One day, Ed Gillespie is lobbying the federal government on proposed acquisitions and patent disputes. The next day, Ed is helping to run the vast bureaucracy. How so? President Bush just named him
White House counselor.
This has to be good news for clients of Quinn Gillespie & Associates, whose paying customers include PhRMA. There's also Amgen and Genentech, which are trying to thwart legislation that would allow generic biologics, which are cheaper versions of their meds.
"I'm fortunate that Ed Gillespie has agreed to join the administration. He is a seasoned hand who has got excellent judgment. He's a good strategic thinker that I know will do a fine job," says Bush in a White House statement.
Not surprisingly, some consumer advocates are upset. "It's very disappointing that the president, given his lack of public support these days, has not reached out for someone more independent who has a better understanding of the needs of people," Joan Claybrook of Public Citizen tells the Associated Press.
Gillespie, a former head of the national GOP, will leave his post as Virginia's Republican chairman to become a senior presidential adviser, beginning June 27. He replaces outgoing counselor Dan Bartlett.Despite the potential for conflicts of interest, Gillespie will not be forced in his new role to recuse himself from all matters related to the companies he has lobbied for, said Ken Gross, a Washington-based attorney and former associate general counsel with the Federal Election Commission.
Instead, Gillespie will have to decide on a case-by-case basis if his activities could violate federal ethics standards. These could include clients such as Sirius Satellite Radio, which needs antitrust approval to acquire a rival; Qualcomm, which wants Bush to veto a federal agency's ban on imported cell phones made with its chips
"It may be that the Qualcomm issue has so many implications within telecommunications that he could possibly participate in part of it, I don't know," Gross says. "It's always hard to prejudge these things." He adds that he knows of no legal restriction on Gillespie being lobbied by his former colleagues.
The White House said it has rules in place to prevent conflicts of interest, or their appearance, for every employee. "He will sever all ties as is required of anyone joining the White House staff," presidential spokeswoman Emily Lawrimore insists. "He will not retain any financial stake in his old firm."
Quinn Gillespie did not return a call seeking comment.
Sirius Satellite Radio and XM Satellite Radio Holdings hired Quinn Gillespie in April to lobby the federal government on their proposed combination, which faces an uphill battle in Washington. One agency that needs to sign off on Sirius's $4.6 billion bid for XM is the Federal Communications Commission, which a decade ago granted each company a license on the condition that one could not acquire the other.
As for Qualcomm, the US International Trade Commission imposed a ban because the Qualcomm chips violated a patent held by Broadcom Corp. The ban is also a blow to service providers, including AT&T - another Quinn Gillespie client - which relies on Qualcomm's technology for the phones it sells.
From 2005 to 2006, Qualcomm paid Quinn Gillespie $840,000 to lobby on the digital TV transition, immigration reform and telecom and technology issues, according to a federal disclosure form.
Gillespie co-founded the firm with former Clinton White House counsel Jack Quinn in 2000. The firm has lured several other former congressional and White House staffers - both Republican and Democratic - including Jeff Connaughton, who was special assistant in the Clinton administration. In 2006, the firm earned $16.8 million, according to the Web site, OpenSecrets.org, which tracks political fundraising and lobbying.
Tim La Pira, a researcher at the Center for Responsive Politics, which compiles the OpenSecrets.org data, said when congressional staffers or White House employees leave the government for the private sector, they are usually prohibited from lobbying the federal government for up to a year. La Pira was not aware of any restrictions when someone from the private sector enters government.
Still, under federal law, Gilliespie will have to submit a financial disclosure form to the Office of Government Ethics, addressing any potential conflicts of interest, such as holding stock in companies that might have business before the White House. In such an instance, Gillespie may be required to sell the stock, or recuse himself from the matter, experts say.