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CAPITALIZING ON CLOUT

Capitalizing on a Politician's Clout

The husband, daughter and son of Rep. Maxine Waters have business links to people the influential lawmaker has aided.

December 19, 2004|Chuck Neubauer and Ted Rohrlich | Times Staff Writers

This year's party sponsors included mortgage giants Fannie Mae and Freddie Mac, two of the world's largest financial institutions. Created by federal legislation to help families buy homes, the companies are subject to broad oversight by the House Financial Services Committee. Waters is a senior member and a longtime ally.

Government regulators have recently accused Fannie Mae and Freddie Mac of accounting abuses that misled investors.

Before the scandals broke, Waters fought legislation that would have required increased financial disclosure by the companies to the Securities and Exchange Commission. In the wake of the scandals, she defended Fannie Mae in an October hearing on alleged accounting irregularities.

Freddie Mac spokeswoman Shawn Flaherty said Rep. Waters called a senior executive about a donation, and the company decided to give, because the party would draw "members of the black caucus and other people who we work with on housing initiatives."

Another party sponsor, OneUnited Bank, had Waters to thank for a recent merger that made it the nation's largest black-owned bank. Waters and other California leaders had pressured a smaller black-owned institution to back out of a deal to sell to a white-owned bank and go with OneUnited instead.

The financial institutions would not say what they gave. A spokesman for the UPS Foundation, another sponsor, said $20,000 was requested and paid.

Rep. Waters, her daughter and the attorney for African American Committee 2000 & Beyond declined to say how much was raised or what Karen Waters was paid in 2004. The nonprofit has until next year to report its 2004 expenses to the IRS.

*

The People Meter

As Nielsen Media Research began rolling out a new television ratings system, the company found itself at odds with some black leaders earlier this year.

Critics charged that minorities were being undercounted by the company's new "people meter" television rating system, which is intended to mechanically record viewer habits rather than rely on handwritten diaries.

The Rev. Al Sharpton and other civil rights leaders lined up against the people meter rollout, as did News Corp., the parent of the Fox network, and Tribune Co., which owns television stations and newspapers, including the Los Angeles Times.

So Nielsen went on the offensive. The company lined up Rep. Waters. Their Los Angeles-based lobbyist, Joe Cerrell, said he hired her daughter and paid her "a couple thousand" dollars to do community outreach for Nielsen.

Both Cerrell and a Nielsen spokesman said the events were unrelated. Rep. Waters was "just anti-Fox" because of Fox's politically conservative reputation and was more than willing to help, Cerrell said.

The congresswoman soon came through for Nielsen. On the night of July 14, a company representative approached Waters with an emergency request: Could she testify at a congressional hearing the next day on whether to delay the ratings system's launch?

At the hearing, several critics testified against Nielsen. Waters appeared as the only pro-Nielsen witness other than the company's president. She told the committee that she was "delighted" overall with the new people meters and that Congress should not try to stop their rollout. She did not mention that her daughter was being paid to help Nielsen, according to the hearing transcript.

The two senators holding the hearing, Conrad Burns (R-Mont.) and Barbara Boxer (D-Calif.), expressed concerns about the new method but, in the end, decided federal regulation was unnecessary.

As Nielsen revved up its lobbying campaign, Cerrell clearly remembered the Rev. Jesse Jackson giving the firm a piece of advice on how best to proceed: "You've got to get Maxine."

*

(BEGIN TEXT OF INFOBOX)

A very special interest

In the last year and a half, the Los Angeles Times has written about 12 U.S. senators and congressmen whose relatives were hired by special interests that the lawmakers have helped. The list:

Senate

Ted B. Stevens

(R-Alaska)

President pro tempore; Chairman, Appropriations Committee

Relatives: Son and brother-in-law

Harry Reid

(D-Nev.)

Minority leader designee

Relatives: Sons and son-in-law

John B. Breaux

(D-La.)

Deputy minority whip

Relative: Son

Trent G. Lott

(R-Miss.)

Chairman, Rules and Administration Committee; former majority leader

Relative: Son

Orrin G. Hatch

(R-Utah)

Chairman, Judiciary Committee

Relative: Son

Tom Daschle

(D-S.D.)

Minority leader

Relative: Wife

Barbara Boxer

(D-Calif.)

Relative: Son

House of Representatives

Curt Weldon (R-Pa.)

Vice chairman, Armed Services Committee

Relative: Daughter

**

House of Representatives

Curt Weldon (R-Pa.)

Vice chairman, Armed Services Committee

Relative: Daughter

Nick J. Rahall II

(D-W.Va.)

Ranking member, Resources Committee

Relative: Sister

W.J. "Billy" Tauzin Jr. (R-La.)

Former chairman, Energy and Commerce Committee

Relative: Son

J. Dennis Hastert (R.-Ill.)

House speaker

Relative: Son

Maxine Waters

(D-Los Angeles)

Ranking member, Housing and Community Opportunity subcommittee of House Financial Services Committee

Relative: Daughter*

*Waters' husband and son earned fees from doing business with state and local office holders or campaigns she has endorsed.

Sources: Times reports

*

Times researcher Mark Madden contributed to this report. Neubauer reported from Washington.

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