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6. Lobbyists Buy Congress

Source:
Open Secrets.org
Title: “Washington Lobbying Grew to $3.2 Billion Last Year, Despite Economy”
Authors: Center for Responsive Politics

Student Researchers: Alan Grady and Leora Johnson
Faculty Evaluator: John Kramer, PhD
Sonoma State University

According to a study by The Center for Responsive Politics, special interests paid Washington lobbyists $3.2 billion in 2008—more than any other year on record. This was a 13.7 percent increase from 2007 (which broke the record by 7.7 percent over 2006).

The Center calculates that interest groups spent $17.4 million on lobbying for every day Congress was in session in 2008, or $32,523 per legislator per day. Center director Sheila Krumholz says, “The federal government is handing out billions of dollars by the day, and that translates into job security for lobbyists who can help companies and industries get a piece of the payout.”

Health interests spent more on Federal lobbying than any other economic sector. Their $478.5 million guaranteed the crown for the third year, with the finance, insurance, real estate sector a runner up, spending $453.5 million. The pharmaceutical/health products industry contributed $230.9 million, raising their last eleven-year total to over $1.6 billion. The second-biggest spender among industries in 2008 was electric utilities, which spent $156.7 million on lobbying, followed by insurance, which spent $153.2 million, and oil and gas, which paid lobbyists $133.2 million. Pro-Israel groups, food processing companies, and the oil and gas industry increased their lobbying expenditures the most (as a percentage) between 2007 and 2008.

Finance, insurance and real estate companies have been competing to get a piece of the $700 billion bailout package Congress approved late last year. The companies that reduced lobbying the most are those that declared bankruptcy or were taken over by the federal government and stopped their lobbying operations all together. “Even though some financial, insurance and real estate interests pulled back last year, they still managed to spend more than $450 million as a sector to lobby policymakers. That can buy a lot of influence, and it’s a fraction of what the financial sector is reaping in return through the government’s bailout program,” Krumholz said.

Business and real estate associations and coalitions were among the organizations that ramped up their lobbying expenditures the most last year. The National Association of Realtors increased spending by 25 percent, from $13.9 million to $17.3 million. The American Bankers Association spent $9.1 million in 2008, a 47 percent increase from 2007. Other industry groups that spent more in 2008 include the Private Equity Council, the Mortgage Bankers Association of America and the Financial Services Roundtable.

The US Chamber of Commerce remained the number one spender on lobbying in 2008, spending nearly $92 million—more than $350,000 every weekday, and a 73 percent increase over 2007—to advocate for its members’ interests. Pro-business associations as a whole increased their lobbying 47 percent between 2007 and 2008.

With record spending on lobbying, some industries face serious cut backs and have put the brakes on spending, but have not discontinued the practice. Automotive companies decreased the amount they paid lobbyists by 7.6 percent, from $70.9 million to $65.5 million. This is a big change from prior years; auto manufacturers and dealers increased lobbying spending by 21 percent between 2006 and 2007. Between 2007 and 2008 the Alliance of Automobile Manufacturers, which testified before Congress with Detroit’s Big Three last year, decreased its reported lobbying by 43 percent, from $12.8 million to $7.3 million. Of the Big Three, only one company, Ford, increased its efforts, though not by much: it went from $7.1 million to $7.7 million, an 8 percent increase.

Among Washington lobbing firms, Patton Boggs reported the highest revenues from registered lobbying for the fifth year in a row: 41.9 million dollars, an increase over 2006 of more than 20 percent. The firm’s most lucrative clients included private equity firm Cerberus Capital Management, confection and pet food maker Mars, communication provider Verizon, pharmaceutical manufacturers Bristol-Myers Squibb and Roche, and the American Association for Justice (formerly the Association of Trial Lawyers of America).

Update by Lindsay Renick Mayer
It seems like this should be a classified ad: “Laid off and looking for work? The lobbying industry wants you!” Since we posted this story on OpenSecrets.org in January, the lobbying industry has only continued to grow, even as industries across the board have continued to shrink, forcing hundreds of thousands of Americans out of work. This growth could be attributed in part to the economy itself—many executives are looking for some help from the government to keep their businesses afloat. Others are simply taking advantage of the opportunities that a spate of government handouts has presented. But as long as there’s a federal government calling the shots, lobbyists will be paid more and more each year to hold their clients’ fire to lawmakers’ feet.

Year after year we see increases in lobbying expenditures—in fact, 100 percent over the last decade—and the flurry of activity during the first three months of 2009 indicates that the trend won’t come to an end any time soon. Based on records from the Senate Office of Public Records, the nonpartisan Center for Responsive Politics found that from January through March, lobbying increased slightly compared to the same period of time last year, by at least $2.4 million. Unions, organizations and companies spent at least $799.7 million so far this year on sending influence peddlers to Capitol Hill, compared to $797.2 million during the same time in 2008. That might seem like a small increase compared to the billions spent each year on this activity, but in a time of economic turmoil, that’s a hefty revenue stream for a single industry.

That said, the industries that have made the most headlines for the help they’ve asked for or received from the federal government actually decreased the amount they spent on lobbying in the first three months of 2009 compared to 2008. Recipients of cash from the federal government’s Troubled Asset Relief Program (TARP) handed out less money to lobbyists than they had in any quarter of 2008, in part, perhaps, because they faced new rules restricting their lobbying contact with officials in connection with the bailout program. CRP found that TARP recipients have spent $13.9 million on lobbying so far this year, compared to $20.2 million in January through March of last year and $17.8 million in the last three months of 2008. With the government doling out billions of dollars, these sums pale in comparison to the benefit the companies are reaping.

To read more about how lobbying and influence peddling are shaping legislation, keep up with CRP’s blog at http://www.opensecrets.org/news/.

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  • Peter Phillips September 19, 2010

    How Corporations Own the US Congress

    By Shamus Cooke

    URL of this article: http://www.globalresearch.ca/index.php?context=va&aid=21052

    Global Research, September 15, 2010

    With the November elections quickly approaching, the majority of Americans will be thinking one thing: “Who cares?” This apathy isn’t due to ignorance, as some accuse. Rather, working people’s disinterest in the two party system implies intelligence: millions of people understand that both the Democrats and Republicans will not represent their interests in Congress.

    This begs the question: Whom does the two party system work for? The answer was recently given by the mainstream The New York Times, who gave the nation an insiders peek on how corporations “lobby” (buy) congressmen. The article explains how giant corporations — from Wall-mart to weapons manufacturers — are planning on shifting their hiring practices for lobbyists, from Democratic to Republican ex-congressmen in preparation for the Republicans gaining seats in the upcoming November elections:

    “Lobbyists, political consultants and recruiters all say that the going rate for Republicans — particularly current and former House staff members — has risen significantly in just the last few weeks, with salaries beginning at $300,000 and going as high as $1million for private sector [corporate lobbyist] positions.” (September 9, 2010)

    Congressmen who have recently retired make the perfect lobbyists: they still have good friends in Congress, with many of these friends owing them political favors; they have connections to foreign Presidents and Kings; and they also have celebrity status that gives good PR to the corporations.

    Often, these congressmen have done favors for the corporation that is now hiring them, meaning, that the corporations are rewarding the congressmen for services rendered while in office, offering them million dollar lobbyist jobs (or seats on the corporate board of directors) that requires little to no work.

    The same New York Times article revealed that the pay for 13,000 lobbyists [!] currently bribing Congress is a combined $3.5 billion. It was also explained how some lobbying firms keep an equal amount of Democrats and Republicans on hand, so they can be prepared for any eventuality in the elections.

    This phenomenon is more than a little un-democratic: when millions of people vote for a candidate, the outcomes are quickly manipulated and controlled before the election even happens.

    Interestingly, the corporate-directed Wall Street Journal wrote a similar article in 2008, as the Democrats had begun to dominate politics in Washington:

    “Washington’s $3 billion lobbying industry has begun shedding Republican staffers [politicians], snapping up Democratic operatives [politicians] and entire firms, a shift that started even before Tuesday’s ballots were counted and Democrat Barack Obama captured the presidency.” (November 5, 2008)

    This article was appropriately titled “Lobbyists Put Democrats Out Front as Winds Shift.”

    The corporate money flows from party to party, so that the same goals are achieved: higher profits for corporations. The sums thrown at these politicians are mind boggling: the Associated Press reported that the corporate-orientated Chamber of Commerce spent “… nearly $190 million since Barack Obama became president in January 2009.” (August 21, 2010)

    These numbers explain the “deeper” differences between Democrats and Republicans — money. Each party is a machine that vies for power because this power carries with it vast sums of corporate money. The longer a party is in office and the more connections it makes, the more its net worth to corporations, the more that these rewards can be spread to the different layers of the party. There is indeed a real-life, nasty fight between the Republican and Democratic Parties to dominate this corporate money.

    One “interest group” that ex-Congressmen don’t work for is labor unions. Unions spend millions of dollars to help get Democrats elected, and millions more is spent trying to get their ear while they’re in office.

    But unions cannot out-spend the banks; and they can’t offer millionaire retirement packages to retired Senators. The corporate retirement plans of Congressmen prove where their minds are while in office, and whose interests are being looked after.
    Unions cannot continue to pretend that the Democrats are their “friends.” Labor has very little to show for this dysfunctional, decades-long friendship: union membership continues to shrivel as do jobs, wages and benefits for workers – a losing strategy if ever there was one.

    A “lesser of two evils” approach to politics equals evil politicians for labor, no matter who wins. In fact, the lesser-evil Democrats have become increasingly evil over the years, to the point where the party as a whole is more Conservative than the Nixon-era Republicans.
    The point has been reached where — in various states — Democratic governors are being endorsed by unions after promising to attack the wages and benefits of public workers!

    To get out of this vicious, dead-end cycle, unions could unite their strength to form coalitions that promote independent labor candidates: 100 percent funded by labor to govern 100 percent in the interest of working people. All other roads lead back to the corporate lobbyists.

    Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org). He can be reached at shamuscook@yahoo.com

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  • Celmer October 27, 2010

    Lobbyists are just paid, a good job opportunity.Corporations and other business interests pay lobbyists to make sure they have good laws to support their business, a good way to earn and live good lives for them and their family. Legislators are paid by people and government to listen to the public and the lobbyists of course and weighs the pros and cons and makes the laws required, a noble job serving the country and most of all the perks that comes from the good lobbyists and business interests. the people pays the legislators, they buy the products and services of the companies that pays the lobbyists and follows the rules and laws that the legislators and corporations had set forth. In short, the people buys the hammer that he pounds on his own head.

  • Jenny October 29, 2010

    Due to the many controversies surrounding the conduct of our lawmakers in congress, many of the citizens are wanting to pay less taxes in as much as these leaders are more inclined to listen to the paying lobbyists and financial giants

  • Charlotte December 7, 2010

    Thank you, I’m attempting to collate all the sales related blogs I can for my home university course at the moment :)

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  • Retep November 1, 2011

    Real dumb comment.

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