The lobbying battles of 2011 drove an arms race for talent on K Street. Lobby wars: Top 5 fights of 2011

Gridlock plagued Congress this year, but that didn’t stop the multi-billion-dollar lobbying industry from duking it out over everything from credit card fees to smog rules.

In fact, a divided Congress, an unruly House Republican freshman class and a Democratic president not winning many friends on the Hill made for a unique environment for K Street to fight epic battles.


Some of the biggest lobbying battles of 2011 pitted mega-influencers against each other, cost millions of dollars, and even drove an arms race for talent on K Street.

Without further ado, here are POLITICO’s top five lobbying battles of 2011:

Big Banks v. Big Retail

The perennial fight over the fee banks charged on debit cards had long kept lobbyists in the green. But 2011 touched off one of the most intense lobbying battles in banking history, pitting Visa, Mastercard and others in the financial industry like JP Morgan Chase & Co. and Bank of America against retailers like Wal-Mart, Home Depot and Target. At stake: more than $15 billion a year in fees banks charge retailers for allowing their customers to pay with debit cards. The banks engaged in an all-hands-on-deck lobbying offensive trying to delay or limit the new rules.

Against the odds, the retailers — lead by the Retail Industry Leaders Association — prevailed in a June. The nail-biter of a vote in the Senate allowed new limits from the Dodd-Frank financial regulatory reform law to be enacted limiting how much banks can charge retailers for using debit cards.

RILA’s Katherine Lugar said that the campaign “was a testament to the lobbying force that the retail industry has become particularly when large and small retailers are perfectly aligned. This powerful alliance will remain intact as we pursue credit reforms in 2012.”

AT&T’s Bid to Buy T-Mobile:

AT&T is no stranger to fighting battles on Capitol Hill. The company has one of the biggest in-house and contract lobbying teams, regularly using third party groups to try and sway public opinion — but the company couldn’t sway the Department of Justice to let its proposed merger with T-Mobile go forward.

AT&T spent nearly $16 million on its lobbying campaign and almost $2 million in campaign contributions in its bid to sell federal regulators on its proposed $39 billion deal. The lobbying campaign captivated K Street and expanded many firms’ bottom line as both AT&T and its opposition (including Sprint) engaged in an arms race of signing hired guns. AT&T’s effort — which included getting more than 70 lawmakers to sign on in support of the deal — wasn’t enough. In spite of its mega effort, AT&T was forced to drop its bid — costing the company nearly $4 billion in cash and spectrum as part of the deal’s breakup fee.

Supercommittee Courts K Street:

The supercommittee, tasked with cutting at least $1.2 trillion from the nation’s deficit, was the talk of the town this fall with K Streeters in the early days often getting more information on potential deals than staffers. But that quickly changed, as the committee went on lockdown.

As veteran K Streeter Gerald Cassidy, founder of Cassidy & Associates, told POLITICO this fall. “During my 42 years in Washington, this is the most closed-mouth committee that I have seen,” Cassidy said.

That didn’t stop the private sector and even state-level officials and other lawmakers from trying to get a word in to give their issues a leg up. Health care and the defense industry in particular amped up their lobbying campaigns — advertising, working members of the powerful panel and also lobbying key lawmakers in leadership. In the six week run-up to panels decision, nearly 200 companies and special interests reported they were lobbying the 12-member panel.

Of course, the supercommittee didn’t pull off anything heroic. But that doesn’t mean the lobbying has stopped. With health care and defense cuts slated to go into effect at the beginning of 2013, K Streeters are already eyeing opportunities to try and find a way to turn back the clock.

Smog Wars:

Greens and public health groups lost big in the summer’s bruising lobbying war over new smog standards.

The White House decision to punt on the long-anticipated smog rules in early September was a gift to heavyweight industry associations led by the Business Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers, the American Petroleum Institute and others that lobbied for months to kill tougher ozone standards.

The industry coalition met behind closed doors with EPA top brass, House Republicans and White House officials, and publicly warned that a stricter smog rule – estimated to cost up to $90 billion annually — would hurt both industry and President Barack Obama’s chances for reelection in 2012. They also appealed directly to Obama’s chief of staff Bill Daley, hoping to find a sympathetic audience in the former bank executive.

Environmental and public health groups including the American Lung Association, the Environmental Defense Fund, the League of Conservation Voters, and the Natural Resources Defense Council waged an aggressive lobbying campaign of their own to demand tougher rules. But their arguments about the health and environmental benefits of the rule weren’t enough to spur the administration to risk the political fallout of a new standard heading into an election year.

Business Bests Labor in Trade Brawl:

Businesses looking to boost international exports scored a major victory with the passage of three long-stalled trade deals opposed by labor unions.

Industry champions of the U.S. agreements with South Korea, Colombia and Panama included the Chamber of Commerce, the National Association of Manufacturers and the U.S.-Korea FTA Business Coalition, an umbrella organization representing hundreds of businesses. The businesses and the Obama administration touted the agreements’ potential to bolster exports by $13 billion – with $11 billion in Korea alone – and to create more than 70,000 jobs.

The three deals had languished since they were first negotiated under President George W. Bush, but were able to win bipartisan support in Congress after the Obama administration tweaked the agreements and linked them to the extension of a program that offers money to American workers who lose their jobs due to foreign trade.

Labor unions including the AFL-CIO and other critics fought against the deals, warning that the South Korea pact alone could displace 159,000 workers. Unions also criticized worker protections in Colombia, citing a high murder rate of trade unionists, and accused Panama’s government of neglecting worker’s rights while harboring money launderers.

Several unions broke ranks to endorse the Korea free trade deals. The United Automobile Workers and the United Food and Commercial Workers International Union said they were encouraged by the increased exports of automobiles and meat.