Former congressman cashing in on connections

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Retired U.S. Rep. Jerry Costello. D-Ill., spent his entire congressional career serving on the House committee that oversees railroads, highways, transit and aviation.

Now, the connections he made during 24 years representing a Downstate district are proving lucrative for Costello as a lobbyist and consultant for transportation and other interests.

According to interviews and records:

• As a congressman, Costello pushed for the Air Force to award a $35 billion tanker contract to Boeing Corp. The Chicago company now pays him $10,000 a month as a lobbyist. It also hired his son John Costello as an Illinois lobbyist while Costello was in Congress.

• In the House, he helped downstate Scott Air Force base survive multiple rounds of base closings. Now, Costello, who left Congress in January 2013, is part of a team paid $25,000 a month to help keep Scott safe from future base closings.

• Costello, the congressman, secured millions of dollars for the downstate Madison County Transit District — and now gets $7,000 a month from the agency as a lobbyist.

Records show John Costello also has found work with interests his father backed in Congress:

• The congressman helped the freight railroad industry in its successful 2012 fight to beat back an effort to allow bigger trucks on the nation’s highways. During that time, the Illinois Railroad Association paid Costello’s son as much as $60,000 a year to lobby in Springfield.

• Costello was an advocate in the House for renewing a federal tax credit for “short line” railroads. An industry group called the Short Line Tax Policy Coalition hired Costello’s son as an Illinois lobbyist as this issue was being debated in Congress.

The former congressman says clients have sought him as a lobbyist because, “They knew that I was knowledgeable. I had experience.”

Costello, 64, says his son was hired to lobby on state issues and that no one got special consideration from him in Congress as a result.

John Costello did not respond to requests for comment.

Those leaving Congress are barred from lobbying their former colleagues for one year but not from being paid advisers to those who want something from Congress. They also are allowed to lobby federal agencies and other governmental bodies.

In 2013, his first year out of Congress, Costello set up a solo lobbying practice in his hometown of Belleville and made at least $200,000 in fees, according to interviews and financial disclosure reports. He also draws a $60,000-a-year federal pension, plus state and local pensions totaling an additional $19,000 a year.

Boeing was one of Costello’s first clients, hiring him to lobby the Federal Aviation Administration. Headquartered in Chicago, Boeing paid the former congressman $90,000 for nine months’ work last year and renewed his contract for 2014 at the same $10,000-a-month rate, according to Costello.

In 2008, Costello led a group of 11 Illinois lawmakers protesting the Air Force’s decision rejecting Boeing’s bid for a $35 billion contract for aerial refueling tankers. Boeing argued the selection process was unfair and won a ruling by the Government Accountability Office to reopen bidding. This time, in 2011, Boeing won the contract, a decision Costello applauded.

In August 2010, Costello said he’d helped persuade Boeing to open its first manufacturing facility in Illinois, creating 125 jobs in Costello’s district.

A year earlier, Boeing had hired John Costello to lobby for the company on state issues. The son, who worked for Boeing through 2011, did not have to disclose his fees under Illinois law.

Boeing spokesman Gayla Keller would not comment except to say: “Boeing works with a variety of parties to advocate on behalf of its businesses.”

Costello’s friend U.S. Rep. John Shimkus, R-Ill., has dubbed him “the patron saint of Scott Air Force Base.” Costello’s strategy as a congressman to keep Scott open was to increase the number of military units based there, among them the 126th Air Refueling Wing of the Illinois Air National Guard, which brought hundreds of jobs to his district from Chicago.

Now, the Leadership Council of Southwestern Illinois has hired Costello, along with retired Air Force General Duncan McNabb and the Washington lobbying firm Smith, Dawson & Andrews, for 18 months for $450,000 to keep pushing to keep the Air Force base open. Costello won’t say what his share of the fee is.

Ellen Krohne, the business group’s executive director, calls Costello “the very best person for the job.”

Other Costello lobbying clients include the Madison County Transit District, which he helped get tens of millions of dollars in federal grants while serving in Washington. Now, Costello says he is paid $7,000 a month to lobby for the transit agency in Springfield.

Another lobbying client was the owner of a Sauget, Ill., hazardous-waste incinerator that had a history of emissions violations and was on notice the U.S. Environmental Protection Agency planned to impose limits on the amount of lead, arsenic and mercury the incinerator could burn. Veolia Environmental Services hired the former congressman to lobby on permitting issues at the southwestern Illinois location and paid him $60,000 over five months, records show.

Costello says he was an adviser to Veolia. The company did not return calls. The permitting issue remains under review.

In Congress, Costello backed policies that help freight railroads, a big industry in his district. In 2009, the Short Line Tax Policy Coalition hired John Costello, according to Illinois secretary of state’s office records. The Washington coalition was formed to support a federal tax credit that helps pay for track rehabilitation and maintenance for railroad feeder lines that carry freight from factories and farms to national rail networks.

The tax credit expires every few years. In Congress, the elder Costello routinely backed extending it.

The coalition employed Costello’s son from 2009 through February 2013, shortly after the lawmaker left Congress. Disclosure reports compiled by the National Institute on Money in State Politics show John Costello was its only lobbyist outside the nation’s capital.

The former congressman says he “was a supporter of the short-line tax credit for many, many years . . .  It is not like, ‘Oh, you hired my son, and so I’m going to vote for an issue that you’re interested in.’ ”

The coalition did not respond to requests for comment.

In February 2012, Costello and U.S. Rep. Lou Barletta, R-Pa., beat back legislation the freight railroad industry opposed to allow longer, heavier trucks on the nation’s highways, saying they’d damage roads and pose a safety hazard.

From 2008 through 2012, state records show, the congressman’s son picked up three more clients whose members or owners include national railroad operators: the Illinois Railroad Association, the Terminal Railroad Association of St. Louis and the Alton & Southern Railway Company.

Though John Costello wasn’t required to report his fees, the Illinois Railroad Association reported that for two years it paid $60,000 a year for lobbying at a time he was its only outside lobbyist.

By Chuck Neubauer and Sandy Bergo of the Better Government Association

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