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Upcoming EU elections bringing undue influence into the spotlight again

A few days ago, a broader coalition of European civil society organizations launched a campaign to make some noise around the influence of big businesses on EU institutions. The timing seems perfect as the upcoming EU elections could create some more serious buy-in from candidates for an effective lobbyist registry. Fixing the current system — which is broken in so many ways — has been on the table for quite a while now, without any success.

PfP
Photo credit: Politics for People

So what’s the problem? As a new study shows, a vast majority of banks and financial lobby groups working to influence EU banking regulations are not registered within the EU’s volunteer lobbyist system, and other industries are notoriously opaque too. As a result, EU citizens have no idea how many laws that affect their lives directly have the fingerprints of lobbyists all over them – from climate to public health to data protection – or how their MEPs (Members of the European Parliament) are influenced by the agenda of big business.

The new Politics for People website – launched as the centerpiece of the broader civic campaign – provides an easy way for EU citizens to directly contact their MEPs through social media channels. People can urge their politicians running for re-election to sign a pledge, and support the interest of the broader public as opposed to the voice of those with money. The website also features case studies explaining how excessive industry lobbying impacts upon the daily lives of ordinary EU citizens, and how the “fire power” of big business can impede meaningful reform.

A lot of prominent MEPs have already signed the pledge, which is a truly encouraging sign. Two days ago, the European Parliament issued a resolution upon the European Commission (the executive body of the European Union) to prepare a legislative proposal for a mandatory register by 2016. It also asks the Commission to, in the meantime, introduce ambitious measures to encourage lobbyists to join the register — for instance, by limiting the number of meetings with unregistered lobbyists.

For our friends living across the pond: you can take action now!

[...]


Why is our tax code so lame? Or, what we can learn from Caterpillar and Dave Camp

Today being tax day, it’s a good time to take a few moments to reflect on some of the pathologies of the U.S. tax code and why they are not likely to change anytime soon.

Exhibit A is the case of Caterpillar, the latest multinational company to come under the scrutiny of Sen. Carl Levin, D-Mich., and his Senate Permanent Subcommittee on Investigations. Recently, Levin’s committee released a blockbuster of a report on how Caterpillar had used Swiss subsidiaries to save $2.4 billion in taxes. That’s a lot of money, that $2.4 billion. For those keeping score, it’s roughly 63 times the $37.9 million that Caterpillar has spent to lobby the federal government since 1998.

Caterpillar is part of a bigger story: the relationship between how much companies lobby and how little they pay in taxes. For example, of the eight companies that spent the most on federal lobbying between 2007 and 2009, seven decreased their overall tax rate between 2007 and 2010. And six of the “Big Eight” enjoyed a decrease of at least seven percentage points.

Or, consider the Fortune 100 companies that lobbied on the most tax bills between 2008 and 2010. The 10 companies that lobbied on 50 or more bills since 2008 paid an average effective tax rate of 17.1 percent in 2010. The 10 companies that lobbied on between 25 and 49 bills (one of which was Caterpillar) paid an average effective tax rate of 18.0 percent. The remaining publicly-traded Fortune 100 companies paid an average effective tax rate of 26.0 percent. The companies that lobbied on the most tax bills also have seen their tax rates decline the most since 2007 (see Figure 1 below).

A graph showing the tax rates among Fortune 100 companies.
Figure 1. Graphic credit: Sunlight Foundation

The most comprehensive academic analysis of this question, published in the American Journal of Political Science, finds that “Firms that spend more on lobbying in a given year pay lower effective tax rates in the next year. Increasing registered lobbying expenditures by 1 percent appears to lower effective tax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm that lobbies.”

Some of the lobbying involves protecting the existing loopholes, like the ones that benefit Caterpillar. The rest involves pushing for small changes to the tax code to narrowly benefit companies or industries. According to a 2005 report from the President’s Advisory Panel on Federal Tax Reform: “Since the 1986 tax reform bill passed, there have been nearly 15,000 changes to the tax code – equal to more than two changes a day. Each one of these changes had a sponsor, and each had a rationale to defend it. Each one was passed by Congress and signed into law.” In 2011, the IRS’ own ombudsman estimated the length of the U.S. tax code to be 3.8 million words – or about 6 ½ times the length of the famous Russian novel War and Peace, for those reading at home.

Not all of Caterpillar’s lobbying budget goes to tax lobbying, of course. But of 165 lobbying reports that Caterpillar filed since 1998, 130 (79%) mention tax issues, making it the company’s top issue.

Looking more closely at these 130 lobbying reports, 46 mention either the phrase “international tax” or “international corporate tax.” Another 22 mention “subpart F,” the section of the tax code that deals with controlled foreign corporations, which is what Caterpillar employed in avoiding those taxes.

Why reform never happens

Earlier this year, House Ways and Means Committee Chairman Dave Camp, R-Mich., put forward a 979-page plan for tax reform. It was an ambitious plan, but it made the fatal mistake of every other tax plan before: It challenged the interests of an industry with a lobbying presence in Washington (well, actually, several industries). Therefore, it was dead on arrival.

As Alexander Furnas and I documented last year, pretty much every industry lobbies on taxes, and, as we wrote at the time, “Lobbyists representing pretty much the entire economy are well entrenched and prepared to defend a dense thicket of interlocking interests to protect favored loopholes, credits and other tax favors. Their attention is both wide and deep.”

Every year, it seems, there is yet another call for tax simplification, another bold plan or proposal to attempt to solve what experts can agree is “a hopelessly complex mess, antithetical to growth, and… crammed with conflicting incentives.” Every year, that proposal dies in committee, before anybody has to make the hard choices that would upset some industry or set of companies with lobbyists ready to pounce at the slightest suggestion that they would be targeted “unfairly.”

Caterpillar is just the latest of many companies to be called out by Levin’s subcommittee. Last year it was Apple. Before that it was Microsoft and Hewlett-Packard. Not much has happened to change how these companies operate and pay taxes. A good guess is that nothing will happen with Caterpillar either. After all, they’ve been lobbying to keep their loopholes in good shape for a long time, and they are probably pretty good at it by now.


So on this tax day I will leave you with three guesses.

My first guess is that Caterpillar will continue to lobby to prevent any changes to the loopholes it enjoys, and soon this latest report will be forgotten, just like the ones before it. After all, Levin — one of the few consistent crusaders against corporate tax avoidance — is retiring this year.

My second guess is that more companies will hire more accountants and lawyers and lobbyists to come up with more tax strategies, because when you have a tax code as big as we do, there are probably infinite ways to exploit it.

And my third guess is that senators and members of the House will continue to propose and then drop comprehensive tax reform. After all, if there weren’t the constant looming threat of tax reform, all those tax lobbyists would have a lot less to do.

I’d even be willing to put money on all that. As long as my earnings would be tax-deductible. I’ll ask my accountant to come up with a way. There’s gotta be something in that tax code to help me out…

[...]


Erring on the side of shady: How calling out “lobbyists” drove them underground

By most accounts, the business of lobbying has been waning in recent years.

But not really. Lobbying contracts don’t just disappear, they just go unreported.

More and more, lobbyists are following former Senate Leader Tom Daschle’s lead and simply not disclosing their lobbying. The reason shadow lobbyists can get away with it is simple: The definitions of “lobbyist” and “lobbying” suffers from well-recognized loopholes. They justify not lobbying because they do not meet the law’s “20% threshold,” meaning they must be engaged in lobbying activities for 20% or more of their time on behalf of a client; otherwise, they are simply offering strategic political advice. Or something like that.

But what is puzzling is why this has become a trend in only the last few years.

A graph showing the number of registered lobbyists from 1998 and 2013.
Graphic credit: Sunlight Foundation

Why does the decline start around 2008? The loophole-ridden Lobbying Disclosure Act became law in 1995.

During a series of interviews with lobbyists, trade association executives, lobbying shop managers, political law compliance attorneys and lobbyist headhunters in Washington, I have uncovered several competing explanations for this sudden decline in lobbyists and lobbying revenues.

Two transparency steps forward, one step back into the shadows

The most commonly mentioned reasons are the Honest Leadership and Open Government Act (HLOGA) of 2007 and the Obama administration’s executive order on ethics. As one lawyer put it:

Prior to HLOGA — and prior to the Obama administration — I would say that most of us in town who advise clients erred on the side of telling them to register [under the LDA]. There wasn’t much of a struggle with “Is this 20% or not?”

The logic is simple: Before these changes in the rules, individuals registered under the LDA just in case. There was no downside. Now, being a registered lobbyist subjects people to additional campaign finance disclosure and gift rules, as well as steep civil and criminal penalties for non-compliance. So, political lawyers simply say don’t register.

Apparently, there’s no risk for doing so. (Though there seems to be some slight risk for registering and screwing up the paperwork.) As Lee Fang reports, even the U.S. Attorney admits, “We have no ability to know if somebody doesn’t register.” Even though we do. Rather, it seems the Department of Justice just has little interest in investigating these cases.

We are left with two explanations for the same problem. But is it fair to blame HLOGA and Obama’s executive order equally?

In a recent conference on lobbying reform sponsored by American University, former White House Counsel Bob Bauer defended the executive order from recent criticism. In doing so, Bauer admits:

To preserve their career options, [lobbyists] don’t want to be lobbyists anymore, at least in name, and they are retreating to more back door or back room types of strategizing for clients.

By shutting lobbyists out from plum White House jobs or advisory boards, the administration may have driven them even further underground.

Bauer objects. He points to evidence of deregistration beginning before 2009. That’s true. As the data show, the trend started in 2008.

A graph showing the percent change in registered lobbying from 1998 to 2013.
Graphic credit: Sunlight Foundation

Coincidentally, candidate Obama famously made that campaign promise that the executive order institutionalized in Iowa — in 2007. It’s possible that savvy lobbyists may have applied one of the tricks of their trade — monitoring how political developments affect businesses and occupations — to themselves. It’s possible, but not likely. Especially since the administration has offered so many waivers to its own policy.

Clearly, HLOGA — and the legal advice to err on the side of shady — is the primary reason. To be clear, these ethics and open government reforms made significant transparency improvements. But they ignored the key culprit: redefining what “lobbying” and “lobbyist” is.

Alternative explanations

It’s the economy, stupid: Another frequently mentioned reason for the decline in lobbying revenues and the number of lobbyists is the “Great Recession.” As the economy declined, businesses and associations cut their budgets, including their lobbying expenditures. This makes sense, but absent better evidence about the lobbying profession specifically, I remain skeptical. According to a 2013 report from the George Mason University Center for Regional Analysis, higher-wage jobs in the business services sector — like lobbying and law — actually grew during the Great Recession. And in any case, the recession was at its peak in 2009, after the decline began.

Partisan gridlock: Political polarization is rightly at the center of any conversation about modern American politics, so it stands to reason that Congress’ apparent inability to do anything could also explain the decline in Washington lobbying. Why hire an expensive lobbyist or open up a Washington office when Congress isn’t doing anything anyway? This is unlikely as well. Recall that Obama enjoyed unified government for two years, so Republican intransigence didn’t really begin until Rep. John Boehner, R-Ohio, took the Speaker’s gavel in 2011. More importantly, Congress does get things done. They just do so under contrived deadlines. So, if anything, that means organized interests need to have constantly vigilant lobbyists ready to act when Congress does. Even political scientists learned this lesson the hard way.

Earmarks: Congress’s moratorium on earmarks means appropriations lobbying specialists have lost their raison d’être. If earmarks in fact did go away, this would be a logical cause for a decline in lobbying. But there’s reason to believe that earmarks are alive and well. They just take different forms. And, if the moratorium dried up business on K Street, then reported lobbying on Federal Budget and Appropriations and Taxes wouldn’t be the most commonly mentioned issues. They are. Just as they have been every year since LDA records have been kept.


In the end, the most plausible explanation for the decline in the registered lobbyist population is HLOGA itself. Even Bauer seemed open to more transparency:

The Executive Order is tied to the definitions under federal law, which seems reasonable. Should federal law have to be amended to provide for a broader, more inclusive definition of lobbyist—and this is a difficult issue, on which there are entirely reasonable differences of opinion—then the policy could be amended along with it.

Why it is such a difficult issue? Even an American Bar Association task force and lobbyists themselves recommend changing it. Though there is more Congress could do to make lobbying more transparent, improving these definitions and insisting on better enforcement are great ways to bring lobbying back out of the shadows.

Now, if only we could find a lawyer with close ties to the White House to make the case…

[...]


How Big Pharma (and others) began lobbying on the Trans-Pacific Partnership before you ever heard of it

In 2009, four years before the Trans-Pacific Partnership (TPP) was a widely-debated trade deal, few would have noticed a new issue popping up in a handful of lobbying reports. That year, 28 organizations filed 59 lobbying reports mentioning the then far-off trade agreement. Almost half of those organizations were pharmaceutical companies or associations.

It was an early clue as to which industry would take the most active role in trying to shape the trade agreement while it was still secret from the public. From 2009 until mid-2013 (the time during which the language of the agreement was still reasonably fluid), drug companies and associations mentioned the trade agreement in 251 separate lobbying reports – two and a half times more than the next most active industry (at least measured by lobbying reports).

It is an investment that appears to have paid off. The TPP is quite friendly to drug manufacturers, strengthening patent exclusivity and providing protections against bulk government purchasing (should it hurt profits). At the behest of the pharmaceutical industry, the U.S. is also pushing to limit the ability of national regulatory agencies to support generic drug development. All of this suggests that the active lobbying has paid off.

But the pharmaceutical industry is not alone in lobbying to shape the trade agreement (see Figure 1 below). Next on the list are auto manufacturers (101 reports), followed by clothing & accessories (89 reports), milk and dairy products (82 reports), and textiles and fabrics (82 reports). Figure 1 visualizes the top 20 most active industries, measured by lobbying reports that mention the Trans-Pacific Partnership or TPP by name.

Figure1
Figure 1. Graphic credit: Sunlight Foundation

Looking at the top 20 organizations (Figure 2 below) tells a similar picture: PhRMA, the pharmaceutical industry’s trade association, tops the list at 44 reports mentioning the trade agreement, followed closely by drug giant Pfizer at 42. The Chamber of Commerce comes in third, with 34 reports, followed by the Dairy Farmers of America, the Generic Pharmaceutical Association and Yahoo!, all at 29 reports.

Figure3
Figure 2. Graphic credit: the Sunlight Foundation

The requisite caveat is these counts are based on voluntary disclosures, and they rely on the organization to specifically mention the trade agreement by name in its lobbying disclosure forms (as opposed to something like “trade issues”). Still, the lobbying patterns shouldn’t come as a surprise: They largely reflect the interests that are most likely to be affected by the trade agreement.

Additionally, we can use Docket Wrench to see which organizations wrote the most public comment letters to the Office of the U.S. Trade Representative (USTR) regarding the TPP. Table 1 below lists these organizations, and each organization is linked to a list of its comments on Docket Wrench. For those seeking to better understand these organizations’ positions and arguments — and the ways in which they tried to shape the TPP in its early stages — these documents are an incredible source.

Table 1

Organization USTR Comments
Pharmaceutical Rsrch & Mfrs of America 7
National Milk Producers Federation 7
National Confectioners Assn 7
Intl Intellectual Property Alliance 7
Emergency Cmte for American Trade 7
Corn Refiners Assn 7
Caterpillar Inc 7
AFL-CIO 7
National Potato Council 6
National Assn of Manufacturers 6
General Electric 6
Express Assn of America 6
California Chamber of Commerce 6
Telecommunications Industry Assn 5
Retail Industry Leaders Assn 5
Personal Care Products Council 5
National Cattlemen’s Beef Assn 5
International Dairy Foods Assn 5
Generic Pharmaceutical Assn 5
Coalition of Service Industries 5
California Table Grape Commission 5
California Cling Peach Board 5
Assn of Global Automakers 5
American Council of Life Insurers 5

More broadly, all this early-stage involvement demonstrates just how dedicated these industries and organizations have been to trying to shape the agreement. Our analysis of lobbying reports shows who was working on the issue back in 2009, when the number of players involved was small enough and public scrutiny was so minimal that it was easier to shape priorities and language. Figures 3 and 4 below show which companies and industries were most active when. The general pattern is one of increasing involvement over time, though the charts also make clear which industries were involved right from the very start.

Figure3
Figure 3. Graphic credit: the Sunlight Foundation
Figure4
Figure 4. Graphic credit: the Sunlight Foundation

Hollywood has been involved in shaping this agreement from the start, and the movie industry has largely gotten what it wanted — provisions that bring back some of the pieces of SOPA/PIPA that could not pass Congress, as well as extending corporate-owned copyrights to life plus 95 years. The International Intellectual Property Alliance, a trade group that represents the film and music industry, has submitted seven different comment letters to the USTR regarding TPP. Here’s an example of one demand from a Nov. 10, 2010 comment letter:

[C]oncrete obligations for strengthening copyright enforcement, including: measures to address online and other infringements generally, and specifically, including criminal remedies for significant wilful (sic) infringements of copyright regardless of whether such acts are undertaken with any direct or indirect motivation of financial gain, as well as willful infringements for purposes of commercial advantage or private financial gain.”

Automakers (the second most active sector as measured by number of mentions in lobbying reports) are seeking broader protections against Japanese imports, and have major concerns about currency exchange rates. Ford Motor Company, for example, has recently stated that it will oppose the TPP unless it deals with issues of currency manipulation. It has won some key support in Congress for its position. Back in 2009, Ford listed 10 specific guiding policies for the TPP in a comment letter. Here were its top three demands:

  • “Dismantle non-tariff barriers (NTBs), as well as tariffs.”
  • “Promote an accelerated tariff reduction mechanism or sectoral agreement for trade for environmental goods.”
  • “Require our partners to pursue market-based currency policies.”

The textile industry has also been extremely active. As requested by the industry, U.S. negotiators are putting forward something called a “yarn-forward” rule, which would require that all important production steps take place in a TPP country — one way to prevent China from supplying cheap textile components to other Asian countries. The textile lobbying appears to have paid off in garnering support for the industry position in Washington. Back in 2009, the American Apparel & Footwear association was laying out the case for strict Rules of Origin in a comment letter to the USTR.

The dairy sector has been working with U.S. negotiators to try to open up the Canadian and Japanese markets to expanded dairy imports. As the chief operating officer of the National Milk Producers Federation (NMPF) put it, “Opening the Canadian dairy market is a linchpin.” Back in 2010, NMPF wrote a ten-page letter to the USTR saying it would “continue to work with USTR and USDA as part of the consultation process for this initiative.” It concluded that:

“We would also be remiss not to point out that if fully open dairy trade with New Zealand is a part of the final TPP agreement, it is extremely unlikely that a total net positive benefit for U.S. production agriculture could be arrived at given the existing agreements and the mix of countries currently involved in this endeavor.”

The list goes on, but the basic theme is the same. Pick an industry with an interest at stake and lobbyists for this industry have likely been trying to shape the trade agreement for years. Not surprisingly, many of these interests have been kept in the loop by the USTR throughout the process.

By contrast, the public has been shut out of the process. The Sunlight Foundation, along with more than 30 other civil society organizations around the world, called upon the leaders of TPP countries last year to conduct future trade negotiations in “a manner consistent with the democratic principles and openness and accountability.”

While the lobbying disclosures and comments unearthed through Docket Wrench don’t prove influence, they do provide an important window into the importance of being there at the early stages of the process. And as is often the case in politics, the time to influence policy is at the agenda-setting stage. By the time an issue has become a topic of public conversation, the ability to shape it is far reduced.

[...]


Political chemistry: The legal magic that makes corporate donations disappear

Even though the draft legislation they will be touting is being called “a nightmare” by environmentalists, representatives of chemical companies have good reasons to expect a friendly reception when they go before a House Energy and Commerce subcommittee this morning.

Some of the reasons are obvious from a perusal of public records; others, not so much.

That’s because the muscle behind changing a nearly four-decade old law regulating toxic substances can’t be measured solely by the multi-million-dollar lobbying budgets of corporations and trade associations that have been pushing for it. Nor can it be summed up in the thousands of dollars of campaign contributions funneled to members of the Energy and Commerce Committee by some of the very companies that will be presenting testimony today.

Sure, the powerful American Chemistry Council, a trade association that has taken the lead in lobbying for an overhaul of the 1976 Toxic Substances Control Act, has donated $11,500 to Energy and Commerce Committee Chairman Fred Upton, R-Mich., whose panel will help draft any revisions to the law. But those contributions pale in comparison to what the Chemistry Council has done for Upton in this election cycle completely under the public radar.

Late last summer — a strategically important time in politics because it is the point in the election cycle when would-be challengers decide whether or not to take on incumbents — the American Chemistry Council launched a highly flattering ad campaign touting Upton’s leadership abilities. The ads appear to have aired in Kalamazoo and Grand Rapids, two markets that cover the veteran lawmaker’s western Michigan district. An examination of ad buy records on Sunlight’s Political Ad Sleuth show that the Chemistry Council spent more than $240,000 airing nearly 500 spots during three weeks in August.

Those spots are part of a much larger campaign of similar ads that the Council has been buying since the 2014 election cycle got underway last year. It’s an effort that makes an important point about loopholes in campaign finance law that allow significant political favors to be done outside of the public eye.

Even though the ads for Upton, along with those for 17 other members of Congress, are described on the Chemistry Council’s YouTube site as “Support for” the candidates, they have never been reported to the Federal Election Commission. The Chemistry Council’s reported “independent expenditures” for the 2014 cycle so far: zero.

There’s nothing illegal going on here: Campaign finance law says an ad that praises or criticizes a candidate by name isn’t a “political” ad unless a) it airs within 30 days of a primary or 60 days of a general election or b) it “expressly advocates” for the candidate’s election or defeat. The Chemistry Council’s ads thread the needle by avoiding the use of the so-called magic words: vote for or vote against.

The only way we’ve been able to surface these expenditures is through two ad tracking tools that the Sunlight Foundation created last year out of frustration with growing amounts of political spending and influence that has been occurring outside the Federal Election Commission’s purview.

  • Ad Hawk is a mobile Sunlight app that allows users to identify groups behind political ads and to learn the names of their top donors. To create this tool, our developers scrape the online sites of candidates and politically active organizations to create a database of ads. While curating this database, we first began to notice the American Chemistry Council’s ad campaign.
  • Political Ad Sleuth creates an easy-to-search feed of all of the political ad buys that the Federal Communications Commission currently requires broadcasters to post online. At the moment, only stations affiliated with the top four networks (ABC, CBS, Fox and NBC) that are located in the nation’s 50 largest TV markets have to post political ad buys online. That unfortunately leaves a lot of territory uncovered — especially in a year when so many races that could determine control of Congress are occurring in states without top-50 markets, like Alaska, Arkansas, Iowa, Montana and West Virginia, to name a few.

Even so, it was Ad Sleuth that allowed us to estimate how much the Chemistry Council spent in Upton’s district. It also allows us to see the tens of thousands of dollars the Chemistry Council spent late last year in New Mexico, where Sen. Tom Udall, a Democrat, is up for reelection this year. Udall, a member of the the Environmental and Public Works Committee, is an original cosponsor of the Chemical Safety Improvement Act, the Senate version of the Toxic Substances Control Act rewrite. The Chemical Council also supports that bill. Another sponsor of the bill, Sen. Kay Hagan, a North Carolina Democrat, benefited from scores of ads the Chemical Council bought in her state last summer.

Of the eight senators who have were subjects of laudatory Chemical Council ads, five are cosponsors of the Chemical Safety Improvement Act. Of the nine House members who starred in the commercials, four are members of the Energy and Commerce Committee, three are members of the Transportation Committee and one is House Majority Leader Eric Cantor.

More conventional kinds of influence are also being wielded by proponents of the toxic substance law overhaul.

The ACC CEO testifies in the House
Cal Dooley, President and CEO of the American Chemistry Council, testifies before the House Energy and Commerce Committee

House Energy and Commerce Committee member John Barrow, a Georgia Democrat perennially targeted by Republicans, has received $21,499 from the Chemistry Council, almost half of that in the last election cycle.

The Dow Chemical Employees PAC sent $2,000 to Upton in 2013. The Intel Corporation cut two $2,500 checks to Reps. Steve Scalise, R-La., and Barrow. The Environmental Health Strategy Center — the sole environmentalist group present at Wednesday’s hearing — has not shown the same level of generosity to the subcommittee members. Influence Explorer has no records of state or federal contributions from the green group from 1989-2013.

Although the draft bill under consideration by House members today has yet to be introduced, lobbyists representing chemical corporations that want to see the rollback of EPA regulations have been pushing a similar measure for months in the Senate. Lobbying disclosure forms collected by Open Secrets show that the Chemical Safety Improvement Act was mentioned on three different reports by Dow Chemical’s in-house lobbyists in 2013. The company has spent over $10 million total on all lobbying that year. Likewise, the Society of Chemical Manufacturers and Affiliates — an industry trade group — has been lobbying Congress on the issue since the first quarter of last year. The preliminary hearing for the House bill likely means the start of another groundswell of lobbying.

A complete list of lawmakers who benefited from American Chemistry Council ads is below. Click on their names to see the ads.

Lawmaker State Party Key Committees and leadership positions Rothenberg rating Date posted
Sen. Mary Landrieu LA D Appropriations, Energy and Natural Resources, Homeland Security, Small Business Pure Toss Up 1/16/13
Sen. Kay Hagan NC D Armed Services, Banking, HELP, Small Business Toss Up/Tilt D 8/5/13
Rep. Fred Upton MI R Energy and Commerce (chair), Safe R 8/5/13
Sen. Mitch McConnell KY R Republican Leader Lean R 8/5/13
Rep. Mike Simpson ID R Appropriations Safe R (but competitive primary) 8/5/13
Sen. Tom Udall NM D Appropriations, Joint Committee on Printing, Environment and Public Works, Foreign Relations, Indian Affairs, Rules Safe D 8/12/13
Rep. Steve Scalise LA R Energy and Commerce Safe R 8/13/13
Sen. John Thune SD R Agriculture, Commerce, Finance Not up till 2016 8/16/13
Sen. Chris Coons DE D Appropriations, Foreign Relations, Budget, Judiciary Safe D 8/19/13
Rep. Shelley Capito WV R Financial Services, Transportation and Infrastructure, Running for Senate: Lean Republican 11/6/13
Rep. Bill Shuster PA R Armed Services, Transportation, Safe R (but semi-competitive primary) 11/12/13
Rep. John Barrow GA D Energy and Commerce Lean Democrat 11/26/13
Rep. Eric Cantor VA R Majority Leader Safe R 12/5/13
Rep. Lee Terry NE R Energy and Commerce Republican favored 1/27/14
Sen. Mark Begich AK D Appropriations, Commerce, Homeland Security, Indian Affairs, Veterans Toss Up/Tilt D 1/31/14
Sen Mike Crapo ID R Banking, Environment and Public Works, Finance, Indian Affairs, Budget Not up till 2016 2/27/14
Rep. Rodney Davis IL R Agriculture, Transportation, Toss Up/Tilt R 2/5/14

[...]


Chile passes lobbying law, a first in Latin America

After extensive civil society campaigning, Chile has a new law on lobbying. Due to the efforts of civil society and the near unanimous support of both houses of the country’s parliament, Chile has become the first country in Latin America with legislation on lobbying disclosure.


The Palacio Moneda in Chile.

Despite its weaknesses, the law represents an important step forward for lobbying transparency in Chile. In the new disclosure system, registration is voluntary. While this may significantly limit how the new regulation might capture lobbying activity, the law outlines a unique way of providing such information in the absence of a mandatory register.

The campaign and civil society

Felipe Heusser, the executive director of Fundacion Ciudadano Inteligente and one of the leaders of the diverse civil society coalition that pushed for the new law, argues that the campaign achieved its goals thanks to both its strategy and willingness to be pragmatic. In terms of strategy, the coalition embraced both web-based advocacy and more traditional direct lobbying. It was due to this combination of these approaches, says Heusser, that the campaign was able to help draft and ensure the passage of the law.

The coalition was also pragmatic in its demands: rather than pushing for a perfect piece of legislation, they were willing to work within the bounds of what was possible. This pragmatism did a few things. First, it allowed them to push for the passage of a bill that, despite imperfections, could be a significant first step. Additionally, their reasonable approach and willingness to negotiate likely engendered a strong working relationship with the politicians and officials on the other side of the table.

The work of civil society, of course, is not complete. Not only will organizations continue to push for better lobbying disclosure practices, they will also play an important role disseminating lobbying information to the public. For example, consider Poderopedia, a Chilean website that explores the relationships between individuals and organizations in the public and private sectors. By mapping these relations through simple data visualization, the tool allows users to get a better sense of the interactions between the private and public sectors that shape the policy making process. A product of crowdsourcing, Poderopedia is a collaborative platform that relies on contributions from users.

Another important tool is Inspector de Intereses. Developed by Fundacion Ciudadano Inteligente, this tool matches elected officials’ voting records with their financial disclosures to detect potential conflicts of interest. While Inspector de Intereses doesn’t explore lobbying information in particular, it does reveal the potential influence that private interests might have over public policy and the decisions of elected officials. Tools like this help citizens, journalists, and other actors make sense of often confusing narratives, and are therefore an integral part of citizen oversight and public scrutiny.

The law

While the campaign was effective in pushing for and ensuring the passage of the bill, it is still unclear how strong this new law will be. Registration is entirely voluntary, and thus the activities of many active lobbyists will remain hidden from the public. As Miguel Paz of Poderopedia argues, in the absence of a legally enforceable system the success of the register will rely on the willingness and honesty of lobbyists.

That being said, the law provides an interesting alternative. If a lobbyist is interested in meeting with a public official, they have to submit a meeting form saying, among other things, who they represent and what they want. Along with a summary of the meeting, this information is added to the public register by the independent Information Commissioner. If there is a high level of compliance, this system could provide the public with a more robust picture of lobbying activities.

One aspect of the legislation that will need to be addressed is which government officials are covered by the law. As currently written, a lobbyist meeting with a mid or low level public official does not need to submit a meeting form. Importantly, civil society organizations are encouraged to request changes to the list of government officials covered under the legislation.

Furthermore, Chile’s law seems to be one of the very few in the world that places part of the burden of disclosure on public employees. After meeting with a lobbyist, officials must submit a summary of their meeting to the Information Commissioner, who will then publish the summary. As far as we know, only Poland requires government officials to play a role in disclosure. There are arguments for and against involving public officials in lobbying disclosure, but little evidence proving whether or not such as arrangement can be effective. We are curious to see how this plays out in Chile.

What’s next?

The law has passed, but the fight for lobbying transparency in Chile isn’t over. Cooperation between government officials and civil society was a crucial part of getting this law passed, and continued collaboration will help ensure that the law is successfully implemented. In the coming months, a few critical things missing from the law should be addressed. Data standards, for example, are not mentioned in the legislation. Making lobbying information accessible, open and searchable is critical. Tools that try to make sense of lobbying and influence in the country — such as Poderopedia and Inspector de Intereses — would be significantly improved with open, high-quality lobbying data.

Weaknesses aside, this law represents a significant first step for Chile and the region — one that can, and should, be improved upon going forward.

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In U.K. and EU, lobbying reform efforts come up short

Across Europe, efforts to promote lobbying transparency are coming up short. In both the U.K. and the EU, weak laws and reform efforts are failing to provide meaningful lobbying disclosure, leaving the public in the dark.


U.K. civil society is frustrated with the new lobbying law.
U.K. lobbying bill may restrict civil society campaigns

In the U.K., a lobbying law was recently passed despite widespread disapproval. While the law does create a new register of professional lobbyists, Tamasin Cave of Spinwatch noted that the registration process has two critical weaknesses. First, it is extremely narrow in scope, as only consultant lobbyists working for lobbying agencies must register. This means that lobbyists who work for major corporations or law firms can continue to operate in the shadows. Covering only consultant lobbyists employed by a lobbying agency addresses only the tip of the influence-peddling iceberg — leaving a majority of active lobbyists hidden from public scrutiny.

Second, information on a lobbyist’s goals and who they meet with will not be included in the disclosure process. A lobbyist must list their clients — but nothing more. Without information on lobbying contacts and objectives, lobbying disclosure provides little to no additional information on the policymaking process.

Many in Britain are up in arms about the new law, which disproportionately targets civil society and threatens the political rights of campaigners and advocates in its restrictions and rules on campaigning and advocacy. The new law, which has come to be referred to as the “gagging bill,” places new restrictions on the amount of money civil society organizations, charities and unions can spend in the run up to an election. These restrictions apply to all spending related to advocacy or campaigning, even if it is not in support of a candidate or political party. For example, if an advocacy organization wants to raise attention around a particular issue prior to an election, their ability to do so may be constricted. The law also introduces a host of regulatory burdens that may significantly limit the capacity of small nonprofits.

EU lobbying reform stalls with weak report

Meanwhile, in the EU a joint committee of the European Parliament and Commission was tasked with reviewing the lobbying registration process and making recommendations for the future of the register. ALTER-EU, a European civil-society coalition working on lobbying transparency, published a scorecard analyzing the recommendations and concluded that they were “hugely disappointing.”

While the Parliament stated its support for a mandatory register in the future, the Commission continues to withhold support for mandatory disclosure by active lobbyists. In light of this, movement on a mandatory lobbying registry is doubtful. The joint committee also failed to toughen the weak rules on noncompliance or to recommend any meaningful improvements to the broken financial disclosure system. If this report is any indication, more complete lobbying disclosure in the EU seems unlikely over the short term.


The recent actions of the U.K. and EU are discouraging. Now, there is even greater need for civil society organizations to fight for information about lobbyists that shape the policymaking process outside the realm of public scrutiny.

 

[...]


Britain ‘shines light of transparency’ on secret lobbying. Just kidding.

The following article is cross-posted from OpenDemocracy.

David Cameron’s lobbying bill exposes the hollowness of his muscular claims about cracking down on crony capitalism. Britain’s democracy remains under corporate capture.


UK government wants to register lobbying agencies only (Alliance for Lobbying Transparency)

Today the government’s proposed Lobbying Bill will go into parliamentary ping-pong between the House of Commons and the House of Lords. If this Bill passes without significant amendments it will do nothing to stop secret corporate lobbying, making a mockery of the coalition’s open government aspirations.

Every year an estimated £2 billion is spent attempting to influence decisions in Westminster, an amount that is topped only by spending in Washington and Brussels. Even more than its counterparts across the channel and across the pond, London’s lobbying industry has been able to operate in the dark, free from scrutiny and interference: unregulated, unrecorded and unimpeded.

Four years ago next month, just before the 2010 general election, David Cameron announced his intention, if elected, to tackle the “unhealthy influence” of “secret corporate lobbying”. He pledged to “sort out” what he called “crony capitalism”, to shine the “light of transparency” on lobbying, and to force our political system to “come clean about who is buying power and influence”.

The theme of his speech was “rebuilding trust in politics”. He attacked then Prime Minister Gordon Brown’s “secretive, power-hoarding, controlling” government, and its handling of the 2009 parliamentary expenses scandal.

Transparency has since become a major theme of the coalition government under Cameron, who has claimed repeatedly that he wants to “fix our broken politics” and make the UK “the most open and transparent government in the world”.

Fast forward to the government’s proposed lobbying bill, tabled for discussion in parliament today. The second part of the bill has been widely criticised for gagging charities during election periods. The first part, which outlines plans for the lobbying registry, has received less public attention.

Far from shining a light on the activities of the influence industry, the proposed registry would exclude the vast majority of commercial lobbyists, covering as little as 5 per cent of all lobbying activity. Among the excluded, all ‘in-house’ lobbyists — those based at major corporations, banks, consultancies, law firms, accountancy firms. Even the registered lobbyists would not be required to give the public information about what they are asking for, who they are meeting with, or how much they are spending.

How do the government’s proposals compare with a real statutory register of lobbyists? Here’s an illustration from The Alliance for Lobbying Transparency:

Unless it is scrapped and rewritten or major amendments are made – both exceedingly unlikely – the lobbying bill will make a mockery of the UK’s open government purported aspirations. It will leave the British public none the wiser as to how big money and big business are distorting the fabric of public political discourse and decision-making, and to what end. It will do nothing to shed light on how powerful corporate interests are exerting their influence to shape what is politically possible and politically likely – from inaction on climate change and corporate tax avoidance, to fracking, energy prices and the privatisation of public services.

Even a decent registry of lobbyists would give us just a faint sketch of the impact of corporate lobbying on our democracy. The fight for transparency is just a first step that must not distract us from the bigger and more important fight to push back against the malign, distorting, anti-democratic influence of big money and big business on politics.

The passage of the proposed lobbying bill into law would represent a manifest failure of the current government to take even the most elementary of steps to live up to its pre-election promises to tackle secret corporate influence. It will no doubt be remembered as an historic missed opportunity and an astonishing defeat at the first hurdle – making the UK’s claims to global leadership in government openness and accountability look like a joke.

The Open Knowledge Foundation and the Alliance for Lobbying Transparency have launched a petition asking the UK government to scrap and rewrite the lobbying bill. You can sign here. It is endorsed by Access Info, the Campaign for Freedom of Information, Campaign for Press and Broadcasting Freedom, Corporate Europe Observatory, Corporate Watch, Greenpeace, Integrity Action, Involve, the Open Rights Group, Spinwatch, the Sunlight Foundation, Unlock Democracy, War on Want and the World Development Movement.

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Retired staffers land on their feet, several already on K Street

A picture of K Street and Capitol Hill shaking hands.
Graphic credit: Tiina Knuutila/Sunlight Foundation

In their series this week on the growing influence of revolving door lobbyists, Sunlight’s Lee Drutman and Alexander Furnas sifted the data to document how experience in a high-level position on Capitol Hill can make a retiring congressional staffer a hot commodity in the private sector.

Just how hot of a commodity? To find out, we decided to look at some fresh case studies. Using Sunlight’s lobbying tracker, our database of congressional payroll data and old-fashioned reporting, we checked up on where senior Hill staffers who just became legal to lobby have landed.

Just looking at a handful of the highest paid former staffers from the House and Senate turned up several instances of Hill veterans finding work in the “government relations” (read: lobbying) industry almost immediately upon leaving their congressional posts.

Government connections mean high salaries, particularly for the increasing number of staffers who make the jump to K Street. Though overall lobbying revenues have shrunk in recent years — thanks in part to congressional dysfunction — revolvers are doing well.

The Honest Leadership and Open Government Act of 2007 requires members of Congress and former congressional staffers to go through a “cooling-off period” upon leaving the Hill before they may legally lobby. This period lasts two years for senators, and one year for retiring members and staffers from the House of Representatives. Senate staffers also must wait one year before lobbying in their former chamber.

In January, Sunlight noted that almost 250 former staffers and members became legal to lobby during first week of the new year — many of whom had already landed lucrative new gigs. But it turns out they’re not the only ones enjoying the job opportunities that come along with experience on the Hill.

Upon researching the new positions of five of the highest-paid staffers from both the House and Senate whose cooling-off period ended during the first week of 2014, we found several of these former congressional employees who are already working in a lobbying post — some were hired just months after their retirement, though it’s only this year that they may officially register to lobby.1

James Coon, a veteran of the House Transportation Committee and former staff director of the Aviation subcommittee, will helm the government affairs division of the Aircraft Owners and Pilots Association. The group spent more than $2.9 million lobbying in 2012, Open Secrets records show. Julia Massimino, following the footsteps of her former boss, Rep. Howard Berman — now a senior sdvisor at powerhouse lobby shop Covington & Burling — took the reins of Soundexchange’s newly minted Global Public Policy Division in July of last year. Clarine Riddle, former Attorney General of Connecticut and Chief of Staff and campaign advisor to Sen. Joe Lieberman, I-Conn., will join the former senator at law firm Kasowitz, Benson Torres and Friedman, where she now chairs the firm’s government affairs practice.

Sunlight could not find information on the new positions of Joan Akai, Mike Kitamura or Geri Gaginis — the only Executive Assistant on the list. Know where they are? Email us here.

Tim Smith was charged with sexual assault in September.

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The rise of the million-dollar lobbyist

Lobbying is a very lucrative business. But for some it’s more than very lucrative: It’s million-dollar lucrative.

Between 1998 and 2012, 799 lobbyists working at Washington firms have been associated with $1 million or more in annual revenue at least once (in constant 2012 dollars). And between 1998 and 2010, the number of million-dollar firm lobbyists increased almost four-fold, from 71 to 277. That number, however, has declined since then, falling back to 207 in 2012.

A graph showing the number of lobbyists associated with $1 million+ in annual revenue.
Figure 1. Graphic credit: The Sunlight Foundation.

Each year’s list, however, tends to be a little different. The plurality of million-dollar lobbyists — 31 percent (or 250 individuals) – only show up once in the million club. Add in the 157 who only show up twice, and just more than half were brief members of this elite stratum of lobbyists.

At the high end, three lobbyists show up in all 15 years, and another four show up in 14 of the 15 years. The table below lists the lobbyists who were associated with one million dollars in revenue or more at least 12 of the last 15 years. It is worth noting that of these 19 lobbyists, only one — Liz Robbins — is female. Additionally, two are former members of Congress — Vic Fazio and Robert Livingston, both Republicans.

Name Employer Years
 John Jonas Patton Boggs LLP

15

 Edward M Rogers Barbour, Griffith & Rogers

15

 Barney J Skladany Akin, Gump et al

15

 Lanny Griffith Barbour, Griffith & Rogers

14

 Loren Monroe Barbour, Griffith & Rogers

14

 Daryl Owen Daryl Owen Assoc

14

 H Stewart Van Scoyoc Van Scoyoc Assoc

14

 Jack Steven Hart Williams & Jensen

13

 W Michael House Hogan & Hartson

13

 Robert L Livingston Livingston Group

13

 Vic Fazio Akin, Gump et al

12

 Michael Herson American Defense International

12

 Marc Himmelstien National Environmental Strategies

12

 Kenneth J Kies Federal Policy Group

12

 Tony Podesta Podesta Group

12

 Liz Robbins Liz Robbins Assoc

12

 Timothy R Rupli Timothy R Rupli & Assoc

12

 Martin A Russo Cassidy & Assoc

12

 Bill Simmons Dutko Worldwide

12

Increasingly, the overwhelming majority of million-dollar lobbyists are those with former government experience, be they former government staff or former members of Congress. In 1998, 43.1 percent (31 individuals) of the 72 million-dollar lobbyists reported government experience somewhere in their lobbying forms. By 2012, the share had grown to 79.7 percent of the million-dollar lobbyists.

While the number of million-dollar lobbyists without reported government experience has more or less stayed the same, the number of million-dollar lobbyists with reported government experience has increased steadily, going from 31 in 1998 to 201 in 2010, though falling slightly to 165 in 2012.

A graph showing the type and number os lobbyists associated with $1 million+ in annual revenue.
Figure 2. Graphic credit: The Sunlight Foundation.

Looked at another way in Figure 3, the share of active firm lobbyists associated with at least one million in revenue varies substantially based on background. Only about two percent of lobbyists without reported government experience are likely to be associated with a million dollars in a given year. By contrast, the share of lobbyists with government experience reaching the million-dollar threshold is generally between seven and 10 percent.

A graph showing the percentage of lobbyists associated with $1 million+ in annual revenue.
Figure 3. Graphic credit: The Sunlight Foundation.

All of this is consistent with what we found earlier this week: Lobbyists with government experience earn substantially more than those without government experience, and that all of the growth in both personnel and revenue in the for-hire lobbying business can be accounted for by growth in revolving door lobbyist activity.

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