Bashing of Lobbyists Hits Approps Players Hardest

Posted January 6, 2009 at 6:45pm

At a time when all of K Street has been under relentless attack, one sector is taking an extra thumping.

Appropriations lobbying, long considered the most reliably lucrative niche in the business, has faced unparalleled uncertainty in recent months, with critics insisting that it amounts to little more than a corrupt favor factory.

Some longtime approps lobbyists fear more of the same this year, as Members, particularly Republicans, eye new reforms.

“This is unlike anything we’ve dealt with before,” said one veteran appropriations lobbyist, who would speak only on condition of anonymity. “In the earmark industry, everyone’s concerned.”

But there are fleeting signs of optimism. For starters, earmarks’ biggest nemesis, Sen. John McCain (R-Ariz.), will not be moving into the White House.

And calls for hundreds of millions of dollars in government stimulus is also expected to work some magic downtown.

“Industry after industry and city after city are suffering,” said Gerry Warburg, executive vice president at Cassidy & Associates, a firm that pioneered the earmark business in the 1970s. “The fact is, you’re going to have a trillion dollars worth of government spending, and there’s going to be a strong role for the Congress.”

Warburg added that many legislative branch officials have moved over to the Obama administration, including former Rep. Rahm Emanuel (D-Ill.), who will be the new president’s chief of staff. “Some of the people in the White House, like Rahm Emanuel, support Congress’ power of the purse,” Warburg said.

Even the veteran approps lobbyist says that the sheer volume of appropriated monies should provide for plenty of earmarks before the stimulus package is signed into law — even if there is far more scrutiny.

“It’ll be much more focused than it has been,” he said. “They’ll be focused on economic development and they won’t let any bridges to nowhere happen.”

Of course GOP lawmakers, including McCain, have promised to continue the war on earmarks, but many lobbyists say that rallying cry is lost on most voters.

“If McCain won [the presidency], we would’ve been in a very different environment,” said Rich Gold, who runs the lobbying practice at Holland & Knight, which recently acquired a firm with a large book of government clients seeking funding.

“The message in the election was this isn’t a big enough issue to make a message issue in an election,” Gold added. “You can make an argument that half of America yawned when McCain started the second presidential debate talking about earmarks.”

Still, Gold does expect changes. At the very least, he expects the Democratic-controlled Congress to encourage more openness about earmarks and the appropriations process, so that Members are more accountable for those earmarks they request. That means clients will need to focus on Congressional priorities in the 111th.

“Our local governments and folks in that space need to be more attentive to a broader group of policies at the federal level,” Gold said. “They’re focusing on climate change and health care reform and grant funding from the executive branch agencies.”

Michael Herson, who runs American Defense International, a defense-focused lobbying firm, said he is explaining to clients that earmarks will be harder to get. “But they’re still going to be there,” he said. “Obviously, in a down economic time, the government’s going to keep spending.”

One potential problem is the same conundrum affecting any type of lobbying client: As the economic turmoil hits more cities and companies, those potential clients will likely have less money to spend on lobbying, even at a time when they may need government funds all the more.

Gold said prospective clients remain on the horizon. “We still have small cities and big cities saying, ‘We’re looking to change counsel or we’d like to hire somebody for the first time,’” Gold said. “The federal budget process is incredibly arcane. Even for a big city, it is not self-evident.”

All the more reason for hiring a lobbyist, or so the pitch goes.