A Center for Responsive Politics Report



— by Dan Auble and Sarah Bryner, June 28, 2017

Nearly 2,100 federal lobbyists who were active in 2016 did not report undertaking lobbying activities in the first quarter of 2017. Of those, 58 percent or 1,200 of them continued to work for the same employer.

People change jobs all the time, of course, even within the same company. In the lobbying world it's not uncommon for individuals to refocus their work on state level or global issues, move to public relations or take a more managerial position that does not involve trudging the halls of Congress.

At the Center for Responsive Politics, however, we found that nearly a third of the former lobbyists who stayed at the same organization have titles that indicate they are still working on influencing U.S. federal policy. Thirty percent had job titles that included terms like public policy, legislative, government, lobbyist and the like. (We excluded those that also mention state or international responsibilities.)

It has always been clear that officially registered lobbyists comprise only a fraction of the people in D.C. working to influence Congress and the various regulatory agencies. A 2013 study estimated that the approximately 10,000 registered lobbyists are joined by at least that many who work behind the scenes and are often referred to as shadow lobbyists.

"For years, our lobbying disclosure rules provided some confidence that Americans could see which forces were at work, who hired them and how much they spent to influence federal policy,"" said Sheila Krumholz, executive director of the Center for Responsive Politics. "Now it appears that our disclosure system is being gamed. It’s time to revisit the rules and close the loopholes, so that disclosure is meaningful, providing comprehensive information, and not just the façade of transparency."

What has become more prevalent over the last decade are hordes of lobbyists deliberately moving into the shadows to avoid the consequences of registration. A number of factors contributed to a slowly declining number of registered lobbyists, led by President Obama restricting the ability of registered lobbyists to work in his administration. Trump chose to institute similar policies, though they differ in significant ways, especially enforcement.

The number of lobbyists who stop filing disclosure reports after the third quarter of an election year typically spikes compared to non-election years, as it did this year. However, Trump's plans to "drain the swamp" of Washington do not seem to have contributed to more lobbyists exiting the rolls and far fewer did so than the high point of Obama's first year in office. A total of 767 individuals who lobbied in the third quarter of 2008 (the last reporting period before the election) did not report activity during the next two quarters, while 448 did the same in 2016.



FIGURE 1

Still, for the first time in five years, the amount of money spent by organizations that were already registered went up in the first quarter of this year compared to the same period the previous year.



Into the Shadows?

So, where have these disappearing lobbyists gone? Over half of them (1,207) are still working for the same employer. Another quarter (474) of them changed employers, splitting evenly between those in a similar industry and those in a new one. About five percent (103) went into government and three percent retired or passed away. Our research was unable to verify the status of the remaining twelve percent.



FIGURE 2

Our past analyses have consistently found that about 45 percent of deactivating lobbyists had not changed employers, while we now find a number approaching 58 percent. Not every lobbyist appears in the rolls every quarter, so some of these lobbyists almost certainly will turn up again in filings as the year goes on. In 2016, 156 lobbyists skipped the first quarter but returned later in the year to lobby for the same client or firm they had represented previously. During the eight years for which quarterly data is available, the last time a new president took over was also the year when the most lobbyists skipped reporting on the first quarter. In 2009, 381 did so, while in subsequent years the figure ranged from about 240 to 300.

But even if we assume that the eight-year average of 280 people will return to the rolls later this year, at least 51 percent of deactivated lobbyists will still have stayed with the same employer.

Clearly, not everyone who stops filing does so for nefarious reasons or to obscure the public record. Rachel Radomski, for example, no longer participates in lobbying activities for Vertex Pharmaceuticals and is now associate director of patient advocacy. "It is quite common for our employees to move from department to department as they see opportunities to expand their experience and skillset," said David Whitrap, vice president of corporate communications for Vertex.

The revolving door also got a healthy spin as more than 100 registered lobbyists moved to work in the public sector. Almost all (94) went to the federal government, where they likely will field calls from their former K Street colleagues. At least 60 percent of them went to work for Republicans on the Hill or in the Trump transition and administration, which rises to 70 percent excluding those who went to apparently non-partisan positions.

Among the names: Palantir lobbyist Justin Mikolay left the company to serve as a special assistant to Defense Secretary James Mattis. Palantir provides data analysis to intelligence agencies, and Buzzfeed reports that Mikolay lobbied on a battlefield intelligence contract that could be worth $200 million. Palantir founder Peter Thiel personally gave more than $1 million to pro-Trump efforts in 2016 in addition to $100,000 in support of his inauguration.

Before joining Trump's beachhead team at the Department of Education, Taylor Hansen lobbied for Career Education Colleges & Universities, the trade group representing for-profit colleges. In late March, less than two weeks after the Department of Education announced the delay of Obama policies designed to hold the controversial schools accountable, Hansen resigned from the Department of Education.

After spending ten years lobbying for Transamerica, Byron Anderson joined the Department of Labor, which is reconsidering whether to implement an Obama plan to expand rules limiting fiduciary conflicts of interest. Transamerica, one of the country's biggest life insurers, was reportedly one of the hardest hit under the new rules.



Lobbying Firms vs Clients

Companies, trade groups and nonprofits that want to influence Washington can maintain their own in-house lobbying team, or they can hire a firm that specializes in lobbying. Each strategy has its strengths and many filers do both. Overall, about the same percentage of 2016 in-house lobbyists (10 percent) and employees of lobbying firms (11 percent) stopped appearing on 2017 government documents, but remained at the same employer.

Four of the top 10 lobby firms (judged by how many registered lobbyists they employ) had at least 10 percent of their 2016 lobbying force drop off the rolls but stay with the firm. Two of them — Squire Patton Boggs and Covington & Burling — had more than 15 percent of their 2016 contingent do so. At the other end of the spectrum, Podesta Group, led by Clinton bundler Tony Podesta, had only one of its 36 lobbyists move into the shadows.

The 10 lobby spenders with the biggest in-house lobbying teams generally had a lower rate of retention for people leaving the rolls. Only three, all of them trade groups, had more than 10 percent of their lobbyists stay on but stop reporting. America's Health Insurance Plans used this tactic far more than the others, keeping seven of its 24 lobbyists who were registered last year but not so far in 2017. The Biotechnology Innovation Organization and National Association of Manufacturers both retained 11 percent.

The three corporations in the top 10 — Lockheed Martin, General Electric and Boeing — each had just two 2016 lobbyists stay with the company but not register in the first quarter of 2017.



Contributions

Of the 2,093 lobbyists who did not file in the first quarter of 2017, fewer than half (869 — 46 percent) have ever made a federal campaign donation of over $200, according to our data. Fewer, 687 (or 33 percent), made such a donation during the 2016 cycle. These percentages are slightly smaller than the proportion of lobbyists active in 2017 who donated to candidates (46 percent have made a donation since 1989 and 37 percent made a donation in the 2016 cycle), which might suggest that those who stopped lobbying in 2016 were not as wealthy, politically-connected, or interested in forming relationships with sitting politicians as those who lobbied in the first quarter of 2017.

Only 17 of the deactivated lobbyists made contributions to the Trump campaign, a number slightly proportionally higher than those who lobbied in 2017, but both numbers are quite small. Of those 17 lobbyists, three now work for the government: Current Deputy White House Counsel, Makan Delrahim, has been nominated by Trump to serve as the Assistant Attorney General for Antitrust. In 2016, Delrahim lobbied for Brownstein, Hyatt et al. Byron Anderson previously worked as an in-house lobbyist for insurance giant Transamerica, and now is working for the Department of Labor as an assistant to Secretary Alex Acosta. The third Trump donor, Mark Paoletta, is chief counsel to Vice President Mike Pence.



FIGURE 3: 2016 Cycle donations to Trump from lobbyists who stopped filing in 2017, over $999

Lobbyist Amount Norton, Robert $3,200 Bernhardt, David L $2,700 Paoletta, Mark $2,700 Delrahim, Makan $2,700 Banks, George $1,596 Nixon, William H $1,000 Leggitt, Lance B $1,000 Flood, Michael P $1,000 Murphy, Daniel $1,000 Anderson, Byron $1,000

Of the 687 lobbyists who made donations in the 2016 cycle and stopped lobbying, we were able to determine their party affiliation in most cases. Many lobbyists made donations but not to candidates — in the vast majority of these cases, they were donating to their employer's non-ideological PAC. These lobbyists are classified as nonpartisan though, naturally, they may have partisan beliefs. Generally, lobbyists — like most donors — favor one party heavily over the other, and so we classified them as "Republican" or "Democrat" if 70 percent or more of their party-linked donations went to that party. If a lobbyist gave less than 70 percent of her money to a single party’s candidates or party committees, she was classified as nonpartisan.

Figure 4 shows a noticeable difference in why Democratic and Republican lobbyists deactivated. Of those donating lobbyists who moved into government — which includes state and local government but is dominated by Congress, and also includes people who were hired before the election — Republicans outnumbered Democrats 18 to 10. Given the new president and the fact that the Republicans hold majorities in both houses, this difference should not be terribly surprising. Democrats were slightly more likely than Republicans to change careers (move to a different job outside of policy or advocacy, or return to school) and to continue working for their same employer but not register as a lobbyist. Republicans and Democrats were equally likely to change jobs within the same industry and to retire.

FIGURE 4

During the 2016 election cycle, 2016 lobbyists who did not show up on lobbying reports in the first three months of 2017 gave $2.1 million to Democratic candidates and parties and $1.6 million to Republicans. Lobbyists have a higher prevalence of donating to members of both parties than other types of donors, presumably trying to ensure open doors on both sides of the aisle. A full 25 percent of them made contributions to both parties in 2015-16.

Stewart Van Scoyoc, who once had the longest roster of clients in Washington, has scaled back in the last five years and, in 2017, failed to file for the first time since at least 1998 (the earliest year for which electronic data is available.) He still gave $160,000 last cycle, of which $131,000 went to Republicans, making him the top Republican donor who stopped filing.

James E Eaton ($140k) and Chester Atkins ($148k) were the biggest Democratic donors. In 2016, Atkins, who served in Congress from 1985-1993, stepped in to lobby for the first time in five years on behalf of nonprofit and state based federal student loan servicers. Eaton represented 21st Century Oncology, which terminated all but one of their lobbying contracts after the third quarter and filed for bankruptcy this May.



Conclusions

As the Center for Responsive Politics has shown again and again, the decreasing number of lobbyists appearing on the public record doesn't mean that lobbying activity is actually on the decline. Despite rhetoric by both Presidents Obama and Trump about reducing the influence of lobbyists and the fact that publicly reported lobbying spending is diminishing, we show that many lobbyists are not leaving their field but instead continuing their work off the record. In 2017, the trend of lobbyists remaining with the same employer but no longer showing up on lobbyist disclosure forms appears to be on the rise. Although we do find some differences by partisanship, the bigger picture is that despite denunciations of lobbyists by senior politicians in both parties, more and more lobbying goes on beyond public scrutiny, making it harder to hold those in power to account.

See a spreadsheet of lobbyists who were active in 2016, deactivated in Q1 of 2017 but were still with the same employer.

Sara Swann and Ashley Balcerzak contributed to this report.