“K STREET’S SPRING AWAKENING”is how The Washington Post described the recent blossom of new lobbyist registrations. A formidable batch of 686 registrations were filed in April, just enough to win the three-year record, and more than enough to augur well for those who predict a sprightly Q2. The Post sketches the chronology of lobbying activity as follows: a client hires a firm…a few weeks ensue…said firm registers after their first contact on the Hill…a few weeks ensue…said firm reports fees. Given that typical Q4 hiring seeped into the first months of 2013 (because of the fiscal cliff, as some have claimed), then a full rebound may come later than previous years, reaching its apogee this summer. There’s just one problem: August recess.
All together, too many factors are clouding the usually clear-eyed and credible metric of reported lobbying spending. A decrease in year-to-year spending from 2012-2013 may well result, continuing a trend that began in 2010 and prompting a slew of reporters to herald the demise of traditional lobbying. These tidings, should they come, are best taken with a skeptical eye.
WASHINGTON IS TEEMING with professional lobbyists who make their living by wooing and winning the eyes and ears of policy makers. Yet this week the outsiders are the ones turning heads. Three celebrities will have ambled through the halls of power by week’s end. Former Disney star Demi Lovato sat with HHS Secretary Kathleen Sebelius yesterday at the University of D.C. to honor National Children’s Mental Health Awareness Day. Friends icon Matthew Perry took to the White House and Congress to champion the efficacy of drug courts. Tonight, Breaking Bad‘s Bryan Cranston and his wife will be honored for their humanitarian work with missing and exploited children. Such events evoke memories of a seminal moment in “celebvocate” history:
OPENSECRETS BLOG recently sketched an unlikely comparison between the political influence of big tobacco and that of education. While the former’s command in Washington has largely waned since the 90′s, the opposite can be said of the education “industry.” Both have gradually become more partisan, tobacco leaning increasingly to the right, and education to the left.
So what actually happened to tobacco? Its demise is explained thusly:
In most election cycles between 1992 and 2002, the majority of the industry’s contributions came in the form of soft money. When the Bipartisan Campaign Reform Act of 2002 banned those contributions beginning with the 2004 cycle, tobacco dropped from 41st to 66th among industries in terms of overall donations, and to this day has not recovered.
Yet records of annual lobbying expenditures indicate a decline that originates well before 2004:
1998 was, after all, what might be considered a watershed year for tobacco. The massive settlement between “Big Tobacco” and 46 attorneys general demanding remuneration for tobacco-related health costs was a huge blow to the indsutry, and included provisions that limited its lobbying activity. For an alphabetical list of industry profiles, visit opensecrets.org/industries/alphalist.php
A DECLINE IN reported lobbying is not always synonymous with a decline in lobbying. Many would argue, as some have in recent weeks, that like a crooked weather vane, disclosure reports are a poor gauge of what they were designed to reveal. The most convincing reason for this is that people are avoiding the whole disclosure apparatus altogether by refraining from registration, and thereby joining the ranks of the underground lobbyists, or “unlobbyists.” This phenomenon distorts the size of the advocacy pool (making it appear smaller than it actually is) and, by extension, the extent of its activity. It’s conceivable that if this trend continues, the “unlobbyist” will no longer prove the exception to the rule.
But this isn’t the only reason why an apparent slump in lobbying spending may be illusory. Here are six more offered by Thomas Edsall of The New York Times:
1) The Obama campaign - Tech innovations from the Obama campaign have improved the efficacy of grassroots advocacy and are rendering the middle man obsolete:
[T]he success of the Obama campaign in advancing computer-driven techniques to reach key segments of the electorate has produced a blossoming industry of digital and specialized communications firms using data analysis, microtechnology and computerized list-building to create public support for or opposition to legislative and policy initiatives – virtually all of which goes effectively undisclosed.
2) The Obama Administration - The administration’s anti-lobbying executive orders have ironically discouraged registration:
Taken together, these regulations have encouraged those interested in public service to find jobs that do not require them to register as lobbyists. Or, put another way, those who are eager for government work are not going to formally register themselves as lobbyists and thus make themselves ineligible.
3) Public Relations - PR is replacing GR as another form of advocacy:
To address diminishing revenues, lobbying firms have created their own public relations operations, subsidiaries with the same goals as the lobbying arm, that charge similarly high fees, but which do not have to be publicly reported to either the House or the Senate.
4) Digital advertising – It’s becoming more political. Edsall quotes Jen Nedeau of Bully Pulpit Interactive:
By using data-driven ads to craft a narrative, we believe that social media does not only have the ability to sell soap, but as we’ve already proven, it can help to get out the vote.
5) SOPA – It’s crushing defeat changed the rules of the game:
The scope of the ongoing upheaval in lobbying was brought home with a vengeance in 2011 and 2012 by the failure of traditional lobbying strategies to win approval of the Stop Online Piracy Act. In early 2011, by all normal standards, the odds were with passage of SOPA….The emergence of a powerful public force outside traditional avenues of influence put fear of elective defeat into the hearts of members of Congress and forced the lobbying community to beef up its own non-traditional tactics….Now, in the lexicon of Washington insiders, the acronym SOPA has become a verb, as in the warning to overconfident legislators: “Don’t get SOPAed.”
6) Social media – A cliche but nonetheless true:
[S]ocial media means almost anyone “can shine a light on” Congressional negotiations, so that company or association pushing an issue can no longer depend on the effectiveness of an old-guard lobbyist with good connections on Capitol Hill.
IT’S DIFFICULT TO say whether last week’s lackluster first quarter numbers are indicative of a general demise in lobbying activity. Insiders are providing the press with abundant reasons to eschew the data, among these the assertion that Congress is nursing a hangover from the fiscal cliff, and that lobbying traditionally picks up in springtime.
Perhaps. These arguments, though seductive, will only be well-founded if Q2 numbers reveal a dramatic rebound. Some are certain this will happen. Rich Gold of Holland & Knight told The Hill that “the second quarter is when it’s going to hit.” He told The Washington Post that “a lot of hiring occurred in March, so you’re not collecting the dollars until the second quarter.” And The Post itself followed up with this argument: “The true test for firms may come in the second quarter, after companies and associations have a chance to review new legislation and take positions on which portions of it they want to oppose or support.”
Until then, however (Q2 ends in two months), the numbers remain strikingly low. Even compared to other first quarters (see graph), the last few months were a pitiful showing. Finally, the argument (articulated by one prominent lobbyist) that the opening of a new Congress is the most likely cause for this kind of slump simply doesn’t hold water. At the start of the 111th and 112th Congresses, the top ten lobbying firms spent over 1.5 times as much as they did this time around.
FIRST QUARTER LOBBYING disclosure was due Monday. Here are some of the highlights:
Facebook spent $2.4 million for lobbying in Q1 2013, $1 million more than it spent in Q1 2012, and over $1 million more than it spent in all of 2011.
The NRA spent about $800,000 in the first quarter, over $100,000 more than it did in Q1 2012. OpenSecrets blog calls this slight uptick in spending “surprisingly little” given the intensity of the lobby’s rhetoric after Sandy Hook.
The most targeted issue for lobbying spending was (surprise) pharmaceuticals, where over $22 million was spent. Merck & Co Inc bested the rest of the industry by spending $4 million, roughly what Phrma spent in Q4 2012. This time around, Phrma spent a relatively meager $1 million.
Here are the top ten spending firms in 2013 so far:
PATTON BOGGS LLP
$7,712,500
AKIN GUMP STRAUSS HAUER & FELD LLP
$5,382,500
HOLLAND & KNIGHT LLP*
$4,195,000
VAN SCOYOC ASSOC INC
$3,767,500
BGR HOLDING LLC
$3,422,500
CASSIDY & ASSOCIATES INC
$2,997,500
ERNST & YOUNG LLP (WASHINGTON COUNCIL ERNST & YOUNG)
$2,930,000
CORNERSTONE GOVERNMENT AFFAIRS LLC
$2,787,500
BREAUX LOTT LEADERSHIP GROUP
$2,632,500
FIERCE ISAKOWITZ & BLALOCK
$2,542,500
*bold = firm jumped in rankings from previous quarter
LOBBYIST MARK HAYES, a hired gun for the health insurance company Humana and former aide to Sen. Chuck Grassley (R-Iowa), is at the center of an insider trading scandal and preliminary probe by the SEC. The Wall Street Journal broke the story Wednesday:
His [Hayes's] email to Washington investment-research firm Height Securities, alerting it to a government decision that will save the industry billions of dollars, was a final piece of confirmation Height received before blasting a news alert to its clients, according to emails and people familiar with the matter.
The government decision, made by the Centers for Medicare & Medicaid Services and not yet public at the time of Hayes’s email, reversed earlier plans to reduce Medicare Advantage payments, a big surprise to the industry. As The Hill explains, “the case has prompted criticism of political intelligence firms, which can easily trigger movement in the stock market using insider information but are not required to register or publicly disclose their lobbying work.”
Mike Mayhew, Chairman of Integrity Research Associates, contributed to this criticism: “I don’t believe that the political intelligence and policy research industry has done a very good job of policing itself. Part of that is that it’s a gray area, so they don’t know how to police themselves.”
[T]rade and activity of this sort falls under the heading of trading based on “political intelligence” emanating from Washington. The STOCK Act, heretofore known as The MOLDED SWISS CHEESE Act, does not directly address this stench….Financial reform? Yeah, right!!
Perhaps the most interesting twist to the story, as the reporters at POLITICO Pro pointed out, is that Sen. Grassley began his own investigation on the leak before realizing that his former aide was involved:
Pro’s Jason Millman has an amazing story about what happened when Chuck Grassley went looking for the source of a leak of sensitive details on Medicare Advantage payment rates — and seemed to be zeroing in on a former aide. In a letter, Grassley asked whether a lobbyist at Greenberg Traurig tipped off Height Securities, a political intelligence firm, about a soon-to-be-announced increase in Medicare Advantage rates. The Wall Street Journal identified the aide as Mark Hayes, a long-time senior aide to Grassley on health policy and Medicare.
JACK ABRAMOFF penned an advice column in Businessweek titled “How to Get Your Perk Into a Bill.” “In most cases,” he argues, “you won’t worry about members of Congress who are opposed to you. If you do your job right, they’ll only find out about it once it’s already the law.”
Mark Zuckerberg hired a couple of lobbyists for his new advocacy group. “Zuckerberg is teaming with other Silicon Valley execs like Joe Green to start the group, which is expected to broadly focus on economic issues like immigration and education reform.” The lobbyists were picked up from Fierce, Isakowitz & Blalock and Peck, Madigan, Jones & Stewart.
From The Hill: “The beer giant Anheuser-Busch Companies Inc. has added lobbying help as it tries to acquire the producer of Corona and other popular beer brands.” See an earlier LobbyBlog post “Beer Industry Infighting Returns to Congress.”
“I’ve decided not to be the model penitent for your unconstitutional tribunal,” said a gun lobbyist in Colorado before walking out of an ethics investigation exploring whether he violated a rule against intimidating legislators. “Neville [the lobbyist] was escorted from the capitol that day and Gerou [Rep. Cheri Gerou, a Republican legislator] filed an ethics complaint against him, alleging that his mention of sending mailers to her constituents violated an ethics rule — Rule 36 — against attempting to intimidate or influence legislators.”
On a humorous note, Dog the Bounty Hunter lobbied the Oklahoma legislature for tougher bail enforcement. “The state Senate took the occasion to pass a resolution honoring the 27-year bounty hunter and former bail bondsman. Presumably, lawmakers were scared not to do so”
In mid-January, this blog announced that a new publication called The State Lobbying Compliance Handbook would be available for pre-order. The motivation for the project was described as follows:
Until now, there have only been feeble attempts to conglomerate the disparate and contradictory elements of state lobby law. Yet the appetite for such a project has grown in recent years. Post-recession stimulus provoked a clamoring for clout in state legislatures and governors’ offices. Washington gridlock has driven many to look elsewhere. State and local government affairs operations have sprung up to compete with their federal counterparts….The State Lobbying Compliance Handbook, published by Columbia Books in collaboration with Holtzman Vogel Josefiak PLLC, is a deliverance from these woes.
Now the book is fresh off the press and ready for delivery. For customer convenience, we’ve even included a sample of the content on our order page. This is a highly recommended resource that is well on its way to becoming an indispensable guide for anyone with a stake in state lobbying. Don’t miss out!
POLITICO AND THE HILL have recently reported on the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW), and how it is becoming the focal point of an advocacy battle between big-name beers and their smaller counterparts. POLITICO notes that “the Craft Brewers Association sent 243 of its members to Capitol Hill this week to lobby [for the bill...]” which, according to OpenSecrets, the association’s leader (Bob Pease) is calling “the biggest-ever lobby day — setting up meetings for 250 brewery owners with 90 Senate and 250 House offices.”
The aim of Small BREW, which has just recently been revived after its introduction in 2011, is to “amend the Internal Revenue Code of 1986 to provide for a reduced rate of excise tax on beer produced domestically by certain small producers.” “If enacted,” according to the Hill:
…the Small BREW Act would cut the federal excise tax on beer from $7 a barrel to $3.50, which is placed on a small brewer’s first 60,000 barrels produced per year. After that initial 60,000 barrels, small brewers must pay $18 per barrel, which would be lowered to $16 under the bill.
The Beer Institute, whose members include corporate mammoths like Heineken USA, MillerCoors, Sierra Nevada Brewing Co., and Anheuser-Busch, is opposed to the bill on the grounds that it divides the industry. It instead supports an alternative measure – the Brewer’s Employment and Excise Relief (BEER) Act – which would lower excise taxes on all brewers, not just the small ones. But whereas The Beer Institute will “actively oppose” Small BREW, the Brewers Association supports both bills. It just prefers its own.
LET THE LOBBYING commence in D.C., where administrators are proposing parking regulations that are distressing food truck vendors. According to the Washington Post:
The regulations, which require D.C. Council approval to become law, offer a two-tiered system in which food trucks would still be allowed to sell from any legal parking space , as long as they follow the posted time limits. But truck operators would also be able to apply for a permit for a specially designated spot that would allow them to vend from 11 a.m. to 3 p.m.
The city has also proposed “mobile roadway vending” zones in the more crowded areas. “The zones were offered as a way to alleviate congestion and prevent fights among vendors for prime parking spots.” The best bite-size primer is offered by the Young & Hungry blog at Washington City Paper:
As a refresher: The proposed regulations call for 23 mobile vending zones throughout the city where limited numbers of food trucks would be allowed to sell food. Each zone would have a minimum of three parking spots; the cap is still unknown. A monthly lottery system would determine who got the spots for each weekday, and those who don’t win zoned locations would have to park at least 500 feet away from the zones. In the central business district, mobile vendors would also be limited to metered parking spots with less than 10 feet of unobstructed sidewalk.
So how will all of this affect mobile vendors? It will render them immobile, and thereby obsolete. At least that’s what Doug Povich, Chairman of the Food Truck Association, avers. “You’ve effectively taken away our ability to roam and meet demand,” said Povich “You’ve effectively turned us into stationary roadway vendors.” The D.C. Food Truck Association’s homepage blares, “Proposed Food Truck Regulations Would Make Food Trucks Illegal in Most of Downtown.”
The blame is flatly laid upon the District’s restaurant association, which the vendors believe wants to “flatten the tires of these “mobile interlopers” [who are] stealing their customers and cluttering their sidewalks.” (The Washington Examiner calls the Restaurant Association Metropolitan Washington the food truck vendor’s “natural foe.”)
Since the D.C. Council cannot amend the proposed rules, those who fear for their business have no option but to lobby for a ‘No’ vote. A map of would-be affected zones can be found here.
Amy Showalter is an author andgrassroots and PAC influence expert who foundedThe Showalter Groupto help associations and corporations increase their grassroots and PAC effectiveness. Her blog, Politicking the Bottom Lineis published on Forbes.com.
A REFRESHING ARTICLE in the January 25 issue of CEO Update entitled “Some Lobbyists Chart a Different Course to Career Success” explores whether one can have a career in lobbying without “doing time” on the Hill. The article profiles various lobbyists who did not have prior Hill experience before becoming lobbying professionals, all of whom are obtaining results for their organizations without doing harm to the environment, kittens, or young children.
Yet it remains conventional wisdom that a lack of Hill experience is an instant blight on a lobbying candidate’s credentials. This sort of belief overlooks more important candidate characteristics, one of which I uncovered in a proprietary research project.
Why the “K Street Project” was a dumb idea
Remember former Congressman Tom Delay’s “K Street Project?” It was a campaign to “encourage” K Street firms to hire former GOP congressional staffers. Delay wanted the Republican team to have jobs with companies and organizations whose issues aligned with the GOP. But if the purpose of hiring a lobbyist is to persuade people who disagree with you, then the K St. project was misguided from the start. It ignored a key element of persuasion, which is the principle of similarity.
Dr. Kelton Rhoads and my colleague from USC’s Annenberg School for Communications and I conducted research several years ago to determine the factors that change a legislator’s mind on an issue. We asked the respondents to include examples from a winning effort (the targeted legislator changed his or her mind) and a losing one, and found that the more similar a lobbyist is to the opposed or undecided legislator, the more likely that lawmaker is to change his or her mind. In fact, similarity was one of the top five factors that successfully changed a legislator’s mind. If only Tom Delay knew that…
High-Priority Persuasion Requires Different Tactics
When an organization that leans right hires lobbyists who lean right (which was exactly the strategy of the K Street Project) there is a political soul mate match. But for high priority persuasion, the decision should be based less on the organization’s philosophical match and more on a match with the opposed or undecided lawmakers.
Depending on what’s at stake, you should consider hiring lobbyists who, regardless of Hill experience, share the value system and philosophy of your high-priority influence targets. Many organizations take care of this through contracting with outside firms that have a stable of bi-partisan experts. But hiring in-house those who typically have a different perspective sends a very different message. The commitment level is different because you are making more of a long term decision to win your opponent over.
You need someone who can flip the predictable opponent. A major piece of that puzzle is acquiring someone who has a shared value system with those you are trying to persuade.
Think about it. Otherwise, you’re leaving a major influence tool in the tool box.
THIS MORNING, POLITICO’S Anna Palmer and Elizabeth Titus published an article entitled “Why Republicans still run K Street.” In about 1,400 words, they offer eleven possibilities:
K St. bet red in 2012 – “Some companies bet that Republicans would take back the Senate and the White House in 2012, beginning the process of scooping up talent months ahead of the election.”
K St. is plain bias – “’There seems to be a philosophical and political bias against Democrats,’ McCormick Group’s Ivan Adler said.”
K St. bet red in 2012 AND K St. is plain bias – “The bias toward hiring Republicans was on display over the past two years when corporations and trade groups continued to bet on Romney and Republican chances of taking back the Senate when making hiring decisions and in choosing to retain their top GOP talent.”
There’s a shortage of Dems – “There are also fewer Democrats coming off the Hill or out of the White House who want to pursue corporate lobbying.”
Republicans = business (1 of 2) – “The business world tends to hire more Republicans, anyway, since their beliefs align more closely with those of corporate clients, and potential Republican hires tend to have more corporate experience or a proven record leading an association or in-house team.”
Republicans = business (2 of 2) -”Former Rep. Billy Tauzin told POLITICO that Republicans may dominate downtown ‘because most associations are business groups, which have, generally speaking, a closer association with the Republican Party.’”
Tom DeLay – “[AKA the] K Street Project, in which then-House Majority Leader Tom DeLay (R-Texas) helped lead an effort to install Republicans in many of the top trade associations.”
K St. hires Dems, just not for No. 1 roles – “Many Democrats are hired instead to be the No. 2 lobbyist in the shop, giving associations and companies plenty of political cover on Capitol Hill.”
K St. is dominated by Republican issues – “There are also many industries — such as oil, financial services and health care — that a significant number of Democrats are unwilling to represent.”
Administration officials are loath to lobby – “Democrats leaving the Obama White House have also been more reluctant than previous administrations of either party to join the influence-peddling ranks.”
Powerful friends happen to be Republican – “Veteran Republican Frank Fahrenkopf said personal relationships and the scope of each group’s work matter more than partisan affiliation.”
RESTORE OUR FUTURE, the largest Super PAC to date, is the fundraising behemoth that was behind the Romney campaign. Its millions buttressed the ad blitz that arrested Speaker Gingrich’s primary momentum. Its donors have included millionaires, billionaires, federal contractors, and a phantom company that mysteriously dissolved after giving a clean million. Its founders and current staff were Romnians from the start. Treasurer Charles Spies (pronounced SPEEZ), a powerful DC lawyer and Republican activist, was with Romney since ’08. (Ironically one of his earlier roles was legal and policy adviser at the FEC, an institution anathema to Super PACs). Ditto Carl Forti, described by Mother Jones as a “pioneer in the post-Citizens United world of super-PACs and dark money” and by POLITICO’s Kenneth Vogel and Ben Smith as “Karl Rove’s Karl Rove” (Forti is also Political Director of Rove’s Super PAC, American Crossroads). A no less cogent designation has been applied to RoF’s very own Larry McCarthy, “attack ads’ go-to guy.” McCarthy is none other than the man who created the paragon of attack ads, the 30-second Willie Horton broadcast that knocked the wind out of Michael Dukakis. Though the Horton bit remains matchless, McCarthy’s Iowa ads stirred just as much frustration in their target (Gingrich), and in the fact-checkers who bestowed them with four Pinocchios.
The Sunlight Foundation has a webpage called “Follow the Unlimited Money,” which reveals how RoF’s cash is spent. So far 90% of its expenditures have been piled on attack ads, $89 million of which opposed Democrats and $40 million of which opposed Republicans. The remaining 10% went to positive ads for Republicans. A Democrat has yet to receive a dime.
