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Washington's Lobbyists Change Their Tactics

The Obama Administration aimed to reduce K Street's power, but Washington's agile influence brokers have shifted to different styles

Wednesday, July 29, 2009 - 00:00
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Despite the rhetoric of the past 18 months, few in the nation's capital really believed the Beltway lobbyist would disappear overnight just because a new President vowed to change business-as-usual in Washington and Congress heightened scrutiny. Yes, lobbyists now must heed stringent new disclosure rules; the gift-giving and golf outings have largely vanished. But the influence game rolls on in Obama's Washington.

That isn't to say, of course, that nothing has changed. The Democrats have set in motion a landslide of potentially transformative legislation: an overhaul of the U.S. health-care system; a sweeping energy and climate-change bill; new regulations to rein in the financial markets; and more. "There are a lot of challenges for business," says Steve Elmendorf, a longtime aide to former House Democratic Leader Dick Gephardt who now runs his own lobbying firm. "When there are challenges, they hire help."

With so much legislation and so many new rules, many K Streeters are adjusting their playbooks. One lobbyist says that where a client once hired two firms—one Republican, one Democrat—it now may hire five, including specialists for each house of Congress and at least one big-picture strategist. Twitter, Facebook, and sophisticated Web sites have become de rigueur tools of influence. And lobbyists are looking to cooperate more often with lawmakers—or at least appear to be doing so—rather than simply training their guns on bills they deem hostile.

At a time when lobbying is under assault, the most effective practitioner is sometimes someone who technically isn't a lobbyist. The rules say lobbyists must register with the feds if they call or visit lawmakers, staff, or key Administration officials to influence policy at least twice in a quarter—and also spend at least 20% of their time for any given client on "lobbying-related" activities. Registering as a lobbyist nowadays is "like walking around with a scarlet letter," says a lobbying-law specialist. That helps explain why more lobbyists are deregistering and setting up shop as arm's-length strategists. These people don't contact lawmakers or Administration officials on behalf of clients, but instead offer an insider's insight into which lawmakers are likely to be most receptive to what arguments and how procedural battles could play out. Such advice is in demand as companies and business groups sort out how to tackle multiple issues at once. "There's more of a premium on strategic thinking now," says John Jonas, a registered lobbyist who established the health-care practice at lobbying powerhouse Patton Boggs.

Thomas A. Daschle, the former Senate majority leader, now serves as a "special policy adviser" and strategist at Alston & Bird, focusing in part on health care and financial services. He never registered as a lobbyist. Former Bush Administration counselor Ed Gillespie, a lobbyist for most of the past decade, opted not to reregister this year. Instead he has started Ed Gillespie Strategies, offering companies "strategic planning," "message development," and "crisis management." He declined to comment for this story. Daschle says he doesn't lobby directly but lends others insight into legislative terrain and the tendencies of lawmakers he knows well.

Sometimes these "strategic" lobbyists suggest that their clients do the schmoozing themselves, as meeting with a company CEO is often more palatable to lawmakers than lunching with lobbyists. The Managed Funds Assn., which represents hedge funds, has stepped up its fly-ins. The National Association of Manufacturers recently brought in more than 300 executives. 3M (MMM) is also among those sending executives more often, says John Woodworth, who oversees the company's supply chain. "It sends more of a message if you're willing to spend your time," Woodworth says.

Lobbyists are increasingly taking the fight to the people—or, at least, to their own people. This month the American Farmland Trust, a relatively small farm lobby focused on conservation, plans to mobilize its 30,000 members to urge Farm Belt senators to support the cap-and-trade bill. Using articles in trade publications, talk-radio appearances, Twitter, and Facebook, the group aims to win the backing of rural-state senators, some of whom are concerned about how the measure would affect fuel costs as well as electricity prices in states heavily dependent on coal power.

Bipac, the country's oldest business lobby, says interest in grassroots campaigns has picked up sharply of late. "To the degree this town becomes more difficult for lobbyists to have face time with policy?makers, there's going to have to be another way for them to make their message known," says President and CEO Gregory S. Casey. Murphy Oil (MUR), an El Dorado (Ark.) oil and gas company, has affixed tear-off leaflets to its gas pumps. The leaflets warn that the "current legislative proposals could cause gas prices to increase at least 60%" and direct customers to a Web site operated with Bipac's help. The site offers arguments against the cap-and-trade bill—and Casey says half its visitors click to e-mail lawmakers on the issue.

Tried-and-true tactics still work, of course. In late June, power industry lobbyists managed to get a last-minute amendment slapping tariffs on steel and other carbon-intensive imports into climate-change legislation. But the K Street crowd is less likely now to try killing legislation outright. "The smart strategy is getting taken care of, or getting [lawmakers] to go in a different direction," says Jonas, the Patton Boggs lobbyist. By signing on to White House health-reform efforts, he says, the pharmaceutical industry transformed itself "from Public Enemy No. 1 to the tolerated in-law." One by one, other health-care organizations have followed suit. Appearing cooperative is the new name of the game.

With Jane Sasseen, Elise Craig, and Keith Epstein in Washington