Saturday, February 13, 2010

Lobbyists Spend A Record $3.5 Billion In 2009: Did Average Citizens Profit From These Efforts?

For most people, 2009 marked a year in which many of us had to pull back and tighten the reins on our own personal budgets as a result of the overall downturn in the economy. Apparently, for some segments of society this was not the case. Did you know that lobbyist spent nearly a record $3.5 billion lobbying the federal government in 2009? Recently, I came across some interesting and compelling statistics compiled by the Center for Responsive Politics, a political watchdog group, that I’ll share with you in today’s post that gave me several moments of pause.

For example, companies and special interest groups spent a record $3.47 billion on federal lobbying efforts in 2009, this amount represented a 5% increase over statistics reported in 2008. Lobbyists were not deterred by the Great Recession, the decline of the dollar, bank failures, TARP bailouts, or near 10% unemployment nationally and far worse unemployment rates in a number of individual states. One lesson learned: lobbying appears to be a growth industry heading into the future if you are seeking employment and job security. In other words, lobbying appears to be a recession-proof industry.

The Obama Administration and Congress were busy over the past year pushing forward a number of hot-button issues like health care reform, financial regulatory reform, climate-change and other controversial legislation. In a year when Congress was busy debating such wide-ranging ideological issues lobbyists were paying close attention on the sidelines.

A number of industry sectors notably stand-out as the deep pocket and influential lobbyists. The pharmaceutical and health industry spent an estimated $266.8 million lobbying on health care reform—this happens to be the largest amount ever spent by a single industry in a one year period of time. Business associations spent $183 million on federal lobbying. Oil and gas lobbyists spent $168.4 million. The insurance industry spent $164.2 million. At the end of the day, all of these industry sectors that I mention spent more in 2009 than they did in 2008. However, the electric utility industry spent $144.4 million, slightly off the 2008 pace for that industry segment. To recap, the top five industry sectors in terms of spending were the following:

1. Pharmaceutical and Healthcare Industry ($266.8 million)
2. Business Associations ($183 million)
3. Oil and Gas Industry ($168.4 million)
4. Insurance Industry ($164.2 million)
5. Electric Utility Industry ($144.4 million)

The single largest institutional lobbyist was the U.S. Chamber of Commerce, an association that represents roughly 3 million businesses in various industries, which distributed $145 million for lobbying activities at the federal level. The Chamber of Commerce has consistently held the top spot as the largest single spender over the past nine (9) years. 2009’s figure of $145 million spent on lobbying activity by the Chamber of Commerce marks a 6% increase over 2008 figures.

I promise you that I’m not making these figures up. You can see them for yourself. A wonderful website compiles and breaks down the numbers that I’ve just shared with you. As a citizen, and probably thinking along the same lines as other citizens, when I come across data like this I’m left scratching my head and asking one simple and basic question. Has spending such vast sums on lobbying improved the quality, scope, and reach of legislation and policy emanating out of Washington to make the everyday lives of a greater multitude of citizens better and more productive? I have my own answer and opinion in response to the question that I pose. I can only imagine what your response would likely be in answering this question.


  1. Professor Grant:

    I think it is clear . . . Corporate lobbyists have spent billions of dollars in an effort to defeat the will of the people. Obama won a mandate election and the lobbying industry has successfully blocked (until now) nearly every reform effort that will provide a better nation and life for American citizens. This is mind boggling.

  2. Karen Lander

    After reading this post I saw this bumper sticker: America; The Best Democracy Corporate Lobbyists Can Buy.

    Is this why there is no public option in the health care reform bill? If competition from government backed health care plans would drive down prices and profits for pharmaceutical corporations, some types of providers, insurance companies, etc. they certainly had incentive to lobby in a big way this year.

  3. I believe lobbying is a fact of life. Every citizen is somehow involved with an agency, employer, or entity that engages a lobbyist to represent their interests in issues of importance.

    Churches work on social justice and in many cases engage lobbyists to work on issues affecting non profits. Fireman, teachers, car salesman, nurses, the YMCA, massage therapists, CPAs and locksmiths, along with banks, utilities and automobile makers all have lobbyists. Whether the multimillions spent trickles down to the individual consumer depends on one’s perspective, political orientation and the cause most dear to that individual or group. Whether someone is being helped, depends on where they are when their issue occurs and how they are fairing in the legislative process.

    In general, people must feel lobbying is important and effective otherwise groups would not hire lobbyists or spend the money. Depending on if you are winning at the moment will of course control your perspective of worthy. One of the things that lobbyists do is ensure a group’s ideas are put forward.

    May groups have great causes, but cannot get anything done. Lobbyists understand the political process, the timing, along with what to do and where to be at a certain time. They understand who may be sympathetic and who can help the cause as well as those to avoid because of their opposition. Without the lobbyist, many worthwhile groups with worthwhile causes would be floundering in the legislative process. .

  4. The lobbying industry is definitely one of spending--but isn't that also the nature of lobbying. I am not arguing the ethics of the industry. However, among other things, lobbying is just another form of investing. Right? Lobbyist spend money in hopes of making more. They spend money to make more money, and success within the industry can be measured through expenses almost as easily as it can through profits.

    Is it right? There are great arguments on both sides. However, in regards to the average citizen and whether they receive a direct benefit--probably not. I guess it depends when you ask the question. Another question to consider is whether lobbying was ever intended for the average citizen? It is more common to consider the well-being of the group. Lobbyist represent groups and interests, which has historically had a substantial impact for a bunch of bad reasons. But, it is still business.

  5. You posed quite an interesting question:
    Has spending such vast sums on lobbying improved the quality, scope, and reach of legislation and policy emanating out of Washington to make the everyday lives of a greater multitude of citizens better and more productive?
    no. It amazes me that the number one industry spending great sums of money are the pharmaceutical and healthcare industry. If there is a true intent to improve the lives of the citizens, why not give the money directly to them? There are millions of citizens that cannot afford healthcare or medication. Too many must make a choice between food and medication.

  6. Wow, those numbers are stunning. I think it also goes to show that government will be very cautious about passing bills and other industry regulations to protect consumers, employees, and a fair open market. I understand the great interest these companies have in protecting their special interest when it comes to government regulation, but with those kinds of figures being thrown at politicians, these companies will continue to get what they want.

    Take for example the pharmaceuticals and health care. They have a great duty of reponsibility to the general public. The government is theoretically in charge of assuring general public that these industries will act accordingly or be subject to punishment. However, the politicians are having their pockets filled by these induries which causes their loyalty to shift from voters to the companies.

    What a great country this would be if the actual greedy politicians put a cap on lobbying on a yearly basis. Subsequently these companies may use that money to reinvest, create jobs, create new products, and lower prices for consumers. It seems that if politicians actually did what they promise on the campaign trail (all of they say how they will work hard for the everyday person) then they may actually be stepping in the right direction in terms of our country's economic recovery. But then again, this train of thought would require honesty, integrity, and a caring mindset from the individuals we elect to run our country. Yeah, I know, its a bit much to ask for.

    Agustin Alvarez

  7. Although I'm surprised at the amount of money that has went towards lobbyist, I'm not surprised that more money is actually spent during a recession. It would seem that during a recession, everyone is thinking twice about every purchase, and three times about large investments. At a time like this, businesses and organizations probably feel that they need to look after their own individual interest more than ever. I also agree with the earlier comment that lobbying is a part of life; however, it does not mean I have to like it. The amount of money being spent on lobbyist is a bit disturbing. On the flip side, if I were a large business or organization, I would probably spend a great deal of money on lobbyist as well. Lobbying is often effective, and is apart of the game. So, If you don't have lobbyist, you either loose out on opportunities, or just don't play the game at all.

  8. I concur with Ms. Randolph. As a former lobbyist myself, I can attest that professional lobbyists plays an important role in our system of government by helping to ensure that lawmakers have full and accurate information with which to make decisions. Lobbyists have an obligation to conduct themselves in such a way that they maintain public respect for their profession and for the legislative process

    Though - like in ANY profession - there have been examples of those that fall outside the line of conduct, lobbyists conduct with integrity and honesty all relations with public office holders, clients, potential clients, employers, the public and other lobbyists. They comply with all applicable laws and regulations governing lobbying as well as standards of conduct applying to governmental officials and staff. Lobbyists provide information that is accurate and factual to public office holders, and shall not engage in misrepresentation of any nature. Lobbyists do not divulge confidential information unless they have obtained the informed consent of their client, employer or organization, or such disclosure is required by law. And lobbyists do not represent conflicting or competing interests without the informed consent of those whose interests are involved.

    I find it difficult understand who would berate and entire industry simply by looking at the numbers and without understanding why there is such a profession in the first place. Lobbyists are an integral part of the legislative process and it is no more fair to decry an entire profession than it would be to vilify trial lawyers for obtaining huge awards.

  9. All,

    I want to thank you all for very interesting and enlightening comments and feedback in connection with this post. Honestly, I can understand and don't take opposition with any of your thoughts. I think there is much to be gleaned and understood from each perspective. Again, thank you for posting comments!

  10. Alyn Goodson said.....

    Cash is KING. As the statistics indicate, this is true even during a recession. Our political system has and will continuously be determined by how much money one industry can pump into the political process. But, I wonder how much money actually goes to represent the true interest of the industry? I do recognize that the purpose of lobbying is to ultimately protect and to make that industry profitable. However, when is too much too much?

    For example, let’s review the Health Care and Pharmaceutical Industry. This Industry has contributed 266.8 MILLION dollars in ONE year. Our country has been facing a health care epidemic for many years. The latest statistics show that over 40 million Americans do not have health care insurance. Instead of making the health care system more accessible to many hard working Americans, part of this industry would rather lobby to ensure that their industry is even more profitable than the year before.

    There is something seriously wrong when monetary interests are placed over the interest of an individual. The answer to your question is no. Lobbying has not made legislation any better in America. It has only ensured that the lower class is continuously deprived and that the corporate board members continue to get their bonuses.

  11. This is an interesting article. Overall, the average American citizen is not helped by these lobbying efforts. However, if I was a big company with a lot at stake (especially an oil/energy company or health care company), you better believe I would have lobbyists down in the trenches to curry favor to my industry. The lobbyists benefit companies and their best interests, but that often is not what is best for everyone. It's hard to blame them for wanting what's best for their company, but it's also hard to reconcile that with the stalling of important issues. I completely agree with Ms. Lander's comment about the omission of the public option in health care reform as a possible result of lobbying.

  12. I concur with Ms. Randolph. As a former lobbyist myself, I can attest that professional lobbyists plays an important role in our system company, but it's also hard to reconcile that with the stalling of important issues. I completely agree with Ms. Lander's comment about the omission of the public option in health care reform as a possible result of lobbying.

  13. Well it looks like we've found ourselves alot of money! Why don't we just take it back. It doesn't matter who thinks they own what money. These people have maliciously broken Every Possible Law in to order to gain power and control over us and our basic human rights! They are insisting we let them finish Bombing away all of our futures along with 20 other nations' futures through out the World. If we do not stop these World-Class-Criminal-Gangsters ourselves, No one will! When it came time to taking down Al Capone and all the other Noodle-Ronies we did! Why can No One else get away with Constantly Breaking Laws that most people don't even know about!
    NO ONE except for the Exact Elected, by us, Officials and the infinitly funded, by us, Large Coorperations are able to get away with
    Pharmicide (f u Mr. Gates;-)
    Blackmailing other Countries
    Accepting Bribes from other countries
    Pollution of toxic and deadly perportions
    Illegal Drug Farming trafficking and abuse
    Illegal weapons manufacture trades and deals (especially with our 'enemies')
    Illegal Weapons and depleted uranium Use
    Embessalment Theft and Misappropriation of all Funds Belonging to the World Public Trust!
    Lying Misrepresentation and Censorship of Vital need to know Information.
    I could go on and on and on but unfortunatly I am not so savy when it comes to the common terms of ILLEGALity.
    But look people! We need a Really big World wide NON PEACEFUL PROTEST for ONCE! We need to hunt these Criminals down atleast the Main BOSSES and GodFathers of these World- Wide Criminal Operations. We need to hunt them Millions together strong and let them, ROT in Guantanamo Bay!
    May they taste the many Feces of Castro.
    We gotta quit talkin about this and figure out who these Dangerous Gangsters are and put them in Jail forever!!