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How Lobbying Became A $3.5 Billion Industry - YouTube
Channel: CNBC
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We are going to
drain the swamp.
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It is undermining
American democracy.
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Lobbying is arguably
the American government's
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oldest profession.
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It's an industry worth over
three and a half
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billion dollars, with
around twelve thousand
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professionals and hundreds
of firms, unions,
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trade associations and interest
groups in the
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field. It's one of
the main drivers of
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policymaking in the U.S.,
but people still don't
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know much about it. I
think one of the
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misconceptions about lobbyists is
that, you know,
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we walk around with bags
of money and say, vote
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our way or support this
or oppose this, that it's
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not even close
to the truth.
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We want ultimately our policies
to be based on the
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merits and we want
as much information as
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possible as long as it
is truthful and relevant
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and meaningful.
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Almost everyone agrees with
that premise, but
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consensus pretty much
ends there.
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Who gets the tax breaks
and who gets the subsidies
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and who gets the bailouts
and who gets the
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regulatory rollbacks that
increase profits?
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Well, obviously, it's
the biggest corporations
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and the wealthiest people
at the top.
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We've got to get big
money out of politics.
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There's no real oversight
of the lobbying
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industry. I understand
the complaints.
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I think
they're unjustified.
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In ninety nine point
nine percent of time.
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the pandemic has spurred
record spending on
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lobbying in the first
quarter in 2020.
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But public perception of
the profession remains
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low. So how does this
elusive industry work and
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is it as corrupt
as it appears?
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My name Marci McSwain and
I work as a lobbyist.
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Marcy started her own
firm in early 2019.
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Before that, she worked
nearly a decade for
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former Congressman
Ray McGrath.
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Lobbyists need to be
the most trustworthy people.
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You can't have a job in
this town very long if
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you're trying to trick.
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If you don't equip the
member of Congress with
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information that's going to be
helpful to his or
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her district. Lobbying is
an age old profession
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that dates back to
when the Constitution was
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created. Experts claim the
framers included the
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practice intentionally to make
sure no one
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interest group became
too powerful.
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The ability of
individuals, groups and
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corporations to lobby
the government was
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therefore protected by the
right to petition in
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the First Amendment.
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But there's a sense that,
you know, we're a large
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and diverse country with
a lot of different
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people who have a
lot of different interests.
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And there should be a
way for people to speak
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directly to their elected
officials and say, hey,
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you should support this
policy or, hey, you
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should oppose
this policy.
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In 2019, 12,170 bills,
resolutions and amendments
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were taken up
by Congress.
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Many more thousand
were killed.
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With about twelve thousand
professionals at trade
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associations in House unions
or private firms.
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Lobbyists play a major
role in American
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policymaking. I think
there's a popular
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perception that lobbyists come in
and do all this
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sweet talking, lay down
piles of cash, lavish
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dinners and get
what they want.
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And in reality, lobbying
is much more boring.
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It's making the same
argument over and over
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again, and it's
slowly building coalitions.
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It's talking to lots of
different people and then
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trying to build a case
for your client or your
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perspective. You get to
a breakfast fundraiser in
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the morning, then you go to
work, you do your job
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and you go
to lunch fundraiser.
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Then you come back and
you have another committee
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hearing or a markup or
you go start calling on
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your offices and then you'd
go to a cocktail
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fundraiser and then you go
to a dinner fundraiser
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and then you
rinse and repeat.
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Jimmy Williams lives on a
50 acre farm in rural
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South Carolina. But before
moving back here, he
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spent nearly 20 years
in Washington, DC's
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political scene. Anyone that
ever tells you that
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the idea of the money the
lure of money is not
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there, then they're lying
to you because it's
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absolutely there.
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Between 2000 and 2002,
Jimmy was the economic
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policy adviser to
Illinois Democratic State
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Senator Dick Durbin.
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He says with a degree
in literature, he needed
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the information that lobbyists
shared with him.
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I did everything from trade
to taxes to budgets.
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If it had money signs
on it, I did it.
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And I learned a lot
from those guys then I
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learned over time that
lobbyists will only tell
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you what they want you to
know that I would say,
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OK, great. Who's Against you
and I start writing
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it down. So
who's against you?
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No no one is against you.
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This should never be a
problem to get this passed
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because nobody's
against you.
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And they would look at me
like, well, we may have
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like, OK, so
who's against you?
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Say it's part teacher, educator
and a park lawyer
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is defending or protecting
or trying to implement
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something people will say,
we don't want
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lobbyists writing bills. you'd
rather have us
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writing them than you would
a member of Congress
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who has zero experience in
the issues that you're
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dealing with? The problem is
that there are only
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twenty four hours
in the day.
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And these representatives,
these senators, they
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may not have time or
make time to seek
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alternative perspectives, and
especially when
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those alternative perspectives
are coming from
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groups or individuals that
do not have the
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ability to make
campaign donations.
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There is a reason why
these people are putting
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huge amounts of money
into our political system.
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I think America responded to
somebody who goes to
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Washington owing no
one anything.
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The more money you spend
on members of Congress,
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the more times
you get meetings.
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It's not about
Democrats or Republicans.
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It's about the reality
of money and politics.
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In 2019, about three and
a half billion dollars
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was spent on lobbying
nearly twice the combined
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budgets of the Senate
and the House.
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But it's not only
a large industry.
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Corporations are spending the most
of the top 100
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entities, lobbying 95
percent of corporations.
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Businesses are part of
the American public.
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They're good
for economies.
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I think it's OK to
want a business to be
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successful. That's why
you do it.
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Discussing those things is
important to take to
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the Hill. It's important
for elected officials to
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know how it will impact
businesses, even if it is
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individually. The shift to
corporate lobbying is
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relatively new.
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Up until the 1970s,
corporations largely stayed
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out of Washington.
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Labor unions were much
more important and special
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interest groups bigger actors
than they are
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today. There was a
growth of regulatory agencies
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that were created in the
1960s, in the 1970s.
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And so corporations began
to feel that politics
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actually did threaten their
business a lot more.
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And there was just a
sense that the public
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opinion was moving in
a more socialist direction
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and businesses needed to
stand up for free
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enterprise with
little oversight.
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The next few decades were
a free for all for
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lobbying. When I was a
staffer, I had lobbyists
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from every industry and this
is back before the
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rules are changed. Big,
huge dinners, thousands
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of dollars,
expensive wines.
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I mean, seafood towers,
you name it.
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It was all legal.
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And I would just
laugh, giggle to myself,
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thinking do you think that my
boss is going to be
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with you because you just
bought me a two hundred
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fifty dollar bottle of wine?
You're full of ---.
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The rule changes that Jimmy
is referring to are
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laws that were passed in
the aftermath of one of
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the biggest lobbying
scandals in American
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history. In 2006, the
Lobbying, Transparency and
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Accountability Act was passed
and a year later,
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the Honest Leadership and
Open Government Act.
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They tightened the
disclosure, information and
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reporting requirements from an
earlier law and
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set ethical guidelines
regarding gifts and
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bribes. One of the
laws also made some
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restrictions on who and
when former congressional
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employees could lobby once
transitioning to the
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private sector. Still, opponents
say it's not
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enough. There's no real
oversight of the lobbying
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industry. The disclosures
are voluntary.
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The enforcement is
basically nonexistent.
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The number of lobbyists
who have been punished,
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you can probably count on
one hand, if a senator
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tells you that they don't
know how much money a
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lobbyist has given their
campaign, they're lying
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to. The symbiotic
relationship between campaign
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finance and lobbying
is often contested.
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Following a 2014 Supreme
Court decision, there is
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no longer a limit on
how much an individual can
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give in total. The
biggest one, they're all
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making PAC donations and
even direct individual
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donations. So sending an army
of lobbyists up to
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work Capitol Hill, To
follow that donation is
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kind of the one two
punch, you first give a
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donation and you next have
your lobbyist pay a
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call. Looking through public
records, almost every
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major entity who spends
on lobbying also donates
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to campaigns. Wall Street,
for example, spent
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over a record two billion
dollars on the 2016
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presidential election.
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I for one, if you
said that every everybody in
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this country could not
make a political donation,
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I would jump up and
down for joy For that.
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And I think ninety nine
point nine percent of my
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colleagues would as well. It's
not us you have to
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turn to. It's the House,
the Senate and the White
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House and anybody else who
asked for a campaign
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donation. After spending five
years with trade
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associations, Jimmy moved to
the for profit
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firms. That's when
things changed.
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It was very rewarding
financially because I got
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paid a lot more. But at
the same time, I was then
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beginning to figure out that
people didn't give a
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damn about my knowledge of
banking or of the real
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estate industry is
all about checks.
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No one gave a damn
about anything other than who
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I knew. And how much would
it cost for us to
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write checks to get
into those offices, i.e.
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campaign donation? And that was
a big turnoff and
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I wasn't happy with that.
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Studies are divided about
the impact of campaign
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donations on the
corporation's bottom line.
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For example, a 2017 study
found that the victory
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of the company's
preferred candidate only
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increases the firm's value
by 0.05 percent.
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But that study
didn't consider lobbying.
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The Sunlight Foundation
examined 14 million
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records from 2007 to
2012, including on campaign
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contributions and lobbying
expenditure, and found
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that for every dollar
spent, the corporation
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received seven hundred and
sixty dollars from the
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government. The estimates are
all over the place,
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but it's clear that lobbying
works enough of the
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time. It's sort of like
the old saw about the
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executive who who says, well,
half the money I
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spent on advertising
is wasted.
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Problem is, I just
don't know which half.
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Big tech Facebook, Google
or whatever are
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underestimating the furious
anger of Capitol
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Hill. So it may also
come as no surprise that
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those same companies are pouring
a lot of money
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into lobbying those
very lawmakers.
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One group that recently
started appreciating the
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power of lobbying is the
tech industry, dogged by
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their handling of
consumer data, misinformation
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and harmful content.
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After the 2016 election,
the tech giants entered
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Washington full force.
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In 2019, Amazon, Facebook,
Google and Apple spent
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over 50 million
dollars on lobbying.
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In the 80s, Microsoft was kind
of the big dog and
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they were losing in
antitrust issues and finally
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kind of decided, if you
can't beat em, join em
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and set up
shop in Washington.
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And that has been
true for protection.
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When it comes to advertising
and investment in R&D
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and all those things,
lobbying is just as
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important as
everybody else.
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You don't believe
me? Ask Google.
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You're about to get slapped the
-- out of them by
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the Department of
Justice, aren't they?
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Google is hired up.
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Smart move. Very smart.
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Much of lobbyists successes
are attributed to
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their deep understanding
of the regulatory
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process and personal connections
to Capitol Hill.
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That's something called the
revolving door in
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politics. One study found
that nearly 60 percent
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of retired or defeated
lawmakers of the 15th
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Congress found jobs
in lobbying.
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When I went to work for
Durbin, I could have gone
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to work for any
of those Democratic senators.
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But I chose him because
I knew he's going places
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that put me in a very
good place as a lobbyist
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because I knew the people
would pick me up
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because I would have
influence in those offices.
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So if I'm a corporation,
I'm hiring Jimmy Wales.
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Are there rules in place
to prohibit them from
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having the special treatment,
things like that?
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Absolutely. Are
they broken?
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Absolutely. It is an honor
system type of rules
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and regulations that we
we adhere to.
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Twenty twenty has been a
busy year for lobbyists
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so far. According to
the Center for Responsive
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Politics, lobbying spent for
this year's first
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quarter is the
highest on record.
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Some of the biggest
spenders also saw
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considerable help from
the relief package.
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I don't care if you're
a small business or a
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medium sized business
or large business.
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If you're a trade association,
a union, if you
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don't have a government
affair strategy, you are
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going to be left behind.
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I will continue to point
to the pandemic is a
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perfect example that if
you didn't have somebody
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here with the relationships
of speaking for you,
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well, then you don't you
likely didn't get what
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you wanted or needed
to help yourself.
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Lobbying is often criticized
for its ability to
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tilt policymaking in the
favor of those with
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unlimited resources.
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At the end of the
day, though, lobbying is a
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profession protected by
the Constitution, and
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unlikely going anywhere.
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Without a chemical company,
How do you think
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you're going to get a
single fruit and vegetable
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in this country? And whether
or not someone on
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the left or the right
likes it, that is
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irrelevant to me.
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I can go to sleep at
night knowing that I have
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fed millions of children
in this country through
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legislation that I
have helped passed.
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Not all corporate America is
bad, But my work that
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I did, I wouldn't change any
of it for the world.
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Not a single bit of
it. The most important thing
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is to get big
money out of politics.
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One way is to
provide public financing of
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elections and get a
Supreme Court that really
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understands that money is
is really distorting
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speech. It's not speech.
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It's actually drowning the
speech of most people.
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Everyone always says you know
drain the swamp and
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all these lobbyists who've been
up there and for
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so long and the worst
and I tell sometimes my
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friends and family, I'm
like, that's me.
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Like, no, not
you. You're great.
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We're glad you're up there.
But I am the swamp.
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We're not working against
anyone We're hoping to
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work for and improve the
lives of people here in
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the state.
Important role.
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And we generally try to
do our jobs well and
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responsibly.
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