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In Illinois, Obama dealt with lobbyists

But as candidate, he faults Clinton for ties

Democratic presidential hopeful Barack Obama spoke at a rally Thursday in Atlanta. Obama has tried to distinguish himself from rival Hillary Clinton by criticizing her ties to lobbyists. Democratic presidential hopeful Barack Obama spoke at a rally Thursday in Atlanta. Obama has tried to distinguish himself from rival Hillary Clinton by criticizing her ties to lobbyists. (JOHN BAZEMORE/ASSOCIATED PRESS)

When Barack Obama and fellow state lawmakers in Illinois tried to expand healthcare coverage in 2003 with the "Health Care Justice Act," they drew fierce opposition from the insurance industry, which saw it as a back-handed attempt to impose a government-run system.

Over the next 15 months, insurers and their lobbyists found a sympathetic ear in Obama, who amended the bill more to their liking partly because of concerns they raised with him and his aides, according to lobbyists, Senate staff, and Obama's remarks on the Senate floor.

The wrangling over the healthcare measure, which narrowly passed and became law in 2004, illustrates how Obama, during his eight years in the Illinois Senate, was able to shepherd major legislation by negotiating competing interests in Springfield, the state capital. But it also shows how Obama's own experience in lawmaking involved dealings with the kinds of lobbyists and special interests he now demonizes on the campaign trail.

Obama has tried to distinguish himself from rival Hillary Clinton by criticizing her ties to lobbyists and special interests, and, unlike her, refusing to take contributions from federal lobbyists and political action committees. But Clinton supporters say she has been more honest than Obama - including on the healthcare plan she released last week - in acknowledging that industry deserves a role.

"Senator Clinton has learned along the way the importance of both listening to those who are in the field as well as listening to the concerns of the consumer," said Sylvia Larsen, the New Hampshire Senate president and a Clinton backer. Obama "seems to have forgotten the importance of hearing from all sides."

Obama spokeswoman Jen Psaki said Obama's overall experience in Springfield was that lobbyists and special interests wielded too much power, not that they should have no voice in lawmaking. Psaki said Obama had worked with disparate interests to pass many important bills, including not just the Health Care Justice Act but a sweeping ethics overhaul that became the first major change in Illinois campaign finance law in 25 years.

"Barack Obama's experience with this bill and also with his leadership on the ethics reform bill, which he also helped pass in the state Senate, showed him that real change comes not by dividing but by bringing people together to get things done," Psaki said.

The Health Care Justice Act, which Obama sponsored in the state Senate, grew out of work done by the Campaign for Better Health Care, an Illinois coalition of healthcare advocates, labor unions, and nonprofit organizations. The ostensible goal was simple: make affordable healthcare available to all Illinoisans. But the politics were anything but simple.

On one side were healthcare advocates, eager to capitalize on the Democrats having won control of the General Assembly and the governor's office. On the other were most insurers, who worked vigorously to sink the bill. Obama was in the middle, trying to reconcile a range of agendas to get a viable plan signed into law.

The bill originally called for a "Bipartisan Health Care Reform Commission" to implement a program reaching all 12.4 million Illinois residents. The legislation would have made it official state policy to ensure that all residents could access "quality healthcare at costs that are reasonable." Insurers feared that language would result in a government takeover of healthcare, even though the bill did not explicitly say that.

By the time the legislation passed the Senate, in May 2004, Obama had written three successful amendments, at least one of which made key changes favorable to insurers.

Most significant, universal healthcare became merely a policy goal instead of state policy - the proposed commission, renamed the Adequate Health Care Task Force, was charged only with studying how to expand healthcare access. In the same amendment, Obama also sought to give insurers a voice in how the task force developed its plan.

Lobbyists praised Obama for taking the insurance industry's concerns into consideration.

"Barack is a very reasonable person who clearly recognized the various roles involved in the healthcare system," said Phil Lackman, a lobbyist for insurance agents and brokers. Obama "understood our concern that we didn't want a predetermined outcome."

In one attempt at a deal, Obama approached the Campaign for Better Health Care with insurers' concerns, asking if the group would consider a less stringent mandate than requiring the state to come up with a universal healthcare plan. The coalition decided not to bend, said Jim Duffett, the group's executive director.

"The concept of the Health Care Justice Act was to bring the sides - the different perspectives and stakeholders - to the table," Duffett said. "In this situation, Obama was being a conduit from the insurance industry to us."

Obama later watered down the bill after hearing from insurers and after a legal precedent surfaced during the debate indicating that it would be unconstitutional for one legislative assembly to pass a law requiring a future legislative assembly to craft a healthcare plan.

During debate on the bill on May 19, 2004, Obama portrayed himself as a conciliatory figure. He acknowledged that he had "worked diligently with the insurance industry," as well as Republicans, to limit the legislation's reach and noted that the bill had undergone a "complete restructuring" after industry representatives "legitimately" raised fears that it would result in a single-payer system.

"The original presentation of the bill was the House version that we radically changed - we radically changed - and we changed in response to concerns that were raised by the insurance industry," Obama said, according to the session transcript.

During debate over the Health Care Justice Act, Obama also attacked the insurers, accusing the industry of "fear-mongering" by claiming, even after he made changes they wanted, that the bill would lead to a government takeover.

Still, Obama's willingness to hear out insurers and their lobbyists is revealing given the posture he strikes today on the presidential campaign trail - that lobbyists, insurance companies, and other big-industry special interests have an outsized and polluting influence on policy-making in Washington.

In a new television ad his campaign unveiled last week, Obama says that cynics "don't believe we can limit the power of lobbyists who block our progress, or that we can trust the American people with the truth. . . . In 20 years of public service, I've brought Democrats and Republicans together to solve problems that touch the lives of everyday people. I've taken on the drug and insurance companies and won."

And yet while serving in Illinois, Obama was willing to accept campaign contributions from lobbyists. Obama's state Senate campaign committee accepted contributions from insurance companies and their lobbyists - including $1,000 from the Professional Independent Insurance Agents PAC in June 2003, and $1,000 from the Illinois Insurance PAC in December 2003 - while the Health Care Justice Act was wending its way through the Illinois General Assembly. Obama also collected money from the insurance industry and its lobbyists for his successful US Senate campaign in 2004.

Obama's campaign has said that his position on accepting such contributions has evolved and that he decided not to accept them for his presidential campaign after seeing how much influence lobbyists had in Washington during his first two years in the Senate.

The Illinois task force eventually released its healthcare recommendations, including the Illinois mandate that all residents be covered. But Governor Rod Blagojevich has since come out with his own proposal to expand coverage, and the governor and lawmakers are now wrangling over how to proceed.

Some who worked on the bill say Obama recognized then that lobbyists and industry play an integral role in shaping legislation.

"At the end of the day," said Kim Maisch, Illinois state director for the National Federation of Independent Business, "he realized that if he wanted to pass something, you have to work" with lobbyists.

Scott Helman can be reached at shelman@globe.com.

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