Colorado lobbying firm brings clout to DC

Colorado lobbying firm brings clout to DC

EB-5 Projects

WASHINGTON —Mitch McConnell and Nancy Pelosi don't agree on much. But the top Senate Republican and the top House Democrat enjoyed one shared interest last fall — celebrating a milestone for a Denver-based law and lobbying firm.

The two congressional leaders were among the roughly 30 lawmakers who partied Oct. 8 at a museum a few blocks from the Capitol; a soiree complete with steak, salmon and an ice sculpture cut in the logo of the firm, Brownstein Hyatt Farber Schreck.

The 800 revelers had gathered to toast its 20th year in Washington, but the fête at the Newseum could have just as easily passed as a victory party.

Since opening a D.C. office with a couple of cubicles in 1995, the firm has risen to a national juggernaut.

Last year, Brownstein Hyatt Farber Schreck netted more than $25.7 million in federal lobbying revenue, a haul built from the web of connections it has developed in Denver, Washington and the West and the impact it has made on major policy decisions.

"People said that a small Denver firm would never make it in Washington," said founding partner Norm Brownstein in a speech at the museum party. "But from one client and a small staff in cramped offices, we've grown to have over a hundred clients."

The success, however, has put the firm in the spotlight of public-interest groups, who say its rise is emblematic of a broken political system.

"This lobbying firm employs all the right tools for becoming a powerhouse," said Craig Holman, a lobbying expert with the good-government group Public Citizen.

It writes big campaign checks. It hires former lawmakers and administration officials. And it has developed an expertise in complicated — and lucrative — areas of U.S. financial policy.

The effort has paid dividends. Its 2015 haul in federal lobbying revenue was the second-largest in the nation, the first time the firm ever had reached that mark. It trailed only top-grossing rival Akin Gump Strauss Hauer & Feld, which raked in more than $39 million.

One recent score for the firm was getting a tax cut for foreign pension funds that is expected to cost the U.S. Treasury about $3 billion over 10 years. Another was protecting a controversial program Denver could use to help pay for a $1.1 billion upgrade for the National Western Stock Show campus. A third was securing millions of dollars in compensation for U.S. citizens taken hostage by Iran.

All three wins were written into a year-end spending package that passed Congress in December. The trifecta is impressive by K Street standards, although Holman said this approach — of making small changes in phone-book-size bills — gives too much power to too few people.

"The only people who can get special-interest legislative favors are those who have very close and immediate access to lawmakers — and that this firm has," he said.

Key to the firm's ascension is how it has woven itself into Colorado's political fabric since its founding in Denver decades ago. Its staff and alumni advise Mayor Michael Hancock, Gov. John Hickenlooper and members of the state's congressional delegation.

Brownstein Hyatt Farber Schreck's success is built on and rewarded by this Colorado connection: a feedback loop that put the firm in the right place to help Denver land the 2008 Democratic National Convention, but one that's given rise to criticism that Brownstein Hyatt Farber Schreck is a cog in a machine that favors the wealthy and well-connected.

Yet Colorado leaders, past and present, see Brownstein Hyatt Farber Schreck as the state's secret weapon on federal issues.

"There are times when citizens view very powerful lobbying organizations with some concerns — and that is very legitimate; there are concerns about real influence," said Federico Peña, a former Denver mayor and ex-U.S. secretary of transportation.

"And what I say to them — yes, that is the way the system is set up. But at the end of the day, what I think about is all the positive contributions they have made," added Peña, who did some legal work for the firm between his time as mayor and transportation secretary.

EB-5 visa program

Few issues are better suited for Colorado's most powerful lobbying firm than one nicknamed " Immigration for the 1 Percent."

The policy refers to a rare kind of green card — the EB-5 visa — that helps wealthy foreigners get lawful permanent residency in the U.S. in exchange for investing $500,000 or more into projects that create American jobs.

About 10,000 EB-5 visas are available each year, but Denver officials see this quirk in immigration law as one way they can plug a roughly $200 million gap in a $1.1 billion effort to transform the National Western Stock Show campus. If enough EB-5 investors support the project, it could defray the cost significantly.

Last fall, however, the program was in trouble.

One report by the Government Accountability Office, a nonpartisan investigative arm of Congress, found the EB-5 visa process vulnerable to fraud and that its method of assessing economic benefit, such as job creation, was "not valid and reliable."

Another inquiry by the inspector general at the U.S. Department of Homeland Security discovered three examples of improper influence on the program by a top official. Civil rights groups also were concerned that one goal of the program — to help needy neighborhoods — had been co-opted by developers and wealthy communities.

"The EB-5 program has become a 'bait and switch' for the thousands of blighted communities it was meant to serve," said Nancy Zirkin of The Leadership Conference on Civil and Human Rights.

Propelled by these concerns, Congress moved to reform the program last year by adding new safeguards for oversight and transparency, while also weighing changes that could have prevented Denver from getting EB-5 money.

Enter Brownstein Hyatt Farber Schreck.

Not only has the firm represented several clients with an economic stake in EB-5, but Norm Brownstein said the firm has advised Denver on the program as it weighs EB-5 as a financing option.

The legislative challenge, however, was significant. The top two lawmakers on the Senate Judiciary Committee — Chuck Grassley, R-Iowa, and Patrick Leahy, D-Vt. — both wanted to include EB-5 reforms in a year-end spending package.

Drafts of these reforms circulated on Capitol Hill as Congress raced to finish the package by Christmas. Whether changes to EB-5 would be included was an open question, as year-end spending bills require broad consensus and big policy fights often are avoided.

Asked how the firm engaged the debate on EB-5 visas, Norm Brownstein said its people were "intimately involved in every iteration."

He personally called McConnell, Senate Minority Leader Harry Reid and U.S. Sen. Chuck Schumer, D-N.Y., and joined a broad lobbying effort that urged caution.

Brownstein is well-known in D.C. circles. The Senate once honored him with the title "our 101st senator," and he recently had a cameo on the political drama "House of Cards."

It didn't hurt, either, that the firm and its employees have given tens of thousands of dollars in campaign contributions to these three lawmakers over the years, including a $5,400 check in July from Norm Brownstein to Schumer.

Or that allies and clients in the real estate industry, such as the Real Estate Roundtable, had raised concerns that the reforms were too last-minute and too sweeping.

The end result was language in a year-end spending bill that kept the program unchanged through September. In December, Denver picked the firm as its counsel if it decides to pursue financing for the National Western project through the EB-5 program.

After the spending package was released, Grassley complained about getting rolled.

"Instead of reforming the program, some members of leadership have chosen the status quo," Grassley said. "This failure to heed calls for reform proves that some would rather side with special-interest groups, land developers and those with deep pockets."


Long before it was a D.C. powerhouse, the firm was a project borne of a childhood friendship and later enshrined in a probing 1996 profile by the now-defunct Rocky Mountain News.

The story starts with two of the founding partners, Brownstein and Steve Farber, whose Social Security numbers are separated by a single digit. They met in Denver and grew closer after Brownstein's mother died of breast cancer while he was in middle school.

For a time afterward, Brownstein lived at a foster home in Farber's neighborhood, and he often would crash at his friend's house.

They attended the University of Colorado together. And with the help of a friend — future U.S. Sen. Hank Brown — Brownstein and Farber became the first Jewish students at the school to pledge Delta Tau Delta.

In 1968, they started the firm that still bears their name, along with Jack Hyatt, another friend who retired in 1991 but has remained "of counsel."

A tipping point for the firm came when it helped secure $500 million in funding in the early 1990s for construction of Denver International Airport.

Soon after, the firm hung a shingle in D.C., a decision Brownstein said he made in part because he already was promoting pro-Israel causes in Washington.

"I decided to expand the advocacy beyond the U.S.-Israel relationship," said Brownstein, who serves as the vice president of the American Israel Public Affairs Committee, one of the most powerful activist groups in Washington.

Right away, the firm played a role in helping the cable industry win a major victory in the 1996 Telecommunications Act. Critics said the law led to higher rates for consumers, but supporters argue it paved the way for innovations such as broadband.

Anchored by clients in the telecommunications industry, the firm earned more than $1 million annually in federal lobbying revenue until the mid-2000s, according to the Center for Responsive Politics, a nonpartisan watchdog group.

It was then the firm started knocking at the top tier.

Expansion and charity

Two events helped propel the firm's continued rise — one dealing with business, the other with politics.

The first was the 2007 merger with the Las Vegas firm Schreck Brignone, which gave the newly named Brownstein Hyatt Farber Schreck a huge presence in the Nevada market, as well as an entry into lucrative fights over gambling.

"At the time, we knew online gambling was going to explode and we wanted to be a part of it," said Adam Agron, co-managing partner of the firm.

The move set a pattern for a series of expansions the firm has undertaken in the past decade. With state lobbying efforts in Colorado, Nevada and California, it has planted a flag in policies important to those states and the West generally — notably issues of water, gambling and intellectual property.

The firm also has integrated itself into the charity scene. It has given more than $18.7 million over the past 20 years, including a $500,000 donation in 2015 that was split between the University of Colorado Law School and the University of Denver Sturm College of Law. (About 70 of its attorneys are alumni of those schools.)

The second event to raise the firm's profile was the effort to bring the 2008 Democratic National Convention to Denver.

Farber served on the committee tasked with landing the event; allies said he was instrumental.

U.S. Rep. Diana DeGette described Farber as "probably the most important player on that bid committee."

"He knows all the political players — not just in Denver and Colorado. He knows influential people around the country," said the Denver Democrat.

After the convention, the firm saw its federal lobbying revenue increase from about $14.7 million in 2008 to about $23.2 million in 2009; a one-year increase of nearly 60 percent, according to the Center for Responsive Politics.

Throughout the Obama administration, the firm has stayed above $22 million.

Brownstein lobbyist Al Mottur said the firm made a conscious effort to make a splash at the convention, which included a party for clients at the Denver Art Museum.

"There was a buzz about a firm coming out of the Democratic convention that didn't exist before," Mottur said. "And we got some business that way."

Among them: medical giant Johnson & Johnson, which remains a client, he said.

While its Democratic connections have helped, operatives in both parties said the firm succeeds because it has strong connections with Democrats and Republicans.

Marc Lampkin, once an adviser to former Republican House Speaker John Boehner, is now the managing partner of the firm's Washington office. Barry Jackson, a former chief of staff to Boehner, joined the staff in 2013.

"We are very much a bipartisan, bicameral firm," Lampkin said. "Almost every problem has to be attacked or looked at from the perspective of threading the needle from conservative Republicans to progressive Democrats."


As with other major firms, Brownstein Hyatt Farber Schreck has filled its ranks with former lawmakers and bureaucrats.

It recently hired former U.S. Sen. Mark Begich, D-Alaska, and the staff is filled with employees the Center for Responsive Politics describes as "revolvers": insiders who move back and forth between official Washington and the lobbying world.

One example is David Bernhardt, who worked for ex-U.S. Rep. Scott McInnis, R-Colo., in the 1990s before joining the firm in 1998. After a few years there, he moved to the U.S. Department of the Interior, where he would rise to became the agency's solicitor, which handles legal work and manages its ethics office.

Bernhardt rejoined the firm in 2009 and now co-chairs its natural resources division, although the firm says more of his work focuses on legal issues, as opposed to lobbying.

Asked about Bernhardt, Brownstein said he is a go-to guy inside the Beltway. "Many secretaries of (the) Interior and their people call on David to get his opinion on things," Brownstein said.

But Holman of Public Citizen warned these "revolving door" moves are worrisome because of the cozy network it creates and the potential for favoritism. "It cements the insiders, both from inside the government and outside the government," he said.

Lampkin disagreed. He said the revolving-door criticism is "oversold."

"All it does is get you a phone call," he said of lobbyists' connections to former colleagues. "People aren't doing things for you or doing things because of you. They do things because they are sympathetic to the argument and the policy discussion that you had."

In Colorado, the link between the firm and the government is especially strong.

One attorney, Bruce James, chaired Mayor Hancock's 2015 re-election campaign, which raised at least $1.3 million.

He also advised Hancock in 2011 when he faced accusations of being tied to a prostitution service. The allegations surfaced days before the 2011 election and linked Hancock's cellphone number to the service; the claims were never verified, did not lead to criminal charges and were denied by Hancock.

Denver officials said James has done no work for the city during Hancock's administration. That could change soon, however, as he was named Dec. 28 as one of several attorneys who can do legal work on issues involving public-private partnerships.

Another power player for the firm is Mike Feeley, a former state Senate minority leader who lobbies the legislature and is a campaign co-chair for U.S. Rep. Ed Perlmutter, D-Arvada.

Feeley said the firm's connection to politics is second nature. "It is a law firm with government relations in its DNA," he said.

Firm alumni have done well, too. Doug Friednash, a former Denver city attorney and firm alumnus, is chief of staff to Hickenlooper. Another alumnus, longtime trial lawyer Stan Garnett, is now the Boulder County district attorney and brought colleagues from the firm when he took the role.

Hickenlooper said he has long welcomed advice from the firm and described the team — and Norm Brownstein in particular — as guardians for Denver and Colorado on federal issues such as transportation funding.

"I think he believes that (if) Denver grows and does well, (the) firm is going to grow and do well," Hickenlooper said. "I want him to live forever and never retire."

"Ante-up money"

The bond between lawmakers and lobbyists isn't limited to workplace relationships; campaign contributions also open doors, and Brownstein Hyatt Farber Schreck works that angle too.

According to the Federal Election Commission, campaign donors who listed the firm as their employer gave at least $822,000 in 2013 and 2014. Many of those contributions went directly to the firm's own political action committee, which in turn doled out more than $466,000 during the 2014 election cycle.

"It's the ante-up money to stay relevant," Lampkin said.

Comparatively, employees of industry leader Akin Gump Strauss Hauer & Feld gave about $2 million those years; many of those donations also went to its own political action committee.

One former federal lobbyist said campaign contributions are often — but not always — helpful.

"For some members (of Congress), the more you fork over, the less persuasive you have to be," said Jack Abramoff, a D.C. dealmaker before he was imprisoned for fraud and corruption.

For others, Abramoff added, it can be detrimental, as they don't want to be seen as being in the pocket of K Street.

But "on average, members are conscious of who is giving them money in the lobbying community," said Abramoff, now free and a crusader of sorts for lobbying reform. "It's human nature. If people are giving you things, you are going to be more grateful."

Lampkin said the firm's political action committee only contributes to incumbents and supports both major parties.

Norm Brownstein's own donations echo that approach. In 2015, he gave more than $105,000.

Beneficiaries include every member of Colorado's delegation up for re-election in 2016, from conservative Ken Buck to liberal Jared Polis.

Colorado Sen. Michael Bennet, in particular, has benefited from the firm's help; according to the Center for Responsive Politics, the firm and its employees have given more to the Democrat than anyone else in his career, to the tune of $140,000.

"I believe we have one of the best delegations in the United States," Brownstein said, adding that he has one red line about giving: "If they do not support the U.S.-Israel relationship, I do not support that legislator."

It's a restriction that became complicated last year during the debate over President Barack Obama's Iran deal.


For the Obama administration, the key battleground on the Iran issue was the Senate, and few senators faced as much pressure as Bennet, a swing-state lawmaker up for re-election.

Major opponents included AIPAC and pro-Israel powerbrokers such as Brownstein and Farber. As part of their effort to dissuade Bennet from supporting the deal, the two men lobbied him at Denver's iconic Brown Palace ahead of a key Senate vote.

They were unsuccessful. Sort of.

Although Bennet backed the deal, he was quick to follow that decision by co-sponsoring a bill that would direct more aid to Israel.

Brownstein said Bennet's case was not unique as it relates to Colorado Democrats who supported the agreement, which eases sanctions on Iran in exchange for provisions that curtail its ability to produce nuclear weapons.

"I absolutely told every one of them that I expected them — after the agreement was approved, which I knew it was going to be approved — after that, I expected them to be at the forefront of making sure Israel got what it needed to deal with Iran," he said.

Asked about the conversations, Bennet spokesman Adam Bozzi said that "Norm played a thoughtful and constructive role in the way he made recommendations on the issue even though he may have disagreed with Michael's position."

Slaying dragons

On a separate Iran issue, the firm had better luck than opponents of the nuclear deal. In a year-end spending package, it secured up to $4.4 million apiece for the victims or family members of the Iran hostage crisis that began in 1979.

For decades, the hostages were denied compensation under the terms of their release, but the firm was able to persuade lawmakers to tap into a unique source of funding: a nearly $9 billion penalty levied against the French bank BNP Paribas for violating sanctions against Cuba, Iran and Sudan.

Every once in a while "you get to slay some dragons, and it makes it all worthwhile," said Manny Ortiz, who worked the cause for the firm. "And this was such a project."

The firm also was successful in using the year-end spending package to overhaul the Foreign Investment in Real Property Tax Act, or FIRPTA.

Working on behalf of clients such as the Real Estate Round table and National Association of Real Estate Investment Trusts, both industry groups, the Brownstein firm championed a revision to the tax code that, among other changes, makes it cheaper and easier for foreign pension funds to invest in U.S. real estate.

"Seven years ago, I came up with the idea of putting a coalition together of all the major real estate industry representatives and companies to go and change FIRPTA to allow foreigners to invest in U.S. real estate," Brownstein said.

The revision is expected to cost the government about $3 billion over the next decade, according to an estimation by Congress' Joint Committee on Taxation.

Supporters said the hit to the U.S. Treasury was offset by other adjustments to real estate tax law, and that the infusion of new money would aid the U.S. broadly.

"If you take losing a couple of billion of dollars to get trillions of dollars invested in our economy, then, well, what are you going to choose?" Brownstein said.

Jeff DeBoer, head of the Real Estate Roundtable, credited the firm in successfully making that point to lawmakers.

"They are a rare combination of substance and politics," he said. "They do their homework. They understand the issues."

Holman, however, warned that its methods bear watching.

"Their success in the omnibus bill really depicts how one gets legislation passed on Capitol Hill. Money buys not only access, but it also buys legislation. And you can see that happen in the omnibus."


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