When President Trump took office many industries and organizations new that it would call for a re-examining of the lobbying playbook. Throughout his campaign, Trump called for a draining of the swamp and to implement new lobbying reforms. Moreover, Republicans won a supermajority in the 2016 elections, changing the political landscape of Washington, D.C. Jeffrey Taylor, Managing Partner of USGRI.com, argues that “Some presidential transitions are so Earth shaking that they require companies to conduct a much deeper analysis of their government relations plans; Carter to Reagan, Bush to Clinton, Clinton to Bush, Bush to Obama were all substantial ideological flips… but Obama to Trump is not your typical transfer of power. It is a monster change in direction for the U.S.; and by extension for U.S. and foreign business and industry.”
When President Obama took office in 2009, he also had supermajorities in both chambers of Congress, many companies initiated a new government relations efforts. However, according to Taylor, “Based on President Trump’s cabinet, the policy and management differences with the outgoing Obama Administration will be stark, substantial, significant, and aimed at systemic change in nearly every area of government policy that affects business.” This means companies need to re-write their playbook for the new administration.
However, Taylor also argues that “those that want to engage in a first-time government relations effort don’t need to carve out a big lobbying budget, there are firms that can capably and economically represent your company in Washington for a reasonable budget – and it gets you in the game!”
In the Trump era, one strategy that organizations will employ is how they frame their argument. Taylor suggests that President Trump “believes – rightly or wrongly – that he’s beholden to no one for his victory, except ‘middle America’ who elected him. In the past few week, he and his Administration has come to adopt a message of fighting for the ‘forgotten man’.” President Trump indicated this in his first speech before a Joint Session of Congress saying, “Dying industries will come roaring back to life. Heroic veterans will get the care they so desperately need. Our military will be given the resources its brave warriors so richly deserve. Crumbling infrastructure will be replaced with new roads, bridges, tunnels, airports and railways gleaming across our very, very beautiful land. Our terrible drug epidemic will slow down and, ultimately, stop. And our neglected inner cities will see a rebirth of hope, safety and opportunity. Above all else, we will keep our promises to the American people.” Therefore, organizations that can frame their argument as being advantageous to the average American will be significantly more impactful.
This week’s lobby log post looks into the current debate over lobbying transparency in the European Union. Currently steps are being made to make lobbying more transparent through the introduction of a mandatory transparency register. Politico reports, “Negotiations on setting up a mandatory transparency register, which lobbyists and activists would have to sign up to in order to meet with MEPs and senior EU officials, are to begin behind closed doors in the coming months. But lawyers from the Council of the EU, representing governments, have already raised questions about the legality of the plan.”
In 2011 the European Commission, the executive of the E.U. headed by President Juncker, and the European Parliament, composed of Members of the European Parliament (MEPs) who are directly elected by voters in each of the 28 Member States, created a voluntary lobbying register. Politico reports that, “As of Thursday, 11,191 organizations — including consultancies, trade associations and NGOs — had voluntarily signed up to the existing register…The [new] idea is to expand that register, make meetings with senior EU officials conditional on being signed up to it, and give it more staff and resources.” However, lobbyists have also complained that regulations in individual member states overlap the current E.U. initiative. For example, “Ireland…introduced its own register in 2015 which covers meetings with MEPs as well as national politicians,” according to Politico.
The problem historically with creating such a registry in the E.U. has been the Council. “So far, we never got the Council on board,” said Hübner [chair of the Parliament’s Constitutional Affairs Committee] “We never managed to have the three institutions on board and we never managed to make it obligatory.”
The Council is the main-decision making body of the each where “government ministers from each E.U. country meet to discuss, amend and adopt laws, and coordinate policies. The ministers have the authority to commit their governments to the actions agreed on in the meeting.” The Council opposes the initiate because it argues, “the Commission’s decision to regulate lobbying by using a so-called inter-institutional agreement is problematic — and possibly not legal,” according to a legal opinion obtained by Politico.
Since his inauguration, President Trump and the Republican controlled Congress have worked at light-speed to dismantle many Obama-era regulations like the 2010 Dodd-Frank Act. On Friday, Feb. 3, 2017 President Trump issued the “Presidential Executive Order on Core Principles for Regulating the United States Financial System” executive order, which according to Politico “backed sweeping changes to U.S. financial regulations…taking the first step toward undoing one of his predecessor’s signature legislative initiatives.”
Such actions have ignited fierce debate and lobbying activity. However, the Wall Street Journal reports that, “The number of federal lobbyist registrations last year fell to its lowest mark in 18 years, according to an analysis of new public records, as lobbyists increasingly exploit loopholes in disclosure rules. Some 11,143 total lobbyists filed registrations in 2016, down from 14,153 in 2008, the year before President Barack Obama took office—a decrease of nearly 30%, according to an analysis of lobbying records by the nonpartisan Center for Responsive Politics.”
The 2016 year-end and fourth quarter LDA results are in. Many of the top firms saw decreased Q4 revenue when compared to the same period in 2015. However, much of this decrease in revenue can be attributed to the focus on the election. Politico has ranked the top firms below. The figures were verified with the firms, except those marked with an asterisk, which were estimated based on Senate filings:
This week the Senate has been busy with the confirmation hearings for President-Elect Trump’s cabinet nominations. On Wednesday, the Senate Foreign Relations Committee’s confirmation hearing of Secretary of State nominee Rex Tillerson became heated over ExxonMobil’s lobbying activities connected to sanctions on Russia while Mr. Tillerson was the CEO.
Responding to a question from Senator Bob Menendez (D-N.J.) Mr. Tillerson denied opposing sanctions on Russia saying, “I have never lobbied against sanctions. …To my knowledge, Exxon never directly lobbied against sanctions,” reports The Hill. This resulted in Senator Menendez pulling “out printed pages of lobbying disclosure reports filed by Exxon going back to at least 2009, listing legislation that would further impose sanctions on Russia. One form described a lobbying topic as “Russian Aggression Prevention Act, provisions related to energy.” CNN reports that Sen. Menendez continued saying, “I know you weren’t lobbying for the sanctions.” In fact, he said: “Exxon became the in-house lobbyist for Russia against these sanctions.”
Politico Influence reports that “Exxon, for its part, chimed in on Twitter, “Let’s be clear: We engage with lawmakers to discuss sanction impacts, not whether or not sanctions should be imposed.” Let’s be clear: That is akin to saying you’re “educating” instead of “lobbying.” Exxon was raising concerns about how sanctions would impact them, such as inconsistencies between the rules in the United States and in Europe. The staffers on the receiving end understood this to be lobbying against the proposals as written.”
Throughout the hearing Mr. Tillerson’s connection to Russia has been under scrutiny. As CEO of ExxonMobil, Mr. Tillerson met with Russian President Vladimir Putin on several occasions and was awarded the “Russian Order of Friendship” in 2012, according to Politico.
On Monday, during a closed-door meeting the House Republican Conference voted to adopt an amendment to the proposed House rules package, which was set to be voted on Tuesday. The amendment put forward by Judiciary Committee Chairman Bob Goodlatte’s (R-Va.) would move the Office of Congressional Ethics (OCE) watchdog under the oversight of lawmakers through the House Ethics Committee.
The OCE is an independent, non-partisan entity charged with reviewing allegations of misconduct against Members, officers, and staffers of the United States House of Representatives. The office was first created in 2008 under then Speaker of the House, Nancy Pelosi. According to Politico, “Congress had created the office in the wake of Jack Abramoff scandal, which included the GOP lobbyist’s admission that he tried to bribe lawmakers. At the time, lawmakers hoped to stop anything like that from ever happening again.”
By Tuesday however, there was widespread outcry from both democrats on the Hill and outside groups about Chairman Goodlatte’s amendment. In a statement House Minority Leader Nancy Pelosi (D-Calif.) said, “Republicans claim they want to ‘drain the swamp,’ but the night before the new Congress gets sworn in, the House GOP has eliminated the only independent ethics oversight of their actions. Evidently, ethics are the first casualty of the new Republican Congress. The Office of Congressional Ethics is essential to an effective ethics process in the House, providing a vital element of transparency and accountability to the ethics process. The amendment Republicans approved tonight would functionally destroy this office. Congress must hold itself to the highest standards of conduct. Instead, the House Republicans Conference has acted to weaken ethics and silence would-be whistleblowers.” Similarly, the Citizens for Responsibility and Ethics in Washington (CREW) released a statement saying, “Undermining the independence of the House’s Office of Congressional Ethics would create a serious risk to members of Congress, who rely on OCE for fair, nonpartisan investigations, and to the American people, who expect their representatives to meet their legal and ethical obligations…If the 115th Congress begins with rules amendments undermining OCE, it is setting itself up to be dogged by scandals and ethics issues for years and is returning the House to dark days when ethics violations were rampant and far too often tolerated.”
By Tuesday afternoon House Majority Leader Kevin McCarthy (R-Calif.) was forced to call an emergency House Republican Conference to reverse the decision on the amendment. However, Politico reports that “McCarthy’s motion to restore the current OCE setup was adopted by unanimous consent after Trump himself got involved” tweeting “With all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it ……..may be, their number one act and priority. Focus on tax reform, healthcare and so many other things of far greater importance! #DTS.”
Minority Leader Pelosi released another statement following the House Republican Conference’s removal of Chairman Goodlatte’s amendment saying, “House Republicans showed their true colors last night, and reversing their plans to destroy the Office of Congressional Ethics will not obscure their clear contempt for ethics in the People’s House. Once again, the American people have seen the toxic dysfunction of a Republican House that will do anything to further their special interest agenda, thwart transparency and undermine the public trust.”
Some Republican members praised President-Elect Donald Trump’s involvement in the issue. According to The Hill, “Rep. Tom Cole (R-Okla.) said late Tuesday that President-elect Donald Trump “deserves a lot of credit” for House Republicans ditching a plan to weaken the Office of Congressional Ethics (OCE). “I think he deserves a lot of the credit. Look, I think it’s absolutely the right thing to do,” Cole told CNN’s Erin Burnett OutFront.
Following the Republican’s decision to remove the amendment from the House rules package (H.R. 5), the House of Representatives, approved the rules of the 115th Congress in a vote by the Yeas and Nays: 234 – 193.
Much of President-Elect Trump’s electoral campaign focused on “draining the swamp” and cleaning up Washington through ethics reforms, particularly around lobbying. During the election President-Elect Trump’s campaign released a plan for a lobbying reform package and implemented strict rules about lobbyists serving during the transition and in President-Elect Trump’s administration. Lobby Blog will continue to monitor ethics regulation changes under the 115th Congress and Trump Administration.
Lobbying in Sacramento, the state capital of California, has exploded in recent years. The Los Angeles times reports that, “State records show $551.9 million in lobbyist expenditures for all but the final two months of the 2015-16 legislative session. Two decades ago, total state government lobbying cost $266.9 million.” Moreover, there are currently 1,871 registered professional lobbyists, which is more than 15 per member of the state Senate and Assembly.
However, the biggest lobbying spenders in Sacramento may surprise you. Unlike in Washington D.C., where large national business interests, associations and corporations, like the U.S. Chamber of Commerce, the National Association of Realtors, and General Electric top the list of lobbying spending, in Sacramento the biggest spenders are local governments. According to the Los Angeles Times local governments lobbying the state government accounted for “more than $84 million in the last two-year legislative session. By comparison, oil and gas companies spent less than half that amount. Agriculture interests spent just 10 cents to every dollar spent by cities, counties and statewide government associations.”
The reason many local governments are turning to lobbyists is that “Local officials often feel they need more Sacramento muscle beyond their legislators. City council members in Glendale were told in a 2013 staff report that lobbyists would help “gain support from key public officials and policy makers on decisions that directly impact the city.” In the most recent legislative session, Glendale paid more than $166,000 for lobbyists. The city of Los Angeles spent about $1.6 million.”
In Washington D.C., state and local governments spent a combined total of $51,271,774 on lobbying efforts in 2016 according to The Center for Responsive Politics. 4 out of the top 10 state and local government spenders in Washington, D.C. were from California: Los Angeles County, CA – $707,000; Orange County, CA – $570,000; City & County of San Francisco, CA – $500,000; City of Los Angeles, CA – $470,000.
There has been a wave of lobbyist deregistrations in the past couple of weeks after the incoming Trump transition team announced that registered lobbyists will not be able to serve in the transition process or in the administration. The Washington Post reports that “As part of the new policy, every person who joins the administration will be asked to sign a form that states they are not a registered lobbyist. If they are, they will have to provide evidence of their termination.”
However, according to The Washington Post some critics argue that “This kind of snap immunity demonstrates the flaw in the apparent Trump approach focusing on lobbying conflicts to the exclusion of other kinds,” said Norm Eisen, chief White House ethics lawyer in the Obama administration. “There are also a huge amount of non-lobbying conflicts both coming into and leaving a transition … that Trump’s emerging ethics structure does not seem to adequately address.”
The incoming administration has not only shaken the status quo for individual lobbyists, but has also changed the way businesses are going to handle government relations over the next four years. The Wall Street Journal reports, “Businesses are moving from defense to offense,” said Hunter Bates, a partner at law and lobbying firm Akin Gump and onetime chief of staff to Senate Majority Leader Mitch McConnell (R., Ky.). “What we’re about to see is a host of issues going from gridlock to the goal line.”
Many major issues for businesses, such as immigration, health care, the tax code, infrastructure and Wall Street regulations. According to “Matthew Johnson, a Republican lobbyist at Podesta Group, one of Washington’s top lobbying firms… If Mr. Trump and Congress take action on immigration, health care and other areas, he said, “That is a full plate. That’s a legislative bonanza.”