By
Nina Easton, Fortune Washington bureau chief
WASHINGTON (Fortune) -- John J. Castellani has a dream, best described (with apologies to Castellani) as a twist on the 1975 hit "Why Can't We Be Friends?". As president of the Business Roundtable, Castellani is the Washington go-to guy for the nation's top CEOs, and right now he's gamely trying to make the most of a new political environment in which his constituency is about as popular as a batch of rejects from last night's American Idol.
With populist-minded Democrats in charge of the House of Representatives, the emerging theme is "corporate greed run amok," from big oil tax breaks to CEO salary packages. So Castellani is engaged in a little makeover work. On Tuesday, he appeared at the National Press Club alongside two unlikely allies - the town's hottest labor leader and the most powerful senior citizen lobbyist - to call for healthcare reform. They didn't agree on a specific solution, but they did agree that it's a problem. "We agreed there are good ideas out there," Castellani later said. "Let's sit down and figure out what's best."
And for all those new Democratic lawmakers who missed the press conference, there was the 6"x8'', above-the-fold photo in the Washington Post the next day: Castellani shaking hands with Service Employees International Union president Andy Stern, whose union spent millions on liberal-left causes and candidates last year. In between the pair stood Bill Novelli, president of the American Association of Retired Persons, another Democratic favorite and arguably the one man standing between President Bush and his hopes for private Social Security accounts. Castellani admitted that he probably "wouldn't be standing up there" with this pair if not for the change of guard in Washington.
Then, on Thursday, the Business Roundtable released an education initiative that includes partners from the civil rights community, such as La Raza and Citizens Commission for Civil Rights. A couple hours later, Castellani sat down for lunch with reporters to discuss the Roundtable's 2007 policy agenda, an earnest list of do-good initiatives that includes not only healthcare and education reform, but a project to combat global warming. "You don't have to convince the members of the Business Roundtable that [climate change] is an issue," he noted.
Nowhere on this list of admirable goals was any mention of the topics likely to keep America's CEOs most occupied - and on the defensive - in the coming months, as veteran Democratic committee chairs make headlines by exposing corporate excess, a phenomenon that Castellani accurately describes as "a pent-up desire for oversight hearings."
Knowing what's in store, the Roundtable folks are busily making the rounds on Capitol Hill, meeting with an average of seven lawmakers a day. Much of this discussion is focused on critical trade agreements that are up for consideration this year, as they try to combat a growing protectionist sentiment on Capitol Hill. But inevitably corporate behavior also comes up. According to opinion polls, favorable public opinions of corporations has plummeted, and restive Democrats reflect that mood.
This week alone, the Democratic-controlled House (along with some Republicans) voted to repeal oil- and gas-industry tax breaks and to force the government to negotiate directly with pharmaceutical companies to set Medicare prescription prices. Those measures will likely be blocked by the Senate and President Bush. But House Democrats do have the power to make headlines, which they plan to do with an array of corporate investigations.
And Barney Frank, in particular, has caught the attention of CEOs with his ardent desire to limit the size of corporate salaries. Frank, Massachusetts Congressman and chair of the House Financial Services Committee, sees the salary gap between wage-earners and CEOs as a moral issue. "Even if inequality doesn't bother them," Frank said of business executives in a recent speech, "even if Mr. Nardelli getting $210 million for being fired when other people make $7 an hour for working very hard, even people untroubled by that -and I envy them the ease of their consciences; they must get a lot more sleep than a lot of us do - if they don't care on those grounds, they ought to recognize that we are in gridlock, that we are unable to go forward with policies that many think are pro-growth because there are so many people who see only the short-term pain that those inflict, or even the medium-term pain and don't see any gain."
Frank wants shareholders to be able to approve pay packages, a proposal that Castellani likens to allowing salaries to be set in a "New England town hall meeting" with all the politics and factions and infighting certain to "tie a company up in knots." And that encapsulates the defensive side of the Business Roundtable's political strategy this spring: Whether on trade or compensation or taxes, business executives are delivering are trooping to Capitol Hill to deliver one message to lawmakers.
As Roundtable executive director Larry Burton put it: "Do no harm"--to markets, to the economy, to prospects for growth. Sounds good. The danger is that lawmakers will throw that message right back at corporate America. 
