Tag Archives: lobbying

Trade Associations Spending More on PR and Less on Lobbying

According to this article in Associations Now, a trade magazine for those of us in the association management business, trade associations are moving dollars away from lobbying and into public relations:

Overall, the trade groups spent $1.26 billion on advertising, far more than any other service, and nearly twice the $682 million that was spent on lobbying, legal services, and government affairs. A huge portion of the $1.2 billion total came from just one relationship: The $327.4 million the American Petroleum Institute paid public relations firm Edelman over the four-year period. The amount was most of the $372 million the association spent over the period.

In its report, CPI portrayed advertising as an area where trade groups had more freedom to push their message, compared with more traditional means.

“The public relations industry is on a growth tear while the number of federally registered lobbyists is actually shrinking,” CPI reporters Erin Quinn and Chris Young wrote in their story. “Public relations work, unlike lobbying, is not subject to federal disclosure rules, and PR and advertising campaigns can potentially influence a broader group of people.”

I’d imagine that another factor is that with the Citizens United ruling from the Supreme Court, many companies that would have funneled “political” dollars through trade associations are now taking the DIY route.

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: