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Fact of the Matter - Northam: "Gillespie sold out Virginians" as lobbyist

Democratic gubernatorial nominee Ralph Northam has been pounding the airwaves with a TV ad accusing his Republican opponent, Ed Gillespie, of “selling out” Virginians to big business interests during his days as a Washington lobbyist.

The 30-second spot, titled “Sold,” shows pictures of unsmiling, concerned-looking students and workers interspersed with grainy video of Gillespie laughing.

“Lobbyist Ed Gillespie didn’t care about college students when he lobbied to keep their student loans high,” the narrator says. “Ed sold them out. He didn’t care about our workers when he lobbied for companies sending their jobs overseas, or when he fought to give billions to Wall Street banks. Ed Gillespie made millions selling out to the highest bidder. He’ll sell you out, too.”

There’s no doubt that Gillespie and his firms represented many high-powered corporations during his 10-year lobbying career than ended in 2007. That includes seven years of work at Quinn Gillespie & Associates, a highly successful lobbying firm he cofounded in 2000.

But Northam’s attack ad makes a number of misleading statements about Gillespie’s activities and tries to back them up with on-screen citations that, when checked out, don’t support Northam’s claims.

Let’s take a closer by examining the major claims in the ad:

Gillespie lobbied to keep “student loans high...”

Northam backs this claim by citing an Oct. 3, 2017 article in The Washington Post reporting that Gillespie, who is now pledging to lower the cost of attending college, ran a lobbying firm that “fought to do the exact opposite” from 2005 to 2007.

Back then, private lenders put up their own money for student loans and the federal government paid a portion of the interest rates the financiers received. To help attract borrowers, Uncle Sam also guaranteed the loans against default.

Pressure to reform the program began when some lenders were caught overcharging the government. Public interest groups began questioning whether federal funds would be better spent by increasing grants to needy students instead of subsidizing the lenders.

Congress took up legislation to achieve those reforms, sparking a lobbying battle by lenders who said the bill would wipe out profits and put some out of business. Quinn Gillespie represented two major student lenders: Nelnet and Bank of America. It’s lobbying efforts were not successful, however. Congress passed the bill with strong bipartisan support in 2007 and then-President George W. Bush signed it.

Gillespie “lobbied for companies sending their jobs overseas...”

Northam bases this claim on Gillespie’s and his firm’s registrations as lobbyists for two tech giants during the last decade: Microsoft and Hewlett-Packard Co. The corporations had broad legislative interests and a total of more 30 lobbying companies under contract. Both corporations also were expanding overseas.

Northam’s ad implies that either Gillespie, personally, or his firm, specifically lobbied to help the companies outsource jobs. But Northam provides empty proof for his claim. His campaign cites two sources:

  • A 2004 New York Times article on Microsoft’s announcement that it will expand operations in India. The story doesn’t mention Gillespie, his firm or any lobbying efforts. But his does note that Steve Ballmer, then Microsoft’s chief executive, said the overseas expansion “would not reduce job opportunities at (Microsoft) operations in the United States,” - something Northam’s ad omits.
  • A 2005 New York Times report that “corporate America has come to view India not just as a source of low-cost talent, but as an economic force to be reckoned with.” Again, there’s no mention of Gillespie, his firm, or any lobbying efforts.

It should be noted that Microsoft, in 2004, had 57,000 employees - 37,000 of whom were in the U.S. - according to the company’s annual report that year. This year, Microsoft reported having 124,000 employees - 73,000 in the U.S. These numbers erode the ad’s claim that U.S. workers were harmed.

Gillespie “fought to give billions to Wall Street banks..”

The statement refers to the Troubled Asset Relief Program (TARP) that was created by the Bush administration in 2008 to slow dama to the U.S. economy during the Great Recession. The program - which allowed the government to buy the troubled assets of failing banks, insurance companies and other institutions - passed Congress with bipartisan support.

Northam’s ad claim runs into immediate trouble because Gillespie was not a lobbyist at the time. He had left his firm a year earlier to work as an adviser to Bush.

Northam’s ad cites a May 2009 Politico article describing the White House’s efforts six months earlier to build broad support for the TARP bill. It mentions that Gillespie secured an agreement from the Heritage Foundation - an influential conservative think tank - to “hang back” from criticizing TARP.

The ad omits that the rescued Wall Street banks have largely paid back the $313 billion they received under TARP. And when interest and dividends on the assets are counted, the government has made a $24 billion profit from its assistance to banks, according to a June 2017 report on TARP by the nonpartisan Congressional Budget Office.

“Ed Gillespie made millions selling out to the highest bidder...”

Northam’s ad sources this claim with a June 2007 article in Washingtonian magazine ranking the top 50 lobbyists in Washington. Gillespie was rated 8th and his partner, Jack Quinn, was No. 4. The article noted that Quinn and Gillespie had sold their firm to a London-based firm, WPP, and had “no doubt” netted “millions.”

The article notes that Gillespie had close connections to then-President Bush and clients that included AT&T and Sony. But it never accused Gillespie of unethically, as the ad suggests.

Bottom line

Clearly, Gillespie was a successful Washington lobbyist, made a lot money in that role and took on some clients who did not have broad public interests at heart.

But Northam’s ad largely misleads voters. It omits key details and inaccurately cites news articles to tar Gillespie as unscrupulous.