The Washington Examiner

March 5, 2018

By: Beau Rothschild

While many are focused on DACA and funding for the wall in the next appropriations bill to be considered by Congress before the March 23 deadline, another issue that will also be litigated is the future of states that have allowed medical marijuana.

Since 2014, Congress has included a funding rider that prevents the Justice Department from taking action against states that have allowed the use, distribution, possession or cultivation of medical marijuana. President Trump’s numerous campaign promises to uphold this freedom for states that have passed laws allowing marijuana for medical use is well documented. Yet, his own attorney general, Jeff Sessions, has gone as far as to send a letter to members of Congress demanding the funding rider be removed from law.

Sessions’ stance on the issue violates the notion of federalism and breaks Trump’s campaign promises.

The funding rider was first passed as an amendment offered by Reps. Dana Rohrabacher, R-Calif., and Samuel Farr, D-Calif., on a 242-186 vote in the House. It was made part of the appropriations “CROmibus” that was signed into law late in 2014. Rohrabacher teamed up with Rep. Earl Blumenauer after Farr left Congress to push the bipartisan amendment. The Rohrabacher-Farr Amendment was blocked by a House leadership rule preventing the amendment from being offered during last year’s appropriations process. Sen. Patrick Leahy, D-Vt., was successful in attaching the prohibition to the Senate appropriations bill for the Justice Department last year.

Multiple continuing resolutions have continued enforcement of the provision into this year, yet the final disposition on this issue is in doubt as Congress negotiates the final appropriations bill for this year before the late March deadline. It would be both a political and a policy mistake for Congress to not renew the rider.

On the political side, it is clear that medical marijuana has wide support from voters of both parties. The Washington Times reported on Apr. 18, 2017 on a Yahoo/Marist poll that pegged support for medical marijuana at 83 percent. Candidate Trump understood the will of the people, and that is why he was so vocal a supporter of medical marijuana. Not many issues poll that high, and considering that Congress had a 10 percent approval rating (14 percent approval of Congress by Republicans) according to a Facebook/Quinnipiac Poll from August of last year, they might want to support medical marijuana for political reasons.

On the policy side, it also makes sense for a Republican-controlled Congress to respect the wishes of states that have allowed medical marijuana. Federalism is a core value of the Republican party, yet the party is not abiding by the idea that the states make better decisions about governing their own populations. This is an issue that does not divide the American people, yet the Republican leadership seems to be answering to the will of Attorney General Sessions more so than the will of their own constituents.

As a loyal Republican, and a former House staffer, I want my party to succeed. I want to see Republicans do everything they can to govern consistent with the will of voters in a way that makes it more likely that they hold onto the House. That may not be the case if the Congress continually ignores the will of Americans who want to see spending under control and a government that acts consistent with the will of the people.

In our great nation, we have a separation of powers that provides Congress the “power of the purse.” Congress makes the laws, and the executive branch implements them. Congress is well within its powers to prevent the Justice Department from implementing a wrongheaded policy that will go after legal enterprises in states that are providing medical marijuana services to needy people.

The people in states that have voted for state legislators who have passed laws to allow medical marijuana need to be respected. Congress should flex some muscle to keep the Rohrabacher-Leahy amendment in place.

Beau Rothschild is Vice President of Business Development at LPC.  Prior to joining LPC, Beau served as a Chief of Staff on Capitol Hill and in senior staff positions for a number of committees,  including the Committee on House Administration and with the House Republican Conference.

The Washington Examiner

January 14, 2018

By: Beau Rothschild

I worked on Capitol Hill for years and now am working in the private sector. As a staffer, I interacted with lobbyists on a daily basis. Many times, they came in to lobby for help in reducing regulations, lowering taxes, or passing legislation that makes sense for markets.

There were other lobbying meetings I had that gave me a bad feeling in the pit of my stomach, because these lobbyists came into the office to push for action that clearly would help their client to the detriment of other companies.

I am aware of at least one instance where this has played out in public. The case of hedge fund Pershing Square’s Bill Ackman using lobbying and public relations to pressure the federal government to put a business into bankruptcy. His public position is that he is an “activist investor” who is trying to do some good by pushing a sports nutrition company, Herbalife, which he believes has a flawed business model, out of business. Ackman has put a large amount of money behind this push.

In December 2012, Ackman’s hedge fund had shorted Herbalife to the tune of $1 billion. That set off an epic battle in which Ackman tried to persuade investors to stay away from Herbalife. He made a three-and-a-half-hour presentation lecture in a 500-seat auditorium that was webcasted that resulted in Herbalife stock dropping 10 percent in six seconds and a whopping 42 percent over a week.

But Herbalife recovered and the presentation resulted in failure. Ackman did not profit from a drop in the stock — he needed a complete crash of the company to cash in.

Ackman later bragged to the Street that he had spent $50 million “to research and publicize the fund’s negative views on Herbalife.” Some of this cash was spent on a lobbying campaign in Washington, D.C., designed to get the attention of members of Congress and to push for Federal Trade Commission and Securities and Exchange Commission investigations of Herbalife. Ackman was successful in getting the FTC to investigate Herbalife, yet that effort failed to drive the company into bankruptcy.

Once persuasion failed to kill Herbalife, Ackman had resorted to lobbyists and the government to do his dirty work. There is nothing wrong with a hedge fund shorting a stock they think is overpriced, but it’s a whole other thing to use the power of government to secure an investment strategy. I would think of Ackman’s tactics whenever I met with other lobbyists who came to my office wanting to use the government for competitive advantage.

Herbalife survived Ackman’s assault and saw its share price more or less recover. Ackman recently had to convert his short position into something called “put options.” According to Bloomberg’s report on the change from November of last year, Ackman has changed his position to make “sure he won’t lose more money if the shares keep going up.” Hopefully he and others will back way from this business of using government to get rich on their Wall Street bets.

Beau Rothschild is Vice President of Business Development at LPC.  Prior to joining LPC, Beau served as a Chief of Staff on Capitol Hill and in senior staff positions for a number of committees,  including the Committee on House Administration and with the House Republican Conference.