Dealers play the political game in Washington D.C.

WASHINGTON D.C. — The timing could not have been better for the American International Automotive Dealers Association annual Congress in the nation's capital.

The AIADA meeting, scheduled far in advance, coincidentally occurred the same week Congress was putting the Bush tax plan to a vote. Included in the plan was the repeal of the so-called death tax, a subject near and dear to many dealers. Consequently, a full-scale personal lobbying effort ensued.

Repeal of the death tax has been a “constant drumbeat for dealers” for years, says Scott Lane, vice president of government relations for AIADA.

The death tax, or the estate tax of 55% was levied on all estates valued at $675,000 or more once the owner died.

The tax was especially burdensome for small businesses including automotive dealerships.

“The cost of minimizing the tax is exorbitant,” says Mr. Lane. “Dealers have to pay huge insurance policies sometimes costing $30,000-$50,000 a year in order to offset the tax.”

The 700 AIADA dealers came to Washington, however, fully expecting to see victory. All indications pointed to the passage of the bill and President Bush's certain signature.

“We were using ‘inside-the-Beltway’ tactics and the latest intelligence.”
— Scott Lane
AIADA

Last year, a similar bill repealing the death tax passed both houses of Congress but was vetoed by President Clinton. This year, there were no foreseeable obstacles. A Republican-controlled Congress and White House meant sure victory.

Or did it? Sometime late Monday, May 21, Democrats in the Senate began introducing amendment after amendment in an attempt to slow the bill's passage. (In the three days of Senate floor debate, the senate voted on 58 separate amendments.)

Tuesday night brought even worse news that left some dealers wondering if that old saying about the inevitability of death and taxes was indeed true.

James Jeffords, Republican senator from Vermont was rumored to be leaving the Republican party. His defection would give the Democrats power in the Senate. Suddenly, victory seemed a lot less certain. (Senator Jeffords did leave the Republican party, but agreed later that week to wait till the tax bill was passed.)

A frustrated Walter Huzienga, president of AIADA, told Ward's Dealer Business the following morning, “The news came like a bolt of lightening out of the sky. Lou Holtz (Tuesday's Gala Dinner keynote speaker) told me of the Jeffords rumor as we were walking into dinner.

“Just about the time you think it's done, you got to go back out and do it again.”

The AIADA lobbyists knuckled down again. Both Monday and Tuesday nights, AIADA brass and dealers met with swing senators as late as 12:30 a.m. in the ante room just off the Senate chamber.

Also on Tuesday night, as soon as the Jeffords story broke, AIADA began sending out urgent e-mails to both key senators and to dealers.

Early Wednesday morning, AIADA held a special legislative briefing for the dealers. Lawrence Wilcox, chief aide for Senator Jon Kyl, R-Arizona, instructed the dealers on what they should tell their senators and how they should say it.

Says Mr. Lane, “We were using ‘inside-the-Beltway’ tactics and the latest intelligence.”

Meetings between the dealers and their senators and congressmen that had been scheduled weeks in advance for that Wednesday afternoon suddenly now were vitally important.

Mr. Lane explains, “Ninety percent of the game is timing. Many times the last group to talk has the greatest impact.”

The dealers were the last ones to talk, as it turned out. Many of them were in their senators' offices lobbying right up until the vote was called on Wednesday afternoon.

Dave Conant and Fritz Hitchcock, two prominent California dealers, had an unpleasant meeting with an aide to Senator Barbara Boxer, D-CA.

Says Mr. Conant, “Her aide was one of those cocky, just-out-of-college types. Of course, Fritz and I, working all of our lives, know nothing.”

Fortunately, most other senators received their dealer constituents more pleasantly.

Several dealers were in their senators' offices on Wednesday afternoon watching as the votes were tallied. As it became clear the tax bill was going to pass the Senate, cheers and high fives broke out among the dealers. Some dealers even exchanged high fives with their senators.

On June 7, with AIADA Chairman Richard Kull in attendance, President Bush signed the bill into law.

“It was a great moment for AIADA and grassroots politics,” notes Mr. Lane. “We were in Washington at a very critical time. It was also a wonderful opportunity for our dealers to experience the gratification of many years of hard work.”

The experience also shows that dealers can play an integral role in the lobbying process. Many times the dealer is a community leader and his or her community's biggest taxpayer.

Says Mr. Lane, “Probably the most effective lobbying strategy is talking to your congressman about the impact the policy will have on your business and on the lives of your employees.”

“Lobbying helps put a face on the issue. If you can articulate the real-life impact a bill has on your life, you're doing your job.”

Congressman Dave Camp, R-MI, says the dealers did that.

“The key is to try to build working relationships and they've been able to do that. The issues they've lobbied on have been very consistent. It is always helpful to hear how certain legislation will impact employers.”