Introduction

An anti-soda tax billboard in Richmond, California. Courtesy of Jenny Wang

The nation’s most politically active trade associations appear to be more interested in lobbying the public than they are in lobbying lawmakers.

That’s the main takeaway from a new Center investigation by Erin Quinn and Chris Young.

Trade groups like the American Petroleum Institute and the U.S. Chamber of Commerce spent more than $1.2 billion on contractors for advertising, public relations and marketing services from 2008 to 2012. That dwarfs what they spent on top lobbying contracts.

Erin Quinn and Chris Young spent more than six months investigating this story and joined us for this podcast discussion.

Chris and Erin, isn’t this what trade associations are supposed to do?

Erin Quinn: This is what they’re supposed to do, we expect this. Trade groups are designed to advocate for policies that benefit their member companies. They play a major role in shaping public policy in the United States.

Chris Young: But when most Americans think about the power trade groups wield, they think mainly about the work they do lobbying members of Congress. Much less attention is paid to how they use public relations and advertising to directly influence the public. So our investigation found that trade associations’ favorite top contractors were often PR and advertising agencies.

Not lobbying firms.

CY: Not lobbying firms, exactly. And that runs counter to what most people would think, when you look at the data.

How is public relations more effective than lobbying when it comes to influencing public opinion?

CY: For one thing, PR and advertising fly under the radar. So unlike lobbying, they are not necessarily subject to the same federal disclosure rules that lobbyists have to abide by.

EQ: So let’s say for example, a trade group is pushing for a specific piece of legislation that might not be so popular with the public. During the campaign for that, if there is no contact with a government official, they do not have to report who they hired to do that work. But on the other hand, lobbying firms report how much money they were paid, who their clients are, and what subject areas they cover in their work.

CY: And aside from that, PR and advertising campaigns have a much broader impact. So they are typically much more expensive than lobbying contracts, but they have the potential to influence millions of Americans, who can then put pressure on lawmakers. Lobbyists’ influence, on the other hand, tends to be more limited in scope.

So going to the public can be a better strategy than paying lobbyists?

EQ: Going to the public definitely acts as an effective complement to the lobbying. Public relations influences people to care about a topic and take action on it, whether that action is engaging in a letter-writing campaign, or calling your congressman or even starting some sort of group in support of it. This raises the profile of an issue. So that by the time the lobbying occurs, the lawmaker has probably already heard the arguments and they’re already familiar with the topic at hand.

CY: And even beyond what Erin was just saying, these PR and advertising campaigns help refine industry’s lobbying efforts. One public relations expert actually told us that it “provides air cover” for lobbyists. What he means by that is that lobbyists’ job becomes a lot easier if they can point to polling numbers that were influenced by a successful PR or advertising campaign. So it’s a tool in the tool belt for a lobbyist to go in with that. So it’s not necessarily that public relations is replacing lobbying so much as it is that it’s enhancing it.

So are you talking about ads you see on the subway? What are some recent examples of these kind of campaigns?

CY: The work that PR and advertising agencies do for these trade groups takes many different forms. Trade groups can hire firms to produce ads — they can be print ads, they can be online, they can be on television. They can also conduct so-called “grassroots” campaigns that are designed to rally the public around a particular issue.

EQ: And we say “so-called grassroots” because it’s not necessarily true grassroots that is driven by everyday people. But it’s rather manufactured to look that way.

CY: So to give an example that some Americans, many Americans might be familiar with, the American Beverage Association over the past few years has been waging soda-tax fights across the country. With the help of PR firm Goddard Gunster, formerly Goddard Claussen, the trade association has created “front groups”, they’ve bought millions of dollars worth of ads in cities considering taxes on sugary drinks to try to fight them.

EQ: And by front groups we mean organizations that are posing as an independent third party when really it’s backed by some sort of special interest.

CY: That battle that I mentioned with the beverage taxes from the American Beverage Association, it played out most recently in California, in San Francisco and Berkeley, both those cities were asking voters whether they favored or opposed taxes on sugary drinks. On Election Day, voters in San Francisco rejected a soda-tax ballot measure, but a similar tax ended up passing in Berkeley.

EQ: Another example that wasn’t necessarily focussed around a piece of legislation was a campaign that the American Petroleum Institute took on during the last presidential election. There were really contentious debates at the time around things like the Keystone XL Pipeline and how to deal with climate change. And the energy industry really wanted to make sure that they were represented well in those debates.

And so API along with their PR counsel Edelman created online groups called Energy Citizens and had an advertising campaign called “Vote For Energy”, and it was really a chance for oil and gas to polish its reputation before the election.

Why did you both feel this was something important to investigate? Why does industry PR spending matter to voters?

EQ: The industries that we’re dealing with have major implications for public policy. And these are really high profile issues so it’s important for voters to know who is crafting the debates around these issues, and where the messages that they see are coming from.

CY: And sometimes it can be hard for the public to know where these messages really are coming from. Erin can tell us a little bit more about an interesting example we found of a seemingly independent group created by the National Mining Association. Why don’t you tell us a little about “Count on Coal”, Erin …

EQ: So “Count on Coal” is a group that claims to be this independent, citizen-driven grassroots campaign but people who come across their website or see their advertisements or their Facebook page can’t immediately tell who’s really behind the effort. “Count on Coal” is actually the product of a multi-million dollar contract between the National Mining Association and its PR firm.

And how did you figure that out?

EQ: We actually found this on a tax return in what was maybe an accidental disclosure, where the National Mining Association in their 2012 tax return, listed under their top contractors the name of their PR firm which was Weber Merritt Strategies, and instead of listing the services, whether it was PR or communications, they actually wrote the name of the group, “Count on Coal”. So we knew this was manufactured by the PR firm and the National Mining Association.

And it wasn’t a small contract, it was worth $4 million

So the grassroots coalition was actually an arm of the National Mining Association?

EQ: Exactly, it was not citizen-driven.

So if industry groups aren’t using lobbying as much to influence public policy, how else are they doing it?

CY: So this is something that has been reported over the past few years. Media reports have noted that there has been a gradual decline in the amount of money special interests are putting into their lobbying efforts, and there has also been a drop in the total number of registered lobbyists.

So some observers who are watching this say this trend is likely the result of a shift toward so-called “soft-lobbying.” And that’s where trade groups and unions influence public policy through the use of academic think tanks, through nonprofit organizations, grassroots groups, all that aren’t subject to federal disclosure rules. These are all different ways to shape public policy without drawing too much scrutiny.

Were you surprised by anything you found?

EQ: What we found most surprising I think was the sheer size of the contract between the American Petroleum Institute and their PR firm Edelman. It was the largest contract for each of the five years that we looked at. And the relationship totaled more than $327 million in five years. Other contracts we looked at didn’t even come close to this.

CY: It was also interesting to see how the list of top contractors for some trade associations were sometimes dominated by PR and advertising firms. So for example in 2010 and 2012 — both election years — all five of the top contractors for the U.S. Chamber of Commerce were advertising agencies.

Ogilvy & Mather’s parent company, WPP, praised the firm’s work on behalf of the American Chemistry Council. Screenshot

EQ: And the American Chemistry Council was another example of a group that relied pretty heavily on public relations.

CY: That’s right. In 2008, for example, the American Chemistry Council spent nearly $35 million on public relations services. All of their top contracts that year were for public relations.

During that year, they had a few different PR campaigns, but one was led by Ogilvy & Mather and they helped defend the industry from bad press related to a group of chemicals that are found in plastics. These chemicals were suspected of causing a variety of health problems. The firm won a number of awards and praise for making the situation less problematic for the American Chemistry Council.

Sounds like a job well done.

CY: Yeah I guess so.

Not all industries are represented in your story, is that right? What’s missing, and why?

CY: That’s true. So we wanted to focus our analysis on the most politically active trade associations. So the trade groups that are really moving public policy.

So we only included the trade groups that spent at least $1 million on lobbying in 2012, and that’s according to data compiled by the Center for Responsive Politics. A total of 144 trade associations met that $1 million threshold, and these are the groups again that are most heavily involved in shaping public policy.

So how did you dig up all of these numbers?

EQ: After we narrowed down our universe to the politically active trade associations that Chris just mentioned, our next step was to dig up their annual tax filings. These are publicly available, and on the documents they list their top 5 contractors who did some sort of outside work for them. And they list the names of the firms that they hired, the type of work that they did, and the cost of the contract for the given year.

CY: And we collected and analyzed that data for all of these associations over a 5 year period. Our data starts in 2008. We started there because 2008 was the first year that trade groups were required to publicly report their top contractors. And the data runs through 2012, which is the most recent year for which data is available for pretty much every group. So there was a lot of data entry involved in this project as you can imagine.

EQ: And when we finished the data entry, we were able to analyze based on the services that were done by the firms or the industries that the trade groups came from.

Were you surprised that nobody wanted to talk to you on the record?

CY: Not necessarily. It is a bit ironic, that a lot of these PR firms wouldn’t talk, especially considering that these are highly skilled communicators who … these firms often boast about their communications savvy. But these relationships between trade associations and PR and advertising firms are sensitive in many cases, and the contracts are very lucrative. So there’s a lot at stake here. And because these campaigns often deal with controversial issues, it’s no surprise that trade groups and PR firms might want to keep quiet about their work.

EQ: This is something I actually asked a PR expert about and he told me that often public relations is not about communicating something, but rather about not communicating something.

So this story is part of your ongoing investigation that you call the Misinformation Industry. Tell me a bit about that.

CY: Sure, this is a relatively new project at the Center for Public Integrity and it’s part of our “Consider the Source” team. It’s intended to shed light on Washington’s political messaging industry essentially. So we’ll be taking a comprehensive look at how special interest groups gain public support for their political agendas, and sometimes that’s using misleading tactics like front groups like we talked about.

EQ: Next up we’ll be looking at how this kind of work affects the food supply in this country.