Lobbyists Spend Record Sums to Influence Washington
WASHINGTON, 10 Apr
The old jab about the United States having the best democracy money can buy took on new meaning Thursday.
For every day Congress was in session last year, lobbyists spent an average of 17 million dollars currying favour with legislators and federal officials, the nonpartisan Centre for Responsive Politics (CRP) said in a new report.
Corporations, labour unions, governments, and other interests spent a record-setting 2.79 billion dollars last year in hopes of influencing policy, the group said. This marked a 7.7 percent, or 200-million-dollar, increase over 2006, also a bumper year for the influence industry.
'At a time when our economy is contracting, Washington's lobbying industry has been expanding,' said Sheila Krumholz, executive director of the 25-year-old watchdog group. 'Lobbying seems to be a recession-proof industry. In some respects, interests seek even more from our government when the economy slows.'
Their efforts get results. The National Education Association (NEA), the largest U.S. teachers' union, succeeded in blocking reauthorisation of President George W. Bush's 2001 'No Child Left Behind' law governing the running and judging of schools nationwide. Likewise, Congress quashed proposals to raise taxes on private equity groups, an issue of concern to the Blackstone Group and other private finance firms.
Even so, how much bang lobbyists get for their clients' buck remains undetermined.
'It's difficult to quantify the return on this investment' in lobbying for or against legislation, said CRP spokesman Massie Ritsch. 'But generally, the amount spent on lobbying is small compared with the outcome.'
Where lobbying for government contracts is concerned, 'the returns are astronomical,' Ritsch added. 'Multimillion-dollar contracts are awarded for, say, 100,000 dollars worth of lobbying.'
Health interests poured 444.7 million dollars into federal lobbying last year, outspending all other sectors of the economy for the second year in a row, CRP said.
The finance, insurance, and real estate sector -- known collectively as FIRE and the powerhouse of the U.S. economy -- placed second with 418.7 million dollars poured into the political trough.
Drug and health-care product makers topped the ranking of specific industries by spending 227 million dollars for lobbying services, or 1.4 million dollars per day that Congress met in 2007.
The drug industry has spent 1.3 billion dollars on federal lobbying over the last 10 years, more than any other industry. Its reported lobbying increased 25 percent in 2007, CRP said.
Insurance firms spent 138 million dollars on lobbying, followed by electric utilities, which spent 112.7 million dollars. Computer and Internet firms spent 110.6 million dollars. Hospitals and nursing homes paid lobbyists at least 90.5 million dollars.
The securities and investment industry ranked sixth, spending 87.3 million dollars -- a 40 percent jump over 2006.
Among individual companies and organisations, the U.S. Chamber of Commerce stood out as the biggest spender in 2007. The business association's reported lobbying fell by about 27 percent last year, following a record year in 2006. Nevertheless, the chamber and its affiliates spent nearly 52.8 million dollars on internal advocates and those hired from outside lobbying firms.
General Electric was the number-two spender (23.6 million dollars), followed by the Pharmaceutical Research and Manufacturers of America (22.7 million dollars), the American Medical Association doctors' trade group (22.1 million dollars) and the American Hospital Association (19.7 million dollars).
The top 20 spenders also included the American Association of Retired Persons, the National Association of Realtors, General Motors, oil major Exxon Mobil, communications firms AT&T and Verizon, and defence contractors Northrop Grumman, Boeing, and Lockheed Martin.
Last year's overall growth in spending on federal lobbying was in keeping with the roughly 8.0 percent annual increase since the late 1990s, CRP said.
Some interests' lobbying surged in 2007, however.
Blackstone Group, which sought to prevent higher taxes on its profits, boosted its lobbying effort by 477 percent to spend 5.4 million dollars last year. The NEA spent 9.2 million dollars, a 464 percent increase. CRP said it presumed the teachers' union concentrated its lobbying efforts on 'No Child Left Behind'.
Among Washington lobbying firms, Patton Boggs reported the highest revenue 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, Verizon, pharmaceutical manufacturers Bristol-Myers Squibb and Roche, and the American Association for Justice (formerly the Association of Trial Lawyers of America).
CRP said that in calculating spending levels, it used the narrow definition of lobbying provided by the Lobbying Disclosure Act of 1995.
'Spending by corporations, industry groups, unions, and other interests that is not strictly for lobbying of covered government officials, but is still meant to influence public policy, is not reported -- and may exceed what was spent on direct lobbying,' the group said. Such activities include public relations, advertising and grassroots lobbying.