The Washington Post: Lobbying expenditures drop for many firms in first quarter

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The Washington Post
Lobbying expenditures drop for many firms in first quarter
By Dan Eggen
April 22, 2010

Maybe everyone is just lobbied out.

Despite passage of sweeping health-care legislation and an epic fight over Wall Street regulation, lobbying expenditures dropped for many major firms and trade organizations during the first quarter of 2009, according to disclosure forms filed in Congress this week.

The U.S. Chamber of Commerce, which spent a record $72 million on lobbying and advocacy efforts during the fourth quarter of 2009, spent less than half that in the first three months of this year, records show. The American Bankers Association spent less on lobbying during the first quarter — $1.8 million — than it did during any quarter last year. J.P. Morgan Chase spent 20 percent less so far this year than it did from October to December, when it racked up nearly $1.9 million in Capitol Hill lobbying costs.

Lobbying also dropped precipitously for many energy companies despite the continued debate over climate legislation, including Chevron (down 55 percent) and Exxon Mobil (down 64 percent).

It’s important not to go too far, of course. Many major firms racked up impressive billings as they attempted to head off Wall Street regulations, health-care reform and other Obama administration proposals. The Pharmaceutical Research and Manufacturers of America, which represents drugmakers, spent more than ever, $7 million. The Financial Services Roundtable, the New York Stock Exchange and Credit Suisse Securities all ratcheted up their spending dramatically during the first quarter; Goldman Sachs, which now finds itself at the center of a major fraud scandal, nearly doubled its lobbying, to $1.15 million, in the first three months of the year.

Even so, the top 25 firms and groups in the financial, insurance and real estate sector posted an overall drop of 8 percent compared with the fourth quarter of 2009, to $41.3 million; that number is also down slightly from the same period a year earlier. There are many possible explanations, from a shift in focus to the midterm elections to the fact that Washington was shut down for days after February’s historic snowstorm.

But don’t worry: There’s plenty of time in the year to catch up.

Speaking of Goldman Sachs: The fraud charges leveled against the firm last week present a clear political problem for Democrats, who have collected millions in contributions from Goldman employees and others connected to the case.

The problem is particularly acute for President Obama, who took in nearly $1 million from Goldman Sachs employees during his run for the White House in 2008, according to data compiled by the nonpartisan Center for Responsive Politics. GOP candidate John McCain, by contrast, collected about $230,000 from Goldman employees, who nonetheless were still among his top givers.

Overall, Goldman’s employees and its political action committee gave 3-to-1 to Democrats over Republicans during the 2008 cycle. Former House majority leader Richard Gephardt (D-Mo.) is a registered lobbyist for Goldman, while former Obama counsel Gregory Craig recently signed on to represent the firm. (White House officials say ethics rules prohibit Craig from contacting any administration officials on the subject for two years.)

But the firm’s Democratic preference has waned in recent months as the White House has singled out Goldman and other highly profitable Wall Street firms for criticism. The company’s PAC gave $167,000 to Republicans and $123,000 to Democrats in March, Federal Election Commission records show.

An RNC spokesman declined to comment. Hari Sevugan, a spokesman for the Democratic National Committee, said the contributions by Goldman employees "would be a lot more telling if Wall Street banks weren’t fighting tooth and nail against the sweeping reforms the administration is advocating for."

The SEC accuses Goldman of a complex form of fraud by selling mortgage-backed securities to clients without disclosing that they were crafted to fail and that billionaire hedge fund manager John Paulson — who helped design them — was also betting on a negative outcome. Goldman denies the charges.

Paulson poses another political problem for both parties. The Paulson & Co. CEO is a longtime fundraiser who leans Republican but also gives generously to Democrats, particularly those with influence on Wall Street.

Last week, for example, Paulson hosted a fundraiser at his Manhattan home for Republican National Committee Chairman Michael S. Steele and presidential hopeful Mitt Romney. Just a week earlier, Paulson hosted a fundraising reception for Sen. Charles E. Schumer at the Friars Club, calling the New York Democrat "one of the few members of Congress who has consistently supported the hedge fund industry."