Archive for May, 2016

Record Lobbying Donations in 2016 Campaigns

Friday, May 27th, 2016 by Matthew Barnes

As previously discussed in Lobby Blog, we are experiencing an election cycle filled with much anti –lobbying rhetoric from leading presidential candidates on both sides of the aisle like Sen. Bernie Sanders (I-Vt.) and Donald Trump. Nevertheless, lobbyists have come to play a significant role supporting many of the 2016 presidential campaigns through direct donations and fundraising. Lobby Blog has previously reported that Democratic presidential candidate Hillary Clinton “received more than $600,000 from more than 300 different registered lobbyists and PACs in the first half of 2015.”

The support for candidates from lobbyists has continued into 2016. According to the Hill, “Lobbyists may well give more in 2016 than they did in previous cycles… And with control of the Senate in play, it’s increasingly difficult for lobbyists from both parties to resist fundraising pleas.” Already in this election cycle “the top 20 givers among registered federal lobbyists, as identified by the nonpartisan Center for Responsive Politics, have collectively donated more than $2.5 million.”

The Hill argues that on the Democratic side one explanation of the increase in lobbying contributions is because of “new arrangements such as joint fundraising committees have also driven up the requests for money. And registered Democratic lobbyists, who for two presidential cycles were blocked by President Barack Obama from donating to his campaigns, have now been liberated. They have made Democratic front-runner Hillary Clinton the top recipient of K Street cash among White House hopefuls this election cycle. The Democratic National Committee is also once more welcoming lobbyist checks.”

Lobbyists, such as Pat Raffaniello, who runs Raffaniello & Associates, also argue that while there may be an increase in spending from the industry, it is nothing compared to the millions of dollars raised and donated to PACs by highroller groups such as hedge funds. According to Raffaniello “Unless you are raising hundreds of thousands of dollars, it seems like a wasted effort from a lobbying point of view…You don’t get on anybody’s radar screen.”  However, some like Nick Penniman, Executive Director of Issue One, argue that “direct donations from lobbyists to lawmakers and congressional candidates have special value, even if they’re comparatively low…Lobbyists don’t have the big checks, but lobbyists’ money, because it’s going directly to the campaigns, is pure gold…It’s the highest currency in political giving.”

 

Hedge Funds Launch New Lobbying Arm

Thursday, May 19th, 2016 by Matthew Barnes

A new Washington D.C. based trade association has been created a select group of hedge funds. The new association is named the “Council for Investor Rights and Corporate Accountability,” or “CIRCA.” According to the Wall Street Journal, “it is the first coordinated effort by activists to make their case to lawmakers and the American public that their investment strategy helps, rather than harms, companies and the U.S. economy.”

CIRCA is supported by a consortium of five different activist firms, but does not name them in the press release. However, Reuters reports that, “According to a person with direct knowledge of the matter, the group’s backers are: William Ackman of Pershing Square, Carl Icahn, Daniel Loeb of Third Point, Paul Singer of Elliott Associates and Barry Rosenstein of Jana Partners.” The five backers manage approximately $90 billion according to the Wall Street Journal.

In recent weeks activist investors have come under fire and have attracted the attention of politicians. In March Senators Tammy Baldwin (D-Wis.) and Jeff Merkley (D-Ore.) introduced S.2720, “The Brokaw Act.” The act was cosponsored by Senators Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.).

According to Sen. Baldwin’s press release on The Brokaw Act, “The problem of short-termism is real and there is growing chorus who believe short-termism is holding America back from reaching its full potential to create stronger economic growth for our nation. Put simply, short-termism—also known as “quarterly capitalism”—is the focus on short time horizons by both corporate managers and financial markets. It results in corporate funds being used for payouts to shareholders in the form of dividends and buybacks rather than investment in workers, R&D, infrastructure, and long-term success. Activist hedge funds are leading the short-termism charge in our economy. They abuse lax securities laws to gain large stakes in public companies. Once there, they make demands to benefit themselves at the expense of the company’s long-term interests. The most common demands are for more debt, stock buybacks, reduced R&D, cost-cutting, layoffs, and general reduction any investment in long-term growth.”

In CIRCA’s press release Senior Advisor Rob Collins argues, “CIRCA was founded on the widely accepted idea that a well-functioning system of checks and balances between boards of directors and shareholders is fundamental to long term economic growth and U.S. prosperity,”  according to the Reuters report.

Contractor’s Return on Government Relations Spending

Wednesday, May 11th, 2016 by Matthew Barnes

New analysis of lobbying spending and government spending from MapLight has revealed that in the past decade U.S. government contractors have received $1,171.00 in taxpayer dollars for every $1.00 that they contribute to lobbying and PACs. MapLight reports, “The 25 largest federal contractors, as ranked by value of contracts received during the 2014 fiscal year, have received almost $1.6 trillion for their work since October 2005. These companies spent about $1.2 billion on lobbying and contributed more than $150 million to PACs during that time, according to MapLight’s analysis of federal procurement data and lobbying and PAC contributions from the Center for Responsive Politics.”

The return for every dollar invested in political influence between October 2005 and September 2015 by the three largest government contractors is listed below. All figures are provided by MapLight.

  • Lockheed Martin Corp. – Spent at least $140 million on lobbying and political contributions and received $331 billion in federal dollars, yielding a $2,366 return on every $1 invested.
  • Boeing Co.- Spent $150 million on lobbying and political contributions and received $201 billion in federal dollars, yielding a $1,341 return for every $1 invested.
  • General Dynamics Corp. Spent $96 million on lobbying and political contributions and received $136 billion in federal dollars, yielding a $1,421 return for every $1 invested.

Interestingly, MapLight reports that not all major government contractors have relied on heavy spending on lobbying. “The consulting firm Booz Allen Hamilton, based in the Washington, D.C., suburb of Tysons Corner, Virginia, has earned $29 billion in government contracts since October 2005. During the same period, it spent $80,000 on lobbying and none on political contributions, giving it a return of $362,564 for every $1 spent on political influence.”