WORD ON THE K STREET

Washington's Once And Future Lobby

(By Charles Dharapak -- Associated Press)

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By Jeffrey H. Birnbaum
Sunday, September 10, 2006

The Jack Abramoff scandal has incited predictable outrage among Washington's political class this year, and with the midterm elections approaching, candidates across the country are promising to clean up the city's lobbying culture. Ned Lamont, Connecticut's upstart Democratic candidate for Senate, went out of his way this summer to attack the capital's influence peddlers and their patrons. "We know who the lobbyists are taking care of," he said ominously on CBS's "Face the Nation." And as Maryland Lt. Gov. Michael S. Steele, the state's leading Republican candidate for Senate, recently proclaimed in an advertisement, "We've got congressmen on the take and lobbyists eager to make a deal. The whole system's broken."

Such theatrics notwithstanding, don't imagine for a moment that anything will really change. Lobbying has grown massively in just the past few years, becoming a multibillion-dollar industry, and it will continue to expand long after Abramoff is imprisoned and released. Lobby-law firms, trade associations, interest groups and labor unions -- known collectively as K Street -- have experienced a quantum leap in clout and are now, more than ever, a permanent and pervasive force in Washington, essential to the daily workings of government and politics. Lobbyist bashing, no matter how shrill, will not diminish that power.

Every 10 years or so, reformers have sought to rein in these paid persuaders, but the influence of lobbyists has only expanded. Today, twice as many registered lobbyists -- about 30,000 -- ply their trade than did so just six years ago. And overall spending on federal lobbying has nearly doubled, to $200.2 million per month in 2005 from $116.3 million per month in 1999. By all accounts, business is booming.

One reason behind this growth is the lobbying industry's simple-yet-dazzling economics. For a relatively small investment in a lobbying campaign, corporations can receive a gargantuan return. The Carmen Group Inc., a mid-size firm, has calculated that for every $1 million its clients spend on its services, it delivers, on average, $100 million in government benefits. A yield that immense, common in federal lobbying, is unheard of anyplace else.

K Street wasn't always so lucrative. In the 1990s, lobbying was mostly a defensive effort, with corporate interests fending off unwanted restrictions. But in this decade, industries have increasingly gone on the offensive, treating Washington like a profit center rather than a place to minimize losses. Since President Bush took office in 2001, the White House and both legislative chambers have been controlled by pro-business politicians, and corporations have lined up for tax breaks and lighter regulations. In Bush's first term, Congress passed and the president signed five bills containing significant corporate and personal tax cuts.

At the same time, the size of government has ballooned, and lawmakers have become ever more willing to share the wealth. Federal spending grew by 49 percent from 2000 to 2006, to $2.66 trillion. And an increasing share of that amount was handed out in narrowly focused projects called earmarks, for which an entire sub-industry of lobbyists has emerged. According to the Congressional Research Service, the number of earmarks in appropriations bills alone more than tripled to 15,887 in 2005 from 4,155 in 1994 -- and most of them were shepherded by lobbyists.

Earmarking is not hard work. Lobbyist Jeffrey S. Shockey earned about $2 million from four dozen clients in 2004 and he needed only one associate, people familiar with his operation said. All a lobbyist must do is fill out some forms and write up a short proposal for the money; find a lawmaker (preferably on either the House or Senate appropriations committee) to sponsor the earmark; and make a few follow-up calls during the year to the lawmaker's staffers, nudging them to move the proposal along. In return, lobbyists try to keep their lawmakers happy. Shockey kept in particularly close touch; he is now a top aide to his frequent patron, Rep. Jerry Lewis (R-Calif.), chairman of the House Appropriations Committee.

Some companies previously shunned such back-scratching as distasteful -- and paid a heavy price. Microsoft Corp. didn't hire a full-fledged staff of lobbyists or donate heavily to political causes until after the Justice Department sued it for antitrust behavior in 1998. Dozens of corporations learned from Microsoft's mistake and opened their own D.C. offices. In just the past couple of years, Google, Valero Energy Corp., Herbalife International, Walgreens and GoDaddy.com have opened for business in the District. Wal-Mart has also beefed up its presence as Democrats have attacked its business practices. And the hedge fund industry, worried about attracting extra regulation, has tripled the amount it spends on federal lobbyists since 2003, so far to sterling effect.

Government has become so complex that only experts -- say, ex-congressional staff members turned lobbyists -- can decipher and navigate it. Anyone who wants to penetrate the system has little choice but to hire lobbying firms. And for good reason: Washington is no longer the insular and distant regulator it was before World War II. It insinuates itself into almost every facet of Americans' lives, from school assessments to corporate accounting to homeland security.

In turn, lawmakers have come to rely on lobbyists to provide much of their campaign cash, most of the information and voter support that propel their legislative initiatives, and many of the off-hour perks that keep them well-traveled and well-fed. These benefits are so valuable that Congress -- even faced with an ornery, anti-Washington electorate -- is poised to pass, as soon as this week, a sliver of an already weak lobby-reform bill, and discard anything that would limit its contact with lobbyists. Almost no one on Capital Hill wants to discourage the sugar daddies on K.

Lobby groups have become players in virtually everything government does; often, they are the key players. During the first six months of 2005, for example, the AARP (and its $20 million advertising and lobbying blitz) was instrumental in shooting down Bush's plan to add private accounts to Social Security. And this year, a Republican bill that would have combined a minimum-wage increase with a cut in the estate tax was stopped dead by a coalition of labor unions led by UNITE HERE, which publicized a provision in the bill that could have reduced wages for some workers who rely on tips. At least five senators cited the provision as a major reason they voted no.

One bill that did pass this summer updated the nation's pension and trade laws; like every other piece of legislation, it was shaped by lobbying. Representatives for Delta and Northwest airlines won special pension protections to ease their financial woes. And at least 73 imported products -- such as nail clippers and vicuña hair -- received targeted tariff relief, virtually all because of pressure from Washington lobbyists.

Despite the latest scandals, lobbying has become a respectable, appealing profession. A couple of decades ago, it was considered too unsavory to attract former Congress members. But now, lobbyists have become so influential -- and so rich -- that more and more lawmakers and their aides consider the profession a second career. A recent study by the liberal group Public Citizen reported that nearly half of all lawmakers who return to the private sector join the lobbying ranks. Former top congressional officials can easily earn $300,000 a year or more as lobbyists -- or about double their government salaries.

Many former lawmakers are proud to be lobbyists and consider themselves part of a vital establishment -- one sometimes known as the Fifth Estate, after the three branches of government and the media. This level of comfort has no doubt made contacts between lobbyists and lawmakers increasingly sympathetic. Why would congressional aides and lawmakers want to anger the lobbyists who approach them when they aspire to become lobbyists themselves?

Former congressman Bill Paxon (R-N.Y.) remembers fondly when he was looking for work as a lobbyist in 1998 and interviewed at Akin Gump Strauss Hauer & Feld LLP. "It was such a pleasure," he said. He sat down with senior partner Robert S. Strauss, who told him, "Bill, we're not in this for the short term. We want to hire people who will offer quality advice to quality clients for a long period of time." And, Paxon said, "that's proven true." He has been a senior adviser at the firm since 1999. He is also part of a lobbying family; Paxon's wife, former congresswoman Susan Molinari (R-N.Y.), is chairman of a firm named the Washington Group.

As Paxon discovered, lobby companies and associations are built to last. Akin Gump and most other K Street organizations are carefully populated with Republicans and Democrats so that they can stay in business no matter which party runs the show. They also donate big bucks to politicians of both parties. In fact, most of the money raised by House members is collected either "by or through groups that lobby," said Michael J. Malbin, executive director of the nonpartisan Campaign Finance Institute. Senators also receive a lot of their dough from the K Street set. (Members of the House and Senate spent a total of $623.4 million for their 2004 reelection campaigns.) All of which makes the anti-lobbyist rhetoric ring rather hollow. Even lobbying antagonists have their ties. Connecticut's Lamont accepts contributions from so-called leadership political action committees, which routinely receive money from labor and corporate organizations. And Lt. Gov. Steele's coffers have swelled thanks to fundraising by a group of Republican lobbyists in Washington that unabashedly calls itself Team Steele.

"Lobbyist-bashing may provide some convenient sound bites this fall, but it doesn't have much of a connection to the way Washington normally operates," said Alex Vogel of the bipartisan lobbying shop Mehlman Vogel Castagnetti. He should know. Vogel is a former chief counsel to Senate Majority Leader Bill Frist (R-Tenn.). As the company's Web site notes, "Alex's engagement with Majority Leader Frist continues. He currently provides counsel to Volunteer PAC, the Majority Leader's political action committee, and World of Hope, his charitable organization."

Such connections are hard, if not impossible, to break. "For the more than 30 years I've been around here, people have always complained about lobbyists," said Wright H. Andrews Jr. of the lobbying firm Butera & Andrews. "But they don't understand. My own mother didn't understand. She cried when I told her what I was going to do." But he explained, "After people have been here a while, they find out that the lobbying community is an essential part of the legislative process."

Joel Jankowsky knows this firsthand. He left the staff of House Speaker Carl B. Albert in 1977 and became the first official lobbyist at Akin Gump. Now, nearly 30 years later, Jankowsky oversees 45 full-time lobbyists and a dozen other professionals who plead before government regularly. He and his colleagues serve 161 clients and generate nearly $30 million in annual revenue. His once-rare transition from top congressional aide to private lobbyist has become common, and his firm's practice continues to bloom.

After the midterm elections, Jankowsky predicts, the lobbying industry will get even busier and grow larger -- no matter which party prevails. History says he's right.

kstreetconfidential@washpost.com

Jeffrey H. Birnbaum covers lobbying and politics for The Washington Post.


© 2006 The Washington Post Company

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