The economic downturn means lobby shops and clients alike are scrutinizing their books and watching their bottom lines, according to an analysis of termination reports filed with the Secretary of the Senate.
Lobbyists had until Monday to file first-quarter financial statements with the Senate lobbying office, a requirement that includes disclosing what reportable relationships they have severed during the first three months of the year.
According to records filed by Tuesday morning, firms filed roughly 1,500 termination contacts with the Senate through March 31, ending lobbying campaigns that ranged from pro bono work to sophisticated in-house lobbying blitzes costing thousands of dollars per day.
This years first-quarter total represents a 20 percent increase from the same three-month period in 2008, when organizations filed some 1,250 termination reports.
The now-defunct PMA Group, once run by a lobbyist connected to House Appropriations Subcommittee on Defense Chairman John Murtha (D-Pa.), was forced to let go of all its clients for a total of 105 terminations, cutting loose Unisys Corp., L-3 Communications Corp., Lockheed Martin Corp. and General Dynamics.
Patton Boggs was next in line, notching 41 contract terminations during the first three months of the year. Nick Allard, managing partner of the firm, said he was pleasantly surprised at the number, which was fewer than similar three-month stretches during the past decade.
If you look at 2006, we had 68 and in 2004, we had 38, Allard said. First quarter 2007, we had 51 terminations. ... Relative to prior first quarters during new Congresses, its a bit low.
Allard also attributed routine firm housekeeping for the arguably steep number of terminations, saying the firm goes through its files at the outset of each Congress to make sure were catching and closing things when the work is completed.
He also cited several countervailing forces to his firms finish with so many losses so far this year.
On one hand you have a very activist, very ambitious administration and a lot of pent up work after eight years where government is viewed as part of the problem and not part of the solution, Allard said. On the other hand, you have a historically bad economy and other factors.
President Richard Nixons ghost also figures into canceled contracts during the first quarter of 2009. Donald Alexander, a former partner at Akin, Gump, Strauss, Hauer & Feld, died in February, ending the decades-long career of the former Internal Revenue Service commissioner best known for standing up to the 37th presidents request to use the IRS as a political tool.
Of Akin Gumps 16 terminated contracts during the first quarter, at least two were registered to Alexander, including Nationwide Mutual Insurance Co. and Sequoia Ventures Inc., according to records filed with the Secretary of the Senate. The firm declined to comment for this story.
Moses Mercado, managing director of Ogilvy Government Relations, said that his firm was anticipating a spike in terminations during the first quarter, agreeing that many clients are now less inclined to keep writing checks once the lobbyist has put out the fire it was hired to extinguish.
Normally what happens is if youre successful, they like to keep a very good firm on retainer, he said. But nowadays, Mercado continued, if you fix their problem, they dont really need you.
Ogilvy terminated 13 contracts during the first quarter, including Icahn Associates, Credit Suisse Securities and LG Electronics USA.
Another firm attributed the jump in terminations to the slumping economy but for reasons that may not be as obvious.
Paul Lee, a former staffer to ex-Sen. Don Nickles (R-Okla.) who started the firm Strategic Health Care 15 years ago, said his shop had to cut loose a number of pro bono clients in order to meet the brisk demand for hand-holding, as the White House plots to upend the nations health care system.
We do a lot of pro bono work for hospitals and other health care providers, and our work has actually picked up so much in the last six months or so that we dont have as much time to do the pro bono work anymore, Lee said. We just made a decision that we cant do as much of that anymore because were getting too busy.
Strategic Health Care canceled 15 contracts during the first quarter, including 10 hospitals.
Krivit & Krivit, another firm with more than a dozen terminations during the first quarter, said it used the early months of 2009 to review its internal compliance policy, according to Sandra Krivit. After analyzing its case load, the law firm which has a number of public interest clients realized it was over-reporting and filed termination reports for 13 clients, including numerous municipal governments.
Most people under-report. We were over-reporting, Krivit said, adding that especially with all of the hoopla going on, we thought, Why would we put ourselves out there?