Where Have All the Lobbyists Gone?
Lobbyists, moreover, are considered lobbyists only if they advocate on behalf of a certain position on legislation; if they’re simply gathering intelligence, they are not considered lobbyists under the law.
Many unregistered lobbyists have argued that since they spend less than 20 percent, or one full day per week, engaged in contacting lawmakers, they should not have to register. Others have found equally creative justifications for not complying with the law. Newt Gingrich, during the last presidential campaign, memorably declared that he did not have to register as a lobbyist for the Federal Home Loan Mortgage Corporation, which paid him about $1.7 million, because he worked for Freddie Mac as a “historian.” Gingrich also developed a healthcare institute that offered draft legislation, meetings with lawmakers and other benefits to its member corporations, including Astra-Zeneca and WellPoint. This institute, which even brought on Daschle for some events, did not register any of its advocacy as lobbying.
Gingrich’s “historian” claim was widely mocked. And ethics watchdogs, including Public Citizen’s Craig Holman, regard Daschle’s failure to disclose as a clear “flouting” of the law. But their behavior has become the norm.
Shining a Light on Shadow Lobbying
Last summer, in the wake of the disastrous collapse of the Rana Plaza factory in Bangladesh, which killed more than 1,100 people, a team from Daschle’s law firm, DLA Piper—including retired Senator George Mitchell and Charlie Scheeler, a former Senate aide—unveiled a plan to allow American retailers to skirt responsibility for future garment-factory disasters. While international advocates and some retailers with business in Bangladesh put forward a plan to create legally binding requirements for safety reforms, the Mitchell plan allows firms to pay only small upfront fees for upgrades, with no future commitments. Scheeler met with legislative aides in the Cannon House Office Building to generate support for the alternative agreement, which labor activists panned because it would not hold retail companies accountable for factory fires and other hazards.
Like Daschle, Scheeler and Mitchell are not registered lobbyists, so the officials they engaged as well as the wider public were not necessarily aware that their firm represents Gap, one of the largest retailers identified with the Rana Plaza collapse, and one of the firms that would have been affected by the more stringent safety agreement.
As common as the practice is, such clear-cut examples of unregistered influence peddling are actually hard to come by given that the work is done, by and large, behind closed doors. One way that such information does come to light is through bankruptcy proceedings—as occurred when one company was forced to reveal all of its creditors in May 2012.
LightSquared, a startup that hoped to compete with AT&T and Verizon in the cellphone business, retained a staggering seventeen different lobbying firms as it pressed the Federal Communications Commission for an exemption that would allow it to use GPS signals to run a nationwide broadband cellphone service. After failing to obtain a favorable ruling from the FCC, LightSquared began lobbying the Defense Department for a “spectrum swap” to use airwaves allocated to the military. As all avenues began to close, the company declared bankruptcy.
Though LightSquared had disclosed a large number of registered lobbyists—including seven former members of Congress—the company’s bankruptcy proceedings revealed an even greater influence game.
One of LightSquared’s creditors was the Chertoff Group, a consulting firm run by former Homeland Security Secretary Michael Chertoff. LightSquared also owed money to Portico Policy Advisors, a company founded by Jim Doyle, a former Clinton administration aide who now advises businesses on a “range of policy, regulatory and communications issues,” according to his website. Doyle is the co-founder of Business Forward, a trade association that routinely organizes meetings with White House officials and business leaders. Neither the Chertoff Group nor Portico Policy Advisors is registered as a lobbying firm.
LightSquared’s influence team extended even to Stanley McChrystal, the former commander in charge of military operations in Afghanistan. After McChrystal retired following a Rolling Stone story that exposed his dim view of senior administration officials, he founded the McChrystal Group, an Alexandria, Virginia–based consulting firm. In January 2012, as LightSquared desperately sought to acquire spectrum, representatives from McChrystal’s firm contacted the Defense Department’s mid-Atlantic area frequency coordinator to discuss the deal. The McChrystal Group was interested in the spectrum reserved for test aircraft and weapons systems, according to an account published by GPS World, a trade publication.
The McChrystal Group, which is not registered as a lobbying firm, initially denied ever contacting the Defense Department on the spectrum deal. “We purposefully have not been doing those types of things, and lobbying is among those practices better left to other people and has never been part of our business plan or focus,” said Duncan Boothby, a senior aide to McChrystal. Boothby said the firm’s work on behalf of LightSquared related only to an “initial assessment,” in which the McChrystal Group would “come in and present to them what services we could provide, where we saw their strategic problems.” LightSquared bankruptcy documents show $70,000 in payments to the McChrystal Group.
Days after our initial interview, Boothby called to say that the McChrystal Group had indeed contacted the Defense Department on behalf of LightSquared, yet stressed that it had merely sought to collect information rather than advocate a certain position—a key difference that would excuse the company from having to register as a lobbying firm.