The Hill’s Revolving Door

Live in D.C. long enough you'll realize that there's a fairly standard playbook for the ambitious:

  • Get a job, no matter how lowly, in a Congresscritter's office.
  • Pay your dues.  Work insane hours for pretty low pay, at least by D.C. cost of living standards.
  • Build connections.
  • Go to work for a lobbyist, or start your own lobbying firm, and continue to work insane hours but now make some insanely good money in the process.
  • Pray that your people stay in power.
  • If necessary repeat the process to rekindle your connections/influence.

One guy I knew worked for a Republican senator, left working for him to partner with a couple of guys in a new lobbying firm, and his first year was close to earning seven figures.  I heard through the grapevine that subsequent years were even better, but I lost touch over the last few years so I have no idea how the rise of the Democrats in 08 affected his business.  I suspect it wasn't good, especially after seeing this research (found via Freakonomics blog)about the direct correlation between influence and income of ex-staffers from the Hill.  From the summary:

While there is no scarcity of anecdotal evidence, direct econometric evidence on the extent to which previous ocials are able to convert political contacts into lobbying revenue remains, to the best of our knowledge, non-existent. In this paper we provide such evidence. In particular, we study how the lobbying revenue of congressional sta ers turned lobbyists depends on the power of the congressional politicians for whom they have worked in the past…

Our main nding is that lobbyists connected to US Senators su er an average 24% drop in generated revenue when their previous employer leaves the Senate. The decrease in revenue is out of line with pre-existing trends, it is discontinuous around the period in which the connected Senator exits Congress and it persists in the long-term. The sharp decrease in revenue is also present when we study separately a small subsample of unexpected and idiosyncratic Senator exits. Measured in terms of median revenues per ex-sta er turned lobbyist, this estimate indicates that the exit of a Senator leads to approximately a $177,000 per year fall in revenues for each aliated lobbyist. The equivalent estimated drop for lobbyists connected to US Representatives leaving Congress is a weakly statistically signi cant 10% of generated revenue. We also nd evidence that ex-sta ers are more likely to leave the lobbying industry after their connected Senator or Representative exits Congress.

Here's a nice synopsis of the research:

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