WASHINGTON - The old jab about the United States having the best democracy
money can buy still has merit, according to a report out this month. For every
day Congress was in session last year, lobbyists spent an average of US$17
million currying favor with legislators and federal officials, the nonpartisan
Center for Responsive Politics (CRP) said in its report.
Corporations, labor unions, governments and other interests spent a
record-setting $2.79 billion last year in hopes of influencing policy, the
group said. This marked a 7.7%, or $200 million, increase over 2006, also a
bumper year for the influence industry.
"At a time when our economy is contracting, Washington's lobbying industry has
been expanding," said Sheila Krumholz, executive director of the 25-year-old
watchdog group. "Lobbying
seems to be a recession-proof industry. In some respects, interests seek even
more from our government when the economy slows."
Their efforts get results. The National Education Association (NEA), the
largest US teachers' union, succeeded in blocking reauthorization of President
George W Bush's 2001 "No Child Left Behind" law governing the running and
judging of schools nationwide. Likewise, Congress quashed proposals to raise
taxes on private equity groups, an issue of concern to the Blackstone Group and
other private finance firms.
Even so, how much bang lobbyists get for their clients' buck remains
undetermined.
"It's difficult to quantify the return on this investment" in lobbying for or
against legislation, said CRP spokesman Massie Ritsch. "But generally, the
amount spent on lobbying is small compared with the outcome."
Where lobbying for government contracts is concerned, "the returns are
astronomical," Ritsch added. "Multimillion-dollar contracts are awarded for,
say, $100,000 worth of lobbying."
Health interests poured $444.7 million into federal lobbying last year,
outspending all other sectors of the economy for the second year in a row, CRP
said. The finance, insurance and real estate sector - known collectively as
FIRE and the powerhouse of the US economy - placed second with $418.7 million
poured into the political trough.
Drug and health-care product makers topped the ranking of specific industries
by spending $227 million for lobbying services, or $1.4 million per day that
Congress met in 2007.
The drug industry has spent $1.3 billion on federal lobbying over the past 10
years, more than any other industry. Its reported lobbying increased 25% in
2007, CRP said.
Insurance firms spent $138 million on lobbying, followed by electric utilities,
which spent $112.7 million. Computer and Internet firms spent $110.6 million.
Hospitals and nursing homes paid lobbyists at least $90.5 million. The
securities and investment industry ranked sixth, spending $87.3 million - a 40%
jump over 2006.
Among individual companies and organizations, the US Chamber of Commerce stood
out as the biggest spender in 2007. The business association's reported
lobbying fell by about 27% last year, following a record year in 2006.
Nevertheless, the chamber and its affiliates spent nearly $52.8 million on
internal advocates and those hired from outside lobbying firms.
General Electric was the number-two spender ($23.6 million), followed by the
Pharmaceutical Research and Manufacturers of America ($22.7 million), the
American Medical Association doctors' trade group ($22.1 million) and the
American Hospital Association ($19.7 million).
The top 20 spenders also included the American Association of Retired Persons,
the National Association of Realtors, General Motors, oil major Exxon Mobil,
communications firms AT&T and Verizon, and defense contractors Northrop
Grumman, Boeing and Lockheed Martin.
Last year's overall growth in spending on federal lobbying was in keeping with
the roughly 8% annual increase since the late 1990s, CRP said.
Some interests' lobbying surged in 2007, however.
Blackstone Group, which sought to prevent higher taxes on its profits, boosted
its lobbying effort by 477% to spend $5.4 million last year. The NEA spent $9.2
million, a 464% increase. CRP said it presumed the teachers' union concentrated
its lobbying efforts on "No Child Left Behind".
Among Washington lobbying firms, Patton Boggs reported the highest revenue from
registered lobbying for the fifth year in a row: $41.9 million, an increase
over 2006 of more than 20%. The firm's most lucrative clients included private
equity firm Cerberus Capital Management, confection and pet food maker Mars,
Verizon, pharmaceutical manufacturers Bristol-Myers Squibb and Roche, and the
American Association for Justice (formerly the Association of Trial Lawyers of
America).
CRP said that in calculating spending levels, it used the narrow definition of
lobbying provided by the Lobbying Disclosure Act of 1995.
"Spending by corporations, industry groups, unions and other interests that is
not strictly for lobbying of covered government officials, but is still meant
to influence public policy, is not reported, and may exceed what was spent on
direct lobbying," the group said. Such activities include public relations,
advertising and grassroots lobbying.
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