White House Reverses Lobbying Ban

August 13th, 2014 by Linnae O'Flahavan

THE WHITE HOUSE HAS REVERSED part of its ban preventing registered lobbyists from serving on advisory panels. Lobbyists may now sit on advisory panels “so long as they’re acting on behalf of a corporation, trade association or industry group and not as private citizens or representatives of the government,” reports POLITICO. The original ban was put in place in 2010, but has been challenged in court by 6 lobbyists who, as a result of the ban, were kicked off advisory panels. Those lobbyists include Erik Autor, Nate Herman, Cass Johnson, Stephen Lamar, Bill Reinsch, and Andrew Zamoyski. The courts ruled against the White House by refusing to dismiss the case, and as a result, the Office of Management and Budget has eased up on restrictions by publishing the new rule in the Federal Register.

There appears to be significant criticism of the Obama administration for easing up on promised ethics reforms regarding K Street’s influence, although it is important to note that the reversal in policy is coming after court decisions going against the ban. Bloomberg quotes OMB’s Communications Director Melanie Roussell, who defends the ban, clarifying that “the purpose of the prohibition is ‘to restrict the undue influence of lobbyists on the federal government’ and was ‘not designed to prevent lobbyists or others from petitioning their government.’” Nonetheless, many lobbyists are up in arms about the ban, claiming constitutional rights violations, and are glad to see the White House reversing part of the ban.

It remains unclear exactly how far the White House will retreat on this issue since the administration is admitting defeat by reversing even part of the ban. In addition, POLITICO reports that the Obama administration has hired over 70 previously registered lobbyists including Broderick Johnson, Melody Barnes, James Kohlenberger, and Sean Kennedy. President Obama ran for office on a platform vowing to keep K Street influence out of the White House, but his plans seem to be failing, regardless of his intentions. It’s hard to say what Obama truly intended to accomplish, but quite easy to say that his ethics reforms aiming to minimize special interest influence on government policy are not really working.

Scalise, Freehery interviews raise eyebrows

August 7th, 2014 by Linnae O'Flahavan

RECENTLY ELECTED HOUSE MAJORITY WHIP Steven Scalise (R-La.) this past week conducted what would normally be considered routine job interviews to fill open positions in his new leadership office. However, the interviews were unusual because, as POLITICO reports, Scalise invited lobbyist John Freehery of Quinn Gillespie & Associates to sit in.

It seems that Freehery, who is a registered lobbyist for several major corporations including SONY Corp., 21st Century Fox, and AT&T, did not make actual “yes” or “no” recommendations about candidates. Instead, as Scalise spokesman T.J. Tatum states, Feehery “provides feedback on quality of candidates.” This partnership between a corporate lobbyist and the House Whip is highly unusual, and raises a number of ethical questions, although no House Ethics rules appear to be broken.

Freehery has defended his role in the job interviews by citing his previous work experience as a House leadership communications director under then-House Majority Whip Tom DeLay of Texas. Nonetheless, there are a number of eyebrow-raising links between Scalise and Freehery, including USA Today’s report that Scalise paid Quinn Gellespie & Associates to review his communications strategy plan, and the fact that AT&T has already contributed $15,000 to Scalise this election cycle.

The partnership between Scalise and Freehery seems to be questionable at best, and marks a big change in public relationships between Members of Congress and lobbyists. While influential arrangements such as these might not be new in Washington, a willingness to display them in public certainly is. Giving a major corporate lobbyist significant power in staff decisions for the House Whip’s Congressional office is a slippery slope. It remains to be seen how the publicity will affect newly elected Scalise, and whether more partnerships such as these will now appear.

 

Registration Crackdown

July 30th, 2014 by James Cameron

AGGRESSIVE CRACKDOWNS ON Lobbying Disclosure Act violations are rarely seen, but last week The Hill, in what it called a “bombshell,” reported that at the end of its most recent report, the Office of Congressional Ethics (OCE) “voted to refer one entity to the U.S. Attorney’s Office for the District of Columbia for failure to register under the Lobbying Disclosure Act.”

This is particularly noteworthy because as Covington & Burling’s Robert Kelner notes in the National Law Review, unregistered lobbyists have rarely, if ever, been pursued by the OCE or the Department of Justice. Kelner attributes the lack of enforcement to illegal lobbying being relatively low on the DOJ’s list of priorities, as well as a lack of media attention to LDA violations.

However, as we wrote in this space back in March, that may be changing. Since 2010, we’ve seen an uptick in enforcement for failure to file quarterly lobbying disclosures and for FARA violations. Between 1995 and 2010, only three lawsuits filed by the U.S. Attorney’s Office against lobbyists were settled, but since 2010, at least five suits have been filed related to HLOGA and FARA violations. With the revelations in OCE’s latest report, are we beginning to see the kind of enforcement that these laws originally intended?

With the lobbying industry increasingly operating underground, it seems likely that last week’s bombshell won’t be the last incident of illegal unregistered lobbying, but only time will tell if the OCE has more investigations underway or if this is an isolated incident.

 

Niche Lobby Shops Reap Rewards from Big Changes

July 23rd, 2014 by Linnae O'Flahavan

WASHINGTON’S BOUTIQUE LOBBY shops are thriving as a direct result of the major changes that have plagued K St. powerhouses in recent years, according to The Hill. In just the first two quarters of 2014, for example, there have been 39 law firm mergers and acquisitions—the total for all of 2010. In the past year, Greenberg Traurig has acquired almost 40 attorneys and lobbyists, including thirteen from rival Dickstein Shapiro. And Patton Boggs, which has also been losing partners and top lobbyists to other firms such as Holland & Knight and Wilmer Hale, recently announced their merger with Squire Sanders.

Smaller lobby firms are finding success in part by steering clear of this chaos, and by specializing in niche practices that work underneath top tier issues.  They’re also benefiting from K St.’s culture of defections and “poaching of talent,” as The Hill describes it, which opens space for more specialized lobby shops to grab hold of significant clients such as Facebook, Google, Verizon, and Goldman Sachs.  These major changes, which are supposed to reward the K St. behemoths, are ironically creating room for start-ups to get a stronger foothold.

But while the lobbying landscape is undoubtedly changing at a rapid pace, and the trend seems to indicate that smaller shops are profiting as a consequence, the question remains whether this is sustainable.  Once DC’s major players begin to settle down, presumably these unique opportunities will begin to fade.  In the meantime, however, there’s yet more poaching to do.

Bitcoin Hires Lobbyists

July 17th, 2014 by James Cameron

BITCOIN’S PUBLIC PROFILE has grown significantly in the past year, and like any burgeoning cause or industry, it has lobbyists. The Wall Street Journal reported last week that the Bitcoin Foundation, a nonprofit with the goal of standardizing, protecting, and promoting Bitcoin, has hired Thorsen French Advocacy to represent the Foundation on Capitol Hill.

The Bitcoin Foundation is by no means the first group to lobby on issues related to the digital currency. The Hill notes that Falcon Global Capital, a Bitcoin investment group, hired lobbying firm Thompson Hine in May, and also registered an in-house lobbyist. MasterCard, meanwhile, has Peck Madigan Jones monitoring or working on Bitcoin issues.

Bitcoin has steadily gained visibility in the past year, with the FEC approving the cryptocurrency for PAC contributions, although the PAC must convert Bitcoins into dollars before depositing them into a campaign account. But it has also faced significant public mistrust following the disappearance of $460 million in Bitcoin from Mt. Gox, formerly the world’s largest Bitcoin exchange.

While Bitcoin still has a long way to go to reach mainstream acceptance among lawmakers and the general public, the Bitcoin Foundation’s lobbying hire should do much to advance the currency’s profile on Capitol Hill. It remains to be seen whether it will ever become the borderless, non-political, and widely trusted currency that its proponents hope for.

The Coming “Corporate Welfare” Vote

July 8th, 2014 by Geoffrey Lyons

“IT IS HEREBY DECLARED,” wrote President Roosevelt on a chilly February day in 1934, “that an agency, to wit, a banking corporation, be created….” Thus emerged, by virtue of Executive Order 6581, the Export-Import Bank of Washington. Eighty years later, the Ex-Im Bank is facing mounting opposition by conservative groups who claim it’s nothing more than a benefactor of corporate welfare.

They have a point: over 80% of the bank’s loan guarantees go to Boeing, which is no wonder competitors like Delta are irked by the bank’s favoritism.  On the other hand, supporters say the bank is needed to compete internationally on an “uneven playing field.”  Countries like China, they claim, have no qualms pumping government subsidies into the coffers of leading companies, so voluntarily terminating similar practices at home would amount to “unilateral disarmament.”

Both sides of the debate face a similar challenge: August recess.  In order to build a solid, bipartisan coalition to either pass or block a new charter before Congress goes home, policymakers need to move quickly.  According to Sen. Chuck Schumer (D-N.Y.), there’s enough support in the Senate to reauthorize the bank.  Yet there are singular obstacles in the House, not least of which is House Financial Services Committee chairman Rep. Jeb Hensarling (R-Texas), a strident opponent of the Ex-Im bank who could single-handedly squash any efforts at the committee level.

While on the surface it seems Congress is on track to renew the Ex-Im bank’s charter (with some key reforms to satiate conservatives), it’s not entirely certain how things will play out.  Many policymakers, including John Boehner and John McCain, appear undecided.  And even if they did come out in favor of the bank, there would be precious little time on their side.

The Fireworks Lobby: Quiet Federally, Making Noise in the States

July 3rd, 2014 by James Cameron

AS ANYONE WHO FOLLOWS associations and lobbying knows, there’s an association and a lobby for everything—and fireworks are no exception. The industry is represented by the American Pyrotechnics Association, which retains K&L Gates to lobby on such issues as safe packaging and transport of chemicals under the Pipeline Hazardous Materials Safety Administration, and amending the Harmonized Tariff Schedule to benefit fireworks manufacturers.

But the association doesn’t have a tremendous presence on the Hill; since 2012, it has spent just $14,165 on federal lobbying efforts. Likewise, its political action committee, Americans Supporting the Pyrotechnics Industry (or PAC-4-PYRO), spent a mere $6,000 during the 2013-2014 election cycle.

Given the myriad of different state laws governing fireworks, it’s probably not surprising that the industry wields greater influence at the state level. An article for New Hampshire Public Radio details how fireworks manufacturers poured money into the state to prevent New Hampshire’s legislature from banning mortar style fireworks, which are among the best-selling fireworks both in the state and nationwide. The article notes that Phantom Fireworks, a manufacturer based in Ohio, spent close to $7000 to lobby against a ban on mortars. With little financial clout on the other side, it’s likely that mortars will remain legal in New Hampshire.

While the fireworks lobby has a token Washington presence, it’s clear that its real impact is at the state level, where a lack of organized or funded opposition give it an advantage.

NCAA Pays Lobbyists in Hopes of Never Paying Athletes

June 20th, 2014 by Geoffrey Lyons

BOTH THE NATIONAL Collegiate Athletic Association (NCAA) and the Big 12 have hired lobbyists for the first time.  The issue: the “welfare of student-athletes,” what The Hill describes as “a key turn of phrase being used to underscore that players are students…and not professional athletes who should receive compensation.”

The debate on whether student-athletes deserve pay has been heated for years, and came to a boil most recently when the Chicago division of the National Labor Relations Board decided that Northwestern football players qualify as “employees” and therefore can unionize.  But until now, the NCAA has relied on in-house lobbyists to bring the issue to the Hill, which cost them $180,000 in 2013 alone.

It’s unclear how difficult the NCAA’s task will be.  One lobbyist speculated that when Major League Baseball was last on the Hill, it caved on its steroid policy.  Whether there’s even a chance that the NCAA will do the same depends on how earnestly the issue is taken up by Congress.  At the moment, The Senate Committee on Commerce, Science and Transportation, has yet to reschedule a hearing.

K St. Drools Over Cantor

June 12th, 2014 by Geoffrey Lyons

AFTER HOUSE MAJORITY leader Eric Cantor’s (R-Va.) unpredictable defeat Tuesday night, a predictable response: what’s next for the Virginian?

Perhaps the most eager to know are those willing to coax the lame duck into working for them.  His leadership position, writes the Hill, makes him an incredibly lucrative prize.  And depending on the results of this year’s midterm elections, his stock could rise in just a matter of months. The timing of his defeat combined with his length of service and rank within the Republican party are the chief ingredients that make Cantor even more magnetic than “Blue Dog” Democrats, a “popular breed” on K St. for their bipartisanship and amity towards business.

Whether Cantor’s staff will get a share of this fortune is less certain.  Some are arguing that their value will sink as a result of the defeat, while others are skeptical of this assessment.  Ivan Adler, a principal at The McCormick Group, told The Hill “being in leadership means you know the entire caucus; that’s something that’s really important. Those relationships don’t go away because your boss is not there.”  POLITICO’s stance appears to incorporate both views, noting that former Cantor staffers on K St.

are [all] lobbyists with extensive relationships all over town who will ultimately be fine without their Cantor connection on Capitol Hill. But Cantor’s exit – assuming he doesn’t mount a quixotic write-in campaign – shifts the center of gravity and talent on K Street significantly.

As for Cantor’s donors, a potential measure of his influence, POLITICO adds that it’s “futile” to list them “because it’s essentially a who’s who of Fortune 500 and major trade associations.”

Of course, these discussions tend to invite needless speculation, so it’s worth ending on two points of consensus: Eric Cantor has his pick of the crop, and whoever gets him will profit immensely.

On K St.’s Heterogeneity

June 5th, 2014 by Geoffrey Lyons

TWO BLACK VULTURES recently made K St. their home, prompting the sort of jokes that one would expect when the caricature of an entire industry nests on its doorstep.  When lobbyist Charlie Dewitt was informed of the vultures’ arrival, he provided the most telling response: “of the bird variety?”

Yet generalizations of any sort would seem unfitting after reading the Washington Post’s brief sketch of K St.’s “new landscape.”  The article provides short portraits of four firms – Franklin Square Group, Chamber Hill Strategies, Policy Resolution Group, and lobbying powerhouse Holland & Knight – each of which is distinguished by some unique characteristic.  Holland & Knight, for example, was the first lobbying group within a law firm to cease using billable hours.  According to Rich Gold, the firm’s head of public policy, this decision meant “not having to worry about how many people to put on a client matter for fear that their collective hourly billing might surpass the monthly retainer the client is paying.”  Policy Resolution Group is equally notable for being a wholly-owned subsidiary of the law firm Bracewell & Guiliani.  According to senior leaders in the firm, “having a separate subsidiary allows non-lawyer lobbyists and professionals to rise to a position that is equivalent to partner, and that helps recruit the best people.”

And it’s not just structural and operational nuances that separate these firms from the pack.  Franklin Square Group, which specializes in technology, prides itself on being the “bridge” between the vastly different cultures of Silicon Valley and Washington.  Of course, they too have a structural distinction in that every partner owns some form of stock option in the firm, but they prefer to see themselves as straddling the line between the fast-moving and risk-driven milieu of the Bay Area and the stodginess of the Beltway.  Taken together, all of these differences account for nothing when the K St. stereotype is very much alive.  The vultures’ choice for nesting grounds helped drive this point home.

Association Lobbying: A Boon for K Street and a Tool for Associations

May 28th, 2014 by James Cameron

FOR MANY ASSOCIATIONS, a crucial aspect of their mission is to advocate their legislative agenda before Congress. Likewise, association lobbying can be a welcome boon to firms, especially since lobbying revenue has declined in recent years. But which firms are the most influential in the association space, both in terms of clients and income? And, conversely, which associations spend the most on lobbying, and therefore are among the most influential in government relations?

Based on data from Lobbyists.info, we were able to determine the top five lobbying firms for total active association clients as well as for total association income in 2013:

  1. K&L Gates LLP: 24 association clients
  2. Ernst & Young and Patton Boggs LLP: 23 association clients
  3. Powers Pyles Sutter & Verville, PC: 22 association clients
  4. Capitol Counsel LLC and The Podesta Group: 21 association clients
  5. Hogan Lovells LLP and Van Scoyoc Associates, Inc.: 20 association clients

There are few surprises on this list for anyone familiar with the government relations industry, but how do these firms stack up in terms of total association income for 2013?

  1. Patton Boggs LLP: $6,090,000
  2. The Podesta Group: $4,430,000
  3. Mehlman Vogel Castagnetti Inc.: $4,100,000
  4. Ernst & Young: $3,940,000
  5. Akin Gump Strauss Hauer & Feld LLP: $3,930,000

While this list contains some of the biggest firms on K Street, it’s clear that catering to the association space can prove lucrative. It’s also evident that associations see the worth in investing considerable funds to lobby Congress effectively, but which associations (and industries) wielded the most significant monetary clout on K Street in 2013?

  1. Pharmaceutical Research and Manufacturers of America (PhRMA): $275,781
  2. National Cable & Telecommunications Association: $211,365
  3. Edison Electric Institute: $148,962
  4. Biotechnology Industry Organization (BIO): $130,845
  5. U.S. Chamber of Commerce: $128,832

These associations represent some of the biggest and most lucrative industries in America, so it’s no shock that they have the most money to spend on lobbying, but they’re not the only associations who are willing to spend significant cash to further their legislative agendas; four other associations spent six figures in 2013, and 35 others spent more than $50,000. Despite congressional gridlock and a government shutdown, associations are finding ways to make themselves heard on Capitol Hill.

195…

May 19th, 2014 by Geoffrey Lyons

…the number of times “affordable care act” has been referenced in a federal lobbying filing since 2011, according to data from Lobbyists.info.

Because The Patient Protection and Affordable Care Act (ACA) was signed into law in March, 2010, virtually all relevant lobbying activities have been attempts to either amend or repeal it.  Some of the activities are very precise (“To amend subtitle B of title I of the Patient Protection and Affordable Care Act to extend the temporary high-risk insurance pool program to the territories.”).  Those that are less so are commensurately more ambitious (“To repeal the Patient Protection and Affordable Care Act.”).

The 195 references are (predictably) dispersed unevenly.  2011 had by far the most with a grand total of 72 ACA references.  2012 and 2013 saw 57 and 58 respectively.  When broken down by quarter, Q4 and Q3 2011 take first and second place with a combined 40 references.  And 2014 isn’t the end of it.  If the midterm elections are as bad for Democrats as some expect, there should be more ACA activity to come.

Disclosure ‘Round the World

May 8th, 2014 by Geoffrey Lyons

IT’S NOT JUST to satisfy a peculiar curiosity that one studies the minutiae of Taiwan’s lobbying disclosure.  Nor does one graph data from Canada’s Federal Lobbying Registry to pass the time.  These things are done, rather, in an effort to better understand “the impacts of technology-driven transparency policies around the world.”  It’s in the hope of learning something useful that the Sunlight Foundation, with funding from Google.org, Google’s charitable arm, is taking this initiative very seriously.

Lobbying disclosure is only one issue area in the research, but will include three case studies: Canada, Hungary, and Taiwan.  So far only an analysis of Canada’s disclosure has been published, with Hungary and Taiwan forthcoming.

The Canadian case study is staggeringly detailed: an over 5,000-word analysis is accompanied by three graphs and over four hours of interviews with experts on the country’s disclosure framework.  Whether this impressive assemblage of data will have any application in the U.S. is yet to be seen, but it would surely be a shame if it didn’t at least point us in the right direction.  The section on enforcement, for example, argues that Canada’s  Office of the Commissioner of Lobbying is a “credible threat.”  If we learned from our neighbors, perhaps the same could be said for our Department of Justice.

May the Least Worst Site Win

April 28th, 2014 by Geoffrey Lyons

IMAGINE IF YOUR organization’s website received an award for showing “signs of improvement.”  Though “still weak,” it’s beginning to provide “basic” information.  This less-than-cheering diagnosis comes from the Congressional Management Foundation’s 113th Congress Gold Mouse Awards, which recognizes House and Senate offices (including committees) for effective websites and citizen engagement on social media.

The awards shine a welcome spotlight on an abysmal set of sites, some of which are utterly unnavigable.  The issue would be hilarious were access to lawmakers anything less than elemental to a healthy democracy.  By praising those few Hill offices who work hard to ensure their websites are functional and inviting, the CMF brings us a step closer to a day when they’ll all be like that.

In future editions of the awards, it would be nice if the CMF could draw attention to those sites in most need of repair (National Journal has since taken down its list of the worst committee websites).  That ought to really get people talking.

History Matters

April 15th, 2014 by James Cameron

THOSE WHO CANNOT REMEMBER the past…cannot lobby effectively. That’s why Lobbyists.info recently unveiled its latest feature: historical links between staffers, federal lobbyists, and members of Congress going back to 1987.  Since lobbyists’ connections to lawmakers can matter just as much as their skills and experience, this is a crucial resource.

Why are these historical links so valuable?  For one, lawmakers are staying on the Hill for longer than they used to.  A report by the Federation of American Scientists found that the average years of service for members of the 113th Congress is 9.1 for the House and 10.2 for the Senate.  If you want to lobby on a piece of legislation before the House Energy and Commerce Committee, and a lobbyist you’re thinking of hiring was a staffer for Henry Waxman in 1993, then that historical link may play a crucial role in picking the right advocate.

With the revolving door between staffers and lobbyists spinning at cyclone speed, the links between former staffers and Congress have become vital to understanding the influence game.  It’s increasingly clear that understanding these historical links can give advocates a leg up on the competition.