How a Washington Breakfast Influenced Conservative Votes on Patent Reform

I bought breakfast at a local diner in downtown Harlan, Iowa a couple of weeks ago. A home cooked sausage and cheese omelet plus an endless cup of coffee is less than $9. Breakfast in Washington, it seems, is much more expensive, not to mention much more gratifying.

The life’s blood of politics is money. For an incumbent politician the more money they have the easier a path to reelection, which seems to be the primary focus of most Members of Congress. Raising money is an absolute job requirement, at least if you want to stay as an incumbent politician.

While many a commentator has lamented the chase for money by politicians, one less often told story is how senior Members of Congress are able to influence more junior Members, those who are in truly swing districts, and those Member who are perennial targets from the opposing party.

Here is a story of how $1,000 a plate Washington breakfast influenced the votes of several Conservative Members of Congress who serve on the House Judiciary, including Representative Steve King (IA-04), allowing Committee passage of H.R.9, the innovation killing Innovation Act.

Over the past several years there have been a number of large corporations, many that have patents themselves, who have funded and managed a powerful Washington lobbying effort. The focus has ostensibly been on reforming the problem of patent litigation abuse, but the changes advocated would be to their favor at the expense of innovators, like universities, independent inventors and startups. These large companies commercialize thousands of technologies invented by others, without permission, and thus benefit directly from weaker patent rights.

In total, this lobbying effort, which has been lead primarily by Google, has dumped over a billion dollars on Washington in ten years in a seemingly endless effort to kill inventors and small innovation companies so they can take their patented inventions without consequences. Google alone spent over ten million dollars the first six months of 2015 climbing the charts to number three in corporate spending in Washington. This effort created a fictional cartoon character called a patent troll, placed Google employees into key positions within the USPTO, Commerce Department, and The White House, and influenced many votes to pass damaging legislation.

The Chairman of House Judiciary Committee, Bob Goodlatte (VA-06) unveiled H.R.9 in the House Judiciary Committee in early February. Congressman Goodlatte is not only the primary driving force behind H.R.9, but importantly, his son was a Facebook executive. Free riding on innovation sounds like a great deal, but as it turns out nothing in life is really ever free. Still, the potential conflict of interest goes a long way to explain why Congressman Goodlatte may be so interested in seeing radical changes to U.S. patent laws.

Despite Congressman Goodlatte’s best efforts, by April H.R.9 was faltering due to opposition from conservatives both on and off the House Judiciary Committee. Congressman Goodlatte was understandably frustrated by opposition from the conservative wing of his own party. Just 12 months prior, the 113^th Congress passed the original Innovation Act (H.R. 3309) in the House by a vote of 325-91, only to watch it die in the Senate under the threat of a bi-partisan filibuster. H.R. 9, he thought, would pass by the same margin in this the 114^th Congress. The fight would be again in the Senate.

Congressman Goodlatte had been working closely with President Obama, and a few of the twenty plus Google employees now working in the Obama administration, in a joint effort to push H.R.9 through the House. In a city where nothing bipartisan ever seems to get done any more, a powerful Republican Committee Chair working to push forward the Obama agenda on patent reform seemed curious. Why would Republicans want to hand Google, a loyal Obama ally, with everything they wanted on patent reform? Despite the optics of Republicans working to reward a staunch Obama ally, Congressman Goodlatte did not expect conservative opposition, but he was getting it in large doses.

For Congressman Goodlatte, failure to pass H.R. 9 could mean a significant loss of lobbyist money, but he comes to Congress from one of the safest of all districts. First elected to the House of Representatives in 1992, Goodlatte has four times run unopposed in the general election. In 2014 he received nearly 75% of the vote, and in years where he has had close elections he has still managed to win by over 30%. In many years he has won reelection by 50% or greater margin.

Congressman Goodlatte doesn’t need lobbyist money or corporate donations. He will be the Congressman from Virginia’s 6^th Congressional District as long as he chooses to run. But other Members of Congress are not as geographically lucky as is Goodlatte, including some Conservatives who are frequent targets of Democrats.

By May 22, 2015, Congressman Goodlatte scheduled at least three $1,000 a plate breakfasts for wavering Judiciary Committee Conservatives. Money made at these breakfasts went directly to the Conservative’s campaign coffers. While not directly stated, the timing of the breakfasts suggest they might have been intended to influence their vote on patent reform.

The secret to maximizing lobbyist donations is to guarantee the proper bang for the buck. For this reason, Goodlatte, whose rank and power matter to crafting legislation favorable to donors, attended these breakfasts personally, allowing his name to be used in order to ensure a larger turnout. The announcements went out with his name and his picture included. Below is one of the announcements:

June 4th Breakfast

Dear XXX,

Congressman XXX is pleased to announce that Chairman Bob Goodlatte will be the special guest at his June 4th breakfast at the Capitol Hill Club.

With all the critical issues being debated in Congress, this will certainly be a breakfast not to miss.

Details for the June 4th breakfast are below. Please let me know if you or a colleague will be participating.

[…]

Capitol Hill Club

3rd Floor – Speaker’s Room

Donation Request: $1000/PAC – $500/Personal…

Steve King (OH-04), Jim Jordan (OH-04) and Ken Buck (CO-04) were each the recipients of the $1,000 a plate bonanza. Of the three, Iowa Congressman Steve King was arguably the most important. His seniority could embolden other Conservatives to vote against H.R.9. Importantly, a vote against H.R. 9 is akin to going against Congressman Goodlatte and the House leadership. In the 114^th Congress, there are consequences to going against leadership. Despite this, King knew well the damage that H.R. 9 would levy on Iowan inventors and small innovation companies. After multiple meetings between inventors and Congressman King’s staff, inventors were lead to believe that Congressman King would vote against the Innovation Act despite the risk. A cascade of conservative votes might follow.

Below are the campaign contributions from the 2015 Federal Election Commission records. The $1,000 a plate breakfasts were held in Q2, so a comparison of Q1 to Q2 campaign contributions sheds some light on the potential amount of money necessary to influence a vote in the House Judiciary Committee.

According to the Washington rumor there were many more $1,000 a plate breakfasts for Conservatives on the Judiciary Committee. It is not clear which Members received the benefit of $1,000 a plate breakfasts, but we do know of Members who were leaning to vote NO, but changed their vote to YES on H.R. 9.

While there might not be a smoking gun that proves that a campaign fundraiser was contingent upon a YES vote on patent reform, the timing of the breakfasts and the vote in Committee on the Innovation Act is curious. Despite a lack of consensus on the House Judiciary Committee the Innovation Act was passed out of Committee by a 24-8 vote on June 14, 2015. It would be truly disturbing if votes could be so easily influenced on any legislation, but particularly H.R. 9, which threatens to ruin the U.S. patent system in order to make it personally most advantageous for a couple dozen companies that would really prefer an abolition of the patent system altogether.