Don’t Cry for K Street: Federal Lobbying is Down, But Profits Are Up

Washington's influence-peddlers are increasingly taking their skills to state, local and even foreign governments.

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K Street, Washington, DC
Doug Plummer/Getty Images

Last year, super Beltway-influencer Tony Podesta spent a lot of time lobbying… in Paris. The fact that Podesta was busy was no surprise – his firm routinely ranks third in lobbying revenues in Washington. It’s the location that was  different.

The Podesta Group had been hired by a Canadian mining company to help them gain access to a uranium-rich tract of land in Tanzania. The problem was that the United Nations Educational, Scientific and Cultural Organization (UNESCO), which is based in Paris, had declared the area a World Heritage Site. The company bought a pristine strip of land adjoining the other end of the park and proposed trading the two plots. Podesta lobbied the 18 countries with representatives on UNESCO’s World Heritage Committee and persuaded them to change the site’s boundaries, thereby opening up the uranium-rich lands to mining.

While Podesta still makes ample profits from federal lobbying, the firm is increasingly taking its talents outside of Washington. And it isn’t the only one. Federal lobbying in Washington decreased by 4.5% in the second quarter of 2013 from the same period last year, and two thirds of the industries tracked by the Center for Responsive Politics are spending less money on lobbying in 2013 than they were in 2012. Overall, the amount spent on lobbying has decreased every year since 2010 to $3.3 billion in 2012. The number of registered lobbyists has dropped from 15,000 in 2007 to 12,000 in 2012, according to the center, which tracks Washington lobbying. Podesta Group’s revenues reflect the market trend. Its income from direct federal lobbying has declined from a high of $29.4 million in 2010 to $27.5 million last year and it’s on track to make $27 million this year.

The decline is due to a variety of factors: the economic downturn means people have less money to spend on lobbying; after 2010, a peak year that saw federal overhauls of the health and financial sectors, the subsequent legislative logjam in Congress means fewer opportunities to lobby for bills; and the stigma of lobbying in the Obama era prompted many lobbyists deregister and rebrand what they do as consulting or public relations. “Before people would register because they just wanted to be safe. You have to spend 20% of your time lobbying to register and they might have gotten up to 18%, but registered to be on safe side,” says Monte Ward, president of the American League of Lobbyists. “But now they look at it as: If I ever want to serve in Administration again, I better not register.”

But don’t shed any tears for the lobbyists’ plight. The Podesta Group is having another banner year thanks to its lobbying efforts outside of Washington. “I don’t spend very much time lobbying in the U.S.,” Podesta tells TIME. “I don’t spend 20% of my time lobbying, but I register anyway because people might look askance at the fact that I’m not registered.”

And while federal lobbying may have decreased, lobbying of state and local governments has increased. The American League of Lobbyists has been pushing legislation not only to tighten federal lobbying registration, but to also force local lobbyists to register. Many Washington lobbying firms are spending more time building grass roots campaigns for various issues, from gay marriage to stand your ground laws, at the state level. Silicon Valley groups, for example, spent millions of dollars advertising in local districts to support immigration reform and relatively little money on federal lobbying on the bill. Other industries have taken advantage of the Supreme Court’s takedown of campaign finance laws to give money directly to candidates, bypassing lobbyists completely.

Lobbying has actually been expanding on micro and macro levels. Washington operators have learned that whether you’re lobbying a State Legislature on a gun law or a global body for a mining company, the same talents apply. James Thurber, an American University professor who helped the Obama Administration craft its lobbying rules, believes that the industry has “gone underground” and is actually far larger than just the 12,000 registered federal lobbyists – he says it’s more like 100,000 people bringing in north of $10 billion annually. The “lobby” may not be in the corridors of Congress any more, but it’s just as lucrative.

5 comments
MrObvious
MrObvious

I'm sure our founding fathers had this is mind when they added 'redress of grievances' into the constitution. Legal bribery.

deconstructiva
deconstructiva

Thanks, Jay. I'm depressed because there IS an American League of Lobbyists. I hate to imagine THEIR lobbying efforts. There indeed may be a need for such a group in order to keep everything from going rogue / underground. That only makes things worse. (Do I sound bitter about lobbyists?) I wonder how Jack Abramoff got along with that ALL group. Oh wait...

http://www.alldc.org/press/abramoff.cfm

Naturally they offer a defense of their "profession" in this link too....

History has proven that legislators need lobbyists. It's not for the so-called "special interest money," it's for the research and other resources they bring to the table. With over 4,000 bills introduced in the 108th Congress, it's inconceivable that a member or his/her staff could know all the nuances of every bill introduced. It's impossible! This is why the role of a lobbyist is so critical. With so many pieces of legislation and so many different interpretations of this legislation, it's the role of lobbyists on all sides to help members and their staffs weed through it all. It's only at this point that a member can be expected to cast his or her vote in the best interest of his constituents and the country. Without lobbyists, it's scary to think what types of laws would be passed in this country.

Lobbying is a legitimate and necessary part of our democratic political process. Government decisions affect both people and organizations, and information must be provided in order to produce informed decisions. Public officials cannot make fair and informed decisions without considering information from a broad range of interested parties. All sides of an issue must be explored in order to produce equitable government policies. In a nutshell, this is a vital role we play. Without it, members and staff could not be expected to do the "right thing."

gysgt213
gysgt213

Washington's influence-peddlers are increasingly taking their skills to state, local and even foreign governments."

My concern is does the national news media have the resources to cover and follow what they are peddling?



PerryWhite1
PerryWhite1

@gysgt213 Nope, nor do they have any interest in doing so. Hence the success of ALEC laws at the state level.