Top Spenders

The figures for spending may seem high, but they are paltry sums compared to the amount of money that hinges on congressional decisions. Members of the Chamber of Commerce of the United States stand to benefit from an investment bonanza if China is admitted to the World Trade Organization; strict environmental laws could cost them billions of dollars in pollution control equipment and clean up costs. Doctors who have seen their incomes stagnate under managed care have the American Medical Association on Capitol Hill pushing for regulation of HMOs. Businesses are rarely known for spending money frivolously—they do not spend money on lobbyists if they don’t think the potential benefits outweigh the costs.

Among the broad economic sectors, finance, insurance and real estate remains the top spender on lobbying, although its margin over the next largest sector has been significantly reduced. In 1998, miscellaneous business was the second largest sector, with $30 million less in lobbying expenditures than finance. In 1999, health was the second ranking sector, just $15 million behind. Every economic sector grew in 1999 except for agribusiness, which fell over 30 percent, and lawyers and lobbyists, which fell 7 percent.

At the industry level, the pharmaceuticals and health products industry reclaimed its title as the largest spender on the strength of a 23 percent surge in spending. Insurance, which was 1998’s largest spending industry, fell to second despite an 11 percent hike in lobbying spending. The big story, though, was the explosive growth in the computer industry’s lobbying expenditures, which have grown an average of 42 percent each of the last two years. In 1999, the computer equipment and services industry was the sixth largest spender at $50.4 million. The big loser was tobacco, which fell from $67.4 million in 1998 to $23.7 million in 1999.

The collapse of the big spenders was partially attributable to the depression in tobacco lobbying. In 1998, the two organizations with the largest lobbying efforts were both tobacco firms. In 1999, neither was. The Chamber of Commerce of the United States spent $18.8 million to become the largest lobbying spender in Washington, followed closely by the American Medical Association at $18.2 million. Whereas in 1998 there were three $20 million spenders, in 1999 there were none.

The 1999 figures reflect a trend away from big spenders and toward smaller groups. In 1998, the cutoff to be one of the top 100 spenders was $2.88 million; in 1999, the cutoff fell to $2.56 million. The fact that overall lobbying expenditures continued to rise while spending by the biggest clients fell is indicative of a surge in small filers. Indeed, the overall number of lobbying relationships grew faster in 1999 than it did in 1998. The growth in the number of relationships also outstripped the growth in spending by a margin of 6.9 percent to 2.1 percent.

In 1999, nearly a quarter of all lobbyists in Washington — 2,945 to be exact — spent at least some time lobbying on tax policy, making it the most heavily lobbied issue. More than 2,000 lobbyists also worked on budget/appropriations issues, health care, and domestic and international trade. The least attention was paid to unemployment, which was lobbied on by a mere 16 lobbyists out of 12,113 who were active in 1999.

THE GOLDEN PARACHUTE

Every two years, a buzz normally associated with the NBA draft circulates around K Street. A new batch of elected officials leaves office to enjoy the lucrative contracts that the world of lobbying has to offer. The Center identified 129 former members of Congress who worked as lobbyists in 1999. Among them was former House Appropriations Committee Chairman and almost-Speaker of the House Bob Livingston, who set up Livingston Associates. After his one-year ‘cooling off’ period expired, he was able to earn $1.14 million in fees for lobbying his former colleagues.

Former lawmakers like Livingston are especially valuable as lobbyists because they know the legislative process and because of their personal connections to members of Congress. Former legislators have the kind of connections that it would take an outsider hundreds of hours in schmoozing and thousands of dollars in campaign contributions to develop. Thus, the true crown jewels of the lobbying world popular former Congresspeople who retain the ability to donate to congressional candidates through their fundraising committees.

Ethics rules prohibit members of Congress and officials in the executive branch from lobbying their former colleagues for a year after leaving office. However, this does not prevent some individuals from reaching agreements with lobbying firms before they are even out of office. The logic for lobbying firms is twofold. First, former Congressmembers know the ins and outs of the legislative process and often have a grip on complex issues. Thus, hiring them as lobbying strategists is worthwhile even if they themselves can’t lobby for a year. Second, reeling in a big-name Congressperson such as former Democratic Congressional Campaign Committee Chairman Vic Fazio (D-Calif.) gives a lobbying firm luster that can attract potential clients.

Lawmakers view lobbyists as key players in the legislative process. For legislators and their aides, lobbyists are sources of ideas on legislation or information about arcane issues. At times, lobbyists even write proposed bills and amendments that lawmakers introduce as their own. At a minimum, lawmakers get feedback from lobbyists on legislation to prevent objections late in the legislative process. It is not unheard of for a congressional committee to request that lobbyists appear to comment on proposed legislative action or upcoming government reports. Congressmembers hoping to get legislation passed or defeated often coordinate their activities with K Street in order to fully mobilize the relevant constituency.

Lobbying is also making a move into the twenty-first century by going on-line. Tony Podesta, the brother of the former White House Chief of Staff, renamed his lobbying firm podesta.com. Lobbyists are creating Web sites with password-only chat rooms where lobbyists and legislators can get together to discuss pending bills and amendments. Moreover, lobbyists are turning to the Web to build grassroots support for or opposition to legislation that can pressure key Congressmembers.

QUALITY OF REPORTING AND REGULATION

As a result of loopholes in the Lobbying Disclosure Act and weaknesses in enforcement, the quality of the lobbying data is uneven. Filers continue to make a variety of errors, from forgetting to report income or expenditures to listing the incorrect filing period. Other than inconsistencies with the definitions of lobbying, one of the biggest problems was the failure of organizations that employ in-house lobbyists to include payments to outside firms and individuals for lobbying activities. The Center found dozens of cases where lobbying firms reported earning more money from a client than the client reported spending. Adding to the confusion are reports that are filed with the Clerk of the House’s Legislative Resource Center but not with the Secretary of the Senate’s Office of Public Records, or vice versa. Since the computer systems of the two offices are not linked, there are often records in one place that do not exist in the other as a result of errors in mail delivery or processing. Such discrepancies make accurately analyzing the data a treacherous exercise.

Nevertheless, the quality of filings continues to improve. Lobbyists have been required to register and report on their incomes since the passage of the Lobbying Disclosure Act of 1995. After some initial confusion, the process has been smoothed out dramatically from the filer’s point of view. The House and Senate now provide a 19-page guide on filling out lobbying disclosure forms; instructions and lobbying report forms can also be downloaded and printed from the House and Senate web pages. In 2000, the Senate started electronic filing for lobbyists.

Unfortunately for the general public, access to lobbying records seems to be going into reverse. Neither the House nor the Senate yet provides an on-line database of lobbying records. Nor does either office provide an affordable way to get access to all of the records (a project to put records on-line at the Senate has been pushed back to late 2001). Currently, the only way to get access to any records is to go in person to the Office of Public Records in the Senate, where reports can be printed at $0.20 per page or to the Legislative Resource Center in the House, where the records are $0.10 per page. In the past, it had been possible to purchase an entire reporting period’s worth of lobbying reports on microfilm for about $400. However, forms filed electronically will not be included on future microfilm rolls, paradoxically limiting access to public records.

TOP SPENDERS

The following chart shows the top lobbying spenders for 1999. It includes all reported payments that organizations made to lobbying firms as well as in-house expenditures for lobbying activities. It also includes all activity reported for subsidiaries and affiliates of those organizations. Groups spending more than $1 million numbered 281 in 1999, a rise of 20 from the 1998 total. However, the number of groups spending more than $5 million fell from 39 to 36 and the number spending more than $10 million fell from nine to seven.

The big story of 1999 is the collapse in lobbying spending by tobacco firms after the failure of tobacco regulation legislation in 1998. The previous year’s top spender, British American Tobacco, fell to 107th in 1999 as it cut its lobbyist spending from $25.2 million to $2.4 million. Philip Morris, the second most prolific spender in 1998, reduced its Washington presence by cutting lobbying expenditures from $23.0 million in 1998 to $14.8 million in 1999.

At the same time tobacco spending was plummeting, spending by companies in other industries was growing. Two of the top five spenders are now related to health care. The American Medical Association (#2) and the American Hospital Association (#4) increased their total spending by 12 percent. Pharmaceutical maker Schering-Plough jumped from 51st largest spender in 1998 to ninth in 1999. However, not every surging industry is well represented in the list of top spenders. Despite being the sixth-largest industry in terms of spending on lobbyists, the computer equipment and services industry accounts for only one firm in the top 25 (IBM, #24) and just four of the top 100. Both of these figures still represent increases over 1998.

Overall, there was a lot of volatility in the top 100 spenders of 1999. Ten of the top 25 spenders from 1998 dropped off of the list, including two of the top three. British American Tobacco and the Christian Coalition fell from inside the top twenty-five to outside the top 100.

When calculating the expenditures by organizations in 1999, the Center took mergers and acquisitions from 1999 into account. Therefore, the 1999 figure for Exxon Mobil Corp represents the combined spending during the year by both Exxon and Mobil, which lobbied as separate entities at the beginning of the year but as a combined entity at the end.




Organization

1999 Lobbying
Expenditures
1998 Lobbying
Expenditures
1997 Lobbying
Expenditures
Average Growth
1

Chamber of Commerce of the US

$18,760,000
$17,000,000
$14,240,000
14.8%
2

American Medical Assn

$18,180,000
$16,820,000
$17,280,000
2.6%
3

Philip Morris

$14,820,000
$23,148,000
$16,248,000
-4.5%
4

American Hospital Assn

$12,480,000
$10,520,000
$7,880,000
25.8%
5

Exxon Mobil Corp

$11,695,800
$11,960,000
$10,454,660
5.8%
6

Edison Electric Institute

$11,580,000
$11,020,000
$10,020,000
7.5%
7

Blue Cross/Blue Shield

$11,162,354
$9,171,572
$8,761,936
12.9%
8

SBC Communications

$9,500,000
$5,280,000
$6,220,000
23.6%
9

Schering-Plough Corp

$9,231,000
$4,268,000
$2,682,508
85.5%
10

AT&T

$8,560,000
$7,950,000
$8,110,000
2.7%
11

Ford Motor Co

$8,360,000
$13,807,000
$7,343,000
6.7%
12

General Electric

$8,318,024
$7,630,000
$7,440,000
5.7%
13

Business Roundtable

$8,300,000
$11,640,000
$9,480,000
-6.4%
14

Boeing Co

$8,200,000
$8,440,000
$10,020,000
-9.5%
15

Sprint Corp

$7,951,711
$7,398,665
$6,740,000
8.6%
16

United Services Automobile Assn Group

$7,470,000
$3,520,000
$3,560,000
44.9%
17

Natl Cmte to Preserve Social Security

$7,220,000
$6,780,000
$7,660,000
-2.9%
18

General Motors

$7,017,874
$8,414,900
$10,600,000
-18.6%
19

Abbott Laboratories

$6,789,000
$1,877,147
$893,300
175.7%
20

National Assn of Realtors

$6,760,000
$6,040,000
$6,320,000
3.4%
21

American Council of Life Insurance

$6,600,000
$7,050,000
$4,935,000
15.6%
22

GTE Corp

$6,490,000
$4,200,000
$3,880,000
29.3%
23

IBM Corp

$6,360,000
$5,552,000
$5,240,000
10.2%
24

Securities Industry Assn

$6,059,277
$4,660,000
$5,000,000
10.1%
25

Fannie Mae

$6,000,000
$5,550,000
$4,960,000
10.0%
26

USX Corp

$5,840,000
$4,400,000
$4,140,000
18.8%
27

Seniors Coalition

$5,695,052
$6,290,053
$6,183,352
-4.0%
28

Assn of American Railroads

$5,597,827
$4,580,000
$5,790,000
-1.7%
29

DaimlerChrysler

$5,520,000
$6,280,000
$4,340,000
12.8%
30

Chemical Manufacturers Assn

$5,490,000
$4,848,760
$5,020,000
4.6%
31

Merck & Co

$5,320,000
$5,000,000
$5,140,000
1.7%
32

Ameritech Corp

$5,260,000
$7,254,000
$6,800,000
-12.0%
33

AFL-CIO

$5,220,000
$4,230,000
$3,230,000
27.1%
34

Citigroup Inc

$5,080,000
$8,800,000
$10,220,000
-29.5%
35

Northrop Grumman Corp

$5,028,639
$6,117,612
$5,880,000
-7.5%
36

Pharmaceutical Rsrch & Mfrs of America

$5,020,000
$3,120,000
$6,320,000
-10.9%
37

National Assn of Broadcasters

$4,900,000
$5,200,000
$4,680,000
2.3%
38

GAF Corp

$4,890,000
$1,520,000
$700,000
164.3%
39

Bell Atlantic

$4,880,000
$21,260,000
$15,812,840
-44.4%
40

Textron Inc

$4,860,000
$4,150,000
$3,860,000
12.2%
41

Microsoft Corp

$4,860,000
$3,740,000
$2,120,000
51.4%
42

American Bankers Assn

$4,787,819
$5,196,310
$4,147,535
7.4%
43

Health Insurance Assn of America

$4,760,000
$4,495,000
$4,800,000
-0.4%
44

Commonwealth of Puerto Rico

$4,758,113
$3,944,505
$4,335,396
4.8%
45

Investment Co Institute

$4,700,000
$3,380,000
$3,720,000
12.4%
46

United Technologies Corp

$4,656,674
$4,174,193
$6,403,000
-14.7%
47

American Farm Bureau Federation

$4,500,000
$4,560,000
$3,000,000
22.5%
48

General Dynamics

$4,368,894
$3,908,417
$4,388,353
-0.2%
49

Southern Co

$4,260,000
$2,820,000
$2,420,000
32.7%
50

Motorola Inc

$4,206,016
$5,152,573
$5,659,800
-13.8%
51

Lockheed Martin

$4,200,440
$6,970,880
$3,600,000
8.0%
52

Chase Manhattan

$4,200,000
$5,920,000
$4,140,000
0.7%
53

Shell Oil

$4,156,219
$3,720,219
$2,940,800
18.9%
54

Eli Lilly & Co

$4,130,000
$5,160,000
$3,836,442
3.8%
55

BellSouth Corp

$4,120,000
$4,940,000
$5,125,700
-10.3%
56

American International Group

$4,100,000
$6,940,000
$3,400,000
9.8%
57

BP Amoco Corp

$4,019,394
$3,472,190
$5,213,900
-12.2%
58

Monsanto Co

$4,000,000
$4,000,000
$4,000,000
0.0%
59

American Assn of Retired Persons

$4,000,000
$3,720,000
$6,120,000
-19.2%
60

Prudential Insurance

$3,930,000
$3,840,000
$3,476,897
6.3%
61

Pharmacia & Upjohn Inc

$3,910,400
$2,442,980
$1,916,512
42.8%
62

Pfizer Inc

$3,830,000
$8,000,000
$10,000,000
-38.1%
63

Bristol-Myers Squibb

$3,620,000
$2,820,579
$3,780,000
-2.1%
64

Merrill Lynch

$3,580,000
$3,800,000
$2,880,000
11.5%
65

Cellular Telecom Industry Assn

$3,535,000
$4,570,000
$1,549,460
51.0%
66

Amgen Inc

$3,440,600
$2,360,000
$1,240,000
66.6%
67

Walt Disney Co

$3,440,000
$2,446,800
$2,150,000
26.5%
68

American Petroleum Institute

$3,383,442
$2,982,188
$3,680,000
-4.1%
69

FDX Corp

$3,320,000
$3,320,000
$3,300,000
0.3%
70

Aircraft Owners & Pilots Assn

$3,280,000
$800,000
$940,000
86.8%
71

Atlantic Richfield

$3,233,620
$3,540,000
$6,660,000
-30.3%
72

American Institute of CPAs

$3,206,707
$1,896,297
$1,940,000
28.6%
73

Mississippi Band of Choctaw Indians

$3,205,000
$1,480,000
$1,147,000
67.2%
74

National Cable Television Assn

$3,160,000
$4,800,000
$3,360,000
-3.0%
75

National Assn of Independent Insurers

$3,098,545
$3,006,995
$2,806,446
5.1%
76

American Forest & Paper Assn

$3,090,000
$1,970,000
$1,820,000
30.3%
77

Global Crossing

$3,070,000
$120,000
$0
[n/a]
78

Gun Owners of America

$3,040,000
$1,150,000
$1,800,000
30.0%
79

Loews Corp

$3,030,000
$4,220,000
$4,450,000
-17.5%
80

US West Inc

$3,020,000
$3,020,000
$4,100,000
-14.2%
81

National Assn of Manufacturers

$3,020,000
$3,620,000
$6,180,000
-30.1%
82

Time Warner

$3,000,000
$3,000,000
$3,000,000
0.0%
83

American Electronics Assn

$3,000,000
$1,804,902
$1,640,000
35.3%
84

Procter & Gamble

$2,960,000
$3,180,000
$2,950,000
0.2%
85

AMR Corp

$2,954,527
$4,320,000
$5,638,000
-27.6%
86

Freddie Mac

$2,940,000
$2,160,000
$1,560,000
37.3%
87

American Insurance Assn

$2,940,000
$3,062,000
$2,637,000
5.6%
88

AlliedSignal Inc

$2,940,000
$4,020,000
$3,080,000
-2.3%
89

Health Industry Manufacturers Assn

$2,920,000
$2,470,000
$3,391,796
-7.2%
90

Union Pacific Corp

$2,881,000
$3,940,000
$3,280,000
-6.3%
91

EDS Corp

$2,869,662
$3,310,070
$2,220,348
13.7%
92

American Home Products

$2,865,743
$2,210,000
$2,500,000
7.1%
93

Northwest Airlines

$2,770,000
$2,880,000
$2,250,597
10.9%
94

Newport News Shipbuilding

$2,740,000
$2,660,000
$3,360,000
-9.7%
95

Glaxo Wellcome Inc

$2,739,116
$3,120,000
$3,774,000
-14.8%
96

America's Community Bankers

$2,720,000
$2,600,000
$1,828,893
22.0%
97

Bond Market Assn

$2,689,100
$2,591,000
$2,392,000
6.0%
98

60 Plus Assn

$2,620,000
$3,000,000
$2,500,000
2.4%
99

SmithKline Beecham

$2,600,000
$2,680,000
$2,600,000
0.0%
100

Biotechnology Industry Organization

$2,558,796
$3,703,990
$1,276,549
41.6%