Politico

For embarrassed Washington Post executives—reeling from what the paper’s own ombudsman called a public relations "disaster" over a flier promoting a "salon" for lobbyists to mingle with prominent newsmakers—there must be a sense of "Why us?"

The fact is The Post’s clumsy effort to make money on its brand name and market its access to the powerful was a belated effort to follow in the steps of at least two other prominent news organizations: the Wall Street Journal and the Economist magazine.

The Journal, for instance, is charging a $7,500 for its two-day CEO Council in November, an elite gathering that will include the paper’s top editors and high-profile speakers like Tony Blair, Rupert Murdoch, and Education Secretary Arne Duncan. And for a few thousand dollars, The Economist can open the door to intimate off-the-record meet-and-greets with world leaders.

These events illustrate how the basic transaction—charging big fees to special interests to arrange private, special-access encounters with powerful people—that caused the Post this week to be excoriated is a more endemic practice than many people in political and media circles realize. Some watchdogs hope this week’s Post scandal will help put an end to a hard-to-defend practice by revenue-hungry news organizations.

Tom Rosenstiel, director of Pew’s Project for Excellence in Journalism, said he thought the Post flier raised a red flag for news organizations to be wary of entering into a financial arrangement with people that you’re covering.

"One has to ask," Rosenstiel said, "Is the amount of money you might generate from this worth damaging that bond with your readers?"

While the speakers at the Journal conference this November will be on the record, with ostensible benefits for Journal readers, Rosenstiel said the bigger problem is when newsmakers and top editorial staffers are offered up to guests with no press access whatsoever, as the Post was originally planning. By doing so, he said, news organizations are "encouraging the notion in the readers mind that [they're] part of some insider establishment that it considers more important than public knowledge."

The Journal arguably crossed that line in March, when the paper agreed to allow National Economic Adviser Larry Summers to conduct his talk, during a $5,000-a-head conference, as closed to press. All the other speakers at the Future of Finance Initiative conference, including Treasury Secretary Timothy Geithner, spoke on the record. But when it came time for Summers talk, Journal deputy managing editor Alan Murray, who’s instrumental in organizing the paper’s executive conferences, instructed attendees (and not reporters) to get in cars headed for White House. (The Journal declined to comment on this arrangement).

Changing the Summers talk from on to off the record and whisking executives over to 1600 Pennsylvania Avenue came up late in the process at the Journal. By contrast, The Economist, the British publication that has developed considerable readership on this side of the Atlantic, makes it clear from the start what the ground rules are for its conferences. And those have nothing to do with informing average readers. 

The Economist has scheduled two off-the-record summits this year bringing together government officials and business leaders together in Mexico and Brazil. The magazine’s website lists three aims for the summits, one of which is to foster an off-the-record, high-level debate between Mexican business leaders and key ministers on the policies and strategies of the current government. The price for the Mexico and Brazil summits are not listed, but prices for other events run anywhere from a few hundred dollars to nearly $4,000.

"The events are off the record because we have found it is the best way for our delegates and host governments to get value from the discussion," an Economist spokesperson wrote in an e-mail. “It also explicitly means that the event will not be covered by The Economist.

"We host events because they are a natural extension of the debate initiated by the magazine," the spokesperson added.

Rarely has a prestigious news organization found itself so much on the defensive about the practice as The Post was on Thursday following POLITICO’s report on a marketing flier sent to lobbyists that offered exclusive, off-the-record access to the top of the Post’s masthead, Congressional leaders, Obama administration officials, and the paper’s health-care reporters in exchange for fees ranging from $25,000 for one event to $250,000 for ten.

Post executives- publisher Katharine Weymouth and executive editor Marcus Brauchli–focused on the flier, which in particularly over-the top language promised a corporations a “seat at the table” with policy-makers for a dinner that would have a certain type of mood. “Spirited? Yes. Confrontational? No. The relaxed setting in the home of Katharine Weymouth assures it.""

Weymouth and Brauchli said the flier not been vetted, adding that the newsroom would never have taken part in a pay-to-play scheme as described. But Weymouth did not repudiate the concept of charging corporate sponsors for off-the-record dinners and insisted that "there is a viable way to expand our expertise into live conferences and events."

Rosabeth Moss Kanter, a professor at Harvard Business School, said on POLITICO’s Arena that the bottom line for the Post brass was money, "and when people start thinking money, they tend to forget to think about anything else."

"Let’s hope that the Chinese wall between the news side and the business side doesn’t crumble under current intense financial pressure as the industry transforms," Kanter said. "The bottom line, so to speak, is not what was said on the fliers about paying big bucks and getting a seat at Weymouth’s dinner table. It is that the fliers were honest about the nature of the offering: contacts for cash."

For the Post, facing steep losses this year, such events have been part of a revenue-generating strategy for some time. As Weymouth told staffers in a memo last December, "to expand our revenue base and diversify our business model, we must look for opportunities to create new products, especially in the areas where business and policy intersect." One idea, she wrote at the time, was "hosting of specialized conferences for business decision makers with a stake in Washington policy-making."

Perhaps no one has perfected the art of bringing together ideas and debate in the public sphere while generating profits and prestige as Atlantic Media owner David Bradley. Microsoft has teamed up with National Journal for private dinners, and Bradley’s annual schmoozefest, the Aspen Ideas Festival, brought together over one hundred speakers with leading positions in government, business, journalism, advocacy and the arts this past week.

Sponsored by the Aspen Institute and Atlantic, along with corporate support, the festival also features Cabinet members, the top editors and writers from Bradley’s magazines, and a sundry media all-stars. (As coincidence would have it, Weymouth sat on a future of journalism panel in Aspen titled "What’s the News Worth to You?")

Atlantic Monthly editor James Bennet said that "the whole idea of the [festival] is to be on-the-record and in open conversation."

According to Bennet, "sponsors of the session here go to events and have the same opportunities to ask questions as everybody else." But The Atlantic, like other news organizations, charges big money for such gatherings, though anyone can head to the website for regular festival dispatches or clips of panels and interviews.

POLITICO has also collaborated with sponsors such as the ACLU and Yahoo in holding public events. But each has been open to the public and press - a critical distinction according to John F. Harris, POLITICO’s editor-in-chief.

"My view is that it is the job of news organizations to illuminate public issues, and do so in a public way," Harris wrote in an e-mail. "Sponsored events, in which editors set the agenda and the proceedings are transparent, can do this effectively. It is not our job to serve as a kind of escort service to facilitate private encounters between special interests and public officials."

"Publisher Robert Allbritton agrees with this and has directed us to avoid events that revolve around these kind of transactions," Harris added.

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By all accounts, it was an excellent evening. For the 75th anniversary of the Securities and Exchange Commission, the SEC’s Historical Society — an independent, nonprofit organization — threw a lavish dinner for 950 at the National Building Museum.

Critics, though, might gawk at the spectacle of a commission that’s been criticized as too close to industry celebrating itself in a dinner paid for largely by firms that have business before it.

Earlier this year, fraud investigator Harry Markopolos called the SEC “both a captive regulator and a failed regulator” for its failure to detect fraud by Bernard Madoff, who had been in the close orbit of the SEC before being unmasked as possibly the most corrupt money manager of all time.

But none of that, apparently, was on the minds of the industry attendees and SEC staffers who began their meal Thursday night with fennel-spiced prawns and five-citrus salad and heard tributes to current and past SEC chairmen and a speech by the current top regulator, Mary Schapiro.

“Her remarks were clearly intended to convey that despite the media hits the SEC has taken over Madoff, that the SEC is here to stay and we are as important as ever,” said one attendee. “It was like Braveheart’s speech before going into battle.”

A giant screen projected images of SEC luminaries over the diners, who savored main course selections that included port wine and orange-glazed rock Cornish game hen. Each attendee was given a hardcover, elaborately produced book commemorating the occasion with photos from the commission’s history, including Joseph P. Kennedy giving a press conference in 1934 and the all-female 1939 SEC bowling league.

The dinner was financed by donors to the Historical Society who purchased tables ranging in price from $3,500 to $7,500 and placed notices in the bound book congratulating the commission on its achievements. (“Each new day presents an opportunity to celebrate,” read the ad from Fidelity Investments. “A blue ribbon achievement? It certainly is!” gushed a full-page ad by the accounting firm Ernst & Young.)

Tickets cost $250 per person but $50 for SEC staffers or government employees.

“This was not an SEC-sponsored event,” the SEC said in a statement to POLITICO. “The event was organized by the nonprofit SEC Historical Society, a 501(c)(3) organization which is not in any way affiliated with the SEC. The SEC staff who attended the event all paid their own way.”

More than 70 tables were sold for the event, largely to law and lobbying firms that do business with the SEC. Among the table sponsors were Standard & Poor’s, the ratings agency that came under criticism for failing to scrutinize the subprime mortgage market before it collapsed, and D.E. Shaw & Co., the hedge fund that paid Obama economic adviser Lawrence Summers more than $5 million while he worked there.

Carla L. Rosati, the executive director of the SEC’s historical society, said she took precautions to make sure the event passed ethical muster. She said that SEC staffers sat at their own tables — not sponsors’ tables — and that the notices placed in the commemorative book were worded in such a way that they were congratulatory, not advertising.

“We did as best as we could to ensure that there was a separation between those who regulate and those who were regulated,” she said. “Our principal purpose is to preserve and share the history of financial regulations from the 1930s to the present.”

At the end of the evening, dessert options included rum baba with tropical fruits and berry coulis.

Wall Street POLITICO is a weekly column looking at the issues that drive business.

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Horse trading in Washington is infamous. But it’s rare to catch a glimpse of the horse in the midst of the trade in real time. 

Friday was one of those rare exceptions when the powerful lobby for seniors, the AARP, sent a memo to Senate officials threatening to yank support for the chamber’s health committee’s version of reform if it didn’t get what it wanted on another provision in the bill related to biogeneric drugs.

The sharply-worded memo, sent through an e-mail obtained by POLITICO late Friday, illustrates the hardball politics and dealmaking going on behind the scenes as Congress considers a trillion-dollar overhaul of the health care system.

In the Thursday e-mail sent to Senate Health, Education, Labor and Pension Committee health policy staff director David Bowen, AARP lobbyist Nora Super spells out the deal:

"I cannot recommend a letter of support or a major grassroots effort in support [of the health care reform bill]. Indeed, people will probably have to be critical, particularly about that provision. I hope you won’t force us to do that on such an important bill that I know you all have worked so hard on," she wrote in the email.

"Again, AARP wants to be supportive, however, we also need to feel as if the concerns of our members have been heard," Super wrote.

Senate committee spokesman Anthony Coley said of the email: "We don’t comment on private conversations, especially those with allies who share our belief that health reform should reduce costs, protect choice and guarantee high quality, affordable health care for all Americans."

At issue is the creation of a federal approval process for generic biologics, drugs such as insulin that are proteins made by living organisms. Name brand drug makers want exclusive rights to sell biologics for 12 to 14 years before a similar generic version can be marketed. AARP is pushing for a shorter window.

"We believe strongly, along with many other consumer, business, labor, insurance, [pharmacy benefit managers], and provider groups, that a double digit exclusivity period is simply too long and therefore not acceptable. We would be explicitly negative if this is the bill the Committee reports out," Super wrote.

In an interview on Friday, Super said her e-mail to Bowen was intended to express disappointment about the direction the committee was headed on a key AARP priority.

"That wasn’t what I would perceive as a threat," she said. "It was a private correspondence. I’m not going to talk to you about what it did or didn’t mean. It wasn’t meant to be a story for the press."

In the e-mail, Super tells Bowen that the high prices of biologic drugs are a major problem for seniors and that lowering their cost is more important to AARP’s membership than drug re-importation.

"I believe AARP could have not been more clear throughout this process that prescription drugs is one of our number one issues for our members," she wrote. "Thus, we are having trouble understanding reports that so many Committee Democrats — led by your team - refuses (sic) to budge on this issue."

A senior pharmaceutical industry lobbyist, who opposes the AARP sought changes, said the e-mail illustrates that the seniors’ organization, which offers insurance products and could stand to gain from cheaper drug prices, puts its business interests before its public policy concerns.

"The worst kept secret in health care circles is that AARP is more about its insurance wing than it is about seniors. If this isn’t the smoking gun, I’m not sure what is," the lobbyist said. "I can’t believe that AARP would threaten the Senate with pulling its support for health reform for their insurance wing. They say they have a firewall. Some firewall, huh?"

But AARP spokesman Drew Nannis called the charge bunk.

"Our push for health reform will continue for more than 40 million members and it isn’t surprising that any discussion about lowering drug prices might draw the ire of the pharmaceutical industry," he said. "Any assertion that products that bear AARP’s name somehow dictate policy is ridiculous."

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Former Vice President Al Gore canceled plans to fly to Washington for a celebratory news conference with House Speaker Nancy Pelosi on Thursday, and instead was working the phones from Tennessee to help push a landmark climate bill to passage.

The vote is close, and Democratic leaders are worried.

The speaker, President Barack Obama and White House Chief of Staff Rahm Emanuel were all telephoning undecided or wavering House members in both parties. 

As part of the rescue mission, Obama added a last-minute Rose Garden event in which he was to make "brief remarks on the importance of passing a historic energy bill that will create new jobs and reduce our dependence on foreign oil."

The American Clean Energy and Security Act, better known as the Waxman-Markey bill, would cut greenhouse-gas while promoting renewable energy and energy efficiency.

The measure, which is likely to have an even tougher time in the Senate, is a linchpin of Obama’s first-year agenda. A victory would give the White House momentum going into a vote on health care later this summer.

Pelosi has said she is going forward with plans for a vote on Friday, because that’s the way to lock in support. But she has not committed to a vote then if her count is still short. Sources say House Democrats could prevail by as little as 10 to 15 votes.

Gore, who has continued to make the climate crisis his signature issue, was to hold a press availability with House leaders and committee chairs at 2 p.m. in the Rayburn Room of the Capitol. 

The speaker’s office sent this notification to reporters Thursday morning:

“As the list of undecided Members narrowed, the Speaker thought it was unnecessary to impose on the Vice President’s schedule to travel to Washington, and instead to continue coordinating efforts from Tennessee," spokesman Drew Hammill said in an e-mail.

Gore, who was coming at the invitation of the speaker, was going to make the case for strong action one of the President’s top priorities — energy and global warming — without delay. He supports the House bill as the way to cut pollution, make dramatic increases in using energy efficiently, and increase use of renewable energy, which will boost jobs and improve our national security.

Earlier this week, Gore held a conference call to mobilize more than 10,000 of his Repower America grassroots activists.

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The Obama administration made it clear Wednesday it will veto any defense authorization bill that includes money for additional F-22 Raptor fighter jets or that cuts money for the F-35 Joint Strike Fighter jet program.

The House Armed Services Committee has approved a bill that includes more than $300 million as a down payment to buy 12 F-22s in 2010.

“If the final bill presented to the president contains this provision, the president’s senior advisers would recommend a veto,” the Office of Management and Budget wrote in a statement of administration policy. Defense Secretary Robert Gates has proposed killing the F-22 program after this year.

OMB handed down a similar threat to the House bill’s provision calling for the development of an alternate engine on the Joint Strike Fighter program. In addition to reducing funding for the jet to help fund another engine, the bill limits the amount of money the Pentagon can spend on the program until it funds the second engine.

Pratt and Whitney won the contract to make the initial engine, but Congress has stepped in for the past several years to add money for a second one under development by General Electric and Rolls-Royce.

The full House was expected to begin consideration of the bill after voting on the Homeland Security appropriations, possibly this week. And the Senate Armed Services Committee on Wednesday continued work on its version of the defense bill.

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‘Crisis buster’ jumps to Glover Park

The Glover Park Group has scored a coup with the hiring of Larry Kamer, named one of America’s Top 10 Crisis Busters by PRWeek.

He pulled Nike through the flak over its international labor practices and helped a California hospital halt false rumors of HIV/AIDS-tainted blood.

Now Kamer is in Washington as managing director and director of public affairs at Glover Park.

“It’s through crisis that organizations become better managed,” he told Suite Talk. “It’s thrilling to work in a high-stakes environment.”

Since 2007, the oft-quoted Kamer has been West region director and senior counselor for Fleishman-Hillard in San Francisco. Before that, he was president of the public relations giant Manning, Selvage & Lee in Chicago. His clients have included General Motors, Harvard University, Home Depot and the American Red Cross.

But it’s “political pedigree” that gives him his business acumen, he said. He helped then-Rep. Paul Simon (D-Ill.) win a Senate seat in 1984 and came close to getting then-California Lt. Gov. Leo McCarthy to the Senate in 1988.

At his friend Joe Lockhart’s Glover Park firm, Kamer said his goal is to “take its public affairs to the next level.”

Obama campaign vet lands L.A. gig

Matt Rodriguez, a former Western states regional director for Barack Obama’s presidential campaign, has joined Dewey Square’s growing Los Angeles-based national grass-roots practice.

Obama’s New Hampshire state director during the 2008 primaries, Rodriguez got his start in politics as a press aide to then-House Majority Leader Dick Gephardt (D-Mo.) and pitched in on then-Missouri Democratic Sen. Bill Bradley’s 2000 presidential bid and Democratic Sen. Chris Dodd’s 2004 reelection campaign in Connecticut.

“I strongly believe in DSG’s values and extraordinary commitment to its clients and am excited about the opportunity to help grow the California practice,” Rodriguez said.

Suite Talk follows career changes, client developments and other movements in the public affairs sector. Please send news and photos to suitetalk@politico.com, and follow us at www.twitter.com/suite_talk.

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Less than an hour after President Barack Obama finished a wide-ranging speech on health care reform Monday, American Medical Association head Nancy Nielsen declared herself most pleased with one small section of it.

“What we are thrilled about is that this is the first Democratic president who has talked to us about any kind of liability reform,” Nielsen told reporters.

Obama traveled to Chicago to ask a skeptical group of physicians for their support on health care reform, including the public insurance option, which the AMA has resisted. And he gave a vague nod to the need for some type of medical liability reform — a gesture that appeared aimed at buying goodwill and a little more time to persuade the group.

The president did not get specific in the speech, and he did not promise anything new. Obama stated flatly Monday that he opposed caps on malpractice awards. When asked what the president had in mind on liability reform, a White House spokeswoman pointed to his support as a senator for mediation programs and reducing preventable medical errors.

Although Obama drew boos for saying he opposes malpractice-awards caps, his acknowledgment that the fear of lawsuits forces physicians to practice defensive medicine was a noteworthy development for the AMA, which has long argued this point.

“I want to work with the AMA, so we can scale back the excessive defensive medicine that reinforces our current system and shift to a system where we are providing better care, rather than simply more treatment,” Obama said. “So this is going to be a priority for me. And I know, based on your responses, it’s a priority for you.”

Still, his language was so innocuous that it earned only a tepid response from the American Association for Justice, formerly known as the American Trial Lawyers Association.

“The notion that ‘defensive medicine’ is leading to higher health care costs is not supported by empirical data or academic literature,” the group said in a statement. “Limiting the legal rights of injured patients will do nothing to lower health care costs or aid the uninsured. We will work over the coming weeks and months to educate members of Congress and the administration on how to best protect victims of medical negligence.”

The president and lawmakers are looking to change the way physicians practice medicine by paying them for the quality of care rather than the quantity of tests they administer — and physicians have wanted to know how they would be protected from lawsuits. Otherwise, they say, they will continue to practice defensive medicine.

Obama rarely talked about malpractice reform on the campaign trail. But he co-wrote an article on the issue with Hillary Clinton for the May 2006 issue of the New England Journal of Medicine. They argued for a comprehensive approach built around the idea of reducing preventable medical errors rather than capping jury awards, which many Republicans support. “Capping malpractice payments may ameliorate rising premium rates, but it would do nothing to prevent unsafe practices or ensure the provision of fair compensation to patients,” Obama and Clinton wrote.

In his speech Monday — the most comprehensive explanation of his health care reform proposal since taking office — Obama described the American health care system as a “ticking time bomb” in need of a drastic overhaul — and said part of that fix must include the controversial public insurance option.“Make no mistake: The cost of our health care is a threat to our economy,” Obama said. And he defended the public insurance option as a necessary competitor to private insurers and as a tool to ensure choice and lower costs for consumers.

“What I am trying to do — and what a public option will help do — is put affordable health care within reach for millions,” he said. “And to help ensure that everyone can afford the cost of a health care option in our exchange, we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.”

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A federal judge has virtually wiped out the prison sentence of more than 12 years he first imposed on a Pentagon analyst who pled guilty to leaking classified information to two pro-Israel lobbyists.

At a hearing Thursday evening in Alexandria, Va., Judge T.S. Ellis reduced the sentence for the former defense official, Larry Franklin, to probation plus 10 months in "community confinement," likely a halfway house.

Prosecutors had asked the judge to drop the sentence to 8 years in light of Franklin’s cooperation, while a defense lawyer for Franklin, Plato Cacheris, asked for "no sentence at all."

In explaining his decision to dramatically reduce Franklin’s sentence, Ellis cited the lack of punishment and light punishments imposed on other leakers, as well as Franklin’s cooperation in the prosecution of the two lobbyists later fired from the American Israel Public Affairs committee, Steven Rosen and Keith Weissman.

Last month, days before the case against the pair was set to go to trial, the government dropped the prosecution. The Justice Department said legal rulings in the case and the threat of new disclosures of classified information made a trial unadvisable.

"It’s a very difficult and unusual situation," Ellis said. "This one is unique."

The judge said he did not quibble with the government’s decision to drop the Rosen and Weissman prosecutions, but that the move was "significant" and had "some relevance" to what punishment Franklin should receive. He said it was "very disputable" whether some of the information at the heart of the case was actually the kind of "national defense information" it is illegal to relay outside the government.

Ellis railed Thursday against people who leak classified information, including those who leaked national intelligence estimates about Iran and revealed the existence of the warrantless wiretapping program maintained by the National Security Agency. However, he also said he had no problem with people who disclosed such information as an act of civil disobedience and accepted what followed. "Disclosing it was okay, if a person is willing to stand up and say, ‘I did it. Give me the consequences,’" the judge said.

Ellis said he wanted Franklin’s punishment to serve as a "beacon" to other officials that they would face serious consequences if they committed similar breaches. "Secrets are important to a nation. If we couldn’t keep our secrets, we would be at great risk," the judge said.

Franklin pled guilty in 2005 to three felony counts involving illegal distribution and possession of classified information. He had been free pending the trial for the two ex-Aipac officials. His attorney, Plato Cacheris, said the former policy analyst had trouble finding good work.

"He’s been digging ditches. He’s been cleaning cesspools," the attorney said.

The information that Franklin gave to the two AIPAC lobbyists has never been officially detailed, but it related to the threat Iran posed to U.S. forces in the region. He also acknowledged numerous meetings with an Israeli diplomat, Naor Gilon.

In a plea for leniency Thursday, Franklin said he was motivated solely by "love of our republic and by the safety of our military personnel that were about to go into Iraq." He insisted he wasn’t trying to leak anything, but simply to use a back channel to alert "a particular NSC source" to the dangers in Iraq. The ex-Pentagon analyst didn’t know at the time that Rosen and Weissman worked for the pro-Israel lobbying group.

Franklin said he wanted to spend time instructing young people "about the threat that civilization faces from those who would replace us," who he indicated were the forces of "radical Islam."

"One object of our adversaries is to force us to change internally. What I did was playing into that objective," Franklin said. Franklin said he was "grateful to be.in a country where the rule of law and a respect for human rights is vibrant."

Ellis quickly interrupted. "You believe rule of law is important?…..I’ve lived in countries where there isn’t rule of law. I was born in one," the Colombian-born jurist said. "And what really [matters] is whether government officials obey the law."

Franklin said he did believe in the rule of law and he acknowledged "serious errors in judgment."

That triggered another salvo from the judge. "An error is putting on the wrong color tie," Ellis said. "We’re talking about crimes."

Earlier, Cacheris argued that the government’s request of eight years imprisonment for Franklin "smacks of vengeance" stemming from the decision to abandon the prosecution against Rosen and Weissman. "It’s just not justified," the defense attorney said. He insisted the decision to drop the case against the two ex-lobbyists "was not because of anything Mr. Franklin did."

Cacheris’s description of Franklin’s cooperation also produced some intriguing news.

"He’s given them other cases involving people who cannot come into this country," the defense lawyer said cryptically.

Cacheris also suggested that Franklin was the target of witness tampering in the Aipac case. "Someone came to approach Franklin to have him, in effect, disappear," the defense attorney said. He said Franklin immediately reported the incident to authorities.

Cacheris did not elaborate on the episode, but it could help explain why the FBI sought to interview Jewish leaders several years ago about attempts to provide financial assistance or employment to Rosen and Weissman.

Prosecutor Neil Hammerstrom suggested Franklin deserved more severe punishment than Rosen and Weissman, had they been convicted. "In many ways, he was a more significant violator than Rosen and Weissman ever were alleged to be," the prosecutor said. "If you don’t have people like Mr. Franklin in government doing that, you don’t have people [outside] passing classified information."

Hammerstrom also noted that Franklin took top-secret information to his home even after being disciplined for such activity. "

You have before you an individual that just can’t seem to follow the law when it comes to classified information," the prosecutor said. He said Franklin deserved credit for cooperating, but that his assistance not been "ideal."

In response to a question from Ellis Thursday, Franklin confirmed speculation that his rendezvous with Rosen and Weissman was arranged by Michael Makovsky, a former energy analyst for the Pentagon. Makovsky, who has left the government, was not charged in the case and was expected to be a witness at the trial of Rosen and Weissman

Before the main hearing Thursday, lawyers spent nearly half an hour arguing behind closed doors about whether the re-sentencing should be open to the public. The judge eventually allowed the press and public into the courtroom, though he said portions of court filings about Franklin’s sentence will remain under seal.

As the hearing concluded in the case, which has been the subjected of hard-fought legal battles for nearly four years, the judge struggled to maintained his composure. He praised prosecutors and defense lawyers. "You all did a very good job," said Ellis, who is now semi-retired.

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House Judiciary Committee Chairman John Conyers (D-Mich.) took aim at so-called interchange fees in legislation he introduced last week, reigniting the lobbying war between credit card companies and the merchants who take those cards as payment.

Interchange fees are a business-to-business charge collected from the merchant’s bank by card-issuing banks every time a consumer swipes plastic to pay for a purchase. The fees are set by credit card associations; the market is dominated by Visa and MasterCard.

For years, retailers have complained that the card associations have been unfairly hiking interchange fees, and they have appealed to Congress for help.

Conyers’ bill — co-sponsored by Republican Rep. Bill Shuster of Pennsylvania — aims to help retailers by waiving antitrust laws to allow them to collectively negotiate certain fees with the banks.

“It is time to level the playing field for merchants and consumers,” Conyers said in a statement introducing the bill. “It is not an attempt at regulating the industry and does not mandate any particular outcome. This bill simply enhances competition by allowing merchants to negotiate with the dominant banks for the terms and rates of the fees.”

Like Conyers, the merchants’ coalition claims the bill would ultimately benefit consumers by bringing down the cost of goods and services.

But the credit card industry is crying foul. Lobbyists for the group point out that Conyers’ bill — unlike an earlier version — does not specify that merchants must pass on savings to consumers. They also claim that the push is not being made on behalf of mom and pop business owners, as the merchants’ group claims, but, rather, is being bankrolled by big retailers.

“This legislation is an attempt by giant retailers to make consumers pay for one of their business expenses — the cost of accepting credit and debit,” the Electronic Payments Coalition, a group representing the credit card industry, said in a statement.

“At a time when American families everywhere are struggling to make ends meet, they shouldn’t be forced to pay more so giant retailers can profit at their expense.”

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TogoRun Opens D.C. Shop

The New York-based health care communications firm TogoRun has opened a D.C. branch in Georgetown, with Anne Woodbury as senior vice president and managing director.

Formerly of Fleishman-Hillard, Woodbury has been on the job barely a week, and she’s already working with big clients overseas. Suite Talk tracked her down in Amsterdam, where she was conferring with the health care segment of the electronics giant Philips.

It’s a good time for TogoRun to set up shop in Washington, she said, because of the current “health reform frenzy.” Her company also plans to expand its health care focus beyond pharmaceuticals and offer clients more comprehensive public policy plans.

Before Fleishman-Hillard, Woodbury was chief health advocate for the Center for Health Transformation, a think tank founded by former House Speaker Newt Gingrich (R-Ga.). But she said her GOP ties shouldn’t matter.

“Health isn’t really a partisan issue,” she said.

The firm’s curious name, TogoRun, comes from Togo, the plucky Alaskan sled dog who helped carry an emergency antitoxin from Anchorage to Nome in 1925.

Grant Thornton Adds Two

Norman Lorentz and John Short have joined Grant Thornton as directors in its global public sector practice.

They’ll help the Alexandria, Va.-based global management consulting business provide financial, performance management and systems solutions to governments and international organizations.

Lorentz had managed member relations as vice president at the Council for Excellence in Government, now merged with the Partnership for Public Service.

Short, with a background in audit and internal controls, comes from the Washington federal practice of Price-waterhouseCoopers, where he was a director.

Grant Thornton is the U.S. member firm of Grant Thornton International, one of six global audit, tax and advisory organizations.

Suite Talk follows career changes, client developments and other movements in the public affairs sector. Please send news and photos to suitetalk@politico.com and follow us at www.twitter.com/suite_talk.

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