Boosted by regulations, a small business opens its own lobby shop


An Electronics Recyclers International e-waste plant processes old cell phones and other gadgets. (RALPH BERRETT )
February 13, 2012

Many small companies bemoan government regulations, but Electronic Recyclers International celebrates them — or at least one in particular. ERI recycles e-waste, and in the company’s six-year history, the number of states with e-waste recycling laws has gone from three to 25.

Most of these state-based laws mandate that companies like HP and Dell contract with e-waste recyclers to collect and recycle used electronics, including cell phones, computers and other gear. Consequently, the California-based ERI’s revenue has more than tripled in the past six years, and it has grown from 73 to 420 employees.

“E-waste is one of the fastest-growing solid waste streams in the world, and e-waste recycling is the fastest growing recycling opportunity in the world. We manage a problem that’s been borne out of the technological revolution,” said ERI founder John Shegerian, “and partly our growth is thanks to great legislation.”

In addition to profiting from regulations, the company also benefits from government waste, so to speak. In July of last year, a task force headed by the White House, EPA and GSA recommended that all electronics used by the federal government be processed by certified recyclers — such as ERI. The company swiftly joined the GSA schedule for electronics recycling.

And, in a move that some experts say is unusual for a small business, the company also has opened a D.C. office as a way to lobby for stronger e-waste legislation on a national scale.

“We will provide education and outreach to the GSA, Congress and the EPA to make sure they understand what it means to be a responsible recycler and what we can do for them,” said Katie Reilly, who heads up the company’s Washington branch.

One of the company’s top priorities is the Responsible Electronics Recycling Act of 2011, which has been introduced in both the House and Senate.

“We had 17 or 18 meetings in the last week with congressmen and aides,” Shegerian said. “Being in D.C. is critical to the future of our company and our industry.”

A rare venture

When it comes to lobbying, small businesses usually hire contract lobbyists rather than open their own Washington offices, according to Howard Marlowe, president of the American League of Lobbyists.

“Opening up your own office is an expensive commitment,” he said. “You can hire a contract lobbyist for $100,000. If you open up your own firm, you have to invest three times that because of office space rental, equipment and benefits. Because of that, we don’t see that many small enterprises or small interests opening their own offices.”

But there are, of course, advantages to having a dedicated, in-house, on-site lobbyist.

“You know the person you hired is working only for you, and you can direct what he or she does in a more hands-on way,” he added.

A new business model

In addition to pushing for the recycling bill, Reilly said another purpose of the company’s Hill visits is to remind members of Congress that “we’re a constituent and, in states where ERI is growing, we’re a good employer.”

That’s an important perk of being a small business that also happens to lobby, said Ivan Adler, who specializes in placing lobbyists as a principal with the McCormick Group, an executive search firm in Washington.

“From a legislative point of view, these businesses are voters in their district, and they’re taken seriously by Congress,” he said.

Adler has noticed other smaller interests cropping up on K Street lately, although he declined to mention specifics. Organizations like the National Small Business Association lobby for small-company interests writ large, but small businesses often have disparate interests and may favor a more tailored advocacy approach, he said.

As with ERI, the determining factor for branching out on one’s own is whether regulation is at stake that’s central to the company’s business model.

“What’s good for one group of small businesses may not be great for another,” Adler said. “The barometer really is the closer you come to the bull’s eye of government regulation, the more apt you are to have an office in Washington.”

Shegerian is relatively new to the lobbying scene. He formerly ran a dot-com, and “never came to Washington” with that business, he said. But he caught the government-relations bug when he was invited last June to meet with various White House representatives about job growth.

“I was surprised by how well we’ve been received by the White House and by the federal agencies,” he said. “I never expected this to be part of the business model, but shame on us if we didn’t take them up on it.”

E-mail Olga Khazan here. Follow Olga and OnSmallBiz on Twitter.

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