans will need
only 50 votes – with Vice President Cheney
available to cast the tie-breaking vote – to
pass a bill.
Stephens: Over the years whenever Republicans wanted to cut taxes, we always
went for capital gains, and the reactions of
the various interest groups were fairly predictable. The dividend proposal caught a
lot of people off guard. I heard someone
say recently that the reason the White
House picked the dividend proposal is that
in 1980 30% of the voters owned stock and
in 2000 70% of those who actually voted
owned stock.
Morse: The White House is well aware
that there is some reluctance on the dividend proposal right now, but they feel they
will be able to push the debate the way they
did in 2001. Corporations should pay close
attention as the details of this proposal
unfold and get involved early so that they
can play a role in shaping the final version.
For example, the proposal is to end double
taxation of dividend income. But that
means a corporation may have to apportion dividend income based on the percentage of its income that avoided taxation.
There will be an opportunity to help shape
the definition of the dividends that will be
exempt from double taxation.
Editor: So, corporations should carefully think through their position on the
dividend proposal and other aspects of
the tax package.
Gorton: Thinking about it is one thing,
doing something is an entirely different
one. Companies and individuals need to
be proactive on tax issues. They need to
influence Members of Congress before a
bill is introduced, and then they need to
deal with all the details as they work
through the legislative process. We have a
complicated situation today with the tax
bill. Agreements are still being made that
will have profound effects on particular
businesses.
Gorton: I spent a great deal of my career
advocating broad product liability tort reform, which historically fell to trial lawyer
inspired filibusters. This Congress is more
likely to focus on particular areas of abuse
rather than broad based reform. It also is
likely that this approach will see some successes.
Stephens: Plugging into Washington is
something that can benefit every company.
A lot of companies see Congress as productive of nothing but trouble. This doesn’t
have to be the case. If you get involved in
the process early and educate the people
on Capitol Hill, they will have the information they need to make helpful decisions.
Morse: I agree that we will see product
liability come up again with possibly a
better chance of enactment. It certainly will
be a priority among House leaders. Bankruptcy reform is almost assuredly going to
pass and there is still an opportunity to
make changes.
Editor: How can corporations that want
to achieve a specific result get plugged
into Washington with help from Preston
Gates?
Valentine: There are those in Washington
who are in a position to make things happen, those who watch it happen, and those
who say “what happened?” You can’t score
if you are not in the game. This is true for
legislation, regulation and administrative
action.
Morse: We advise our clients on what is
currently on the table, what other issues are
likely to be considered and what they can
do to affect outcomes. Then we help them
get it done. For example, a client may have
an issue that is not being considered as part
of a bill. We develop and implement a strategy for getting that issue considered and
successfully resolved.
Gorton: Remember, the legislative process
– and rulemaking too — can open up opportunities. Don’t just play defense. We
find that pending legislation can provide
an opportunity to include provisions that
can provide a positive benefit or correct
an existing inequity. Too many businesses
look on government as an undisguised enemy on every level. The government can
help them, but it needs to know what is required to provide that help.
Editor: What other issues should be on
corporate radar screens?
Gorton: Energy will be a major issue.
Congress did not come close to passing a
major energy bill in the last Congress, but
the fact that Republicans control the drafting of the bills in both the House and the
Senate probably improves the opportunities for energy legislation. Some of your
readers’ corporations will be energy producers. Every one of them is an energy user.
This legislation will have an impact on all
of them.
Valentine: Another issue is asbestos litigation reform. Senator Hatch has already
announced that he will kick off the effort
with a hearing next month. The Senate
Judiciary Committee Chairman, Senator
Hatch, has already announced that he will
kick off the effort with a hearing next
month.
Stephens: Across the country, doctors are
involved in demonstrations and even suspensions of medical service. Two thousand doctors recently protested outside the
New Jersey State Assembly in favor of liability reform. I cannot remember doctors
protesting anything. Somebody has clearly
explained to the doctors that they have to
behave in a grassroots fashion. They effectively dramatized the issues. The political system is going to feel that stimulus and
respond.
For more information about any of the issues discussed in this interview, please
contact any of the panelists at
202.628.1700. Visit us on the web at
www.pgerm.com.