Sept. 22, 2014

Wang: Lobbyist Association Content to Tread Water

As one of his first acts in office, President Barack Obama issued an executive order prohibiting lobbyists from serving in key administration positions. Next, the administration banned lobbyists from talking to officials about stimulus funding. To cap things off, the Obama White House forbade lobbyists from serving on federal advisory committees. Many in Washington dubbed this populist offensive a “war on lobbyists.”

For a while, it appeared the American League of Lobbyists, the most prominent professional association for K Street, was standing its ground and pushing back against the attacks. Recently, however, ALL has proposed a series of legislative changes that purport to tighten regulation over the profession. After publicly unveiling the proposals, ALL’s first step was, of course, a good old-fashioned campaign at lobbying Congress to enact the changes.

So have lobbyists thrown in the towel? Not quite. Far from making sweeping changes, one gets the sense that these proposals amount to treading water, perhaps until cooler heads prevail at the White House. While there is nothing wrong with this strategy, ALL’s proposals may also sacrifice some lower-level pawns in a bid to satiate the critics.

Under the Lobbying Disclosure Act, lobbyists must be registered with Congress under a three-pronged test. First, they must make more than one lobbying contact (i.e., a communication to executive or legislative branch officials or staff urging some policy position) on behalf of a client or employer. Second, they must spend more than 20 percent of their time working for that client or employer during a quarter on activities in support of making lobbying contacts. Lastly, the lobbyist or firm must receive more than $3,000 per quarter from that client for lobbying work, or the employer must spend more than $11,500 per quarter on lobbying work.

ALL’s first recommendation is to eliminate the 20 percent activities threshold for retained lobbyists and to lower it to 10 percent for in-house lobbyists. Additionally, ALL suggests that the lobbying contact prong be reduced to one communication for retained lobbyists.

While these proposals sound significant, in practice, they are unlikely to have a big effect on the major players, who are not shrinking violets when it comes to holding themselves out as lobbyists. Heather Podesta, the doyenne of K Street, even started wearing a scarlet “L” to poke fun at the anti-lobbyist rhetoric. Regardless of the thresholds, professional lobbyists likely will have to register for at least one client anyway, at which point they are already in scarlet-letter land. Requiring them to register for more clients will not create more repercussions.

Additionally, lobbyists are chosen for their work because of their familiarity or effectiveness with the client’s issues. It is likely counterproductive to the lobbying effort, and hence a bad business practice, to dilute individual lobbyists’ expertise with respect to a given client by spreading the work to other individuals within a firm simply to avoid the 20 percent threshold for registration for any one lobbyist.

ALL’s proposals also are unlikely to affect major solo practitioners. Even without the 20 percent threshold, it’s unlikely that a lobbyist working on his own could charge a client more than $3,000 per quarter for lobbying activities while skirting registration by never making any lobbying contacts for that client.

comments powered by Disqus