Ethics of Influence: Lobbying Firms
How lobbying firms are incentivized to work against the interests of their clients.
By Brian J. Wise
Influencing legislation on behalf of clients is a cutthroat business. Personal and professional relationships are leveraged, legal boundaries are pushed, and influence is peddled through every means available. But what if lobbyists were incentivized to work against the interests of their clients? What if lobbyists saw great opportunity for profit in the failed policy campaigns they are hired to execute? What if lobbyists sabotaged effective efforts in order to create a prolonged need for their services at a time of crisis, when clients are willing to pay a premium?
That is our current system, and the people losing are the clients of traditional lobbying firms, and the businesses, employees, and consumers they represent.
Stories of the nefarious tactics of lobbyists representing corporate interests make for good storylines. Shows like House of Cards and Scandal may seem far-fetched, but the reality of the lobbying industry isn’t far off from the themes of those hit television shows. The fight isn’t always for influence on the Hill; plenty of people are able to claim that. The real fight within the industry is for market share and profit, with many government relations consultants willing to do almost anything, including work against their own clients’ interests, to grow their share of the pie.
According to OpenSecrets.org, more than $3.22 Billion was spent on lobbying in 2015. That amount was split amongst 11,512 lobbyists, the smallest number of individual lobbyists since 1998. The nature of lobbying makes this industry ripe for the kind of competitive tactics consultants use to increase their own profits.
Lobbyists are regularly hired by clients experiencing a crisis to accomplish very specific legislative or regulatory objectives. This often leads clients to overlook the incentives that lobbying firms may or may not have for achieving those goals. In addition, lobbying firms are frequently asked to work collaboratively with competing firms who may be able to offer different assets and resources to a specific campaign. When this happens, one team of lobbyists can end up working against the other team of lobbyists, in some cases sabotaging the efforts of the competing firm, in order to solidify their ongoing relationship with the client. In these cases, it is easy to blame a lack of results on the collaborating firm, rather than taking responsibility for the failure within their own practice. Ultimately, the loser is the client.
Compounding their desperation, traditional lobbying firms are becoming increasingly threatened by the effectiveness of independent third party organizations and their ability to influence public policy debates in a much more efficient way than traditional lobbying. Gone are the days of walking into an office with a bag of cash and a demand for a quid pro quo vote. The rise of third party grassroots and political organizations has, in many regards, reduced the need for a dedicated lobbyist, and traditional lobbyists are taking note. These groups exert much more power and influence than a single lobbyist ever could. With the increased influence of movements like the Tea Party on the right and the Warren Wing of the Democratic Party, the insurgent power of these organizations has challenged and, in many cases overtaken, the establishment regimes over which traditional lobbyists exerted so much influence.
The changing roles in the industry of influence lead lobbyists, therefore, to fight back for their share of each client’s budget. As lobbyists see their share threatened, they fight to discredit and destroy the effective campaigns that are replacing them. This can be seen within grassroots advocacy organizations, especially on conservative issues. Organizations who receive a significant portion of their funding from corporate interests and high net worth individuals are being pressured by lobbyists to return to the traditional lobbying model. But instead of embracing this new model, lobbyists are increasingly grasping at the air, hoping that clients wont notice the effectiveness of third party organizations and the more efficient tactics they use to mobilize grassroots support to influence elected officials, rather than the lobbyists’ pay-for-play approach, which continues to see campaign contribution limits drop and their relative influence declining with it.
While ultimately shortsighted and not at all in the interests of the client, these are the extreme lengths many lobbyists will go to avoid embracing innovation in the industry. To evolve would be to accept the threat to their market share.
Clients who seek to influence public policy would do well to recognize the incentives that motivate each lobbyist with whom they contract. It is not always better to employ dozens of independent lobbyists that all work for different companies. They may have different relationships, but that gives each one of them more people to blame for the failure of a given campaign.
Lobbying campaigns are most effective when they are run through a single shop, with a single person who is ultimately accountable for the success or failure of a campaign. That “lead” must be incentivized to win. If you are in an industry that seems to be under constant attack, you must ask yourself if it is time to consider a different strategy, to develop a base of support now to mitigate regulatory or legislative attacks in the future. As part of this process, it is critical to question the tactics of failed campaigns and determine whether the government affairs professionals entrusted with leading these important policy campaigns are working with you, or against you.
Brian J. Wise is the Managing Partner of Wise Public Affairs, a strategic advocacy firm that focuses on the use of third party organizations to influence public policy. He is also the President of the US Consumer Coalition and the Chairman of the Leading America Foundation, a charity designed to promote private philanthropy and restore integrity to the nonprofit community.