(Pixabay)
That was just a movie. But special interests in Washington D.C., still buy access and influence to broker deals behind closed doors. They leave journalists a few crumbs to follow, but we need to know where to look.
Lobbying is attempting to influence government action. American companies and special interest groups spend billions of dollars a year trying to sway powerful people and then donate generously during campaign season. Foreigners spend heavily, too, though they are more restricted in donating to campaigns and their registration requirements are – at least in theory – more stringent (see our tip sheet on the Foreign Agents Registration Act, or FARA).
In this tip sheet, we focus on lobbying, first in the federal government and then at the state level. In another, we dive deeper into campaign finance.
As you dig in, consider: This is the stuff that’s legal and sometimes includes a paper trail. Plenty of influence peddling and outright corruption happens off the books or with the help of shell companies. Look at the leak of 11.5 million files from the law firm Mossack Fonseca that resulted in the Pulitzer-winning “Panama Papers” investigative series.
What is lobbying?
The Lobbying Disclosure Act of 1995 and the Honest Leadership and Open Government Act of 2007 require anyone who lobbies a member of Congress or the Executive Branch (the White House and all federal agencies staffed by presidential appointees) to register with the clerk of the House of Representatives (you can search records here) and the secretary of the Senate (records here). This usually applies to people who are paid to press their cause. A 2011 report by the Congressional Research Service (CRS), a nonpartisan think tank inside Congress, describes how registration works and how the Obama administration tried to tighten registration requirements. A 2016 report describes the roles of the clerk and secretary.
To mark the 20th anniversary of the Lobbying Disclosure Act, in 2015 the CRS outlined gray areas needing Congress’s attention. These include shadow lobbying (“when an individual who is paid to engage public officials on behalf of clients does not register”), grassroots lobbying (“attempts to persuade government decision makers and influence policy outcomes by shifting public opinion and motivating citizens to take action, often by contacting representatives and senators”) and the revolving door (“when federal employees leave the government for employment in the private sector or the government hires former private sector employees for government jobs”).
OpenSecrets
Government bodies make a lot of lobbying records available, but don’t present them in a single place. One organization that has tried to collect the most pertinent documents out there is the Center for Responsive Politics, a nonpartisan research group based in Washington, with its OpenSecrets.org project. The database is a critical instrument for anyone investigating influence peddling in Washington, though it can take a little fiddling to find what you need.
The tool helps you search donors and lobbyists, candidates and interest groups by industry. (Largely in Washington; for details on state-level activity, see below.) You’ll find that defense contractors like Boeing give more to Republicans than Democrats, but gave far more to Hillary Clinton’s presidential campaign than to Donald Trump’s in 2016.
You’ll also be able to scrutinize political action committees (PACs) and the personal finances of top federal officials, including the number of shares they own in which companies. Democrat Mark Warner of Virginia, for example, is the richest member of the Senate, with an estimated net worth of $243 million, according to OpenSecrets.
OpenSecrets collects all this data by combing through and coding millions of Congressional records and tax filings annually. The nonprofit is privately funded, largely through foundation grants of the type that also support Journalist’s Resource.
Industry groups & advocacy organizations
OpenSecrets classifies industry groups into 13 sectors, 100 industries and more than 400 categories. These include private-sector companies petitioning for government contracts, such as Lockheed Martin, and private groups like the National Rifle Association (NRA).
Open up the big spenders’ profiles on OpenSecrets and you’ll find that in fiscal year 2016 the NRA spent about $1 million on candidates’ campaigns, a few million more on lobbying and almost $53 million on “outside spending,” which is much harder to track: “The NRA’s influence is felt not only through campaign contributions, but through millions of dollars in off-the-books spending on issue ads,” OpenSecrets says.
Consider also an organization’s tax status. The NRA files as a “social welfare organization,” a tax-exempt charity under section 501(c)(4) of the Internal Revenue Code that is allowed to shield the identities of its donors. Such an organization must “be operated exclusively to promote social welfare,” the IRS explains. It “may engage in some political activities, so long as that is not its primary activity. […] Seeking legislation germane to the organization’s programs is a permissible means of attaining social welfare purposes.” Gun-safety advocates have argued that the NRA is abusing its tax-exempt status by supporting the firearms and ammunition industry over civic interests.
Another source for finding additional information is the Form 990, which non-profits are required to file with the IRS. Here you can find information on revenues as well as director compensation and other possible leads. The 990 is available on websites like ProPublica, the National Center for Charitable Statistics and Guidestar. Through this form, we learn that the NRA had revenues in 2015 of $337 million.
What’s your issue?
So here are some examples of the way you can use these resources and the information you can find. Often you will find yourself in a bit of a labyrinth unsure where the documents are taking you.
In early 2017, the Environmental Protection Agency (EPA) did an about-face, declining to ban the insecticide chlorpyrifos despite evidence that the chemical hurts children’s brains. Environmentalists were appalled. The EPA’s own conclusions from five months earlier had suggested an imminent ban. What happened?
Chlorpyrifos is manufactured by Dow Chemical. Has Dow Chemical lobbied this issue on Capitol Hill?
- Search for “Dow Chemical” on OpenSecrets.
- Nothing may appear the first time. Modify the search to focus on “organizations.” Voila, Dow Chemical is at the top.
- Click that link.
- The first tab is the summary, which shows that Dow Chemical – a corporation with its own in-house lobbyists – spent $13.6 million on lobbying in 2016. It also shows which candidates received contributions from Dow Chemical and which members of Congress own shares in the company.
- But we’re looking for chlorpyrifos. So go to the “Lobbying” tab and scroll down to the list of bills Dow Chemical has lobbied.
- Because we’ve done enough research on chlorpyrifos to know that the debate is about public safety and marketing, we zero in on bills 2609 and H.R.1599 in the 114th Congress (the 2015-2016 session).
- Click on the number of reports (on the right). This leads to a list of lobbying reports filed in either the House or the Senate. For S.2609, it takes us here and for H.R.1599 here.
- On each of these pages, the little icons on the far left will take you to the actual lobbying reports. We could spend hours looking through these, so once inside search for keywords, such as “chlorpyrifos.”
This one (under S.2609) shows that in the fourth quarter of 2016, Janet C. Boyd, a representative from Dow Chemical, spoke with members of the Senate, the House and the Departments of Agriculture, Commerce, State and Treasury as well as the EPA, U.S. Trade Representative and White House. Lobbyists don’t have to list whom they speak with, so this is sometimes as far as we’ll get. The report also lists Boyd’s phone number. Elsewhere on OpenSecrets we can see a profile of Boyd, where she has worked, and other bills she has lobbied.
The revolving door
Amazon has hailed its efforts to begin delivering packages by drone. But the Federal Aviation Authority (FAA) strictly regulates the operation of unmanned aerial vehicles. What is Amazon doing about it?
For starters, thanks to OpenSecrets, we can see how much money Amazon gave candidates and which members of Congress own Amazon shares. We can see how much the company paid lobbyists, which lobbyists, whom in government they lobbied and on which issues and bills. And we can look at these issues for each year back to 2000.
Since we’re curious about Amazon’s drone program, eventually we land on this lobbying report filed by the firm Akin Gump. It shows that Akin Gump received $80,000 in the first quarter of 2016 to send five people – including Michael Drobac (a former legislative aide to three senators) – to lobby members of the U.S. Senate, the House of Representatives, the Department of Commerce and the FAA on the “testing and operation of UAVs in the U.S.”
Drobac is an example of what the Center for Responsive Politics calls a “revolver” – someone who passes through the “revolving door that shuffles former federal employees into jobs as lobbyists, consultants and strategists just as the door pulls former hired guns into government careers.” If we search OpenSecrets for Drobac, we find he has his own page detailing whom he has worked for. Here we can track him through his career as a legislative aide to several senators, into the private sector and then into lobbying. Others, such as his Akin Gump colleagues Vic Fazio and Bill Paxon spent years as Congressmen. Now they lobby their former colleagues. (There is nothing illegal about this.)
Digging further into a company’s interests
These filings are rarely going to tell us the whole story. Sometimes they may not even reveal the company’s or lobbyist’s position on an issue.
In the same quarter of 2016, while pushing Amazon’s drone program, some of the same Akin Gump staff received Amazon funds to lobby about the Marketplace Fairness Act – legislation that would allow states to collect sales tax on purchases made through internet giants such as Amazon. The lobbying report does not tell us the position Amazon took here, so we have to dig further. (Here are other companies lobbying on the same issue.)
Since Amazon is a publicly traded company, the Securities Exchange Act of 1934 requires it to file quarterly documents detailing its finances and anything it expects to affect revenues. The annual report is called a 10-K. Since the Marketplace Fairness Act could affect Amazon’s revenues, it must mention it in the 10-K. (Check out our accounting tip sheet for more on how to read a 10-K.)
Go to the Securities and Exchange Commission’s website to find Amazon’s most recent 10-K. Once inside, use Control+F to search for keywords, such as “sales tax.” You’ll quickly land on a subsection headlined, “We Could Be Subject to Additional Sales Tax or Other Indirect Tax Liabilities,” where the filing declares, “We support a federal law that would allow states to require sales tax collection by remote sellers under a nationwide system.”
Mind you, this is all just one firm in one quarter. Amazon pays other firms to lobby the same issues and many others.
Campaign finance and “dark” money
Lobbyists and corporations can spend on campaigns and help candidates raise funds to campaign. We will cover campaign finance in another tip sheet, but let’s probe how campaign finance overlaps with lobbying.
There’s a whole category of spending called “dark money.” As the name suggests, these funds are hard to trace (OpenSecrets has a good briefing on this). For publicly available campaign records and records of lobbyists or PACs supporting candidates, check out the Federal Election Commission (FEC).
At FEC.gov:
- On the left, click on the menu entitled “Campaign Finance Disclosure Portal.”
- Then click on the left menu “Data Catalog.”
- Then “Lobbyist/Registrant.”
- Even better, at this stage go to the advanced search and, where you are prompted to select “committee type,” pull down the menu for “Lobbyist/Registrant PACs.”
- You can narrow down your search further, or proceed and then use Control+F to scan the hundreds of listings.
- Dow Chemical has an employees’ PAC that donated almost $1 million dollars in 2016 to individual candidates and the committees supporting them. You can see exactly which employees gave how much to whom.
Each state has its own campaign finance laws and different search portals, some friendlier than others. Oklahoma, where EPA Administrator Scott Pruitt was attorney general until early 2017, keeps records from his runs for office over the years. In 2014, for example, Pruitt received hundreds of thousands of dollars from hundreds of entities including chemical and oil giants Koch Industries and Exxon Mobil as well as individual lobbyists and retirees. (Start here, then enter “Pruitt” and select 2014, then hit search. After clicking on his name, search “all report types” or narrow down to “C-1R: Contribution & Expenditure Report.”)
Lobbying at the state level
Every state has a registration requirement for lobbyists. But they differ wildly. “The definition of who is a lobbyist usually revolves around compensation. Most states define a lobbyist as someone who receives any amount of compensation or reimbursement to lobby. Among the exceptions are Hawaii, Minnesota and New York. These states stipulate threshold amounts of money and time spent on lobbying, and, if these thresholds are reached, an individual becomes a lobbyist,” says the National Conference of State Legislators, which keeps up-to-date lists of registration requirements and reporting requirements by state.
Some states, such as Massachusetts, have a lobbyist public search function on their government websites. Washington D.C. has a Board of Ethics and Government Accountability that lists lobbyists and can be searched by client.
Other resources
A growing number of nonprofits research lobbyist spending and opaque special interests, including the Sunlight Foundation, ProPublica, the Project on Government Oversight and Guidestar.
Also see the Senate Office of Public Records and the House of Representatives’ Office of the Clerk’s lobbying disclosure page.
To search government contracts and government spending, start with the Federal Procurement Data System (FPDS), USASpending.gov by the Treasury Department, and InsideGov (run by the data firm Graphiq). There is no central repository of defense contracting, but try starting with these resources and do a Freedom of Information Act (FOIA) request.
