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| M-01-05: Survey of CNMI-Contracted Lobbyist Activities, January 1994 through September 2001 (Issued 11/09/01) Summary To meet the Chairman of the Senate Fiscal Affairs Committee's urgent need for information, concerning lobbyist activities, the Office of the Public Auditor (OPA) agreed to provide the Committee with preliminary survey information on CNMI contracted lobbyist activities during the two most recent administrations. Because the compilation of survey information provided to the Committee is part of an ongoing audit, it does not constitute an audit report as defined by generally accepted auditing standards prescribed by the Comptroller General of the United States. OPA believes that the CNMI may have in the past paid more than it needed to for lobbyist services, as it may have paid as much as $9.5 million for lobbyists services in the last eight years. This includes $8.5 million paid for individuals/firms we considered lobbyists and $1.0 million to "likely" lobbyists. About 72 percent of this $9.5 million, or about $6.7 million, was paid to one lobbyist, Preston Gates. Of the $3.8 million incurred in 1997, $3.1 million was paid to Preston Gates, most of which was for services rendered without a valid contract. More recently, the CNMI has reduced lobbying costs, but further steps may still be necessary if the CNMI decides to hire or retain lobbyists. The individual in the Preston Gates contract considered key in attaining the CNMI's objectives was Jack Abramoff. In late 2000, Abramoff left Preston Gates and joined the firm of Greenberg Traurig. Before he relocated to Greenberg Traurig, Preston Gates reportedly ranked as one of the ten largest lobbyists in the U.S., and the CNMI was reportedly among Preston Gates' largest clients. In early 2001, The CNMI contracted Greenberg Traurig for lobbyist services at a rate of $100,000 per month. While there is a strong feeling that Washington lobbyists, contracted by the CNMI, have helped preserve the status quo here on some major issues such as legislative threats to raise the minimum wage or a federal "takeover," we have been unable, in the time allowed, to verify the impact of lobbyists in Washington. Further, it may be difficult to validate to what extent lobbyists were the reasons behind preserving this status quo, as there are many outside forces that go into such decisions in Congress. Some believe that as long as the CNMI must confront issues, it will need the close access to the Federal Government and the U.S. Congress that only a Washington lobbyist or its own Washington Representative can provide. OPA interviewed three key policy advisors to the current Governor concerning the CNMI's use of two lobbyists–Preston Gates and Greenberg Traurig. All three advisors indicated that these two lobbyists had made a difference through their access and relationships in Washington. One said that although the previous administration may have paid too much for services of Preston Gates, the current administration had reduced such costs by eliminating certain lobbying costs, such as travel of members of Congress, Congressional staff, and lobbyists to the CNMI. OPA also interviewed the Washington Representative who suggested that the language of lobbyist contracts should be more specific as to CNMI requirements, and that deliverables should be more clear and better defined, thereby helping to ensure that the CNMI gets its money's worth.
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