K Street revenues boom
The leading K Street firms continue to rake in record sums of cash as corporate clients push their chips in to influence President Biden’s ambitious domestic agenda.
Deep-pocketed companies and trade associations, fighting to stave off corporate tax hikes and other Democratic proposals to reshape sections of the economy, are leaning on for-hire lobbyists who have cultivated deep relationships with congressional leaders and Biden administration officials.
Nearly all of the top lobbying firms increased their third-quarter revenue over the same period last year, according to figures shared with The Hill that were required to be filed to Congress Wednesday. They’re extending record gains from earlier this year and remain on track to easily exceed last year’s pandemic-driven lobbying revenue boom.
“You’ve got this historic confluence of significantly high-stakes activity going on in Washington all at the same time and this unprecedented close divide in government,” said Marc Lampkin, who leads Brownstein Hyatt Farber Schreck’s lobbying team. “That’s what is really driving this.”
Brownstein brought in $13.9 million in lobbying revenue from July through September, up 11 percent from the same period last year. Brownstein’s yearly haul so far — $40.3 million — tops all of its K Street rivals and puts the firm on track to exceed its record 2020 earnings.
The flurry of lobbying primarily centers around Democrats’ $3.5 trillion budget reconciliation package, which would raise taxes on corporations to pay for huge investments in climate change, child care, education and health care, and the $1 trillion bipartisan infrastructure bill that has drawn broad support from industry groups.
Democrats’ razor-thin majorities in the House and Senate are aiding business lobbyists’ efforts to block tax hikes, drug pricing provisions, Medicare expansion and an end to fossil fuel subsidies, among other Democratic proposals opposed by powerful industries.
Business lobbyists are targeting a small group of Democratic senators with doubts about several reconciliation provisions, led by Sens. Joe Manchin (W.Va.) and Kyrsten Sinema (Ariz.), and a few dozen moderate House Democrats who have concerns about how certain proposals might affect industries in their district or their reelection chances.
Manchin, who alone could kill the social spending bill’s chances in the 50-50 Senate, has said he will support a $1.5 trillion reconciliation package, a significantly smaller bill that wouldn’t require massive tax increases.
“The devil is in the details,” Lampkin said. “I think everybody is heartened by the fact that the total price tag will be smaller, but until you see the specific policies and what the tax raising provisions are … you can’t rest.”
Akin Gump, the other top K Street powerhouse, pocketed $13.6 million in the third quarter, up 12 percent from last year. The firm’s lobbying practice has accumulated roughly $39.9 million in nine months, a new high-water mark.
“The infrastructure bill and the Democrats’ reconciliation spending bill drove a great deal of this activity, while other areas, such as tax, trade and health policy, remained front and center,” said Brian Pomper, a lobbyist at Akin Gump and former Democratic Senate Finance Committee aide.
Pomper added that lobbying activity should remain strong through the rest of the year. While Democrats are hoping to complete their reconciliation package by the end of the month, K Street expects the process to extend well into November.
BGR Group earned nearly $9 million in the third quarter, its best three-month period to date and a 12 percent increase from last year. The past three months have “demanded intense engagement” with Congress and the Biden administration to ensure BGR’s clients are protected, said Loren Monroe, a principal at the firm.
Cornerstone Government Affairs also brought in nearly $9 million in third-quarter revenue, an organizational best, up from $7.2 million last year.
Invariant, a bipartisan firm run by Democratic fundraiser Heather Podesta, reported nearly $8 million in third-quarter earnings. That’s a single-quarter best for the firm, which upped its total year-over-year lobbying revenue by 43 percent.
While many corporate clients are focused on eliminating Democratic proposals that would damage their bottom line, others are going on the offensive. Green energy firms and prominent automakers are fighting to ensure that key renewable energy incentives aren’t left out of the final reconciliation package. Industries hit hard by the pandemic, such as gyms and hotels, are making a last ditch plea for government aid.
Lobbyists are also eyeing the Biden administration’s impending rule that will require private businesses with 100 employees or more to mandate COVID-19 vaccinations or weekly testing. Large companies are concerned that they could lose unvaccinated workers amid a tight labor market, and that they won’t be able to obtain rapid testing kits that are already in short supply.
“It is hard to top last year’s workload dealing with the pandemic. But the new Congress and the new administration continue to take actions that potentially affect our clients, including those relating to trade, supply chains, vaccine mandates, climate change, health care, taxation … the list goes on,” said Karishma Page, a partner at K&L Gates, which saw its third-quarter lobbying revenue increase by 18 percent over last year.
Fast-growing lobbying firms Tiber Creek Group and Forbes Tate Partners brought in nearly $6.6 million and $6.5 million in the third quarter, respectively, a year-over-year increase of 50 percent and 26 percent.
Squire Patton Boggs made $6.2 million in the third quarter, up from around $5.9 million last year. Cassidy & Associates brought in nearly $5.7 million in the third quarter, an increase of about 33 percent from last year.
The top K Street firms are also the biggest beneficiaries of a broader lobbying boom brought on by the pandemic and Democratic control of Washington. Total federal lobbying spending surpassed a record $1.8 billion through the first half of 2021, according to money-in-politics nonprofit OpenSecrets, which will update its figures with third-quarter data later this month.
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