Articles

"Senator" Thomas

Uber-lobbyist Bill Thomas shepherds controversial bills through the General Assembly for Virginia's biggest corporations. Even critics credit him with phenomenal powers.

by Peter Galuszka

Tall and professorial, lobbyist William G. Thomas is as much a fixture at the Virginia State Capitol as the now-defunct Chicken’s snack bar that for decades served up home-style Brunswick stew and fresh-squeezed limeade.

Respected by friends and foes for his command of complex legislation, Thomas quietly wields clout on behalf of his blue chip clients and, in the process, plays an enormous role in how Virginia's energy, transportation and land use policies are developed and executed. He just may be the most powerful man most Virginians have never heard of.

Thomas' deep-pocketed patrons include utility giant Dominion Virginia Power, the Home Builders Association of Virginia, Exxon/Mobil, United Airlines, Smithfield Foods and financial kingpins Capital One and Genworth Financial. “He is one of the most thorough and meticulous lobbyists in the country,” says Eva Teig Hardy, executive vice president of public policy and corporate communications at Dominion. “He is extremely good at what he does.”

Thomas, who served for 13 years as a Dominion director, is a key author of landmark legislation passed this year that will re-regulate Virginia's electric power industry. While even critics praise his honesty, some worry that his close ties to key legislators approach the incestuous – so much so that he’s jokingly referred to as "Senator" Thomas – something Thomas and his clients deny.

Stories also abound of how, when when Senate or House committees meet in session to discuss laws, Thomas cues lawmakers with complicated hand signals, as a baseball catcher would guide a pitcher on the mound. That's not so, says Thomas, as he sits for an interview in the 16th-floor conference room of the Richmond office of his law firm, Reed Smith LLP. “Don’t print this,” he quips, “We use BlackBerrys.”

At the moment, Thomas, 67, is waiting for chips to fall in the General Assembly elections on Nov. 6. The common wisdom is that Republicans will cling to power in the House of Delegates but Democrats have a chance to take the Senate and with it, a number of powerful committee seats. How the transfer of power plays out -- who gets the key committee assignments and chairmanships -- will set the tone for legislation affecting energy, highways and subdivisions in the years ahead.

Although Thomas works both sides of the aisle, his ties are closest to the Democratic Party of Virginia, which he once served as chairman. His loyalty to the Dems dates back to his early days as a political activist in Alexandria.

Thomas' lobbying career was shaped during the waning years of the Democratic (Harry F.) Byrd machine, which ran Virginia with the top-down authority and cadre discipline not unlike that of a communist party or the Roman Catholic Church. The Byrd Organization style was to do negotiate with business elites behind closed doors while shutting out average voters. The machine was dismantled years ago, of course, and Republicans hold much of the political power in Virginia today. But the culture of politics in the Old Dominion hasn't changed all that much, some lobbyists say. Regardless of the party in power, elected officials still are highly deferential to business interests.

“I came into this business as a military veteran trying to preserve democracy," says Schwartz with the Coalition for Smarter Growth, whose mission is to combat suburban sprawl. “I have honestly been very disturbed by the disproportionate influence of the major industries in the state, such as Dominion, the home builders and the road industry.

Lisa Guthrie, executive director of the Virginia League of Conservation Voters, makes similar observations: “Instead of steering the policy agenda to align with citizen priorities, a number of highly compensated industry lobbyists tilt the playing field toward their influential clients.”

Such blasts don’t seem to have much effect on Thomas, whose manner is genteel and affable. In his view, the divide between Democrats and Republicans is very meaningful. And, like most political observers, he says Democrats have the momentum.

“The environment is very tough for the Republicans right now,” says Thomas, dressed in a crisp white shirt and tie decorated with brightly colored shotgun shells. “The Democrats did a better job in recruiting candidates on the Senate side than they have in the past.”

The Dems have another advantage this fall: the pervasive unpopularity of President George W. Bush. That is why more campaign dollars are flowing to Democratic candidates, Thomas says. While his clients have donated substantial sums this year, Thomas insists that he has played no role in raising money for political campaigns. Indeed, the record shows that the funds dispensed by his clients are fairly evenly split between Rs and Ds. (View table summarizing campaign contributions.)

Should the Democrats take the Senate, however, Thomas' power -- or, at least, the perception of it -- will increase dramatically. A Democratic victory would elevate a close Thomas friend, Richard Saslaw, from minority leader into position as the most powerful member of the Senate. A veteran pol from Fairfax and a rich gas station operator, Saslaw has received roughly $80,000 this year in donations from Dominion, the home builders, the Reed Smith law firm and other organizations connected to Thomas.

According to the Virginia Public Access Project, Saslaw has out-raised Mario Lamiotto, his nominal Green Party opponent, $799,372 to $0. With no worry about getting re-elected, he has funneled more than $700,000 to other Democratic candidates. Plus, Saslaw influences the expenditures of another $1.5 million collected by the Virginia Senate Democratic Caucus.

Should he take over the Senate leadership, Saslaw is well positioned to dictate key committee assignments and chairmanships. Environmentalists expect him to lead a charge against such builder lobby bug-a-boos as the state’s proffer system and elements of this year’s controversial House Bill 3202 that focus on land use and impact fees. Meanwhile, Dominion, facing attacks for plans to build an electric transmission line across Virginia's northern piedmont, has its hooks deep into Saslaw, environmentalists believe. Dominion contributed $15,000 to Saslaw's campaign directly and another $5,000 to the Virginia Senate Democratic Caucus.

In the past few years, Dominion has tended to favor Republican candidates, though it has always covered its bets. In the 2003 General Assembly elections, the power company passed out 54 percent of its contributions to Republican candidates, 45 percent to Democrats. This year, Dominion has reversed the ratio, giving 56 percent to Dems and 44 percent to GOP candidates.

Still, Thomas is careful not to align himself too closely with the Democrats. “You try to get along with people of both parties. I have a good relationship with a lot of people and Dick [Saslaw] is one of them. I also have good relations with [Republican Senators] Tommy Norment and Ken Stolle.” 

To gauge the impact of Thomas' close ties to legislators, consider his efforts with Norment and Dominion this past session. In the last 1990s, Dominion worked with Norment, who represents Williamsburg and serves as Dominion’s point man in the Senate, to enact a bill that would deregulate electricity rates. Electric utilities across the nation had bought into the idea that deregulation would free market forces that would in turn create more opportunities for power companies while lowering rates for customers.

That scenario didn’t pan out. What passed for deregulation in California proved a disaster, while Maryland customers saw their rates double when the state transitioned from capped rates to free-market rates. Customers in Virginia were spared because rates were never lifted. Dominion executives realized that deregulation was a non starter in Virginia and wanted a change, but, of course, a change their way.

This year, Thomas worked again with Norment, along with a team of Dominion officials and Deputy Attorney General Bill Mims, to proactively draft a re-regulation bill that would protect Dominion's interests. Getting the legislation passed was no mean feat given the bitter and distracting infighting among Republicans over budget shortfalls and transportation needs. But the end result was highly favorable to Dominion: It guarantees power companies a generous return on capital invested in new power plants while requiring only limited conservation efforts and a modest shift to renewable energy sources.

“The bill was totally redone three times and it was changed again at the very end. There was one final rewrite over 48 hours,” says Hardy. That kind of Herculean, detail-laden legislation is a Thomas trademark, although Hardy is careful to credit her team and not just Thomas individually.

Thomas has a special leg up when he helps Dominion. From 1987 to 2000, he served on the board of directors of the company. He had a front row seat when former CEO Thomas Capps reinvented the firm from a conventional regulated state utility into an energy player with a national reach. During that tenure, Thomas learned the complex inner workings of utilities and energy markets while occasionally engaging in lobbying on such Dominion projects as a coal slurry pipeline.

Yet those very ties bring criticism from other interests. Mike Town, executive director of the Virginia chapter of the Sierra Club characterizes the re-reg bill as a travesty. The bill was so important that it should have been the object of a study lasting a year or two, but instead was railroaded through. “This legislation has significant impact on every person in Virginia. There was no urgency,” says Town. “You have the largest campaign contributor and the most expensive lobbyist and you end up with a bill that helps two big companies (Dominion and Appalachian Power). There were lots of people in the room – farmers, average customers – but they didn’t get a chance to speak,” he says.

The bill is flawed, he adds, because it binds the hands of regulators to set electricity rates and “makes it much easier for rates to go up rather than come down,” he says. Moreover, it gives priority to “dirty and expensive” new electricity generation such as nuclear and coal at the expense of cleaner alternatives. Town says he wishes he knew Thomas better and had more clues to the secret of his success.

One might be a trait that distinguishes Thomas from the usual bourbon-and-sirloin lobbying crowd -- flexibility and a keen high-level strategic sense. Michael L. Toalson, executive vice president of the home builders association, credits Thomas with pushing the association in a different direction. Before Thomas joined as general and legislative counsel in 2001, the association “had a reputation as ‘just say no’ to every new idea. We were afraid of change. Bill has brought to us the need to be more solution based than adversary based.” Consequently, says Toalson, the builders group “has reached across to many elements in the environmental community” particularly in areas such as cleaning up water supplies and transferring developer rights.

That may be Toalson's perception, but Schwartz, with the Coalition for Smarter Growth, doesn't see it that way. “I haven’t seen any olive branch,” he says. Instead, he notes, the home builders have consistently shouted down any attempt to empower local governments to restrict suburban sprawl. They likewise oppose efforts to erect affordable housing, Schwartz says. Now their major target is the 35-year-old system of proffers, special fees paid by developers to lessen the impacts of rezonings for residential developments.

Thomas says that proffers are “the Wild West” and are not subject to state regulation. Schwartz says that “proffers are negotiated for the community benefit. If they are killed, that puts the burden for all the growth onto local governments and local taxpayers.”

Developers also are expected to go gunning for parts of House Bill 3202, such as Urban Development Authorities, which call for higher density development  in special zones in 59 counties, and Urban Transportation Service Districts in high-growth areas, where special real estate taxes can be levied to support roads.

To hear him tell it, Thomas had a good idea of what he wanted to do at an early age. Born in Washington, D.C., he grew up in Alexandria and was accepted at elite Williams College in Massachusetts. But Thomas says he didn't want to wait four years to get to law school, so he worked out a deal with the dean of then Richmond College, now the University of Richmond. He left Williams after two years, attended Richmond for one year and then went right unto U of R’s law school. He got his law degree in 1963.

His fascination with politics started even earlier. “I began working with political campaigns in Alexandria when I was 14 or 15,” he says, adding that he was more drawn to state level politics rather than national ones, even though the U.S. Capitol was practically in sight across the Potomac.

A critical career move came in 1973 when he joined with John T. “Till” Hazel to form the Hazel & Thomas law firm. Hazel was, a Harvard Law School graduate, would go on to develop some of the biggest real estate projects in Northern Virginia. To conservationists and environmentalists, Hazel came to symbolize the incredible wealth, power and overweening ambition of Northern Virginia's development community. As a trustee of George Mason University and a major fund-raiser for political candidates, Hazel was connected at the highest levels of the Republican Party. Says one observer: “Til would work the Republican side and Thomas, the Democrats.”

Ironically, the proffer system that makes developers so unhappy today was written and introduced as law in 1974 by none other than Hazel himself. Hazel says he backed the measure because Virginia needed a way to put some teeth into commitments made at the time of rezonings and “to avoid the screwball system of restrictive covenants.” The proffer system got bastardized in the 1980s, says Hazel, when local governments started writing in payment requirements for things that were never originally intended. “So, now,” says Hazel, “through the proffer system, the new guy buying a house in Loudoun County gets hit with a $55,000 bill to save the county from buying the things their people needed.”

Thomas disclaims any involvement at the time. Says he: “I’m innocent. I had nothing to do with starting the proffer system.  Ask Til.”

Although they remain friends, Hazel and Thomas don’t agree on everything. Hazel, for instance, opposes Dominion, Thomas’s client, which wants to build a high-voltage transmission line through Virginia's northern piedmont. Hazel, now retired, lives on a farm in Fauquier County.

While Hazel was making tens of millions of dollars in real estate development, Thomas built his reputation as a highly effective and knowledgeable advocate. His trademark as a lobbyist is an ability to work through highly complex legislation, not slapping backs and handing out cash. The high-life dinners and partying usually associated with lobbyists is not something he likes to do, Thomas says. “I just can’t stay out that late any more." His time is better spent working out the details of proposed legislation.

Thomas may eschew the wining and dining, but his colleagues don't hesitate to fill in for him. Dominion lobbyists, for instance, have treated Saslaw to several dinners at Morton’s of Chicago in Richmond where prime sirloin runs about $40. Other treats included several Redskins football games over the past few years. (Saslaw did not respond to requests for an interview.) Norment got a hunting trip worth $1,722 from Dominion, but that’s nothing compared to Martin E. Williams, a Newport News Republican. The senator, who was defeated in a GOP primary this year, racked up several Dominion-sponsored hunting expeditions worth a total of nearly $5,000.

Thomas doesn't need the face time. He has built up enough credibility over the years that most legislators know and trust him already.

“He is very open and easy to get along with,” says former General Assembly member Leslie L. Byrne, a moderate Democrat who was the first female Congressman elected from Virginia. “He was fine if you were on the right side of the fence, but if you weren’t it was kinda miserable.”

Byrne says that Thomas didn’t need hand signals to convey his views. “His presence is enough. If he shows up when you are pushing a bill the homebuilders don’t like, that’s enough. They get it,” she says, adding, “I have tremendous respect for him. He’s an honest man.” 

In the 1990s, Hazel and Thomas noticed the consolidation trend among law firms and decided to put themselves up for sale. “We approached Reed Smith,” Thomas says. The prestigious international law firm with a big government relations practice merged with Hazel & Thomas in 1999.

Since then, Thomas has continued with his busy lobbying work. Besides electricity and development, he represents construction giant Fluor Daniel as it develops special toll HOT lanes in Northern Virginia on the Beltway and Interstate 395. He also handles Virginia-related business for Exxon-Mobil, and represents financial giants Capital One and Genworth Financial.

For years, Thomas lived in Northern Virginia but after realizing that he was spending about 80 percent of his time in Richmond, he bought a farm in King William County, reducing his commute to about 40 minute.

Asked about his philosophy of land use, he responds, “Good question,” explaining that his role has been to help clients, not give them his personal opinion. “My job is to help them understand smart growth and to see it as consistent with what they want to do.” 

If pressed to define his personal philosophy, Thomas says, he’d probably call himself a believer in growth – a description that environmentalists might find jarring. 

Although fit-looking, Thomas expects to continue lobbying full-time for about two more years. He’s been helping Reed-Smith develop a new crop of Virginia lobbyists. “When I’m 70, I’ll cut back my time,” he says. After that, he’ll indulge his passions of golf and wing shooting, which just might explain the shotgun shells on his tie.

-- October 29, 2007