Dec 14, 2020
Politics and COVID
Why did the New York Metropolitan Opera hire a lobbyist?
How the pandemic has changed the value of lobbying
Lobbyists used to open doors for the clients, now they provide a Zoom passcode. Meanwhile, during the pandemic demand for access to Members of Congress has increased.
By Alex Garlick and Trevor Mulhall
In April of 2020, the vaunted New York Metropolitan Opera was in dire straits. Cancelling its upcoming season which was to be hosted at the opera house, the director of the American Ballet Theatre said: “The cancellation of our Met season is, for A.B.T., akin to the cancellation of the Olympics for those athletes.” In response, the Met sought relief from the federal government which was implementing a massive bill to stimulate the economy. Specifically, the Met hired a lobbyist in Congress for the first time, choosing Park & K Public Affairs, a firm that represents businesses, museums and theaters.
The Met wasn’t alone.
It joined other cultural institutions, small businesses, and governments looking to the national and state governments for relief. COVID has transformed the agenda of these governments in many ways. State governments were issuing detailed and sometimes contradictory regulations of industries which were “essential” and allowed to operate, or not. Congress was consumed by a series of multi-trillion dollar relief bills, meant to stimulate a crashing economy. In particular, the CARES act created a $350 billion fund specifically targeted for small businesses, which became a massive target for firms, many of which had never lobbied before.
COVID was also changing the actual practice of lobbying.
“Virtual legislating” over teleconferencing tools became the norm for legislators and staff on Capitol Hill and in state capitals across the country as legislatures restricted in-person interactions to stop the spread of the virus. For example, the Sergeant-at-arms of the US House of Representatives began limiting access to the House Office Buildings March 12 to stop the spread of the virus. These public health measures have deeply impacted the process of lobbying, which by some definitions takes place face-to-face behind closed doors.
These conditions created a paradox of sorts, both in Congress and the states. The demand for lobbying was spiking at a moment in time where the usual method of in-person lobbying was no longer possible, forcing many businesses to resort to alternative solutions. If you were a small business owner without an existing lobbying operation, how would you reach your member of Congress if nobody was answering the phones and their office was closed? Even if you knew someone in their office, it was no longer possible to get on a plane and talk to a staffer or the member face-to-face.
Judging by the pace of activity at the New Jersey-based lobbying firm that serves multiple clients where one of us works part-time, the Met was typical of clients looking for lobbyists that could assist in contacting members of the legislature. Where clients had once hired lobbyists looking for an open door, as legislatures moved to virtual office settings, they were now looking for Zoom codes and passwords to connect to legislators and staff.
Did social distancing change the practice of lobbying?
Using data from Congressional lobbying disclosure reports, we looked to see what impact the pandemic has had on lobbying. Specifically, we looked to test if the relative value of “contract-lobbying,” which is conducted by firms with multiple clients, increased compared to “in-house” lobbying, usually done by employees of large firms with a permanent presence on the Capitol. Using the mid-March onset of legislative social distancing measures as a natural experiment of sorts, we compared the share of revenue collected by contract lobbyists to total amount spending on lobbying. MIT Professor In-Song Kim provides a cleaned version of Congressional LDA data at Lobbyview.org.
Looking across the first two quarters of 2020, we found a relative increase in spending for contract lobbying after Congress went virtual in the spring, which outpaced similar parts of the Congressional calendar since 2014. Specifically, Figure 1 shows that while contract lobbyists usually report a slightly higher share of revenue in the second quarter of Congressional election years, the share of all lobbying revenue that went to contract lobbyists in 2020 increased substantially when virtual legislating began.
This relative increase is a statistically significant relationship, even when we take historical and seasonal factors into account. Figure 2 shows the results of a “difference-in-differences” model to predict the share of spending on contract lobbyists (for an explanation of the model, see here). It shows a slight seasonal increase in the share of revenue for contract lobbyists in Q2 of election years compared to Q1, but an additional increase in 2020 when lobbying went fully virtual by April.
Why does contract lobbying matter?
The relative amount of contract lobbying going up is revelatory about the market for lobbying during the pandemic. A defining feature of contract lobbyists is that they serve many clients, therefore the value they offer to clients is not a deep knowledge of any one issue or policy domain in Congress. They are more access-oriented and it appears as if the pandemic has placed a particular premium on access.
While it should be noted this analysis is preliminary, it raises more questions than it answers. For example, was this shift a result of the medium (online, virtual) or the message being delivered (relating to the massive relief bills)? Did the same patterns play out in the states? Will the pandemic lead to a durable shift to contract lobbying in the years to come?
The future of in-person lawmaking is uncertain, as legislatures across the country are dealing with outbreaks from the virus. In the meantime, lobbyists will have to adapt the ongoing social distancing measures at a time when they are particularly in-demand. Even if constituents and legislators are no longer meeting in-person, the access that lobbyists provide firms and citizens to their elected representatives in government appears to be an essential function, in more demand than ever before.
Alex Garlick, Ph.D., is an assistant professor of political science at The College of New Jersey. Trevor Mulhall is a political science major at The College of New Jersey. This blog is based on Mulhall’s presentation at the 2020 Political Science Independent Research Showcase at The College of New Jersey.
