Business Flip!Flip Business Flip

WASHINGTON — To see the way money affects public policy on Capitol Hill, there’s no better example these days than the lobbying and public relations battle over Section 806 of a House bill to modernize the Federal Aviation Administration.

In the past 15 months, Memphis-based FedEx has spent $21.2 million on lobbying to kill the provision and has set up a public relations campaign to deride it as yet another big Washington “bailout” for its rival, Atlanta-based UPS. In the same time period, UPS has spent $9.9 million on lobbying in favor of the measure.

The 230-word passage placed in the House bill by Transportation Committee chairman James Oberstar, D-Minn., would reclassify FedEx Express employees, including the delivery drivers who are the most prominent face of the company, as nonairline workers. That would mean they would no longer have to organize nationally under the jurisdiction of the Railway Labor Act. Employees who don’t require FAA certification would be placed under the jurisdiction of the National Labor Relations Act.

In effect, it would permit separate FedEx bargaining units around the country to join the International Brotherhood of Teamsters, like drivers of the much larger package deliverer UPS, which is not treated as an airline.

The Teamsters, likely to see its membership swell if the provision becomes law, has spent almost $1.5 million lobbying since January 2009.

“They’re spending a lot of money for a very few words,” said Sheila Krumholz, director of the Center for Responsive Politics, a Washington think tank that monitors the impact of money in politics, speaking of all participants.

“This is an isolated piece of legislation that is so narrowly defined as to apply not even broadly to the entire industry,” Krumholz said. “In that regard, it is I think unusual that it is such a narrow issue that is inspiring so much spending on lobbying and almost certainly on campaign contributions as well.”

Late last month, the Teamsters unveiled a rival public relations campaign, “FedEx Drivers Aren’t Pilots,” with an actor depicting FedEx CEO Frederick W. Smith, sitting at a boardroom table and buzzing a toy FedEx delivery truck through the air.

This is not the first time FedEx and UPS have been engaged in a high-stakes legislative feud. How the companies operate in Washington has been the subject of academic study, including a 2005 Vanderbilt University Law Review examination of another dispute involving FedEx, UPS and the Railway Labor Act. Among the historical points the law review article makes, and that Smith often points out, is that, in the mid-1990s, UPS sought to have its work force subject to RLA jurisdiction.

In 1995, Congress passed the Interstate Commerce Commission Termination Act and removed the “express company” classification from RLA jurisdiction. Some, including Sen. John McCain, R-Ariz., said it had been done by mistake and needed to be fixed.

Fordham University law professor Jill E. Fisch, who examined the legislative sausage-making, wrote in the law review that, mistake or not, it “created a potential ambiguity in FedEx’s status” and “gave the unions new ammunition in the attempt to subject FedEx to the NLRA.”

According to Fisch, FedEx-friendly legislators tried to attach riders to six different bills to get the fix into law, but opponents opposed it as “special interest” legislation and it repeatedly failed. In 1996, as happened this time around, the House and Senate passed different versions of an FAA bill, but the FedEx fix provision wasn’t in either one.

Instead, then-Sen. Fritz Hollings, D-S.C., introduced the rider in a 10-member conference committee reconciling House and Senate FAA bills. The House parliamentarian ruled that the FedEx language was beyond the scope of the conference committee’s authority, but was overruled. Sen. Edward M. Kennedy, D-Mass., filibustered the measure for four days before he gave up and it was passed.

Smith, in an editorial board interview with The Commercial Appeal last month, recalled a slightly more streamlined version of the earlier episode.

“The only thing that happened in 1996 — they like to trot that out, when the federal government deregulated the surface transportation, sun-setted the ICC — there was a line in that bill that said ‘nothing in this legislation shall change the labor status of any carrier.’ That’s all it said. That was left out of the bill that went to conference.

“Fritz Hollings went to Jim Oberstar — he’s the Captain Ahab, you know, and we’re the great white whale (and) this has just driven him crazy for years — Hollings went to Oberstar and said look, ‘This was inadvertently left out, or it could have been taken out on purpose by some staffer.’ The point was that was in the legislation, that nothing in this bill shall change the labor status. The reason it would have been helpful and Oberstar wanted that in there (is) it would have been the wedge that would have allowed them to go back and re-litigate this again. It didn’t change anything. That didn’t say ‘Federal Express.’ It just said ‘nothing in this bill shall change the labor status of any carrier.’”

The RLA issue is so important to Tennessee’s largest private employer that its two current senators, Lamar Alexander and Bob Corker, both Republicans, were willing to take a drubbing when they put a hold on the Senate version of the bill that didn’t even contain the House language.

Corker dropped his hold after families of passengers killed in a plane crash near Buffalo, N.Y., lobbied his staff to stop stalling and pass the improved safety measures contained in both bills. But he and Alexander were and remain adamant that the House labor language harmful to FedEx would not pass the Senate.

And that’s where things stand now.

The Senate’s two-year bill and the House’s three-year bill have yet to be reconciled, and an FAA bill that should have expired in 2007 has been repeatedly extended for short periods, currently until July 3.

That’s also the target date for reconciling the House and Senate new bills, according to Jim Berard, communications director for the House Transportation and Infrastructure Committee.

– Bartholomew Sullivan: (202) 408-2726

PLAYERS AND PAYERS

Lobbyists

Relationships matter in Washington, D.C., and FedEx, UPS and the Teamsters are well connected.

FedEx: In addition to its staff of lobbyists at its Washington headquarters, FedEx has hired former U.S. senators Trent Lott, R-Miss., and John Breaux, D-La., as well as former New York congressmen Thomas J. Downey, a Democrat, and Raymond J. McGrath, a Republican.

Other lobbyists employed in the first quarter of 2010 include Sloan Rappoport, former counsel to the Senate Commerce Committee; Morgan Casey, a former staff assistant to Sen. Kay Bailey Hutchison, R-Texas; Regina Mahoney, a former legislative director for former Memphis Congressman Harold Ford Jr., who also worked as a policy aide to House Majority Leader Steny Hoyer.

UPS: Besides its in-house lobby shop, UPS has hired The Akin Gump Strauss Hauer and Feld law firm (home to former Clinton golf partner Vernon Jordan, former Health and Human Services secretary Tommy Thompson and former Democratic National Committee chairman Robert Strauss).

UPS has also retained Avenue Solutions, whose lobbyist on labor issues is Amy C. Tejral, a former legislative aide to Sen. Ben Nelson, D-Neb.; the Holland & Knight firm, whose UPS work is done by John Buscher, a former legislative director for Continental Airlines who also served as a staff assistant to former U.S. senator Carol Mosely-Braun of Illinois; and Putala Strategies, whose UPS lobbyist, Christopher Putala, is a former senior staffer for then-senator and now Vice President Joe Biden, records show.

The Teamsters: The union’s lobbying efforts are supplemented by outside consultants Albertine Enterprises, whose principals include John M. Albertine, a former executive director of the Congressional Joint Economic Committee, and James J. Albertine, a past president of the American League of Lobbyists.

PAC Contributions

The FedEx and UPS political action committees also stay cozy with lawmakers with financial contributions to their re-election campaigns.

FedEx: The Memphis company spent $117,854 in March, the latest filing available, making contributions to former Teamsters organizer Sidney Chism in a Shelby County Commission race, and the campaign committees of Sens. Dianne Feinstein, D-Calif., Mark Begich, D-Alaska, Jon Tester, D-Mont., Bill Nelson, D-Fla., Kay Hagen, D-N.C., Ron Wyden, D-Ore., and to the leadership PAC of Sen. Christopher Bond, R-Mo.

UPS: UPS spent $247,706 in March, with contributions to the re-election campaigns of several congressmen including Jim Oberstar, D-Minn., author of the FedEx labor provision. Others receiving UPS PAC money included Sens. McCain, Tester, Wyden, Richard Burr, R-N.C., Kent Conrad, D-N.D., Kirsten Gillibrand, D-N.Y., Sherrod Brown, D-Ohio, John Thune, R-S.D., Mark Warner, D-Va., John Barrasso, R-Wyo., and Robert F. Bennett, R-Utah.

Teamsters: The union’s Washington headquarters, listed as a labor organization, not a PAC, spent just $355 communicating with members in behalf of the losing Massachusetts Senate candidate Martha Coakley in March, Federal Election Commission records indicate.

The FEC website lists 46 Teamster local-affiliated political committees, although many are no longer active and most that are deal with local issues and candidates, not federal office holders. For example, one in Dallas spent $17,067 in the first three months of this year, all on local candidates.

Similar Posts:

• FAA reauthorization bill passes in Senate, without FedEx provision
• Another extension of FAA bill is likely
• Aviation bill containing controversial Fed Ex provision won’t be completed by March 31 deadline
• FedEx ‘team’ is rallied for FAA fight
• Congress extends FAA funding for one month