Where Have All the Lobbyists Gone?
“There is no constitutional right on the part of any sordid and powerful group to present its views behind a mask concealing the identity of the group,” thundered Black, who began his political career as a prosecutor. He was particularly concerned about the use of front groups and deceptive tactics to conceal the identity of the true paymasters, whom he referred to as the “money-maddened men behind the mask.”
In 1935, in the weeks before Roosevelt signed the trustbusting bill to break up the electric utility monopoly, Black—who had written a provision in it requiring utility-industry lobbyists to register and disclose their activities—called for a more comprehensive system for the entire federal government. “Contrary to tradition, against the public morals and hostile to good government, the lobby has reached such a position of power that it threatens government itself,” he warned.
Black’s legislation easily passed the Senate, but a reconciled version of the bill failed the following year in the House, where it was shot down by a three-to-one margin. Both houses were decisively under Democratic control, but lobbyists held more sway in the lower chamber, and Democrats there were far more reluctant to pursue aggressive investigations against industry titans. As a result, even though a registration system for foreign lobbyists was created in 1938 after several scandals involving Nazi Germany’s use of agents to spread propaganda in the United States, it wasn’t until 1946 that a wide-ranging lobbyist-registration act, based on Black’s proposed legislation a decade earlier, was finally enacted.
However, the law—which applied only to those seeking to influence Congress and not the executive branch—provided such a vague definition of lobbying that it was challenged in the Supreme Court in 1954.
The Court voted to narrow the law so that it would apply only to those seeking direct communication with lawmakers. The Court also interpreted the law narrowly, so that only those organizations hired “principally” to influence legislation would have to register. And the lack of a clear enforcement mechanism—a problem that persists to this day—meant that few bothered to comply even with these narrowed requirements. Although the Watergate scandal sparked renewed interest in disclosure by lobbyists, it was not until the mid-’90s that Congress updated the system.
The impetus for reform came from a 1991 study by the General Accounting Office that revealed how porous the 1946 act had become. The study found that 10,000 lobbyists listed in an industry guidebook had failed to register. Of those who had, as many as 94 percent failed to complete their registration forms as required by law.
These days, the system is regulated largely through the Lobbying Disclosure Act of 1995, which was signed by President Bill Clinton and revised substantially in 2007 to add new rules concerning lobbyist gifts in the wake of the Jack Abramoff scandal.
As he worked to become president, Barack Obama campaigned vigorously on a call to clamp down on the power of lobbyists. “We are up against the belief that it’s all right for lobbyists to dominate our government—that they are just part of the system in Washington,” he said in a speech in South Carolina. “But we know that the undue influence of lobbyists is part of the problem, and this election is our chance to say that we’re not going to let them stand in our way anymore.”
Obama’s only significant act to curb the influence of lobbyists is now seen as a failure. In fact, in many ways, he only made the problem worse.
In his first month in office, Obama signed an executive order stating that registered lobbyists would not be welcome in his administration. The administration quickly backpedaled, however, issuing a number of exemptions in the following years. But the larger effect was that many lobbyists simply deregistered, removing themselves from the lobbying-disclosure system and thereby pushing the influence-peddling profession more into the shadows. As Robert Gibbs, then Obama’s press secretary, explained glibly to Time magazine, when asked about reports of an Obama nominee engaging in lobbying activity: “If you’re not registered to lobby, you can’t be a lobbyist.” The clear implication was that the executive order would be narrowly enforced—and only against those who were registered under the LDA.
There’s good reason that the poster child for this gaping loophole in the lobbying law is Tom Daschle. The former Democratic senator for South Dakota first came to Washington campaigning as a humble citizen-legislator. Advertisements for his 1986 Senate run showed him cruising the city in a beat-up Pontiac. Over a shot of Daschle parking the car and walking toward the Capitol, the narrator intoned, “Isn’t it too bad the rest of Washington doesn’t understand that a penny saved is a penny earned?”
After being defeated for re-election in 2004, Daschle, like many retiring lawmakers, joined a law firm heavily invested in lobbying and became a “policy adviser” for a number of corporate clients. His salary at the firm rose to more than $2 million in the waning years of the Bush administration, in addition to the $2 million he made in 2008 advising a private equity firm.
While questions over Daschle’s taxes scuttled his 2008 nomination as secretary of health and human services, he continued to play a key role behind the scenes, visiting the White House, participating in Obama administration meetings, and working with legislators on healthcare policy. Now with the firm DLA Piper, Daschle refuses to register for his lobbying activities, though he counts major healthcare firms among his clients.
Daschle, like other unregistered lobbyists, could muster a legal defense for his failure to register. Because the LDA was designed to ensure that ordinary citizens petitioning their government would not be forced to register as lobbyists, the law has a three-pronged test to determine who should—a test that inadvertently allows Washington’s biggest influence peddlers to ignore the disclosure law. According to this test, a lobbyist is an individual who (1) earns at least $2,500 from lobbying over a three-month period; (2) has more than one lobbying contact for his services; and (3) spends at least 20 percent of his time during a three-month period making “lobbying contacts.” If a lobbyist can argue that just one of these statements doesn’t apply, he is not required to register.