Lobbyist eyes 2013 for corporate tax overhaul
WASHINGTON (Reuters) - Kenneth Kies sizes up the chances of reforming the convoluted U.S. tax code like someone who has lived through it before. In fact, he has.
Major tax change in Washington, he says, still awaits the right moment, and it will take longer than the few months that were allotted to the failed "super committee."
A tax lobbyist who counts General Electric Co (GE.N) and Microsoft Corp (MSFT.O) among his clients, Kies got his start in the tax world in 1975 as a law student working in Congress while it debated what became the Tax Reform Act of 1976.
Later, as a congressional aide, he helped with Republican President Ronald Reagan's signature 1981 tax cut and the landmark 1986 tax reform package that followed. The U.S. tax code has not been comprehensively overhauled since then.
In an interview in his office across Constitution Avenue from the U.S. Capitol, Kies, 59, said corporate tax reform could be possible in 2013 under certain conditions.
One, the Republican said, is that Republicans would need to hold onto control of the House of Representatives.
Two, he said, a president -- not Democratic incumbent Barack Obama -- would need to be able to bring around conservative lawmakers.
"If you end up with a Republican in the White House, and that person puts a personal stake into getting tax reform," he said, "it would allow that person to negotiate what might be a more moderate package than the hard right would normally be willing to agree to, and they might feel compelled to vote for it because it's their president."
Kies, as many lobbyists do, says he sees his role as an explainer of the intricacies of tax law to lawmakers, many of whom have little grounding in it.
During the 1986 tax debate, when he was the Republicans' chief tax counsel on the tax-writing House Ways and Means Committee, he became known for drawing diagrams. These days he meets lawmakers over lunch or by phone.
"One of the attributes that served me well when I worked for Ways and Means was I could explain stuff to members in words they could understand," he said.
Nick Giordano, who was the Senate Democrats' chief tax counsel from 1997 to 1999, said Kies's personality can be dominating. "He can take over a meeting, and he tends to do that. Some people are fine with that. Others aren't," he said.
But Giordano said Kies treated Democrats fairly and had demonstrated a stronger technical background than other tax lobbyists. Giordano lobbies for Washington Council Ernst & Young, and he and Kies have some clients in common.
Kies grew up in six places as a son of a U.S. Army officer. He went to college and law school in Ohio and practiced law there before joining the House staff. In 1987 he left Capitol Hill for the law and lobbying firm Baker Hostetler.
In 1995 he again gave up the higher pay of private practice after Representative Bill Archer, a Texan who was incoming Ways and Means chairman, asked Kies to be chief of staff of the Joint Committee on Taxation (JCT), the nonpartisan arm of Congress that studies and evaluates the fiscal impact of tax proposals.
"I'm like the most prominent Republican tax lawyer in Washington at the time, right? I'm thinking, 'I'm going to make a lot of money,'" Kies said.
But Archer had already cleared the idea of another stint of government service with Kies's wife, and Kies took the JCT job for three years. Republicans had just won control of Congress.
He left JCT in 1998.
GINGRICH A DRAW
Kies is now managing director of the Federal Policy Group, a firm with only two other principal lobbyists, but a blue-chip client list that includes big names such as Caterpillar Inc (CAT.N), Pfizer Inc (PFE.N) and Starwood Hotels & Resorts Worldwide Inc (HOT.N).
Kies said one person could draw him back to government service: Republican presidential hopeful Newt Gingrich, who was House speaker when Kies worked in Congress the most recent time. Kies remembers those days as long, but productive.
"You never knew when you were going to get home because Gingrich would schedule meetings at like 11 o'clock at night," he said. "You'd be going over for your 11 o'clock meeting, and there'd be a bunch of guys out in the hallway because they had the 11:30 slot. It was just day after day after day."
Kies put $5,000 toward Gingrich's run in June and has given $212,000 to political campaigns since January 2009, almost all benefiting Republicans, according to the nonpartisan Center for Responsive Politics.
Whoever wins the presidency next year, Kies said lawmakers should plan now as if they know tax reform will be a priority. "That's why the work that's done in 2012 is not unimportant, because it will be preparing for that," he said.
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