Lobbyists have just one week left to add up their receipts and report their earnings for the last quarter of 2013. But even before the numbers are tallied, there’s broad agreement in Washington’s influence industry that last year will show another decline — the third down year since a high of $3.55 billion in 2010.
Does that mean the lobbying business is dying a slow death?
In this still-rough economy, the companies, trade groups, municipalities, universities and others who hire lobbyists are certainly trying to trim costs where they can. It’s hard to justify spending a lot to influence Congress given the little that’s been getting done on the Hill, and K Street pros say they’re hearing from some clients who want to reduce their monthly retainers, or perhaps cut ties all together. (The 113th Congress attracted so much notice for its lack of achievements that some industry watchers wonder why lobbying revenue hasn’t fallen even further.)
But while top lobbyists acknowledge that times are tough, they’re not ready to declare defeat. That might not be surprising. After all, these folks are expert in painting a picture they want the rest of us to see. Yet there may be something to the case they’re making.
The two-year budget deal reached on Capitol Hill in December and a few other recent developments brought hope that Congress will return to “regular order,” which would mean 13 appropriations bills each year, perhaps a big transportation bill and other legislation providing opportunities to help clients get what they want.
“Once you create the sense that committees will operate like they have regularly operated . . . then you get a lot more people in Washington who need to be stakeholders in those policy discussions,” said Kevin O’Neill, deputy chair of the public policy group at Patton Boggs. After what he called “a difficult year,” O’Neill expects the firm’s 2013 lobbying revenue to fall short of the nearly $46 million reported for 2012.
But there’s another factor to consider — and it’s one that the Influence Industry column will come back to as we look at the many ways that advocates try to shape decisions made on Capitol Hill, at the White House and at regulatory agencies. Simply put: Lobbying is changing, lobbyists are branching out into other kinds of work, and the amounts that show up on disclosure reports represent just a fraction of what’s being spent to influence policy.
Tough restrictions imposed by President Obama that effectively put administration jobs off-limits to lobbyists appeared to prompt many K Streeters to remove themselves from the lobbying rolls. At the same time, many firms have been boosting their public affairs, grass-roots organizing, coalition-building and other work that falls outside the traditional lobbying definition.
Perhaps most importantly, the disclosure reports that are due Jan. 21 do not include activities such as preparing comments about proposed regulations and meetings with lower-level regulatory staff members, and there is no public record of income from this kind of regulatory work. While contacts with high-level agency officials, along with interactions with Congress, are reported on the disclosures, non-disclosed regulatory work brings in as much revenue at some firms.
“Our clients are recognizing that they have to participate and work hard in that arena to be successful,” said H. Stewart “Stu” Van Scoyoc, president and chief executive at Van Scoyoc Associates.
Reported lobbying at the firm for 2013 will be about $1 million below the 2012 total of $22 million, he said, attributing the decline in large part to the departure of several lobbyists. In 2012, 14 percent of Van Scoyoc’s revenue came from regulatory work, help with federal grants and contracts, and other areas that aren’t covered by those reports, including earnings at a separate company he owns specifically to do non-lobbying work.
For many D.C. firms, the Dodd-Frank financial overhaul and Obama’s health law have been a boon for regulatory work and are likely to remain lucrative areas for several more years.
Akin Gump has seen what partner Donald Pongrace called a “moderate” increase in its regulatory work, and the firm also expects that its 2013 reported lobbying total will be up at least $1.5 million over 2012’s $31 million. But the firm, too, is hearing from clients that want to trim their lobbying spending.
“A number of long-term [corporate clients] in the market have been scaling back,” Pongrace said. “Most are just saying, during this period we are going to take it easy,” but he expects the firm to maintain strong relations with those clients and hopes they will be ready to jump back in if their issues start moving.
After a few slow years on Capitol Hill, lobbyists say they’ve learned to talk with clients about what they can and can’t expect to accomplish.
“We probably spend more time talking about patience and perseverance,” O’Neill said, “and how many legislative efforts have to be viewed as a multi-year opportunity.”
At the podium: Agency officials and their public appearances
Agriculture Secretary Tom Vilsack is scheduled to address the American Farm Bureau on Monday in San Antonio.
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