Pay to play – How Lobbying works

The story of lobbying in America is about the power of money and its ever-increasing presence in politics. Today, the term alone brings with it a sour taste, and even without knowing the full context, one can still feel correct in their dislike for lobbying and its role in recent history. According to Pew, in 2019, 53% of Americans thought that the role of lobbyists and special interest groups in Washington was a serious issue, and 67% said the same about ethics in the government.

Who hires a lobbyist?

Our understanding of lobbying is centered around the negatives (of which there are plenty). Still, it is important to remember that all kinds of businesses hire lobbyists, including non-profits and unions. The issue in modern politics is that the money behind what we’ll call helpful lobbying is minute compared to its counterpart. For example, in 2020, the total spending on education lobbying was 80.12 million compared to 306.23 million in pharmaceutical lobbying. In 2015 The Atlantic reported that “For every dollar spent on lobbying by labor unions and public-interest groups together, large corporations and their associations (now) spend $34.”

How it typically works is a company, take a drug manufacturer, for example, will hire an in-house lobbyist or one from a lobbying firm (or frequently both), to influence legislation and regulation or barter for preferential treatment in government decisions. Many of these lobbyists are former government employees or contractors and therefore have existing relationships with those in Congress and understand the flow of government business. The more adept the lobbyist, the more a company will continue to invest in lobbying. 

Okay, but what do they do?

Where the magic happens

In short, they convince legislators to take a particular stand, but their methods to achieve this can vary broadly. There are dozens of techniques utilized by lobbyists, with some used more in specific industries. Here are two of the most common.

One tactic is to provide history, context, and perspective on an issue. For this to work, having an experienced lobbyist is crucial, and one of the reasons former government employees are so valuable in the field. For example, imagine a new legislator with little previous experience in government attempting to decide on pharmaceutical legislation. The history and context of pharmaceuticals in the country and its legislative past would be critical to that person. In addition, the ability to predict the passability of the law and to know for sure who in the caucus is on their side or not would be invaluable information.

Another tactic is to assist with the writing of bills (or to write them entirely). For example, a lobbyist with specific expertise can provide the appropriate language required in legislation, a helpful skill that makes them valuable to members of Congress. Sometimes, a company and its lobbyist will write a bill and then lobby members of Congress to get it presented to the caucus. 

A quick history of lobbying in America

Professional lobbyists have fundamentally changed the landscape of modern American politics, but the act of lobbying is at least as old as America itself. The term’s first use in print dates as far back as 1817, and from thereon, is used to describe an actor involved in influencing legislators for a particular purpose.

Considered protected by the First Amendment of the Constitution, which affords “the right of the people peaceably to assemble, and to petition the government for a redress of grievances,” lobbying is legal in America. But beginning in 1938, Congress decided to regulate lobbyists, with the Foreign Agents Registration Act, which required that all agents representing foreign entities within the United States disclose their activities and finances. Soon after the Second World War, legislators again moved to tighten reins on the group with the Federal Regulation of Lobbying Act of 1946, which required all individuals who spent more than half of their time lobbying to register with the government and to report their financial spending.

The timing is no coincidence. By 1946, lobbying had grown massively as businesses began to learn the benefits of lobbying the government. As businesses grew, they invested more money into their niche concerns, and thus the cycle continued. One example still relevant today is the military-industrial complex, which sprouted up during WWII and led to drastic growth for businesses in military tech and related industries.

Forty-nine years later, Congress unanimously passed the Lobbying Disclosure Act of 1995, which led to sweeping changes in the industry. Suddenly, lobbyists were required to report their clients, niche, and the government officials they lobbied. In addition, they had to estimate their income and its source. Perhaps most importantly, the law changed who was required to register as a lobbyist, closing loopholes and expanding the list drastically. 

We should mention Newt Gingrich

Without talking about Newt Gingrich, you really cannot understand the rise of lobbying or money in politics. The de-facto leader of the Republican party for much of the 1990s, Gingrich altered the foundations of American legislation so severely that the process was nearly unrecognizable by the end. In 1994, as newly elected Speaker of the House, Gingrich had a lot he wanted to achieve and little patience for experts, the legislative process, or compromise. So to clear the way, he eliminated hundreds of congressional staffers (experts on key topics who conduct research and inform legislators) and eliminated 25 sub-committees (groups of legislators who become experts on particular issues). In doing so, Gingrich created an environment that undervalued knowledge, where scientific or factual information was sparse. It is in this gap that modern lobbying was born.

What kind of money are we talking about?

By 1998, just four years after the decimation of the legislative process, lobbying spending was at $1.45 billion. Since then, it has more than doubled to $3.49 billion in 2020—an exorbitant amount of money, with no signs of decline.

To help contextualize the numbers, let’s take a look at Facebook, which in 2020 spent more than any other tech company in America on lobbying. A whopping total of $19.68 million, bypassing its prior expenditure records. Perhaps with growing legal and civil-rights concerns and upcoming public hearings, the company wanted to better its chances at success. Yet, with all of this spending, across more than 20 different key issues and dozens of bills, it still only accounts for 0.56% of all lobbying expenditures for 2020.

Can we eliminate lobbying?

Not likely. Not only due to the age of the institution but because those who benefit most from the current system are those that would legislate it. Using the 115th Congress as an example, we see just how unlikely reform is. For those that left Congress at the end of the 2019 term and moved into private-sector work, 59% of them moved into lobbying positions.

This process is known in Washington as the revolving door of K Street (where most lobbying firms are in D.C.). After serving in Congress, the individual moves over to K Street and works as a lobbyist, making millions of dollars off of their newfound contacts and knowledge until they later move back into politics via appointed positions or as candidates once more. More broadly speaking, Public Citizen reports that “43% of U.S. House and Senate lawmakers (86 out of 198) who left office between 1998 and 2004 became registered lobbyists.” There are such egregious examples of this that we could run through, but we’ll spare you the dread. For now, understand that this practice is common, it is expected, and it isn’t likely to go anywhere anytime soon.

Don’t forget if you want to know which companies are taking big lobbying bucks, you should use Ethically. We keep you up to date on sustainability scores across the internet so you are always supporting the best brands!

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