McCain adviser's work as lobbyist comes to light

This story is part of USA TODAY's series, "The Price of Power," which tracks the political and business relationships between public officials and donors.

WASHINGTON — John McCain's top foreign policy adviser lobbied the Arizona senator's staff on behalf of the republic of Georgia while he was working for the campaign, public records show.

Randy Scheunemann, founder of Orion Strategies, represented the governments of Macedonia, Georgia and Taiwan between 2003 and March 1, according to the firm's filings with the Justice Department. In its latest semiannual report, the firm disclosed that Scheunemann had a phone conversation in November about Georgia with Richard Fontaine, an aide in McCain's Senate office.

Orion Strategies earned $540,000 from its foreign clients over the year ending on Dec. 1, reports show. Scheunemann also received $56,250 last year from March to July from McCain, according to campaign finance records.

The campaign consulting fees ended at a time when McCain was under financial pressure to cut costs, but Scheunemann remained the campaign's top foreign policy adviser. He represented McCain throughout last fall — including an appearance at a Republican Jewish Coalition event during the same week he lobbied McCain's Senate office.

While not illegal or a breach of Senate ethics rules, Scheunemann's lobbying of McCain's staff as he was advising the campaign comes to light a week after McCain announced a new policy to avoid such conflicts. The new conflict-of-interest policy prohibits campaign workers from being registered lobbyists or foreign agents and bans part-time volunteers from policy discussions on issues involving their clients.

Campaign spokesman Jill Hazelbaker said the ethics policy is not retroactive. She declined to answer any questions about Scheunemann. "This campaign has a policy; it's the most stringent of any presidential campaign in history, and everyone will have to comply or resign, but we're not going to discuss any individual staff members and their individual decisions," she said in an e-mail.

Scheunemann did not respond to messages left at his firm and at the campaign Monday and Tuesday.

Democratic presidential candidate Barack Obama does not allow registered lobbyists to work for his campaign but has some lobbyists as informal advisers. Lobbyist Broderick Johnson, for example, is an informal adviser who represents such clients as Verizon, Microsoft, Shell Oil and the Ford Motor Co.

Obama's main rival, Hillary Rodham Clinton, does not have a conflict-of-interest policy regarding lobbyists. However, she replaced top strategist Mark Penn earlier this year after he acknowledged meeting with the Colombian ambassador to discuss building support for a free-trade deal that Clinton opposes. Colombia was a client of Penn's employer, Burson-Marsteller.

Melanie Sloan of Citizens for Responsibility and Ethics in Washington, a liberal-leaning watchdog group, said Scheunemann still has a conflict of interest because his small firm continues to represent foreign clients. The records that show Scheunemann ceased representing foreign countries as of March 1 also show his partner, Michael Mitchell, remains registered to represent the three nations. Mitchell said Tuesday that Scheunemann no longer has any role with Orion Strategies but declined to say whether Scheunemann still is receiving income or profits from the firm.

"I can see why the firm wouldn't want to give up the income," Sloan said. "But you can either work for a presidential campaign or be a lobbyist, but not both."

Scheunemann, who was McCain's foreign policy adviser during the 2000 presidential campaign, serves as McCain's spokesman on international issues, including those involving his former clients. For example, Scheunemann gave an interview in April to U.S. government-funded Radio Free Europe/Radio Liberty about Georgia.

"The Georgian example has inspired Americans and American leaders in their dedication to democracy. … It's really about shared values, and it's something that Sen. McCain feels particularly deeply," Scheunemann said.

Georgia paid Orion Strategies $240,000 in the year ending Dec. 1, reports show.

Five staffers and advisers have left McCain's campaign in recent weeks because of the new conflict-of-interest policy. Democrats have pounced on the departures, saying they show McCain has been surrounded by lobbyists while decrying their influence in Washington.

"The fact is, John McCain's campaign is being run by Washington lobbyists and paid for with their money," Obama said Monday in Billings, Mont.

Hazelbaker suggested Obama was being disingenuous because he does not restrict the lobbying activities of his advisers. Obama's campaign co-chairman, former South Carolina governor Jim Hodges, was a registered lobbyist from June 2007 until March for Chicago-based financial services firm Hillenbrand Partners.

"The McCain campaign has put forward the most stringent policy of any presidential campaign in history, and it will be instructive to see if Obama meets the standard set by McCain," Hazelbaker said in an e-mail.