Lobbying frenzy connected to stimulus sparks backlash
The frenzy on K Street over the coronavirus stimulus bill is sparking a new backlash.
Watchdog groups have seized on the activity as major industries push for financial relief and other assistance from Washington. K Street’s critics say the lobbying boom highlights the need for tougher controls on the influence industry and accuse businesses of using the coronavirus crisis to push through long-standing priorities they say go beyond immediate economic relief.
Those frustrations have also found expression in the $2.1 trillion House Democratic stimulus proposal, which includes a lobbying ban for companies that receive government aid until the funds are repaid. It would also ban corporations that receive a loan for coronavirus relief from giving bonuses to executives, buying back their own stock, and paying out dividends to shareholders.
The stimulus deal being worked out in the Senate is likely to include restrictions on corporate compensation and stock buybacks but not a lobbying ban. But lobbying watchdogs say the House language highlights their growing concerns with K Street, which is one of the few industries enjoying a boom amid the crisis.
“The COVID crisis is shaking up Washington, and since more stimulus packages are likely to be on the table, we expect K Street to continue to ratchet up their attention and spending,” Lisa Gilbert, vice president of legislative affairs at Public Citizen, told The Hill. “With that backdrop, putting limits on the corporations that receive taxpayer dollars in bailouts is just common sense.”
Public Citizen, a nonprofit consumer advocacy organization, supports language that would require companies that receive government help to forego lobbying.
“Corporations that receive our taxpayer dollars to stay afloat need clear checks on their ability to engage in influence peddling,” Gilbert said.
The coronavirus outbreak has sparked a scramble in Washington as major industries and companies are pressing for aid to weather the economic downturn.
The airline industry last week initially requested $50 billion in aid, while Boeing requested $60 billion for itself and aerospace suppliers. The aggressive lobbying has included a wide range of groups: Child care companies, the candy industry, alcohol beverage producers, tourism and travel companies, and manufacturers are just some of the businesses that have sought relief from Washington.
That’s alarmed progressive and consumer groups who worry the stimulus package will be a boon to big business.
“We cannot allow corruption at the highest levels of our government to infect our response to this virus,” said Kyle Herrig, president of Accountable.US, a nonpartisan watchdog. “Washington has a choice — stand with Americans who are already sick and those living in fear, or stand with the powerful special interests that have filled their campaign coffers and are now looking to cash in.”
The House language on a lobbying ban is only the latest effort from Democratic lawmakers to rein in K Street.
Democrats have ramped up calls for lobbying bans, and presidential candidate Sen. Bernie Sanders (I-Vt.) has included similar provisions in his platform, calling for a ban on corporate funding for conventions as well as a lobbying ban on former members of Congress and senior staffers.
But those efforts and the latest Democratic proposal to ban lobbying by businesses that receive federal help has rankled K Street lobbyists and those from business groups.
“This proposal smacks of a lack of seriousness. The lobbying that’s going on right now are folks helping lawmakers understand what’s actually happening out beyond the beltway, in the real world, with thousands of employers and small businesses,” Neil Bradley, Chamber executive vice president and chief policy officer, told The Hill. “Blocking that information from lawmakers, all that’s going to do is make this crisis even worse.”
The Chamber has been one of the most active groups pushing for protections for businesses and calling on President Trump to designate “essential businesses and services” during the crisis.
The scrutiny on K Street during a crisis is also not new. Similar proposals on lobbying were floated during the 2008 financial crisis: Sen. Dianne Feinstein (D-Calif.) proposed that any financial institution that receives help from the Treasury Department be banned from lobbying with that money, The Wall Street Journal reported at the time.
But K Street groups are pushing back hard.
“It seems both unconstitutional and shortsighted to remove the First Amendment right to petition the government from the very companies who need to be working with the government right now. It’s unclear how this idea helps workers, their families, the economy, or anyone, really,” said Stephen Worley, the International Franchise Association (IFA) senior director of communications. The IFA is asking Washington for a $300 billion fund to provide liquidity to business owners.
“I think a lobbying ban is a bad idea. The First Amendment is the first amendment for a reason and limiting the ability to petition the government is a slippery slope that needs to be avoided,” lobbyist headhunter Ivan Adler told The Hill.
Public Affairs Council, a nonpartisan association for public affairs professionals, also said such a ban would violate the constitution.
“The courts would likely throw out this proposal because it would clearly violate the First Amendment right to petition the government,” Doug Pinkham, the association’s president, said. “Companies lobby for things like protecting domestic jobs, increasing critical health care research and many other policies that help our country’s economy move forward.”
“Corporations often assist our lawmakers in crafting sound public policy, and taking away a company’s ability to do so during this complicated time is incredibly shortsighted,” he added.
But as the coronavirus outbreak plays out and as the government and businesses look to save the economy, the scrutiny on K Street is unlikely to lift.
Bradley, from the Chamber, called the Democratic response disappointing.
“It’s disappointing because all across America, small businesses are wondering when Washington will get this phase three bill done because they are literally counting the days until they won’t be able to make payroll for their employees,” he said.
Watchdog groups hope that the stimulus debate will help move the needle on lobbying reform.
“Anything that represents long-term corporate reform, not just short-term conditions, is great,” said Adam Green, co-founder of the Progressive Change Campaign Committee.