In-Your-Face Influence Peddling

Based on how slowly financial reform is going, how few people and firms have been punished for indiscretions that helped bring about the worst financial crisis this century, and, most of all, how much public money has been thrown its way, its clear that that the financial industry has done a phenomenal job as far as influence peddling is concerned.

That said, if it was just one industry throwing a bit of grease around, it might not be so bad. But the truth is that many of those who have been chosen to serve our interests have completely lost sight of why they were elected, and have instead become enamored with (and beholden to) myriad special interests with big wads of cash competing to win their affections (and their votes).

To make matters worse, the betrayal is often not very subtle - it’s right there in your face. If you read through the following report from the Omaha World-Herald, “What’s Booming in a Recession? Lobbying in D.C.,” paying particular attention to the bits I’ve highlighted in bold, you’ll see just what I mean.

The recession has taken a toll on corporate bottom lines and public budgets, but lobbying the federal government continues to be a booming enterprise.

Midlands companies, universities, nonprofit organizations and local governments spend millions every year to lobby the federal government. While some have pared back recently, many have maintained their lobbying budgets or even increased them significantly.

The number of registered federal lobbyists was 14,808 in 2008, a year when overall lobbying expenditures reached a new height of $3.3 billion, according to the Center for Responsive Politics, a nonpartisan research group. Lobbying for 2009 is on pace to match that level or exceed it, fueled, not surprisingly, by substantial lobbying on matters related to health care.

For example, Wellmark Blue Cross Blue Shield, Iowa’s largest health insurer, has spent $400,000 on lobbying so far in 2009.

Overall, Blue Cross has spent $16,727,065 on lobbying this year, making it the fifth-highest spender on lobbying so far this year, according to the Center for Responsive Politics, which tracks money in U.S. politics. The center reports that overall health sector lobbying for the year so far is $396 million.

Center spokesman David Levinthal said the fact that lobbyist spending has remained so robust in a recession surprises many people.

“But a lot of companies, despite the economy being what it was, sort of take the approach of ‘We need to invest money now in the hopes of potentially getting a windfall later from federal government assistance via friendly legislation,’ ” Levinthal said. “If you’re a company and you’re trying to get something from the federal government, it oftentimes costs a good deal of money.”

Lobbyists in general have taken a beating in the public’s perception, thanks to various scandals, but Iowans and Nebraskans involved in lobbying say it’s important that lawmakers hear from those affected by federal policies. They said that’s particularly true when sweeping legislation is considered in areas such as health care, energy and the environment, and financial regulation.

Des Moines-based MidAmerican Energy Holdings Co. has been a vocal opponent of legislation that would set a cap on greenhouse gas emissions and establish a trading system for pollution credits. MidAmerican typically spends a few hundred thousand dollars a year on its lobbying. So far this year, the company has spent $1.9 million.

The company says the caps are acceptable but that the proposed trading system would place undue burdens on coal-dependent Midwestern utilities such as MidAmerican and that those costs ultimately would be passed on to customers.

Nearly all of the increased spending has involved flying Chairman David Sokol and other MidAmerican executives to Washington for meetings with policymakers, said Jonathan Weisgall, the company’s vice president for legislative and regulatory affairs. He said the company has not been paying any outside lobbyists.

“The purpose of our lobbying, there is absolutely nothing insidious about it,” Weisgall said. “On climate change, it is to say ‘Here is the impact on our customers, and we just don’t think you’re headed down the right road.’ ”

Omaha-based Union Pacific Corp. also has been paying attention to energy and environmental legislation. Those measures could affect coal usage - and the railroad transports a lot of coal.

In addition, the company has been lobbying on issues specific to railroads, such as protecting the industry’s antitrust exemptions. In all, the railroad has spent about $4.3 million on lobbying in 2009.

Levinthal also has looked at the growth of spending by state and local governments to lobby the federal government. He found that the nonfederal public sector has been increasing its lobbying expenditures every year, reaching more than $84.1 million in 2008.

That is reflected in the decision by the City of Omaha, under then-Mayor Mike Fahey, to hire a prominent Washington lobbying operation, Holland & Knight. The goal was expert guidance in seeking funds through the $787 billion economic stimulus package.

“You gotta grab the money if you can, and there’s a lot there,” said Omaha City Attorney Paul Kratz.

Holland & Knight reported spending about $40,000 on the city’s behalf. Kratz said the city signed two agreements with Holland & Knight, both of which fell under the $20,000 threshold that would require City Council approval.

Fahey’s successor, Jim Suttle, chose to drop the outside firm. Suttle spokesman Ron Gerard said future efforts to land stimulus money could be handled by the city’s grants department.

The City of Omaha directly has received about $14.4 million in federal stimulus money so far, but it’s difficult to say how much of that can be attributed to the outside lobbyist.

Midlands universities also have been actively lobbying. The University of Nebraska has spent $150,000 in 2009, including payments to an outside lobbying firm. Creighton University has paid $120,000 to an outside firm.

All of NU’s campuses have seen big increases in research funding over the past 10 years, and that stems partly from being more engaged with the federal government, said Matt Hammons, director of federal government relations for the University of Nebraska.

Fueled by grants for math education and science, the University of Nebraska-Lincoln set a record for research funding in the past fiscal year: $122 million, with nearly $84 million from federal sources such as the National Science Foundation, the National Institutes of Health and the Department of Energy.

Some other lobbying expenses by Midlands firms included:

• $440,000 by Lincoln-based student lender Nelnet Inc. The company’s top concern has been college aid legislation, already passed by the House, that would eliminate federal subsidies to private student lenders. Nelnet and other lenders are fighting to preserve a role for the private sector, saying billions of dollars and potentially thousands of jobs are at stake.
• About $600,000 so far this year by Mutual of Omaha.
• About $180,000 by ConAgra Foods. The company has been keeping an eye on food safety legislation, as well as the cap and trade legislation, which it worries would have a negative impact on farmers and, therefore, food prices.

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