09-23-2000

TRANSPORTATION: King of the Roads

When you drive on Interstate 99 through central Pennsylvania, the first
things you notice are the gentle, tree-clad Allegheny Mountains that
surround the highway. The view almost compels you to pull over, get out of
the car, and take in the scenery.


But to an inside-the-Beltway eye, there's something else striking about
I-99: its name, the Bud Shuster Highway. State officials named it after
Shuster-the 14-term Republican congressman from Pennsylvania who chairs
the powerful House Transportation and Infrastructure Committee-because he
played a key role in securing $270 million over more than 20 years to
transform an old two-lane road into this 58-mile, four-lane highway. After
all, the interstate was what the residents of this hardscrabble area
wanted from the millionaire computer-business owner they sent to Congress
in 1972. "When he was first elected to office, he came to the local
business community and said, `Where do you want me to place my emphasis in
Washington?' " recalls local business leader Marty Marasco.
"And, basically, they told him, `Bud, we need highways, we need
improved air accessibility, and we need infrastructure.' "


All agree that as a member of the House Transportation Committee, Shuster
has delivered. In addition to the highway, he has helped central
Pennsylvania win federal dollars for bridges, water and sewer projects, a
bus-testing center, and airports. According to critics, these
infrastructure improvements have been a little too much for this mostly
rural district. Its largest city is Altoona, with a population of just
over 51,000.


As you head north on picturesque I-99 near its midpoint in East Freedom,
Pa., it's hard to miss another landmark bearing the Shuster name: the
Shuster Chrysler dealership.


In 1990, Maurice Lawruk, an Altoona millionaire developer, became the
guarantor of a $260,000 lease for Shuster Chrysler, which is headed by the
Transportation Committee chairman's two sons, Robert and William. Lawruk
also invested $30,000 in the dealership. But Lawruk, it seems, wasn't your
typical business partner. As first reported by the Capitol Hill newspaper
Roll Call, less than two years before Lawruk's involvement with Shuster
Chrysler, Bud Shuster-along with the late Sen. H. John Heinz III,
R-Pa.-helped the businessman win a $3 million low-income housing contract
with the Department of Housing and Urban Development.


Moreover, two months after Lawruk became the dealership's guarantor,
Shuster intervened on Lawruk's behalf in a labor dispute the developer was
having with the Bush Administration. Shuster again intervened for Lawruk
the following year. In 1996, in a formal complaint to the House Standards
of Official Conduct (Ethics) Committee, the Congressional Accountability
Project (a Ralph Nader-affiliated organization) questioned whether Shuster
should have assisted someone who had given him generous campaign donations
and helped his family. This complaint, which contains several other
charges involving Shuster's ties to special interests, is still pending
before the Ethics Committee.


Shuster, 68, has chaired the House Transportation Committee since the
Republicans took over Congress in 1995. But due to the term limits that
Newt Gingrich and his GOP revolutionaries imposed on House committee
chairmen, this year is most likely Shuster's final one as full committee
chairman. And nothing has symbolized his six-year tenure more than the Bud
Shuster Highway and the car dealership that sits beside it.


As chairman, Shuster has had a hand in passing two of the most important
and expensive pieces of legislation since the GOP takeover. In 1998, he
helped to pave the way for a six-year, $218 billion highway and mass
transit construction bill. This year, he helped to pass a $40 billion bill
to fund airport construction projects. "When you build
infrastructure, you create jobs," Shuster told National Journal.
"You create economic prosperity."


Indeed, Shuster has chalked up a remarkable record. At a time when
congressional rancor is the norm, he has made his committee the most
bipartisan on Capitol Hill. As the power of committee chairmen has
diminished, he has been able to frustrate, and often defeat, his party's
leadership. And as critics have slapped Congress with the
"Do-Nothing" label, Shuster's committee has been responsible for
a flurry of legislative activity. Not surprisingly, his colleagues regard
him as one of the last great chairmen on Capitol Hill. "He's probably
one of a dying breed," said Rep. Ray LaHood, R-Ill., who sits on
Shuster's panel.


But the car dealership stands as a reminder of Shuster's ties to special
interests. In fact, a federal investigation into favors for property
owners in Boston led to an indictment of and misdemeanor guilty plea from
Ann Eppard, Shuster's former chief of staff, who's now one of Washington's
most powerful lobbyists.


Shuster has also been attacked for being Washington's pork barrel king,
and he's been accused of threatening to eliminate his opponents'
transportation projects. Perhaps more than any other member since Dan
Rostenkowski, D-Ill., who ruled the House Ways and Means Committee,
Shuster represents the best and worst of Congress. And it's not
surprising: To get legislation passed, members often have to twist arms,
intimidate opponents, and win colleagues' support with pork barrel
projects. To amass power and rank (not to mention win re-election),
members have to raise considerable sums of campaign money, and fund
raising often involves cozying up to lobbyists and returning favors to
large donors. "The reality is, in this legislative system, the people
are the combination of the good and bad," says Meredith McGehee of
Common Cause, a liberal watchdog group.


But Fred Wertheimer, president of the campaign finance reform group
Democracy 21, believes that the American political system should be better
than that. "There obviously are better ways to do business than
through the corrupt practices that benefit large donors at the expense of
average citizens," he said. "I would give minimum weight that
[Shuster] practices the best of politics and maximum weight that he
practices the worst."


The Trust Fund Wars


Shuster's two great legislative triumphs as chairman have been the highway
and aviation bills. More than anything else, they were battles over the
heart and soul of the budget process.


In 1956, to help build the interstate highway system, the federal
government created the Highway Trust Fund, which was to be financed by
gasoline taxes. The logic was simple: Gasoline taxes that motorists paid
would be dedicated to road construction and improvement.


But in the late 1960s, the Johnson Administration-in a move, some say, to
help pay for the escalating war in Vietnam-decided to make the Highway
Trust Fund and all other trust funds part of the unified federal budget.
The change became effective in 1969. Consequently, cash reserves from
gasoline taxes were used to make the federal budget bigger. So when
Washington embarked on its budget-balancing crusade in the 1990s, trust
fund dollars that weren't spent on highways went toward other
discretionary spending.


Shuster recalls that when he wanted to join the Transportation Committee
(then called the Public Works Committee) as a freshman in 1973, he had to
first pass a trust fund litmus test from former Rep. William Harsha,
R-Ohio, who was then the committee's ranking member. " `Where do you
stand on protecting the Highway Trust Fund?' " Shuster remembers
Harsha asking. "And that was an easy one for me," Shuster says,
"because I believe deeply in protecting the trust funds.... It's
fraudulent [for the government] to take your gas tax money and not spend
it for the purpose intended."


In his 1998 highway reauthorization bill, Shuster proposed taking the
trust fund "off-budget" in order to pay for a massive increase
in funding road improvements. "I am not a big spender. I am a fiscal
conservative," he argued during the House debate over his bill.
"But there is a fundamental difference between spending tax dollars
to build assets and pouring money down a rat hole."


Shuster's quest wasn't easy, and it didn't succeed without compromises.
Appropriations and Budget committee members have always resisted
off-budget moves because such tactics reduce the amount of spending that
these members control. Other opponents-including the Clinton
Administration-objected to Shuster's bill because it would have
significantly increased transportation spending, and that would have meant
reducing spending on other programs. "Will education suffer? Will the
environment suffer? Will housing suffer?" asked Rep. Michael N.
Castle, R-Del., during the House floor debate.


But Shuster was able to strike a deal with his opponents, with
considerable help from Sens. Christopher S. Bond, R-Mo.; Robert C. Byrd,
D-W.Va.; Phil Gramm, R-Texas; and John W. Warner, R-Va.. Under the
compromise, the trust fund was to remain "on-budget," meaning
that the money in it could still be used to prop up the federal budget.
But a fire wall was erected around the trust fund. This ensured that the
money couldn't be used on anything other than highways. The fire wall also
eliminated appropriators' authority to limit highway spending. On June 9,
1998, President Clinton signed into law the $218 billion Transportation
Equity Act for the 21st Century (TEA-21)-the largest public works bill in
U.S. history.


That a Republican congressman would work to pass such a mammoth spending
bill still infuriates fiscal conservatives. "That was the low point
in the Republicans' control of Congress, because it established that it
was business as usual," said Marshall Wittmann, a senior fellow in
governmental studies at the conservative Hudson Institute.


The next year, 1999, Shuster once again frustrated fiscal
conservatives-this time with his Aviation Investment and Reform Act for
the 21st Century (AIR-21). As he did with the highway bill, Shuster
proposed taking the aviation trust fund (which consists of revenues from
taxes on airline tickets and aviation fuel) off-budget to finance
increased spending for airport projects.


But the appropriators and budgeteers-particularly Senate Budget Committee
Chairman Pete V. Domenici, R-N.M.-were determined not to give in to
Shuster. "It stuck in their craw that he had beat them on the highway
bill," an aviation lobbyist said. So for almost six months after the
House and Senate had passed their respective aviation bills, Shuster
wrangled with Domenici. Finally, Senate Majority Leader Trent Lott,
R-Miss., stepped in and helped broker a compromise. "Trent was
crucial in the Senate," Shuster admitted.


The deal that was struck, which President Clinton signed into law in
April, resulted in a three-year, $40 billion bill. Under the agreement,
Shuster wasn't able to take the aviation trust fund off-budget, nor did he
get a fire wall that was similar to the highway compromise. And although
the aviation deal promised a general-fund contribution for the Federal
Aviation Administration's operations, the money would be subject to the
annual appropriations process. The day the agreement was reached,
Domenici's spokeswoman declared victory: "[Shuster] capitulated, so
we're pretty happy."


Yet, as it turned out, Shuster got what he always wanted: a guarantee
(through congressional points of order) that the money from the aviation
trust fund would be dedicated exclusively to paying for significant
increases in aviation infrastructure. "Shuster won on money, and
Domenici won on process," one observer remarked after the deal was
made. "Shuster's laughing all the way to the bank."


Roping off the highway and aviation trust funds was not an easy task.
"Every single fight was a downright bloodbath," said T. Pete
Ruane, a Shuster ally and president of the American Road and
Transportation Builders Association. Former Rep. Robert A. Roe, D-N.J.,
who chaired the Transportation Committee from 1991-92, expressed amazement
at Shuster's feats. "For him to be able to work that out is [nothing]
short of a miracle."


Timing, Focus, and Power


Why did Shuster succeed in the trust fund wars when other chairmen had
failed? Part of the answer is good timing. A key argument for keeping the
transportation trust funds part of the unified budget was to keep the
nation's soaring deficit under control, notes Stan Collender, a federal
budget expert at Fleishman Hillard. But in the era of budget surpluses, he
says, "you take away that last remaining argument. Shuster was at the
right place at the right time."


According to Shuster's friends and foes, another reason for his success is
focus. Shuster has devoted most of his energies to unlocking the trust
funds. In the battle over the aviation bill, Shuster simply cared about it
more than Domenici and the other budget hawks did, notes Todd Hauptli, the
senior vice president for legislative affairs at the American Association
of Airport Executives and the Airports Council International. "He
just made it clear from the beginning that he was not going to go
away," Hauptli said. "The dirty little secret about Washington
is, persistence pays off."


Shuster agrees that his focus on transportation has played a large role in
his legislative triumphs, and it has since he came to Congress.
"While I like to think I was the best freshman member of the
Transportation Committee," he recalled, "I may well have been
the worst member of the Education and Labor Committee because I simply
didn't give time to it. I focused my time on the Transportation
Committee."


Another reason for Shuster's success is the bipartisan nature of the
committee. Shuster works very well with the committee's ranking member,
Rep. James L. Oberstar, D-Minn. "There is a great reservoir of trust
between us that makes a whale of a difference in getting stuff done,"
Oberstar said.


When crafting any large piece of legislation, Shuster works to reach a
deal with Oberstar, the subcommittee chairman who has jurisdiction over
the bill, and the subcommittee's ranking member. Once the "Big
Four" agree to the compromise, they vote together for and against
amendments to the bill. They also try to keep contentious labor and
environmental provisions out of the legislation. In addition, Shuster goes
out of his way to work with other committee members, says William J.
Hughes, a former committee staffer who now works in the Speaker's office.
"He will accommodate members on the committee.... Because he has
taken care of everyone else, if he can't work out a deal with you, you are
going to be beat."


Shuster's staff is regarded as one of the best on the Hill. In particular,
observers have lauded the work of Chief of Staff Jack Schenendorf, who has
worked on the Transportation Committee for more than 20 years. "I
call him the half-million-dollar man," said former Shuster staffer
Jeffrey P. Nelligan, who now works at the General Accounting Office.
"Any lobbying association, any group would just give their eyeteeth
to have that guy."


But critics point to another reason for Shuster's success: sheer strength.
"He's not winning his debates on intellectual arguments. And he's not
winning the debates on `It's the right thing to do for America,' "
said a senior Senate aide. "He's winning those debates on pure power.
Bud Shuster's politics are about power, and he's good at it."


Much of Shuster's power comes from the size of his committee, which, at 75
members, is the biggest committee in the history of Congress. With
Republicans having such a slim majority in the House, the chairman has
been able to use this gigantic, bipartisan committee to have his way with
the GOP leadership. "At any given time, on any given issue, Shuster
can command at least 40 Republican votes," Hauptli said. "And as
a result, Shuster's gotten the leadership to go along with him on issues
that they might not otherwise be supportive of."


Shuster's power also resides in his ability to entice potential supporters
with spending earmarks, which are more commonly known as pork barrel
projects. The final highway bill contained almost 2,000 spending earmarks
totaling $9 billion-between 4 percent and 5 percent of the $218 billion
piece of legislation. (An analysis by Gannett News Service found that
Pennsylvania benefited more from these earmarks than any other state. The
state received 186 projects totaling $801 million.) "If we have to
[round up] the tough votes to raise money, then it's not unreasonable for
the members who are casting those votes ... to be able to have a voice in
how 5 percent of that money is spent," Shuster explained.


Critics have attacked Shuster's predilection for distributing pork. Rep.
Tom Coburn, R-Okla., complained about Shuster's tactics during the 1998
highway bill debate. Coburn cited a voice mail left for one of his aides
by a Shuster staffer as evidence: " `Matt, this is Darrell Wilson
with the Transportation Committee. I'm calling about the [highway]
bill.... We have a deal for you on the funding levels for that. I
originally spoke with your office last September, and we said there was
$10 million in this bill for your boss. Well, we are now upping that by $5
million.... I just want to know where your boss wants to spend that
money.' " Rep. John Shadegg, R-Ariz., who spoke after Coburn, said,
"It is pure and simple bribery."


But Shuster stresses that earmarked projects still must be vetted by state
transportation departments before they can proceed. He also points out
that most highway dollars are distributed to the states, and that this
process is just as political and suspect. "Angels in heaven don't
decide where highways or airports are going to be built."


Shuster has also been criticized for taking pork away. For example, during
the 1995 House debate over the Line-Item Veto Act, former Rep. William H.
Orton, D-Utah (who's currently running for governor of that state), had
offered an amendment that would have made transportation projects subject
to the line-item veto. On the floor, Orton made it clear that a member of
Shuster's staff had threatened Orton not to offer the amendment. "The
staff of the chairman, the gentleman from Pennsylvania, had let it be
known that they are looking at transportation projects in my district, and
if I offered the amendment, there will be retaliation," Orton said.
The amendment was soundly defeated, 65-360.


As it turned out, a $1 billion highway project in Provo, Utah, lost its
funding, but the money was eventually restored. "Members were scared
to death with what Bud Shuster did to us," said a former Orton
staffer. Furthermore, Reps. Pete Hoekstra, R-Mich., and Dan Miller,
R-Fla., charged in 1998 that funding for their transportation projects had
been significantly cut because they voted against the highway
bill.


Shuster denies any acts of retaliation. "I have never threatened a
single member," he said. "And I challenge the media and anybody
else to name one person [that] I have ever threatened." Shuster
admits, however, that his supporters tend to get more funding for their
transportation projects than his opponents do.


Roe, the former Transportation Committee chairman, says complaints of
retaliation are nothing new. "People said the same thing about
me," he said. But Roe believes that denying the spoils to opponents
can be justified: "[They] can't ask for help if [they] vote against
the legislation."


Ethics Troubles


Shuster's abilities as a legislator are strikingly similar to those of
another larger-than-life committee chairman: former House Ways and Means
Chairman Dan Rostenkowski. From 1981-94, Rostenkowski ruled the committee
and built his reputation as a master legislator.


But there's another similarity between the two chairmen: ethics troubles.
In 1994, Rostenkowski was indicted on 17 counts, chief among them the
charge that he traded official stamps from the House post office for cash.
He eventually pleaded guilty to two lesser counts and spent 15 months in
prison. Unlike Rosty, Shuster has never been indicted or convicted of a
crime. But throughout his tenure as chairman, Shuster has been plagued by
a series of charges and press reports-many of which focus on his ties to
former longtime aide Ann Eppard-alleging that he has crossed the line of
ethical propriety. For example:


* The ties between Shuster and Altoona developer Maurice Lawruk
(especially those involving the Shuster Chrysler dealership) spurred one
of several charges in the Congressional Accountability Project's complaint
against Shuster, which was filed to the House Ethics Committee in 1996.
Shuster's spokesman, Scott Brenner, says there is nothing wrong with
Lawruk's business association with the dealership that's owned by the
chairman's sons. "It's a small town, and people know each other very
well," he said. "These are the things that happen."


* The Congressional Accountability Project's complaint also focused on
Shuster's relationship with Eppard, who since leaving Shuster's office in
1994 has become one of Washington's most powerful transportation lobbyists
(last year, her firm received more than $2 million in fees). She makes
$3,000 a month serving as Shuster's political consultant. Among other
things, the complaint charged that Shuster had received an illegal
gratuity by staying overnight at Eppard's Alexandria, Va., home.


* On April 9, 1998, a federal grand jury in Boston indicted Eppard and
Vernon A. Clark, a Washington lobbyist, for corruption and illegal
payments. The central charge was that Clark and his two clients-who were
worried that Boston's billion-dollar Central Artery transportation
project, known as the Big Dig, would harm their property-gave Eppard and
her son more than $200,000 in illegal payments from 1989-93, when Eppard
was serving as Shuster's chief of staff. As it turned out, Shuster helped
intervene on behalf of the two Boston businessmen, and they later settled
their road-building disputes with the federal government. At one time,
Shuster was reported to be a target of this federal investigation. On Nov.
1, 1999, federal prosecutors dropped their case after Eppard and Clark
pleaded guilty to misdemeanor charges. Eppard admitted receiving payments
totaling $15,000, an interest-free $30,000 loan, and other gratuities from
Clark. Eppard was fined $5,000. Later that week, Rep. John P. Murtha,
D-Pa., hosted a reception on Capitol Hill celebrating the end of the
federal investigation.


Shuster's ties to Eppard and other special interests have sparked protests
from watchdog groups. "The real unseemly part is that [Shuster] does
not seem to have sensitivity whatsoever to his relationships with these
lobbyists," said Common Cause's McGehee. "He's as clueless about
that as Dan Rostenkowski was about being wined and dined at
Morton's."


Yet what truly disturbs McGehee and other watchdogs is how Eppard's close
ties to Shuster have benefited Eppard and her lobbying clients. In
particular, the Congressional Accountability Project's 1996 complaint
detailed how Eppard's clients, such as Federal Express Corp., Frito-Lay,
and the Outdoor Advertising Association of America, have received
assistance from Shuster and his committee. "These ... alliances
between a member of Congress and a lobbyist," complained Gary Ruskin,
director of the Congressional Accountability Project, "lead to the
appearance that those wealthy enough to pay the pricey fees of top
lobbyists may receive special legislative favors or benefits."
(Eppard did not return phone calls for this article.)


While Shuster acknowledges that Eppard's clients have won battles before
his panel, he also points out that some have lost. Moreover, he stresses
that a lobbyist who happens to have a close tie to a member of Congress is
nothing new. "It's very clear to us that had she not been a woman,
[these complaints] never would have surfaced. The sad reality I think Ann
has come to-and if [I] were to advise any new member of Congress-is don't
promote a woman into a senior position, particularly if she's not ugly.
Maybe if she's ugly you can get away with doing it.... You see lobbyists
camping out in members' offices. Chiefs of staff who have worked for years
with members are looked upon as the political gurus for the members. It
happens all the time."


When asked in his interview with National Journal why he thought Eppard
had been singled out, Shuster took his defense one step further and
responded to allegations that his relationship with Eppard goes beyond
work and friendship: "Of course, there was a [Roll Call] story a
couple of years ago. The reporter said I was seen coming out of her house
at 6:30 a.m. That's true. What he didn't write, and finally they had to
acknowledge two weeks later, was that my family was there, my wife was
there, my friend was there. We invited the reporter into the house, and
the reporter sat there for 30 minutes talking to my son." Timothy J.
Burger, who wrote that story for Roll Call, and now works for the New York
Daily News, admits that Shuster's son was present, but says that he never
saw his wife. "If Mrs. Shuster was actually in the building, I would
have loved to have met her and chatted with her," he said.


His Legacy and Future


Sometime in the next few weeks, Shuster will probably pound his last gavel
as chairman of the Transportation Committee. When asked what he thought
his legacy as chairman would be, he said, "With all the baloney that
goes on around this town, we're the building committee. We're building
America. We're doing something constructive."


Collender, the budget expert, points out that Shuster has "put
transportation spending-and particularly highway spending-at a whole
different level. He brought it up five or six notches on the priority
list."


But critics have noted that the increased spending for highways and
airports has resulted in less money for other programs, such as the U.S.
Coast Guard and Amtrak. In addition, others contend that Shuster's trust
fund victories have complicated the budget process and have made
transportation more important than other types of spending. "In order
to do a bipartisan approach during the [budget] process, you have to have
numbers that make sense. TEA-21 and AIR-21 make that a lot more
difficult," said a Republican Hill staffer. "They set priorities
that they are not willing to pay for."


her members of Congress have begun to mimic the way Shuster has roped off
federal money for his programs, and that imitation may be Shuster's
greatest legacy. Rep. Don Young, R-Alaska, is one example. Young, who
chairs the House Resources Committee and most likely will succeed Shuster
as Transportation chairman if the Republicans keep control of the House,
recently helped pass a bill that stops offshore oil and gas royalty
payments from going directly to the federal Treasury. Instead, the
revenues will be set aside for conservation, wildlife, recreation, and
historic-preservation programs.


"I had a bunch of people come to me and say that what they want to
get for their programs is what Shuster got, a Shuster type of
program," Collender said. "They want a separate cap just for
their programs."


Shuster's influence on the Transportation panel will continue; indeed,
that story is perhaps the best illustration of his power. Last year,
Shuster created one of the most powerful subcommittees ever by fusing his
committee's surface transportation and railroad subcommittees. And because
term-limited chairmen may still head their panel's subcommittees, Shuster
will more than likely sit atop that super-subcommittee if the Republicans
keep control of Congress. If they don't, he'll likely serve as the ranking
Republican on the full committee.


Some are already voicing concerns about a possible Young takeover of the
committee. Peter Loughlin, a former Shuster staffer and currently a
lobbyist at the Associated General Contractors of America, worries that
Young might purge Shuster's committee aides-such as Chief of Staff
Schenendorf and General Counsel Roger Nober, who are regarded as among the
finest on Capitol Hill-and replace them with his own staffers. "If
Don Young comes on and doesn't keep those people, then he loses a lot of
institutional knowledge," Loughlin said. "The well-oiled machine
will be at least changed."


One Republican Senate aide was confident that things would remain the same
under Young. "Don Young is very creative, he is very innovative, he's
politically very sharp, and he knows how to cut a deal. That sounds to me
like I just described Bud Shuster." But some wonder about how much
power Young will actually have if Shuster chairs the new
super-subcommittee. "I think Don Young's biggest challenge," the
GOP aide said, "is how do you run a committee that has Bud Shuster
holding 80 percent of the jurisdiction of the committee in a single
subcommittee?" Young, however, says he's not bothered by Shuster's
presence.


Whether he's in the majority or the minority on the committee, observers
say that Shuster will play an important role in reauthorizing the next
highway bill in 2003-giving him a large role in distributing billions of
dollars worth of federal funds and pork barrel projects. Oberstar, the
likely chairman of the Transportation Committee if the Democrats take back
the House, compares Shuster's future presence on the committee to a
hurricane or an earthquake. "Whoever becomes chairman has to live
with the reality that the force majeure in the Republican conference is
Bud Shuster."


There's even speculation that, after sitting out for two years, Shuster
could possibly return to the chairman's seat. Asked about this potential
maneuver, Shuster replied: "I'll cross that bridge when I come to
it." Knowing Shuster, he just might round up the funds to build
it.


Mark Murray

National Journal