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European Union announces new rules aimed to enhance lobbying disclosure

Photo of President Jean-Claude Juncker
President Jean-Claude Juncker.

Last week, the European Commission revealed new rules that will attempt to make EU lobbying more transparent. Beginning December 1, top-level EU officials will be required to publicly declare their meetings with lobbyists. The announcement comes in the wake of scandal for the EU’s new President, Jean-Claude Juncker. Just days after taking office on November 1, documents were leaked alleging secret tax deals in Luxembourg with big corporations that occurred during Juncker’s term as prime minister of the small Western European country.

Though the details of Luxembourg’s tax scandal call into question the trustworthiness of the new EU leadership, any policy that sheds light on the lobby industry could represent a positive step forward in Europe, where there are currently estimated to be over 30,000 lobbyists — but exact numbers, contacts and identities remain mired in secrecy. The EU created its first voluntary lobbying registry in 2011, but without a mandatory requirement to register, the details in the database are sparse. So far, only about 6,500 entities have disclosed any information on their lobbying activities.

Earlier this year, Jean-Claude Juncker made a public commitment to increasing transparency in the influence of lobbying in Brussels, including the implementation of a mandatory register. The most recently introduced rules would require Commissioners, their Cabinets, and the Directors-General of the Commission services to publish the dates, locations and names of organisations and individuals met and the topics discussed.

Information about lobby contacts and meeting details can play a crucial role in increasing transparency around the influence industry, through empowering watchdogs and citizens to connect the dots as legislation is being debated, tweaked and passed. And although the best way to ensure comprehensive and effective oversight is to require mandatory disclosure from both public officials and lobbyist groups, we believe that requiring top-level officials to disclose their contacts and meetings might have some positive effects in itself. First, it demonstrates public institutions leading by example, which could be a crucial step in creating a culture of transparency and restoring trust in public institutions. Second, the disclosure of contacts and meetings could help shine a light on unregistered lobbyists and put significant pressure on top-level EU officials to meet with registered groups only. Third, once we have a more complete picture of lobbyists via a mandatory register, the availability of the two different data sources will significantly increase public scrutiny and oversight through potential comparison.

However, watchdogs are concerned that the most recent announcement is simply a surface-level PR-exercise designed to alleviate public fears about secret influence permeating the Transatlantic Trade and Investment Partnership (TTIP) between Europe and the U.S. The press release is still vague on the exact parameters, but concerns have arised over the scope of the rule which is limited to the Commissioner, the Cabinet and Director General and therefore likely doesn’t apply to those most heavily lobbied on TTIP (and most other issues). There are other red flags indicating that the rules may just be a distraction from the real secrecy in TTIP as there will be no public release of the draft negotiations, a necessary step in helping stakeholders determine whether the negotiations are being carried out in the public interest.

We can only hope that the most recently introduced rules for disclosure are part of a holistic effort by the new administration and only a first step to make EU lobbying more accountable. Going forward, proper implementation will play a crucial role: the data should be released in a timely and accessible fashion and accompanied by proper oversight. For more details on how Sunlight’s vision for increasing transparency around lobbying, please see our Lobbying Disclosure Guidelines.

[…]


Fixed Fortunes: Biggest corporate political interests spend billions, get trillions



Between 2007 and 2012, 200 of America’s most politically active corporations spent a combined $5.8 billion on federal lobbying and campaign contributions. A year-long analysis by the Sunlight Foundation suggests, however, that what they gave pales compared to what those same corporations got: $4.4 trillion in federal business and support.

That figure, more than the $4.3 trillion the federal government paid the nation’s 50 million Social Security recipients over the same period, is the result of an unprecedented effort to quantify the less-examined side of the campaign finance equation: Do political donors get something in return for what they give?

Four years ago, the U.S. Supreme Court suggested the answer to that question was no. Corporate spending to influence federal elections would not “give rise to corruption or the appearance of corruption,” the majority wrote in the landmark Citizens United v. Federal Election Commission decision.

Sunlight decided to test that premise by examining influence and its potential results on federal decision makers over six years, three before the 2010 Citizens United decision and three after.

We focused on the records of 200 for-profit corporations, all of which had active political action committees and lobbyists in the 2008, 2010 and 2012 election cycles — and were among the top donors to campaign committees registered with the Federal Election Commission. Their investment in politics was enormous. There were 20,500 paying lobbying clients over the six years we examined; the 200 companies we tracked accounted for a whopping 26 percent of the total spent. On average, their PACs, employees and their family members made campaign contributions to 144 sitting members of Congress each cycle.

On average, 144 sitting members of Congress received money from the Fixed Fortune 200 each cycle. Graphic credit: The Sunlight Foundation

After examining 14 million records, including data on campaign contributions, lobbying expenditures, federal budget allocations and spending, we found that, on average, for every dollar spent on influencing politics, the nation’s most politically active corporations received $760 from the government. The $4.4 trillion total represents two-thirds of the $6.5 trillion that individual taxpayers paid into the federal treasury.

Welcome to the world of “Fixed Fortunes,” a seemingly closed universe where the most persistent and savvy political players not so mysteriously have the ability to attract federal dollars regardless of who is running Washington.

Political change, permanent interests

During the six years we studied, newly elected Democratic majorities took control in the House and Senate. Two years later, the White House shifted from Republican to Democratic control, and two years after that the GOP came back to take the House. The collapse of the housing bubble in 2007 led to massive bailout efforts by the Treasury Department and the Federal Reserve Board, two massive stimulus bills and the loss of more than eight million jobs. Congress passed laws that overhauled health care insurance and financial industry regulation. Troops surged in Afghanistan and withdrew from Iraq. There were 16 separate “continuing resolutions” to fund the government, a debt ceiling standoff that caused a downgrade in the nation’s credit rating and a “super committee” to wrestle with the federal budget. As middle class Americans lost ground, the Fixed Fortune 200 got what they needed.

What they needed included loans that helped automakers and banks survive the recent recession while many homeowners went under. It included full funding and expansion of federal programs started in the 1930s that, year after year, decade after decade, help prop up prices for agribusinesses and secure trade deals for our biggest manufacturers. It included budget busting emergency measures that funneled extra dollars to everything from defense contractors to public utility companies to financial industry giants. The record suggests that the money corporations spend on political campaigns and Washington lobbying firms is not an unwise investment.

The Fixed Fortune 200 come from a wide range of industries. There are a host of familiar names among them, like Ford Motor Company, McDonald’s and Bank of America, as well as some less famous, like MacAndrews & Forbes, the Carlyle Group and Cerberus Capital Management. (For the complete list, including what they gave and what they got, click here.) There are retailers and investment banks, construction and telecommunications firms, health insurers and gun makers, entertainment conglomerates, banks and pharmaceutical manufacturers, among others.

Out of 20,500 paying lobbying clients, the Fixed Fortune 200 accounted for a whopping 26 percent of the total spent. Graphic credit: The Sunlight Foundation

Overall, the Fixed Fortune 200’s PACs, employees and their family members gave $597 million to political committees and disclosed spending $5.2 billion on lobbying. They make this enormous investment in politics in large part because their businesses are inextricably entwined with government decisions — including spending decisions.

Government as business partner

For example, the federal government issued contracts to purchase goods and services that totaled a little more that $3 trillion during the period; companies among the top 200 corporate political givers won $1 trillion of that, a third of the total. The Treasury Department managed $410 billion in loans and other assistance issued under the Troubled Asset Relief Program, created by Congress to cope with the 2008 financial crisis; of that amount, $298 million, about 73 percent, went to 16 firms among the Fixed Fortune 200. When the Federal Reserve took extraordinary measures in the wake of the 2008 financial crisis, it funneled nearly $2.8 trillion through 29 Fixed Fortune firms. The companies that participated the most in politics got huge returns.

Of the 200 corporations we examined, we could sum the financial rewards for 179. Of those, 138 received more from the federal government than they spent on politics, 102 of them received more than 10 times what they spent on politics, and 29 received 1,000 times or more from the federal government than they invested in lobbyists or contributed to political committees via their employees, their family members and their PACs.

As for the other 21 companies on our list, while we could not quantify the financial benefits that some received, we were able to identify them. Some examples:

  • Arch Coal lists the Tennessee Valley Authority (TVA), the government corporation that’s the largest public electricity producer, as one of its three biggest customers. TVA does not release data on its coal purchases.
  • Forest City Enterprises does not appear as a landlord in the Government Services Agency’s database of federal rental agreements, though its annual report notes that the U.S. government is the third-biggest customer for its pricey New York City office space.
  • Occidental Petroleum has leases on federal land to extract natural gas, but the government does not release information on how much that gas is withdrawn or how much it is worth.
  • And while the government has so far refused to release information on what retailers get the most purchases via food stamps, Wal-Mart went so far as to acknowledge in a filing with the Securities and Exchange Commission that reductions in the now $78 billion-a-year Supplemental Nutrition Assistance Program — or food stamps — could have a significant impact on the company’s earnings, which totaled $476 billion in its most recent fiscal year.

Of the 200 companies analyzed for Fixed Fortunes, 28 are in what the money in politics research organization the Center for Responsive Politics classifies as the communications and electronics sector, 21 in healthcare, 13 in defense and aerospace, 13 agribusinesses, 11 in energy and natural resources, and 7 in transportation. The biggest sector, accounting for 48 of the 200, was finance, insurance and real estate, which is consistently the largest source of campaign funds for politicians cycle after cycle. Congress and the executive branch have paid particular attention to the industry, approving hundreds of billions in aid to help it weather the financial crisis. Meanwhile, the Federal Reserve advanced trillions in credit, which the nation’s central bank hoped would trickle down through the rest of the economy.

Companies with the biggest returns on their political investments include three foreign financial service and banking firms, UBS and Credit Suisse Group from Switzerland, and Deutsche Bank of Germany, all of which benefited from the Treasury Department’s taxpayer-financed rescue of American International Group. Investment banks Goldman Sachs and Morgan Stanley as well as commercial banks like JPMorgan Chase & Co., Citigroup, Wells Fargo and Bank of America also received far more from government than they put into politics: They benefited from the bailouts of the financial industry undertaken by Treasury and the Federal Reserve. Weapons manufacturers like Boeing and Lockheed Martin, both of which disclosed spending more than $10 million each year on lobbying, also made the list. So did McKesson, a pharmaceutical wholesaler that is the biggest vendor for Veterans Affairs, and the Carlyle Group, a wealth management firm started by former government insiders who invest in firms that have significant involvement with government, such as defense, telecommunications and health care.

A range of returns

To catalogue the money flowing to and from the Fixed Fortune 200, we examined data on campaign contributions and lobbying expenditures. We compiled and queried a host of government spending records, including spending approved through the normal budgeting process. We also looked at additional spending measures — extra-budgetary spending on the Global War on Terror, renamed Overseas Contingency Operations in 2009, and emergency or one-time measures like the Emergency Economic Stabilization Act of 2008 and the American Recovery and Reinvestment Act of 2009. And because the Federal Reserve made use of its power to advance credit to private firms in extraordinary circumstances, we also examined its interventions in the economy.

For every dollar spent influencing politics, the Fixed Fortune 200 received $760 from the government. Graphic credit: The Sunlight Foundation

See our methodology for a complete explanation of how we arrived at these numbers and more.

Some of the gets are harder to quantify. While corporate interests disclose lobbying on federal spending — the budget and appropriations process — more than any other issue, they also seek to influence trade agreements, labor rules, environmental regulation and the Internal Revenue Code.

Blue Cross and Blue Shield has its own provision in the tax code, section 833, that saves its companies an estimated $1 billion a year. Life insurance companies like New York Life and Pacific Mutual, and their customers, are eligible for tax breaks that save the industry $30 billion a year, with about $3 billion going to the companies and the balance going to their policyholders. The corporate tax code is full of loopholes and subsidies that companies lobby for to help their bottom lines; Citizens for Tax Justice researched the Securities and Exchange Commission disclosures filed by publicly traded corporations in an effort to determine their effective tax rates; its analysis included 89 members of the group Sunlight examined. The average effective tax rate of those companies was 17.7 percent between 2008 and 2012. Federal law, meanwhile, sets the corporate tax rate at 35 percent.

As far as we can tell, one thing the Fixed Fortune 200 did not do, for the most part, was take advantage of the new opportunities to spend on politics that the Citizens United decision afforded them. The 200 corporate donors gave just $3 million to super PACs, with the bulk of that amount a single $2.5 million donation from Chevron to the Congressional Leadership PAC, a super PAC that’s been linked to House Speaker John Boehner. It’s important to note, however, that contributions by these companies to politically active nonprofits (a category that includes the Chamber of Commerce) are impossible to track because of tax laws that allow those entities to shield donors.

Though beyond the scope of our study, which focused on the federal government, it is worth noting that 174 of the 200 corporations won subsidies from state and local governments, according to Good Jobs First, an organization that tracks economic development programs. The Citizens United decision also applies to state election laws, giving corporations the right to speak at the state and local levels as well.

Nonetheless, opinion polls show that majorities of Americans generally trust governments in their city halls, township boards and state capitals. That doesn’t compare well to the mere 19 percent of Americans who trust their federal government. Frustration with Washington runs high for any number of reasons, but consider:

  • Two-thirds of Americans believe corporations pay too little in taxes and that they should pay more, but tax reform stalls in Congress year after year;
  • Prominent politicians from both parties have criticized corporate welfare programs that benefit big business for more than two decades, but not one of those programs has been repealed;
  • The president and Congress ended a reduction in payroll taxes that benefited wage earners in January 2013 but extended business tax breaks for insurers, energy companies and other corporations;
  • Federal bailouts returned financial industry firms that started the crisis to profitability, while middle class income and net worth of the middle class fell.

More than seven years after Washington passed the first measures to stimulate the economy as the housing bubble started to burst, more and more Americans are living on less and less, without as much savings and other assets to fall back on in hard times. Washington policies that have restored corporate profits and made the stock market boom have left much of the country behind. Perhaps that’s why a whole host of polls, from networks and news organizations and nonprofit groups, show large majorities of Americans, year after year, saying that the country is on the wrong track.

In its Citizens United decision, the court took for granted that “favoritism and influence” are inherent in electoral democracy and that “democracy is premised on responsiveness” of politicians to those who support them. We found ample evidence of that.

“The appearance of influence or access,” the court said, “will not cause the electorate to lose faith in our democracy.”

It appears that the electorate — who stayed away from the polls this year in droves — might not agree.

[…]


There’s no sunlight in the shadows

Photo credit: Architect of the Capitol

Are we living in the world of Alice in Wonderland? That’s the first thought I had last night reading Jason Grumet’s piece on why transparency is ruining government. It’s a piece, I realized by the end, that does not see the world as it is.

The summary of the argument is thus: “Oh, woe is us. No one in Congress can meet in private any more to deliberate, debate and compromise so we can get something done. The ‘new’ demand for transparency is the cause of increased partisanship, stalemate and just about everything else that’s wrong with government. The ‘radical transparency’ that we now operate under is bad so we need to go back to the ‘good ole days’ when a bunch of old white guys sat around in dark rooms, smoking cigars and cutting the deals.”

Wait. Just. A. Minute.

The idea that all meetings in Congress or the executive branch are open and accessible to the public, the assertion that senators and representatives can’t operate behind closed doors is simply laughable. Congress still exempts itself from the Freedom of Information Act, doesn’t operate under open meetings laws and doesn’t even have the same standards for archiving material that the executive branch does.

The few changes in rules enacted in recent years that provide some additional openness could hardly be deemed radical, and did little to change how Washington operates.

No one has called for the kind of “dark side to sunlight” Grumet describes. At Sunlight, we actually agree on his main point: Deliberation in front of the cameras doesn’t always produce the best public policy. We know the delicate nature of finding consensus, but we also believe that transparency is vital to hold government accountable for what it does in our name.

Sunlight and our colleagues in the transparency community have championed real-time, online access to information about the actions of those who represent us in government and the private interests seeking to influence those actions. Because such information allows citizens to hold their elected officials accountable, we would like them to have it as soon as possible. We also believe that all public data should be publicly accessible, which today means online in digital formats.

Because we take seriously the people’s role in our democracy, we pushed the U.S. House of Representatives to pass a rule requiring all non-emergency legislation to be posted online at least three calendar days before deliberation. Think of this as a “safety valve,” giving citizens a final opportunity to examine the changes to legislation, for lawmakers to look at the whole package and for everyone to raise questions and concerns about the bill while it can still have an impact. Lawmakers can and do craft those measures behind closed doors. But the “72-hour rule” gives the public a chance to learn about bills before they are voted on, when they can still have an impact. This is a practical way to balance the smoke-filled rooms that thrill Grumet with meaningful public engagement and participation.

Fostering transparency and accountability in government is also why we think it’s time the Senate finally enter the Internet age and stop hiding their campaign donors by filing campaign finance reports on paper. It’s why we advocate the passage of smart legislation like the Real Time Transparency Act, a bipartisan bill that would require 48-hour disclosure of campaign contributions of $1,000 or more to candidates, committees and parties. Citizens could learn in days — rather than months — which special interests are seeking access to and influence over lawmakers by donating to their campaigns days, not months, after the fact. These reforms will help all of us better understand the interests that can sway officials’ votes on important policy matters that affect us all.

Similarly, we’ve called for better, less vague disclosure of potential conflicts of interest by knowing more about the stock holdings and other assets owned by members of Congress. Having such information has helped journalists monitor financial interests of members of Congress to ensure there are no ethics breaches. And as the teeth have been ripped from the STOCK Act, it’s more important than ever to improve the transparency of political intelligence firms.

Likewise, we advocate for modernizing lobbying disclosure to let the public know which lawmakers that lobbyists contact and what topics discussed. Current law requires only requires lobbyists to list the chamber of Congress they’re approaching, not the name of members, staffers or committees. It’s one thing to know the lobbyist met with a member of the Senate to discuss the federal budget, it’s quite more illuminating to know which particular lobbyists met with specific lawmakers and staff to discuss funding for this weapons system or that road project. Having that kind of information could actually help promote better deliberative discourse: others with an interest in the legislation could give their positions to the member of Congress, providing a fuller range of information and options.

Do these reforms solve everything? No, but transparency can shine a light on what’s not working as well as what does. It allows people to better understand how government functions so they can participate in the dialogue that is our democracy. It lets us learn of ineffective programs and push for their reform or repeal. It can also enable citizens and their representatives to learn of and prevent bad policies from being enacted. It forces those elected to represent us to justify the decisions they make in public. Only by doing that can they build confidence that they have made decisions in the public interest and not on behalf of special interests.  Finally, transparency allows citizens to identify the authors of flawed or failed policies as well as successful ones, and hold them accountable (or reward them) at the ballot box.

The person who said, “sunlight is said to be the best of disinfectants” wasn’t some Watergate baby. It was the towering legal scholar Louis Brandeis, who died in 1941. As it turns out, transparency is hard-wired into the American democracy.

[…]


The enduring power of the ex-senator

three-quarters portrait of John Breaux, wearing a dark suit in his former Senate office with an American flag to his right.

John Breaux, a Louisiana Democrat who served 32 years in Congress before opening a lobbying firm, will be back in his old committee room today. (Photo credit: Wikipedia)

To see the power of Washington’s revolving door — and the weakness of congressional lobbying regulations — check out two events today involving well-heeled corporate interests, health care policy and powerful former members of Congress.

This afternoon at the offices of the influential Bipartisan Policy Center, one of the cofounders of the organization, former Senate Democratic Leader Tom Daschle, will be emceeing a program presenting “innovative strategies” on improving the nation’s health from CEOs of major corporations and leaders of several health associations. Daschle is not registered as a lobbyist, even though he serves as a senior adviser to DLA Piper, a law firm that has spent nearly $137 million since 1989 lobbying on behalf of a wide range of blue-chip corporate clients.

Those clients include two major health insurers, Aetna and Blue Cross/Blue Shield, both companies that are represented on the panel Daschle is moderating. The event is just an hour long, which is potentially noteworthy: Congressional regulations say an individual does not have to register as a lobbyist with Congress unless he or she spends more than 20 percent of his or her time working for an individual client in a given period.

Thirty minutes after Daschle’s panel gets underway, his former Democratic Senate colleague, John Breaux, will be leading a discussion about the role of digital technology in health care in an even more impressive venue — in a Senate hearing room, sponsored by the Senate Select Committee on Aging, which the Louisianan used to chair. Breaux is a registered lobbyist with the Breaux Lott Leadership group, named after him and his partner, former Senate Republican Leader Trent Lott of Mississippi. The notice for the event gives a nod to Breaux’s role as one of the three leaders of the Alliance for Connected Health Care, an organization so new it does not yet appear to have filed the 990 form that would provide details on officers and expenses with the Internal Revenue Service. The other leaders: Lott and Daschle.

While the Breaux Lott firm does not list Alliance for Connected Health Care as a client, Daschle’s employer, DLA Piper, does. DLA Piper registered as a lobbyist for the alliance in February and was paid $170,000 through the first half of this year.

[…]


Wrangling messy political data into usable information

Thanks to the Lobbying Disclosure Act of 1995, individuals and organizations must disclose the activities they undertook each quarter while representing themselves or their clients to Congress. After the Honest Leadership and Open Government Act of 2007 was passed, there was a rapid and sustained use in electronic filing for lobbying disclosures. There are now over 500,000 disclosure forms available for analysis in electronic formats from the past seven years. Although the disclosures don’t offer nearly as many specifics as one would hope, when taken in aggregate the available data provides a high level overview of the movements and trends of the lobbying industry.

Sadly, we can’t just skip from downloading the data to calculating aggregate statistics. The disclosure forms include no reliable way of knowing when two lobbying firms or two clients of a lobbying firm are the same. Without taking an educated guess, we don’t know from the data that the client called “1Sky Education Fund” and the client called “350.org (formerly known as 1Sky Education Fund)” are in fact the same organization. Compounding the issue, two firms usually don’t disclose the name of the same client in the exact same way. Some lobbying firms hardly even disclose their own name consistently. Before we can get into the high level overview of lobbying disclosure data, we must merge and identify all the organizations and individuals in the disclosure forms.

The traditional approach to this problem has been to build software that allows people to label and tag disclosure forms. Human annotation by experts is a tried and true method for understanding these forms. If I had not been one lone intern but rather, say, a hungry swarm of human labor ready to descend on the senate disclosure data like politically inclined locusts settling in on vast fields of informative wheat, I too would have built a system to store the stream of annotations I would have been producing. But, for better or worse, this summer it was just me and a computer with 32 cores, 64 gigabytes of memory and no inborn interest in the lobbying activity of “NPLMCC–Nuclear Power Labor-Management Cooperation Committee” during the first quarter of 2014.

Moreover, we’ve found that lobbying disclosure forms all get submitted during the same two week period each quarter. This means that the month after the disclosure deadlines are hell on researchers. When disclosures hit, everybody drops everything and helps fight the good fight. Despite the best efforts of the labor liquidity movement, hiring and subsequently firing large swaths of lobbying disclosure experts is not a tenable system for dealing with the quarterly disclosures long term. If an organization wants to annotate and tag lobbying disclosure forms, the organization has to be structured to deal with sharp, regular and unavoidable labor surpluses and deficits from the get go.

Some organizations amortize this labor cost by creating dual roles like an individual serving as a reporter primarily and only as an annotator when needed, or finding other disclosure data sets of similar size that are “on” when lobbying disclosure forms are “off.” The Sunlight Foundation was not willing to pursue such a drastic organizational shift and so we decided to explore how far we could get with only software. If a technological solution could be found, we figured it would be faster, cheaper and more reliable than a team of human annotators with, hopefully, acceptable levels of accuracy and precisions.

And so, with all of the above in mind, I embarked on a quest to train a computer to care about politics. The Influence Explorer team figured that if I could reproduce even a fraction of the accuracy that human annotation provides, then a technological solution offered some very real benefits that made the trade off reasonably attractive. In short, we hoped that by sprinkling magical silicon dust over the lobbying disclosure data, we wouldn’t have to destroy the environment by burning of all the midnight oil folks would need to get the projects done each quarter.

ECHELON

Upon arrival to the Sunlight Foundation in May, I was given the goal of automating the annotation of lobbying disclosure data. I had effectively free rein to do what I thought was best. While in pursuit of this goal, I built a series of systems capable of easily answering interesting questions about the world of lobbying disclosures. ECHELON is the third prototype I’ve built so far and is by far the most successful and powerful. With just a few hours of computation, ECHELON is able to approximately reproduce the resolution precision that several years of dedicated hand curation built up.

I’m happy to say that automated annotation and tagging is well within the realm of possibility. I was able to build a system that approximated the results of other organizations. In particular, the number of unique clients and lobbying firms produced by our program was within a few thousand of the same statistics for human annotated data for the same time period. Considering that we started out with over 1,000,000 clients and registrants in total, we were very excited when we saw that we were getting down to around 33,000 clients and 7,000 registrants.

This is not meant to be a deep technical blog post, so I will only touch on the technical architecture before diving into some of the results. ECHELON is a Clojure project built on top of the free version of Datomic and levagesInstaparse heavily. At this point, the core of ECHELON consists of 1500 lines, with another 1000 lines for one off experiments and queries that I’ve been exploring. Most of the core code deals with loading in the data and getting it into just the right format.

As we’ll soon see, such a small project can pack a mean punch.

Parsing field names

One of the major forces powering ECHELON is the understanding of the disclosed name fields. Thanks to Instaparse, we were able to create a formal grammar for parsing the various corporate entities that appeared in the name fields for client, registrants, affiliated organizations and foreign entities. This means that we can turn “SkyTerra Communications, Inc., formerly Mobile Satellite Ventures” into something that looks like the following:

(("skyterra" "communications" :corporation) :fka ("mobile" "satellite" "ventures")) 

All that the above is indicating is that there was a corporation called Skyterra Communications, (“skyterra” “communications” :corporation), that was formerly known as, :fka, Mobile Satellite Ventures, (“mobile” “satellite””ventures”). Which is neat, but sort of useless alone. Here’s what one gets when one runs “SKYTERRA COMMUNICATIONS CORPORATION F/K/A MOBILE SATELLITE VENTURES” through ECHELON’s parser:

(("skyterra" "communications" :corporation) :fka ("mobile" "satellite" "ventures")) 

We get the exact same result for both examples! Two names which look very different produce the exact same result. What I’ve done is create a way of taking a wide variety of inputs and imposing a rigid structure on them, with an emphasis on making similar inputs produce the exact same result.

Once I had run this parser over every organization name field in the disclosure data, I had a fair amount of power to play with. The parser is a vital step in the automated annotation process. As an example, I’ve picked out LightSquared because it is a organization that has a long history and has operated with several different names. Here are all the various names that ECHELON has annotated to be the same thing:

Names of entities matched to Lightsquared
LightSquared
SkyTerra Communications, Inc., formerly Mobile Satellite Ventures
LightSquared (Formerly known as SkyTerra)
SkyTerra
MOBILE SATELLITE VENTURES
LightSquared (formerly known as Skyterra / Lightsquared)
SkyTerra / LightSquared
LightSquared (formerly SkyTerra Communications, Inc.)
Mobile Satellite Ventures, LP
MOBILE SATELLITE VENTURES LP
SkyTerra (Formerly Mobile Satellite Ventures)
Mobile Satellite Ventures
Skyterra
Skyterra (formerly known as Mobile Satellite Ventures)
Lightsquared
Skyterra (formerly known as Mobile Satellite Ventures, LP)
SkyTerra Communications, Inc. (formerly Mobile Satellite Ventures)

So, by the use of a formal grammar and a smart annotation step, we are able to easily find and record the various names that an organization has used as it went about lobbying Congress.

Querying

ECHELON provides a powerful interface for querying the data. Assuming the answer to a question exists within the data, there hasn’t been a question yet that I’ve been able to think of that ECHELON cannot answer. The system is surprisingly powerful, more so than I could have hoped for. Here are the organizations which come up the most often in the disclosure data, broken down by the various associated names:

Alias Number of Occurrences
“PATTON BOGGS LLP” 3611
“Patton Boggs LLP” 3469
“Squire Patton Boggs formerly Patton Boggs LLP” 170
“Squire Patton Boggs” 7
“Patton Boggs, LLP” 6
Alias Number of Occurrences
“Van Scoyoc Associates” 6526
Alias Number of Occurrences
“Holland & Knight LLP” 5062
“Holland & Knight, LLP” 3
“HOLLAND & KNIGHT LLP” 2
Alias Number of Occurrences
“AKIN GUMP STRAUSS HAUER & FELD” 4472
“Akin, Gump, Strauss, Hauer & Feld” 19
“Delaware North Companies on behalf of Akin Gump Strauss Hauer & Feld” 11
“Oneida Indian Nation on behalf of Akin Gump Strauss Hauer & Feld” 10
“City of Houston on behalf of Akin Gump Strauss Hauer & Feld” 10
“Akin Gump Strauss Hauer and Feld” 1
“Akin Gump Strauss Hauer & Feld” 1
Alias Number of Occurrences
“K&L GATES LLP” 4056
“K&L Gates LLP” 212
“K&L GATES, LLP” 55
“K&L Gates, LLP” 12
“K&L Gates, LLp” 1
Alias Number of Occurrences
“Hogan Lovells US LLP” 1459
“HOGAN & HARTSON LLP” 787
“Hogan & Hartson LLP” 634
“Hogan Lovells US LLP f/k/a Hogan & Hartson LLP” 380
“Hogan Lovells f/k/a Hogan & Hartson LLP” 131
“Hogan Lovells US LLP f/k/a Hogan & Hartson LLP” 3
Alias Number of Occurrences
“Cornerstone Government Affairs, LLC” 2999
Alias Number of Occurrences
“Cassidy & Associates, Inc. formerly known as Cassidy & Associates “ 2215
“Cassidy & Associates, Inc.” 268
“Cassidy & Associates” 244
“CASSIDY & ASSOCIATES” 142
“Cassidy & Associates Inc.” 70
“Tiffany & Co. on behalf of Cassidy & Associates” 7
“Hospital for Special Surgery on behalf of Cassidy & Associates” 6
“College of New Rochelle, The on behalf of Cassidy & Associates” 6
“Claflin University on behalf of Cassidy & Associates” 6
“Hampton University on behalf of Cassidy & Associates” 5
“United States Tennis Association Inc. on behalf of Cassidy & Associates” 4
“CASSIDY & ASSOCIATES, Inc.” 3
“National Acquarium in Baltimore, Inc. on behalf of Cassidy & Associates” 3
“Institute for Student Achievement on behalf of Cassidy & Associates” 3
“National Aquarium in Baltimore, Inc. on behalf of Cassidy & Associates” 2
“Cassidy & Associates, Inc.formerly known as Cassidy & Associates” 1
Alias Number of Occurrences
“PODESTA GROUP, INC.” 2902
“Podesta Group, Inc.” 62
Alias Number of Occurrences
“ALCALDE & FAY” 2894
“Alcalde & Fay” 14

There are many interesting little tidbits in the above output. The value of the parser is easily seen as we look at all the variations of the names that pop up within the documents. Specifically, there is a phenomena within disclosure forms where a third party will include itself within the name of the client, i.e. “Patton Boggs on behalf of Northrop Grumman Inc.” even though the lobbying firm that filed the form could be “Cassidy & Associates.” In general, the client name will be something like “Firm A on behalf of Client A” while the registrant will be neither “Firm A” nor “Client A.” This is a common pattern and the parser and annotator account for it. There are several theories about what these disclosed “on behalf of” relationships mean. The most believable one is that the disclosing firms hire these other firms to lobby on behalf of their clients in areas where the disclosing firms is weak. The clients get a wider range of expertise and, perhaps more importantly, clients don’t have to go through the trouble of coordinating with more than one lobbying firm directly. These seems like a reasonable explanation, but these relationships admittedly deserve scrutiny than I’ve been able to give them.

In some rare instances the grammar of the disclosure gets messed up though. While I’m not so into linguistic prescription, it seems like “Entity A on behalf of Entity B” usually means that “Entity A” undertook some work for the benefit of “Entity B” and not that “Entity B” undertook some work for the benefit of “Entity A.” However, as evidenced above, sometimes form fillers will flip the entity positions within the “on behalf of” statement. This confuses the automated annotator. That’s why “Hospital for Special Surgery on behalf of Cassidy & Associates” is resolved to be the same entity as just “Cassidy & Associates.” There is a potential solution to this problem involving more information and a more complicated annotation process, but this issue only occurred a handful of times and thus didn’t feel like it was within the scope of the current project. .

We can see from this that Pattons Boggs occurs most often! Neat. What sorts of activities does Boggs undertake for its clients? Part of the disclosure process is that Patton Boggs must break down what they do into specific issue codes representing the areas that any lobbying activity can fall under. Thus, here is a list of lobbying codes and the number of times Patton Boggs has undertaken an lobbying activity with that code during a quarter on behalf of itself or a client.

Issue Code Number of Occurrences
“Budget/Appropriations” 1679
“Transportation” 965
“Health Issues” 908
“Taxation/Internal Revenue Code” 593
“Medicare/Medicaid” 550
“Urban Development/Municipalities” 399
“Homeland Security” 393
“Energy/Nuclear” 351
“Housing” 332
“Financial Institutions/Investments/Securities” 332
“Defense” 290
“Telecommunications” 284
“Aviation/Aircraft/Airlines” 272
“Education” 257
“Economics/Economic Development” 247
“Law Enforcement/Crime/Criminal Justice” 236
“Natural Resources” 227
“Labor Issues/Antitrust/Workplace” 226
“Environmental/Superfund” 222
“Trade (Domestic & Foreign)” 163
“Government Issues” 148
“Indian/Native American Affairs” 127
“Agriculture” 115
“Insurance” 113
“Clean Air & Water (Quality)” 110
“Retirement” 106
“Consumer Issues/Safety/Protection” 99
“Disaster Planning/Emergencies” 81
“Communications/Broadcasting/Radio/TV” 66
“Chemicals/Chemical Industry” 65
“Copyright/Patent/Trademark” 64
“Banking” 64
“Gaming/Gambling/Casino” 61
“Utilities” 59
“Food Industry (Safety, Labeling, etc.)” 59
“Pharmacy” 54
“Science/Technology” 53
“Roads/Highway” 53
“Manufacturing” 49
“Marine/Maritime/Boating/Fisheries” 46
“Travel/Tourism” 41
“Computer Industry” 41
“Tobacco” 40
“Small Business” 40
“Medical/Disease Research/Clinical Labs” 39
“Immigration” 38
“Foreign Relations” 38
“Railroads” 35
“Veterans” 33
“Sports/Athletics” 32
“Bankruptcy” 24
“Torts” 23
“District of Columbia” 19
“Real Estate/Land Use/Conservation” 18
“Fuel/Gas/Oil” 16
“Beverage Industry” 15
“Aerospace” 15
“Firearms/Guns/Ammunition” 12
“Automotive Industry” 10
“Family Issues/Abortion/Adoption” 9
“Accounting” 9
“Welfare” 8
“Advertising” 8
“Trucking/Shipping” 7
“Media (Information/Publishing)” 6
“Alcohol & Drug Abuse” 5
“Arts/Entertainment” 3
“Intelligence and Surveillance” 2
“Constitution” 2
“Commodities (Big Ticket)” 2

Woah! No wonder Patton Boggs is the entity that shows up the most, they seem to be doing a little bit of everything. How neat. I wonder how things change with time, though. Does Patton Boggs have its bread and butter type lobbying activities or has it been a dynamic firm? Here are the top five activities for each of the past seven years for Patton Boggs:

2008 Number of Reports
“Budget/Appropriations” 281
“Transportation” 127
“Health Issues” 105
“Taxation/Internal Revenue Code” 76
“Medicare/Medicaid” 72
2009 Number of Reports
“Budget/Appropriations” 308
“Transportation” 167
“Health Issues” 149
“Taxation/Internal Revenue Code” 95
“Medicare/Medicaid” 89
2010 Number of Reports
“Budget/Appropriations” 296
“Health Issues” 198
“Transportation” 152
“Taxation/Internal Revenue Code” 113
“Medicare/Medicaid” 101
2011 Number of Reports
“Budget/Appropriations” 254
“Transportation” 150
“Health Issues” 134
“Taxation/Internal Revenue Code” 92
“Medicare/Medicaid” 74
2012 Number of Reports
“Budget/Appropriations” 224
“Transportation” 158
“Health Issues” 122
“Medicare/Medicaid” 82
“Taxation/Internal Revenue Code” 79
2013 Number of Reports
“Budget/Appropriations” 184
“Transportation” 122
“Health Issues” 119
“Medicare/Medicaid” 83
“Taxation/Internal Revenue Code” 76
2014 Number of Reports
“Budget/Appropriations” 132
“Transportation” 89
“Health Issues” 81
“Taxation/Internal Revenue Code” 62
“Medicare/Medicaid” 49

So it seems that Patton Boggs does have its standard issues that it hits every year, with very little movement in the ranking of issues each year. A solid firm then, a stoic firm one might say, a firm that knows what it is good at and sticks to its guns. Good on you Patton Boggs, good on you. Now, this is not the limit of what is possible with ECHELON at all. There is a whole rabbit hole of queries and results that we could disappear into. Every which way I turn when touching the data new questions arise and they can quickly overwhelm us. This post is only meant to introduce and briefly explain ECHELON and its capabilities and so let’s focus on one particular type of query to wrap everything up.

A Comedy of Errors

Back when I was young and naive, i.e. three months ago, I had great faith in the identifiers that the house and senate gave to each registrant and client. You see, registrants are the ones who are actually filling out and filing the forms that I’ve been analyzing. Every registrant, which typically means every lobbying firm, must register that they are going to lobby on their clients’ behalf. Then, each quarter, the registrants file a report on behalf of their clients disclosing the activities they undertook. The house and the senate give each client and firm pair a unique identifier to use when filing the forms. While these identifiers aren’t terribly useful by themselves, they could potentially make it easier to link up all the activities that firms undertook for clients across time. Early on, I was advised by colleagues to look into how reliable the identifiers were. After some rough experiments, it seemed that lobbyists made enough mistakes when entering the identifiers that correcting them all by hand was possible but would not be enjoyable nor productive. I decided to ignore the government issued identifiers for a while if I could by.

Obviously, ECHELON has been a success without using the government issued identifiers. Moreover, ECHELON can tell us exactly how much of a problem these government issued identifiers would have posed if I tried to use them. By relying on only the automated annotation, we can easily find mistakes that lobbyists made when entering in the identifiers on the forms.

First off, form fillers don’t seem to make mistakes when entering in the senate issued identifier. We’ve checked and the senate identifier is apparently used to log into the disclosures systems for both the senate and the house. Thus, these forms cannot be uploaded and still have the senate id wrong. This was a surprising and encouraging find!

The house identifier did not fare nearly so well. I was able to find a couple dozen serious uncorrected mistakes that were made when entering in the house id. At first blush, fourteen mistakes out of over 500,000 forms filled out is a pretty decent track record. However, this number is a lower bound on the number of mistakes that have been made and gives no indication as to the actual number of mistakes. If I ran a better query to find mistakes, found better techniques for annotation, or caught an unknown mistake I was making in my current code, the number of found mistakes in the house identifiers column could sharply increase.

What distresses me most about these mistakes is that they occur in the field where precision matters the most. A firm can forget to include an activity in the disclosures, fudge the numbers on how much they were paid, even misspell the name of their client and it would be fine. That sort of thing doesn’t really matter all that much. Identifiers matter because they are meant to precisely identify an organization and there is no room for error. By making any mistake at all when entering in the identifier, no matter how small the mistake may be, lobbying firms effectively negate the entire purpose of the field in the first place. I’d rather have them leave it blank than to put in nonsense.

Putting the rants of a young pedantic wonk aside, there are two types of mistakes that I’ve found so far when firms are filling out disclosure forms. The first is just a simple typo where something like “1001” becomes something like “10001” or “2001.” The majority of the mistakes found where just typos. These mistakes aren’t terribly interesting, so let’s just look at two examples of them.

“Process Handler et al.” registered that it would be lobbying on behalf of “Mr. Cie Sharp” in early 2007. All throughout 2008, the activities undertaken by the firm on behalf of the client were disclosed with the house identifier “363570022” (as evidenced by the Q1, Q2, Q3 and Q4 reports). However, the house identifier of “362570022” was used on theQ1 report for 2009. After that, the reports switched back to using “363570022” until the relationship was terminated at the end of 2009 (Q2,Q3,Q4, Q4 termination).

“Hoffman, Silver, Gilman & Blasco P.C. (formerly known as Robertson, Monagle & Eastuagh [sic]” has had a long multi year relationship with the “Alaska Forest Association.” The relationship between the two entities is typically disclosed with the house identifier “306260000.” In the fourth quarter of 2011 though, three separate reports were filed to detail this relationship. None of them are amendments to the others, all of them spell the client’s name wrong and two of them use the wrong house identifier (the incorrect “306250000” and “306260005” vs. the correct “306260000”). Strange.

Moving beyond typos, there were two cases of general incompetence. “Keevican Weiss Bauerle & Hirsch, LLC” has lobbied for “TriState Capital Bank” under the identifier “405970000” since 2009. Although they eventually settled in with using the correct identifier, the fourth quarter of 2009 saw that same pattern of three different disclosures, none of them amendments, with two of the disclosures using the wrong identifiers. Thefirst mistake was a simple typo where an extra zero was included at the begininng of the identifier. The second mistake seems nonsensical though; there isn’t a simple way of getting from “405970000” to “408550000” without making at least three typos. If we look for other relationships which have the same identifier though, we see that “Keevican Weiss Baurele & Hirsch, LLC” also does work for “C & S Patient Education Foundation dba Conquer Chiari” and, surprise, that relationship has the “40885000” identifier.

“The Susquehanna Group” has lobbied for “The Corps Network” for about a decade now. This relationship typically uses the identifier “358530003”.One time they made a typo, who cares, but another time they did something odd. I think they just made up a house identifier and used that instead. This report uses “200052379” as the house identifier. That’s more than a few typos and there doesn’t seem to be any other client of anyone who has ever used that identifier. So, as far as I can tell, during one quarter “The Susquehanna Group” just made up an identifier and decided to use that instead. Very strange.

Summary

This has been a terribly long way to explain something that most anyone who has ever worked with raw lobbying disclosure forms has discovered: lobbying disclosure forms are awful in a variety of astounding and disappointing ways. The disclosure forms provide very little information about what is actually going on and the information that is provided is on par with second hand gossip at best. Only by leveraging a fair amount of technical resources and techniques could these forms be processed and turned into something useful. In a way, we’ve shown how ECHELON bootstraps itself out of nothingness and into the Lobbying Form Typo Limelight. ECHELON needs to exist because look at what ECHELON has already had to do to exist! In all seriousness though, the ECHELON project has been a success that shows the power and potential of automated annotation systems. Just as the earth ever so patiently applied pressure and force on the excrement of long forgotten herbivores to create the fuel that powers our modern day economy, we too can apply annotation techniques and hard work to lobbying disclosure data and create something that can further our understanding of the modern political landscape.

[…]


Secrecy and money have no place in lobbying – and a new bill aims to ensure just that

We are celebrating September with blog posts and a special event dedicated to improving the ways the public learns about how influencers get their voices heard in Washington. A few days ago, we told you about the The Real Time Transparency Act (S. 2207H.R. 4442), a bill that would dramatically improve disclosure of big contributions to campaigns by requiring all campaign contributions of $1000 or more to be disclosed within 48 hours.

Today we focus on shining a brighter light on resources that are used to directly influence policy. Sen. Michael Bennet, D-Colo., recently introduced the Lobbying and Campaign Finance Reform Act (S. 2754) to ensure that everyone who is a paid influencer is required to register and report his or her lobbying activities, and to attempt to de-link lobbying and fundraising.

The Bennet bill closes what is known as the 20 percent loophole — a provision in current law that allows some of the most powerful influencers in Washington to operate as “stealth lobbyists” because they spend less than 20 percent of their time lobbying for a specific client. The fiction of the 20 percent loophole is that it implies that only registered lobbyists wield undue influence. In reality, many of the most influential people in Washington are far more influential than the vast majority of lobbyists who do register.

One such example is former Massachusetts Senator and current New Hampshire Senate candidate Scott Brown, who, while at Nixon Peabody, focused on “business and governmental affairs” — aka lobbying — “as they relate to the financial services industry.” Brown likely took advantage of the 20 percent loophole, never registering and reporting his lobbying — er, governmental affairs activities. Brown has threatened to sue Harvard professor Larry Lessig for the sin of referring to Brown as a “lobbyist.” To avoid the risk of a law suit, we’ll just be sure to refer to Brown as a “stealth lobbyist.” Scott Brown’s he-doth-protest-too-much threat of a lawsuit notwithstanding, the portions of the Bennet bill that close the 20 percent loophole are a simple expansion of current, well-established law. Treating stealth lobbyists like every other lobbyist should be something that garners bipartisan support.

Likewise, the remaining provisions of the bill should appeal to members of Congress on both sides of the aisle. The bill prohibits members of Congress from soliciting campaign contributions from lobbyists when Congress is in session, helping to eliminate the appearance or actuality of quid pro quo corruption and relieving members from some of the time consuming burden of fundraising. It also bans lobbyists from the practice of bundling — collecting and forwarding multiple contributions in an effort to get credit from the candidate for raising a lot of money for his or her campaign. The solicitation and bundling limits should appeal to lobbyists, who won’t feel obligated to respond to members’ calls for cash or to hit up their friends and associates for contributions.

The Bennet bill embraces the right of lobbyists to advocate for their cause, while recognizing that they should not be able to do so in secret, nor should they have an advantage as a result of their fundraising prowess. Sunlight and ReThink Media will discuss this and other reform proposals on Sept. 16 at an event to explore “The Price We Pay for Money’s Influence in Politics.” To join us, RSVP here.

[…]


Transparency bills could offer easy wins, but will Congress bite?

Photo credit: Wikimedia Commons

Members of Congress return from their summer vacation next week with the expectation that they will accomplish next to nothing before Election Day. But if members up for re-election want to point to some accomplishments before voters go to the polls, we suggest they look at bills aimed at strengthening transparency of money in politics.

All month, during “Transparency September,” Sunlight will focus on ways to educate and inform the public on how influencers get their voices heard in Washington. And while some will shudder at the thought of “campaign finance reform,” the legislation we are advocating for this month does not limit what can be spent on campaigns or who can spend it. Indeed, in most cases, the legislation simply expands upon current, well-established law. What could be less controversial than that?

So, as a favor to members of Congress, may we present for your consideration:

The Real Time Transparency Act

Introduced by Sen. Angus King, I-Maine, and Rep. Beto O’Rourke, D-Texas, the Real Time Transparency Act (S. 2207, H.R. 4442) requires that contributions of $1,000 or more to candidates, parties and PACs are disclosed within 48 hours. The bill simply expands a 48-hour disclosure requirement already in place in the weeks prior to an election. Citizens should not have to wait weeks or months to find out who is making large contributions to members of Congress.

Ready to help make it happen? Head here to sign our petition or write a letter to the editor. Each option takes just a few minutes, and it can make a big difference in helping us send a our message to Congress: It’s time to get serious about real-time disclosure.

The Senate Campaign Disclosure Parity Act

The Senate Campaign Disclosure Parity Act is a simple bill that would require Senate candidates to electronically file their campaign finance reports with the FEC, the same way House candidates and presidential candidates file. The bill, S. 375, has been introduced by Sen. Jon Tester, D-Mont., and has 50 bipartisan cosponsors — but continues to be blocked by transparency foe Sen. Mitch McConnell, R-Ky. The current paper filing system delays disclosure, wastes hundreds of thousands of dollars annually, and kills a lot of trees. It’s time for Senators to join the 21st Century by electronically filing their campaign finance reports.

The DISCLOSE Act

OK, we admit this one is a bit more controversial. But it shouldn’t be. As reintroduced by Sen. Sheldon Whitehouse, D-R.I., and Rep. Chris Van Hollen, D-Md., the DISCLOSE Act, S. 2516, H.R. 148 would disclose unlimited “dark money” that is spent on elections. Identifying donors of campaign contributions is fundamental to our campaign finance laws and is viewed as the least restrictive way to deter corruption and inform voters. Donors to outside groups would not be prevented from giving unlimited sums if the DISCLOSE Act were enacted. Their political contributions would be made public just as contributions to parties, PACs and candidates are. After Citizens United, voters should know where millions of dollars of money in elections is coming from, and whether it might be buying access to elected representatives.

The Lobbying and Campaign Finance Reform Act

Recently introduced by Sen. Michael Bennet, D-Colo., the Lobbying and Campaign Finance Reform Act requires people who are paid to lobby to register and report as lobbyists, ensuring that some powerful influencers who currently operate in secret disclose information about their activities the way the vast majority of lobbyists already do. S. 2754 also prohibits members of Congress from soliciting campaign contributions from lobbyists when Congress is in session and prohibits lobbyists from bundling large contributions. While dipping a toe into campaign finance reform with its solicitation and bundling provisions, the Bennet bill should be appealing to members of Congress who like to shift the blame for all that ails Washington to lobbyists. It should also appeal to lobbyists, who will be relieved of the pressure of responding to members’ calls for cash and of hitting up their friends and associates for bundled contributions. It’s time to ensure that everyone who is paid to lobby is registered as a lobbyist, and that lobbyists’ influence is not magnified by their ability to bundle contributions.

We’ll be addressing these and other transparency issues during an event on September 16, from 9:30 – 12:00. The event will feature two of the Senators—Tester and King—who have taken the lead on transparency issues and introduced two of the bills mentioned above. RSVP here if you wish to attend.

[…]


Disclosure needed as Obama administration reverses lobbyist ban

K Street, Washington’s lobbying HQ. Photo credit: Wikimedia Commons.

The Obama administration announced it will reverse part of the lobbying ban it instituted in 2010 and allow registered lobbyists to serve on any of 1,000 advisory boards, commissions or panels that provide policy making advice to the government. Reporting on the subject, Politico noted “watchdog groups” were “disappointed” by the decision. The Sunlight Foundation — often labeled one of those “watchdog groups” — is, in fact, not disappointed. At least not yet. We have long thought that rather than an arbitrary ban on one category of influencers, while still offering corporate heads, union leaders and “stealth” or unregistered lobbyists a seat at the table, the public would be better served with a strengthened disclosure regime.

There can be no doubt that too many special interests have too much access to decision-makers in Washington, D.C. But it is the height of absurdity to pretend that only registered lobbyists wield undue influence. As a result of a loophole in existing law, many of the most influential people in Washington avoid registering as lobbyists by claiming that they spend less than 20% of their time lobbying for any particular client. Yet former members of Congress — Tom Daschle and Newt Gingrich come immediately to mind — are far more influential than the vast majority of lobbyists who do register and have therefore been banned from serving on advisory boards.

It is equally foolish to believe that wealthy political donors, like Sheldon Adelson and Tom Steyer, who give millions of dollars in hard and dark money are somehow less influential than a mid-level lobbyist from a small shop who may or may not get his calls returned by senior administration officials. Yet the prior ban would preclude the latter and not the former from serving on advisory boards.

But, while the administration has rightfully decided to set aside the ban, it must ensure that there are new, strong disclosure requirements in place so that the public is aware of every individual who has special access as a result of serving on an advisory board, and what interests he or she represents. Robust, timely transparency is a far better tool than a limited ban in order to determine whether advisory boards are balanced or whether they are stacked to favor one special interest or position.

Even with this reversal, the Obama administration leaves in place an unnecessary prohibition that demonstrates it continues to favor stealth lobbyists and large donors to registered lobbyists. Under the revised rule, registered lobbyists are still prohibited from serving on advisory boards in their “individual capacity,” and may only serve if they are specifically appointed to represent the interest of a particular group.

This twisted position means that a casino magnate like Adelson could, for example, serve on a board addressing Internet gambling and could also serve as a private citizen, advising the government on just about anything of interest to him. However, a registered lobbyist would be limited to serving only on a board addressing the interests she represents, regardless of her expertise in other areas. If the ban on serving in an individual capacity is necessary, it should apply as to every member serving on advisory boards, or else it should not apply at all.

It’s likely that the administration maintained the prohibition against lobbyists serving in their individual capacity as an effort to save face—demonstrating its continued antagonism towards K Street, while attempting to address issues raised in a lawsuit challenging constitutionality of the ban. But if the Obama administration really wants to address undue influence in Washington, it should stop creating hollow exceptions and instead focus on making membership on advisory boards much more transparent.

[…]


New research indicates STOCK Act might be working

The US Capitol, bathed in sunlight. Photo via Flickr user Sky Noir A recently released working paper by Meng Gao and Jiekun Huang of University of Illinois at Urbana-Champaign, has examined how hedge funds have historically benefitted from … […]


Public universities, for-profit colleges seek higher stake in student loans

Younger voters are notoriously disinterested in the political process, at least when it comes to elections for Congress. But a Sunlight Foundation analysis of student loan lobbying data suggests that major players in the political process are interested in them.

Since Congress voted in 2010 to push commercial banks out of the federally funded student loan market, lobbying by commercial banks on the subject has dropped significantly. But lobbying by other entities that have much to gain from keeping young adults in debt continues apace – especially higher education organizations, which have redoubled their efforts to ensure public lines of credit for school are not neglected.

Lobbying by the education sector increased from 315 total reports between 2008 and 2010 to 480 reports between 2011 and 2013 — a 52 percent increase. With a growing majority of students relying on loans to attend college, universities have obvious interests in ensuring access to credit.

Figure 1. Graphic credit: Sunlight Foundation

The most active education organizations are a mixed bag. Some, like Emory University (18 reports since 2008) or the University of Iowa (22 reports since 2008) are well-regarded and nationally-known institutions. Others, like Greater Caribbean Learning Resources (22 reports since 2008) are for-profit institutions. One of the most active colleges, Keiser Collegiate System (21 reports since 2008), is a for-profit turned non-profit.

When we zoom into the organization level, the most active organizations before the 2010 reforms were major student loan providers SLM Corp. (45 reports from 2008-2010), the parent company of Sallie Mae and First Marblehead (41 reports in 2008-2010). Interestingly, Ashland Inc. (a chemical company) and Eisai Co. Ltd. (a pharmaceutical company) were both quite active on “student loans,” but their interest in the issue was more indirect. Both firms held large positions in securitized student loans during the financial crisis when the securities market collapsed. They advocated for the government to restore liquidity to a “frozen” market in student loan-backed auction rate securities (SLARS).

Figure 2. Graphic credit: Sunlight Foundation

Notably, not a single organization dedicated to representing students’ or borrowers’ interests shows up in any of our lists.

Meanwhile, since 2010, financial sector lobbying declined (Table 1). In fact, lobbying reports mentioning “student loans” by both the securities and investments sector as well as commercial banks declined by 43.2 percent — from 373 reports (2008-2010) to 212 reports (2011-2013).

Sector Before Reform (2008 — 2010) After Reform (2011 — 2013)
Securities and Investments 218 128
Commercial Banks 155 84
Total 373 212

Table 1
Figure 3. Graphic credit: Sunlight Foundation

But financial lobbying on the topic of student loans didn’t go away. After all, there is still a thriving private student loan market.

Now, it’s the loan servicers who probably have the most to lose. One bill, introduced by Sens. Marco Rubio, R-Fla., and Mark Warner, D-Va., would change repayment structures. Rather than being on the hook for a fixed payment, borrowers would be on the hook for 10 percent of their annual income, capped at $10,000 a year. Another bill, is a proposal by Sen. Elizabeth Warren, D-Mass., to allow the 25 million or so individuals with outstanding debt to refinance their loans at lower interest rates, which would amount to a tremendous loss in revenue for loan servicers.

In general, loan servicers are compensated based on the unpaid principal balance. They also often get money from late fees. In other words, the easier it is for borrowers to pay off their loans, the less profitable it is to be a loan servicer. As a result, a lot of lobbying by loan providers is defensive; they profit from the existence of a student loan bubble, and anything that challenges it (including direct subsidy for higher education) is a threat to their business model.

While different organizations have different reasons for being active on student loans, a few things are clear: One, a thicket of organized interests care about the issue; two, the passage of the 2010 student loan reform bill changed that thicket; and three, not a single organization representing students or borrowers shows up in any of our lists of leading organizations.

[…]