Richard Neal Has Spent Decades Carrying Water for Corporate America
Richard Neal's career is the story of a low-profile lawmaker keeping his head down, doing the work, and serving the interests of the corporate donors who give him money.
Ask who Richard Neal is, and you’re liable to get two answers.
For card-carrying members of the Beltway and the establishment press, Neal is an old-school DC politician, versed in Congress’s clubby culture of compromise, bipartisanship, and deal-making — “the insider’s insider, a veteran relationship-builder on Capitol Hill,” as the Boston Globe put it in 2017.
But for an assortment of progressive activists, youth-led climate groups, and left-wing reporters, Neal is a potential brick wall ready to halt any attempt at urgent, transformational change pursued should Donald Trump be thrown out of office in November, a brick wall emblazoned, race car–driver style, with an assortment of corporate logos.
A conspiracy of circumstance has made Neal, the sixteen-term Congressman who’s spent his thirty-two years in Washington keeping his head down and quietly rising in the Democratic pecking order, an unexpected flashpoint in 2020. Having ascended in 2019 to the chairmanship of the powerful House Ways and Means Committee, which oversees not only entitlements but any legislation related to taxes, Neal will be in a unique position should Democrats win in November. If a potential President Joe Biden really intends to “transform” the country and become “the most progressive president since FDR,” Richie Neal could well be the man who makes or breaks that promise.
As of the end of August, the latter looks more likely. Neal is a skeptic of Medicare for All, the health care policy that has surged in popularity since the coronavirus pandemic and accompanying recession threw more than 5 million Americans off their health insurance. He remains the only one of Massachusetts’ wholly Democratic delegation to refuse to endorse the Green New Deal, despite grassroots pressure to do so. Going into 2019, Neal tried to handcuff any future progressive agenda by putting forward a rule requiring a supermajority to raise taxes on the bottom 80 percent of earners, a rule that was, at least for this current Congress, defeated.
In short, if a progressive agenda is on the table in 2020, it’s Neal who may well decide whether such legislation ever makes it to the House floor for a vote in the first place.
Neal’s power and, for at least some of his constituents, existence has become headline news largely because of a primary challenge from Justice Democrat and Holyoke mayor Alex Morse, running on a Berniecrat platform of Medicare for All and a Green New Deal, and insisting that “we can no longer settle for small, incremental, and compromising progress.” The race has become national news thanks to a recent smear campaign against Morse orchestrated for the benefit of Neal (and without his knowledge) by local college and state Democrats.
Over the past two years, progressive challengers have unseated several powerful, corporate-funded, and change-resistant Democrats in shock upsets, from Alexandria Ocasio-Cortez’s defeat of former House speaker-in-waiting Joe Crowley to Cori Bush’s victory over ten-term congressperson Lacy Clay. If the voters of Massachusetts’s first congressional district decide against Neal this coming Tuesday, they won’t just be adding one more name to this list, but unseating a politician who has become increasingly cozy with corporate interests over time, seemingly more responsive to campaign contributors than actual voters.
Once Upon a Time
Two patterns for Neal’s career would be set when the Springfield mayor was first elected to Congress in 1988. Just as Neal would run unopposed for the safe blue seat for much of the next three decades, he ran virtually unopposed for an open seat vacated when an eighteen-term Democrat who had held the seat since the Eisenhower years retired. The other was the whiff of scandal surrounding the enmeshing of his government work and his political donors.
In 1990, as Neal fought his first congressional reelection campaign, the Massachusetts inspector general (IG)’s office began looking into his donor records, an investigation that would later become a state and federal matter. The case concerned Insurance Cost Control Inc. (ICC), a firm Neal, in one of his final acts as mayor, had handed a no-bid contract worth $2.5 million for overseeing the town’s employees’ health insurance — and whose owner, Paul Tinsley, had donated to his congressional campaign. “This is politics, pure and simple,” Neal said about the inspector general’s case. He continued to insist years later the whole thing was merely “the logical manifestation of a series of political disputes.”
Not everyone agreed. It was the Springfield city council that had first looked into the matter before running out of money, concluding that “further investigation would be fruitful.” After six months, the IG determined there was “an appearance of impropriety” in the dealings between Tinsley and the city’s personnel director, forcing a rewrite of the contract’s terms. By 1993, a federal grand jury and the state’s attorney general (AG) were both on the case.
The attorney general eventually determined Neal had been the recipient of illegal donations from ICC employees, whom Tinsley had directed to both donate and work on his campaign. The AG’s office had also found ICC had, under Neal’s tenure in 1987–88, ripped the city off to the tune of close to $800,000.
The sprawling investigations also narrowed in on Charles J. Kingston, a key aide for Neal’s 1988 campaign and deputy tax collector for Springfield who, it turned out, had been violating conflict of interest laws by secretly pocketing consulting fees from several companies doing business with the city, including ICC. One of Neal’s predecessors criticized him for handing the contract to a firm connected to a political ally, arguing that the governing body of Hampden County, in which Springfield sits, had rejected a similar offer by the firm.
Neal was never accused by prosecutors of being aware of any of the wrongdoing, and he vehemently defended the contract with ICC, pointing out it had been chosen by a committee of city and union officials, and that later mayors renewed it. But the years-long headache, which involved serious charges of municipal corruption surrounding Neal’s government and people connected to him, foreshadowed later improprieties around his donors and legislative work.
Assurance for Insurance
Through the nineties, Neal’s closeness with the insurance and financial services firms that made up an important chunk of his local economy saw him repeatedly take the side of the corporate sector in Congress.
Neal proved to be one of the perennial thorns in Bill and Hillary Clinton’s sides as they embarked on their doomed health care reform effort. Neal, considered a key target to win over given his place on Ways and Means, was described by the White House as “very concerned” about the economic impact such a measure would have on the hospital and insurance industries in his district, being that Massachusetts Mutual Life Insurance Co. was headquartered there.
He was playing “hard-to-get,” according to a different memo, and wanted “to keep federal involvement at a minimum and objects to forcing small businesses to provide health insurance.” On the subject of keeping health care costs down, Neal claimed that cost was “relative,” quipping that “if it’s your relative, cost is not an issue.”
Neal pushed for weakening of cost controls, and it was partly at Neal’s behest that the White House lowered the standards for firms to self-insure, lowering it from 250 to 100 employees. This all may well preview the kind of conservatizing role Neal may play in future health care reform efforts.
Where Neal was firmly behind the White House was in its effort to gut welfare, cochairing the House Democratic Welfare Reform Task Force and working extensively on the bill viewed as one of the signature defeats of President Franklin D. Roosevelt’s legacy. Neal attacked Republicans from the Right during the bill’s writing, complaining their bill “does nothing, absolutely nothing” to promote work over welfare, and promising his would “be tougher on the work requirement than even the president’s bill was.”
“Individuals should be provided with the opportunity to work, and if they do not want to work, then their benefits should be denied,” he proclaimed.
He was ultimately one of only two Massachusetts Democrats to vote for the final product in 1996, with six voting against. Though he expressed worry that millions of children would suffer, he predicted it wouldn’t have much of an impact on his state. Yet between 1995 and 2007, poverty measures in the state held steady or even increased, even as economic growth saw it slightly decline nationally, while the law has wreaked havoc on poor communities in the South and parts of the West.
The effort suggested the somewhat conservative streak Neal also displayed when it came to abortion rights. He had voted against federal funding for abortions even in case of rape and incest, for banning a procedure used in late-term abortions, and, in 1999, helped to nearly override Clinton’s veto of a bill letting parents whose daughters had abortions file civil suits and allowing law enforcement to prosecute adults (excluding parents) who helped pregnant teenagers avoid their state’s parental consent laws to get abortions.
Despite having voted against NAFTA, and getting a significant amount of support from organized labor, Neal closed out the decade by being one of two members of the ten-member Massachusetts delegation to turn against unions and vote to grant China permanent normal trade relations. He pointed to firms in his district like Spaulding and Milton Bradley as ones that would benefit. He had made unions “very angry,” said the head of the state’s AFL-CIO, but there was little they could do.
“He was one of our guys. And he voted against us,” said one union worker bitterly. “The problem is very clear,” said a local union leader. “Richie Neal and those like him know we don’t have anywhere else to go.”
Neal himself was unconcerned. He predicted it held “great potential for the economic future of this district and for these working families,” and denied it would lead to job losses.
“It has been my experience that companies chasing low wages around the world are companies on their way out of business,” he said. “That kind of job loss is more likely under the status quo. It will be less likely under the agreement.”
Since its passage, the growth of the US trade deficit with China has led to the loss of 3.7 million US jobs, including a decline of nearly one-third of manufacturing jobs, with Massachusetts one of the ten hardest hit states.
“Explain What You Do”
By 2009, Neal hadn’t faced a general election opponent for thirteen years and was sitting on a $2.2 million war chest filled mostly with PAC money from the finance, real estate, and insurance industries. In the Obama years, Neal took a more prominent role in carrying water for those and other industries.
One of the key figures in writing what would end up being Obamacare, Neal had supported banning abortion from being covered by federally subsidized plans, and, according to a spokesperson for Covidien PLC, a Massachusetts-based medical device company, worked with the company to lower the final bill’s tax on medical devices. Despite promising labor leaders in 2006 that he would vote for Medicare for All if it ever got on the House floor, come 2009, Neal’s name was not one of the eighty-five cosponsors of John Conyers’ bill.
His opponents speculated whether his donations from health insurers had something to do with it.
Neal’s currying favor with corporate donors became increasingly brazen. In mid-2010, Neal held a $5,000-a-head fundraiser at the Chatham Bars Inn at Cape Cod, hoping to win the Ways and Means chairmanship by raising lots of money and buying his colleagues’ support. The Globe criticized him, urging Neal not to “accede to the capital’s money culture” and “sell access to himself.”
Neal ultimately fell short of winning the chairmanship, but continued to work closely with industry. Now something of an elder statesman in Massachusetts politics, he became the unofficial leader of the state’s congressional delegation, convening meetings to which he would sometimes invite local industrial leaders, like former Dunkin’ Brands CEO Nigel Travis and the chief executive of the Massachusetts Biotechnology Council. As rising drug prices became more of an issue, Neal told the council’s annual meeting that “the conversation about drug pricing isn’t going to disappear,” and that “it calls on all of you to explain what you do.”
This closeness is perhaps why Neal came to the aid of the corporate sector in several episodes in the Obama era. As alarmed executives, lobbyists, and business groups urged the president against his plans to end the free ride for US businesses deferring paying taxes for overseas earnings, Neal and thirty-eight other House Democrats wrote to Nancy Pelosi calling the idea anticompetitive, with Neal personally warding Obama off from the measure at a White House meeting.
Later, he was one of fifteen Democrats and eighteen Republicans who, at the behest of mutual-fund lobbyists, signed onto a letter to US Securities and Exchange Commission chair Mary Schapiro opposing her plan to tighten regulations on the industry. The letter and names were put together by the Investment Company Institute, an industry group whose members included the Boston-based Fidelity.
But the episode that got Neal the most headlines involved a proposed labor department rule in 2015 that aimed to protect retirees’ savings from unscrupulous financial advisers. The Obama administration wanted to ensure advisors weren’t giving their clients investment advice that saddled retirees with low returns and high fees, but netted them big commissions and other financial windfalls. Firms like MassMutual (Neal’s career-long top donor), Fidelity, and other financial services firms Neal counted in his top contributors naturally opposed the measure.
Neal called the rule “cumbersome and overly complicated,” charging it would “drive people away from retirement advice that need it.” Acknowledging that MassMutual’s location in his district played a role in his thinking, Neal joined forty-six House Democrats to ask Obama to delay the rule, then introduced legislation that watered down the rule, requiring that brokers keep their clients’ “best interests” in mind when giving advice, but without its more strict requirements, like a written contract between the client and the broker.
The local Berkshire Eagle admonished him, saying that bipartisanship “should not be in the service of Republican-style bills catering to the specific interests of wealthy companies.” But while Neal proved responsive to his corporate donors, he became increasingly removed from the actual voters he was supposed to answer to. His local constituents didn’t even know who he was, and the local press urged him to spend more time in the district.
One Committee Chair Under Trump
With the Trump era, Neal has ascended to a newly prominent role, finally winning the chairmanship of the Ways and Means Committee. At the same time, his corporate fundraising has, not coincidentally, reached new levels too.
“Massachusetts companies and industries are excited to perhaps soon have a direct line to chairmen pushing for a bigger piece of the funding pie for them and their interests,” the Globe reported in advance of Neal’s ascension. One longtime lobbyist celebrated it would make “an enormous difference in Massachusetts’ priorities being funded,” because “when you’re chairman you really can have the definitive hold on what’s in the bill and what’s not in the bill.”
As David Daley wrote for the paper, in Neal’s first quarter as chairman alone, he raised more than $520,000 from corporate donors and industry lobbying groups, while spending more than $467,000 for fundraising events at lavish locales and pricey events like concerts and games. Federal Election Commission records show that Madison PAC, a vehicle through which Neal doles out this corporate-raised cash to curry favor with other Democrats, has spent tens of thousands of dollars over the past year for fundraising at restaurants and hotels in DC, Miami Beach, Boston, and Cape Cod, including nearly $60,000 at Chatham Bars Inn — the site of Neal’s once-controversial $5,000-per-person corporate fundraiser in 2010.
That seems tame in comparison to his more recent activities as chairman, which include holding a hundredth birthday party for insurance firm AIG in the Ways and Means Committee hearing room, replete with lobbyists and elected officials.
That generosity has come with access. After receiving $16,000 from tax preparation companies Intuit and H&R Block in the last two election cycles, Neal and the rest of the committee passed a bill barring the IRS from making a free online tax filing system. As Congress worked on a pandemic relief bill in April, insurance executives personally lobbied Neal for federal money in the House legislation, which they effectively got despite privately telling investors they weren’t expecting a hit to their profits.
He’s raked in money from hospitals at the same time that he blocked legislation to end the practice of surprise billing, when patients are hit with unexpected bills for care they didn’t realize they were getting from outside their insurance network. Taking hundreds of thousands of dollars from insurers and pharmaceuticals, Neal forbade Democrats at a Medicare for All hearing from using the phrase “Medicare for All,” and is looking only to revive Obamacare’s “individual mandate” — a giveaway for the insurance industry, given it forces consumers to buy their products.
Meanwhile, he has dragged his feet on what, for a Democrat in the Trump era, should be a basic and uncontroversial task: checking the president. For more than a year, Neal has frustrated rank-and-file Democrats and Trump foes like billionaire Tom Steyer with his glacial pace in going after the president’s tax returns, with the result that they will stay hidden from public sight before voting starts.
Why? So he could get Trump’s help to pass another giveaway to insurers.
Richard Neal’s career has shown that if a lawmaker keeps his head down, stays out of the limelight, and occupies a safe party seat, he can rise through the ranks doing the bidding of industry and lobbyists with little to no controversy. Next Tuesday’s primary will be a test of whether that strategy will continue to pay off.