The coronavirus pandemic triggered a whirl of K Street activity during the first half of the year, but nine of the top 10 biggest spenders reported a decrease in their lobbying tabs during the second quarter, indicating a turbulent business environment in the months ahead.
The U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America posted declines in their federal lobbying spending in the second quarter when compared with both this year’s first quarter and the second quarter of 2019, according to new reports filed with Congress this week.
The pandemic has disrupted the K Street economy, as it has the rest of the nation’s businesses, thrusting most lobbyists into an all-virtual workspace and creating volatility as the November elections draw closer.
Facebook, the tech sector’s biggest spender on federal lobbying campaigns, disclosed shelling out less during the second quarter than the first quarter of the year, down to $4.8 million from $5.3 million. Among the 10 biggest lobbying players this year, only Amazon reported an increase, from $4.3 million to $4.4 million, between the first and second quarters.
Some of the top lobbying firms, including Brownstein Hyatt Farber Schreck, reported an increase in the lobbying revenue they earned from clients during the second quarter, as companies and groups sought help navigating the unprecedented pandemic politics and the upended Washington policy agenda.
Neil Bradley, the chamber’s executive vice president and chief policy officer, said the decline in lobbying expenses during the second quarter is a reflection of his group’s shift to helping its members tap into federal programs to weather the COVID-19 crisis. Much of that work was not reportable under the Lobbying Disclosure Act.
“This effort included a dozen guides, which have more than 3.2 million views online, to help employers navigate aid programs, and we hosted or participated in more than 500 calls and webinars with associations, companies, and local and state chambers,” Bradley said in a statement provided by the chamber. “While this advocacy work largely does not show up as lobbying expenses, we are immensely proud of this vital work that helped many American businesses and families avoid bankruptcy.”
The chamber, including its Institute for Legal Reform affiliate, disclosed shelling out about $15 million for federal lobbying campaigns between April 1 and June 30 of this year, down from $21.6 million in the first three months of the year.
Lobbyists who represent multiple clients said two main things are driving business now: the federal government’s coronavirus response and preparations for the postelection political and policy landscape.
“Clients are really starting to think about what’s ahead,” said Karishma Page, a partner in the public policy practice at K&L Gates, a lobbying and law firm. “Now I think everyone acknowledges there’s uncertainty. What does that mean in terms of the policy agenda and issues?”
K&L Gates’ lobbying revenue went up in the second quarter to $5.1 million, an increase from $4.7 million in the first three months of the year and from the $4.4 million during last year’s second quarter. The firm’s recent clients include the Global Alliance for Cannabis Commerce, which paid K&L Gates $150,000 for the second quarter, and Pitney Bowes, which paid it $230,000, according to lobbying disclosure filings.
Page said she’s done a handful of client briefings this month on the possible ramifications of this year’s elections, but she’s also working internally at her firm on the future of lobbying itself. Lobbyists can no longer rely much on in-person interactions with one another or with government officials.
“The serendipity of running into each other, it’s just not there,” she said. “We are really focusing on innovation and mastering the virtual.”
Brownstein Hyatt also posted an increase in lobbying revenue, making it the top-grossing K Street practice during the second quarter with $12.9 million in disclosed fees under the Lobbying Disclosure Act. Akin Gump Strauss Hauer & Feld, long the top firm in town, disclosed about $12.4 million for the same period.
Both firms’ second-quarter numbers reflect increases over the same period last year; Akin Gump’s revenue declined slightly between this year’s first two quarters, while Brownstein was up between the first and second quarters of 2020.
Marc Lampkin, managing partner of Brownstein’s Washington office, said the coronavirus response, long-term policy planning and various other legislative tidbits such as transportation, appropriations and tax matters have been fueling the firm’s business this year. Recent clients have included the chamber’s Institute for Legal Reform and the U.S. Travel Insurance Association, among others.
“People are already starting to look at what the road map needs to be for the end of this year, into next year,” said Lampkin, a former GOP congressional leadership aide.
Even in the health care sector, top spenders American Medical Association and American Hospital Association reported decreases in their federal lobbying in the second quarter when compared with this year’s first three months and the second quarter of 2019. Both disclosed lobbying on numerous coronavirus policy matters.
Like many of its top-spending cohorts, the Consumer Brands Association reported a decline in lobbying spending to about $600,000 in the second quarter, down from $800,000 in the first three months of the year.
Still, the group’s response to COVID-19 was all encompassing, said its lobbyist Bryan Zumwalt. The group represents companies that sell food and other goods, such as sanitizing products. The Clorox Co., for example, is a member.
CBA was working on supply chain issues and other matters with regulatory agencies, including the U.S. Department of Agriculture and the State Department.
“Here in this situation, the scope is just unbelievable,” Zumwalt said, “having to work with nearly every federal agency.”
COVID-19 dominated the recent workload at Holland & Knight, too, partner Rich Gold said. The firm has registered 53 new lobbying clients since mid-March, and revenue was up from $6.4 million in this year's first quarter to $7.2 million for the second quarter.
In addition to handling pandemic response policy issues, Gold said clients were pushing transportation policies as well as assessing the dynamics heading into the 117th Congress.
“People are starting to ask questions that they’ve never asked, like “Does the filibuster survive?’” said Gold, referring to the current threshold of 60 votes required for cloture on most Senate legislation.
The stakes for the coming Congress will be extraordinary, he added: “These may be the most important two years coming up in the history of our republic.”