Disclosing Lobbying Revenues: An Imprecise Practice

Posted February 24, 2004 at 6:06pm

When the Federalist Group merged its thriving lobbying practice with Republican veteran Wayne Berman last month, the firm’s partners said the deal would catapult the young lobby shop into the ranks of the Top 10 firms in Washington.

In announcing the merger, the partners said that adding the Federalist Group’s $5.6 million in annual lobbying revenues to Berman’s half-million-dollar book of business would create a $12 million enterprise.

Sound like Washington math? It is.

Under the Lobbing Disclosure Act of 1995, lobbying firms have broad discretion over what lobbying revenues they report to Congress each year.

As a result, a growing number of firms such as the Federalist Group can — legally — adjust their lobbying revenues upward to promote themselves, or downward to remain in K Street’s shadows.

The combined effect has made tracking Washington’s largest lobbying firms an increasingly imprecise art.

The problem stems from the 1995 lobbying law, which requires firms to report only the fees they receive from clients for lobbying Members of Congress on legislation.

“The Lobby Disclosure Act doesn’t include all kinds of work that firms do for clients,” said Kent Cooper of PoliticalMoneyLine.com.

Most Washington lobbying firms don’t disclose revenues they receive from lobbying certain federal officials, petitioning state governments, representing foreign countries and companies or organizing grassroots and public relations campaigns.

As a result, many lobbying firms believe that the figures required by the Lobbying Disclosure Act — which publications, including Roll Call, use to compile annual rankings — offer an inaccurate picture of K Street’s most successful firms.

For example, the $12.2 million in lobbying fees that the Dutko Group reported to Congress for 2003 made the firm the 11th largest shop of the year.

However, the Dutko Group took in a total of $19.9 million in lobbying fees when calculated to include proceeds from state-level lobbying, according to Steve Perry, the firm’s president.

Another influential Washington firm, the Livingston Group, reported $8.5 million in business.

However, figures filed with the Justice Department show that the firm and its president, former Rep. Bob Livingston (R-La.), earned an additional $2.3 million representing Turkey and Morocco.

In fact, lobbyists at nearly every lobbying firm on K Street say that they earn much more money than they report to Congress.

“Our footprint is much broader than what the [Lobbying Disclosure Act] numbers indicate,” said Scott Segal of Bracewell Patterson, which reported $5 million in revenues. “We don’t put as much water on the oar. We are very scrupulous about what we count as lobbying.”

Piper Rudnick, the sixth-ranked firm in 2003, reported $18 million in revenues to Congress for 2003.

However, managing partner John Merrigan said the firm pulled in closer to $50 million.

Meanwhile, Cassidy & Associates tumbled from the No. 1 spot on the ranking after it reported a $600,000 slide in revenues to $28.3 million in 2003.

But, Cassidy spokeswoman Aimee Steel said that total revenues for the firm actually rose to $33.6 million.

As for the new and improved Federalist Group, lobbyists at the firm say they will post $12 million in fees this year simply by disclosing more of the revenue that it already receives.

Said founding partner Stewart Hall: “Because people are keeping score, we might as well put some points on the scoreboard.”