Archive for November, 2013

Lobbyists.info Data Reveal $3.6 Billion in Undisclosed Expenditures

Wednesday, November 27th, 2013 by Geoffrey Lyons

IT’S WELL KNOWN within the beltway (and probably suspected from outside it) that most lobbying activity is off the record, hidden from the public eye.  When the GAO finds in its annual audit of lobbying disclosure reports that, for instance, 97 percent of lobbyists reported their income and expenses in 2012, the few of us who read such banal compositions have to chuckle, as if to say “yeah, 97 percent of registered lobbyists.”

It’s a plain fact that the so-called “influence industry” isn’t only comprised of registered lobbyists, and that recorded expenditures only make up a portion of what lobbyists are actually spending.  The rest of this money remains “dark,” “underground,” or whichever nefarious adjective fits the occasion.  But has anyone ever wondered how much is actually hidden?

Political Science Professor Tim LaPira has.  In his latest blog post for the Sunlight Foundation, LaPira takes Lobbyists.info data to estimate total lobbying expenditures in 2012. The current figure, which only accounts for legally disclosed spending, is $3.31 billion.  LaPira estimates that over twice that – an eye-watering $6.7 billion – was actually spent last year.

The magnitude of $6.7 billion is generously put into context:

Let’s put that number in perspective: For every one member of Congress, the influence industry produces about $12.5 million in lobbying. By comparison, the average 2012 budget for member [sic.] of the House of Representative’s office was only $1.3 million.  So, in 2012—a presidential election year, in a down economy, during arguably the least productive Congress ever—“government relaters” accounted for more than nine times the typical House member’s official operating expenses.

Whether LaPira’s findings are accurate is unknowable.  His calculations rely on the unfalsifiable assumption that lobbyists operating outside of the disclosure framework – “stealth” lobbyists, as he calls them – are spending just as much as their compliant peers.  Still, if LaPira’s estimate were off by as much as $2 billion, there remain billions that are being spent unaccountably and with insouciance for the law.  That’s concerning.

A Casino Divided: Adelson, AGA Split on Online Gambling

Thursday, November 21st, 2013 by James Cameron

AT FIRST GLANCE, online gambling seems a no-brainer for the gaming industry.  Casino magnate Sheldon Adelson disagrees.  The Washington Post reports that Adelson, one of the world’s richest men, is launching a public campaign against it, even as the wind appears to be blowing in the other direction.  Three states—Delaware, Nevada, and New Jersey—have already legalized it, and the Post expects that a dozen more will soon follow.  Further, The Hill notes that the American Gaming Association has thrown its full support behind it.

If federally legalized, online gambling is projected to generate more than 50 billion dollars in revenue, why, then, is Adelson so adamantly against what would appear to be a lucrative business for the gaming industry?  The reason, it seems, is at least partly ideological.  Per Forbes, he is pushing the idea that Internet gambling is a danger to both children and gambling addicts, and according to The Post, he is passionate about the issue.

Is he likely to succeed, despite staunch opposition from the AGA?  It’s probably too early to tell, but Adelson’s influence isn’t being taken lightly.  The Hill reports that gaming industry leaders convened in Washington this past Tuesday to establish a strategy to counter his crusade.  The industry’s concern isn’t without reason: Adelson donated a record-breaking $100 million to GOP candidates in the 2012 election cycle, and the Washington Post reports that he has hired Patton Boggs and Husch Blackwell to lobby in favor of an online gambling ban.  He has also upped the ante by hiring several prominent former politicians to co-chair his anti-Internet gambling coalition, including former Denver Mayor Wellington Webb (D), former Sen. Blanche Lincoln (D-Ark.), and former New York governor George Pataki (R).

Although it’s anyone’s guess whether Adelson’s all-in effort will succeed, his wealth and determination against a united AGA means that the lobbying fight over online gambling has more than just a few more rounds of bets.

How Earmarks Affect Lobbying

Tuesday, November 19th, 2013 by Geoffrey Lyons

FOR EACH OF the three years since earmarks were outlawed by Congress, total lobbying expenditures have diminished.  Other factors are surely at play, not least of which is congressional gridlock.  The recent government shutdown, for example, kept many lobbyists entirely out of the fray.  But the earmark moratorium has dealt a unique blow to the influence industry, one that simply cannot be gainsaid.

The most obvious reason for this is that the absence of earmarks, long used as bargaining chips, permits less opportunity for leverage in the political arena.  Earlier this month, former Rep. George Nethercutt (R. Wash.), an opponent of the ban, wrote in a blog post for The Hill that an “unintended consequence” of banning earmarks is the creation of “purist legislators who largely disdain compromise” and “resist seniority.” For lobbyists, these members would become off limits, thus narrowing the playing field.  (A retort to Nethercutt’s argument can be found here).  Jim Dyer of Podesta has gone so far as to say that lobbying will never be the same again. “Opponents of earmarks, they won,” Dyer told Roll Call. “And look what they got: complete paralysis.”

But some lobbying firms have lost more than just a tool for leverage–they’ve lost significant business.  Cassidy & Associates is an example of a firm, cited by Roll Call’s Kate Ackley, that “pioneered the dash for earmarks,” and thus relied heavily on their existence.  For Cassidy and others, losing earmarks was like losing the ground on which they stood:

[Cassidy] had the highest grossing fees (more than $27 million) back in 2000 as measured by the Lobbying Disclosure Act. Last year, Cassidy reported about $15.5 million….In December 2010, on the cusp of the earmark moratorium, the firm restructured and laid off about a dozen employees.

So while the earmark debate still rages, doing its damage to Republican unity (see here and here), lobbyists of both parties are left weakened in its wake, forced to search for alternatives to a process they’ve spent years to master.  Whether or not a ban on earmarks is good for the country is still very much in question.  To doubt its effect on Washington lobbying is to ignore plain facts.

K St., Meet Pakistan

Friday, November 15th, 2013 by James Cameron

EVEN FOR COUNTRIES with troubled relations with the United States, investing in lobbying can pay dividends. That’s why, as The Hill reports, it’s likely that Pakistan will hire a lobbying firm soon after being without representation on K St. since July 31, when Locke Lord Strategies terminated its contract with the country.

Pakistan and the United States have had an uneasy relationship since Bin Laden was killed in Abbottabad in May 2011. The discovery of the infamous terrorist leader living in comfort near Pakistan’s capitol city put a strain on the United States’ trust in the country. By the same token, the Pakistani government blasted the raid as an unauthorized military action on Pakistani soil without the government’s knowledge or approval.

Despite the frosty alliance between the two countries, The Sunlight Foundation notes that last month, the United States was preparing to unfreeze approximately $1.6 billion in aid that had been on hold since the Bin Laden raid, but Congress remains  wary of being seen as supporting Pakistan. As a former Pakistani government official notes in The Hill’s article, “Unless Pakistan mounts a major lobbying effort, it will be difficult to turn the opinions on the Hill around.”

Have renewed lobbying efforts by other countries paid off? For Egypt, it’s too early to tell. Last month, Egypt hired the Glover Park Group after the United States put a freeze on military aid to the troubled nation. The hire comes after more than a year-long hiatus without K St. representation, during which time Egypt’s favorability rating has plummeted in the United States.  While this doesn’t prove that hiring a lobbyists automatically earns approval, doing so certainly couldn’t hurt, especially in Pakistan’s case.

How to Become an Ambassador

Tuesday, November 12th, 2013 by Geoffrey Lyons

IN RETROSPECT, “you get what you pay for” is an apt slogan for the 2012 presidential election.  A $100 donation to Obama’s campaign was repaid with an automated thank-you email. Fifty times that earned a plate at a fundraiser attended by the president himself.  Ten times that could result in some presidential face time.  Now take the product ($50,000), double it, bundle in an additional half million, and you’ve got yourself an ambassadorship.  This is according to Open Secrets blogger Brandon Conradis, who recently explored the giving history of actress Colleen Bradley Bell, the newly nominated Ambassador to Hungary.

But Bell isn’t the only one with star power reaping rewards for political fidelity.  Conradis names three other Tinseltown denizens remunerated with ambassadorships: James Costos (Spain), Charles Rivkin (France), and Nicole Avant (the Bahamas).  “You get what you pay for,” indeed—such words could be scrawled on the White House gates.  Better yet, there’s a phrase more familiar to our history: “To the victor belong the spoils.”

FEC Weighs in on Bitcoin

Friday, November 8th, 2013 by Geoffrey Lyons

ATTORNEYS AT THE Federal Election Commission released an advisory opinion yesterday approving Bitcoin, an electronic currency, as a legitimate form of in-kind contribution.  The draft opinion is a direct response to a request made in August by the Conservative Action Fund (CAF), which sought approval for the use of bitcoins in political fundraising.  CAF essentially wanted to know two things: firstly, “whether it may accept Bitcoins as contributions from individuals otherwise lawfully able to contribute,” and, secondly, “whether CAF may then itself contribute, sell, or directly spend these Bitcoins.”

The FEC has responded with a yes and a no.  Yes, bitcoins may be accepted as a form of contribution; but no, they may not be spent in turn.  In the attorneys’ own words:

The Commission concludes that CAF may accept Bitcoins as in-kind contributions under valuation, reporting, and disbursement procedures, as described below. CAF may not, however, make disbursements using Bitcoins. Instead CAF must sell its Bitcoins and deposit the proceeds in its campaign depositories before using the funds.

One can learn about the arguments for and against the use of Bitcoin in politics here.

Top Lobbyists of 2013

Friday, November 1st, 2013 by Geoffrey Lyons

THE HILL HAS  just unveiled it’s annual “Top Lobbyists” list, and LobbyBlog seized the opportunity, as it did last year, to speak with its wearied compiler-in-chief, Business & Lobbying Editor Dustin Weaver.  It did not go unnoticed that the short time Weaver spared for these questions came at the expense of an impending print deadline, so many thanks are owed.  Any typographical errors in the latest print edition of The Hill can be blamed squarely on LobbyBlog.

LobbyBlog: Only two people are new to the list of top corporate lobbyists. Does this reflect the difficulty of breaking into corporate lobbying in Washington?

Dustin Weaver: It reflects the fact that corporations don’t like to talk about their lobbying. The people who work for them usually operate behind the scenes and aren’t seeking to publicize their work.

LB: The premise to last year’s list read that 2012 “hasn’t been the best year for K Street…” How has 2013 been?

DW: It’s shaping up as another down year. Most firms are treading water when it comes to revenue, and there’s not much hope of things getting better before the midterm elections. Gridlock in Congress is the new normal, and it’s making it harder for lobbyists to drum up business.

LB: What key characteristics distinguish the lobbyists who make the list from those who don’t? What is it that makes them so influential?

DW: Influence, like charisma, is one of those things that can’t be quantified; you know it when you see it. Some of the Top Lobbyists are masters of policy, others are great at building relationships. Some have great access, while others shape the debate using grassroots organizing. People rise to the top in different ways.

LB: One of last year’s big trends was the growth in the number of tech companies hiring lobbyists – Twitter, for example. Yelp just hired a lobbyist earlier this month. Is this an ongoing trend?

DW: Tech is the new boom industry, and their growing lobbying presence reflects that. The bigger companies like Google and Facebook get, the more lobbying help they need in Washington.

LB: Here’s an excerpt from Mark Leibovich’s This Town, which received a lot of buzz this year: “In 1974, 3 percent of retiring members of Congress became lobbyists. Now, 50 percent of senators and 42 percent of congressmen do. No one goes home anymore.” Can you expand on this?

DW: Law and lobby firms definitely place a high value on the insider knowledge that only lawmakers can provide.  Why more lawmakers are choosing to make the jump to K Street, I can’t say. But as a career move, it seems to be more acceptable now than it used to be.