• Fiscal cliff, elections boost spending on lobbying

    Jonathan Newton / Getty Image fi

    K Street in Washington, D.C. home to many influential lobbying firms.

    By Dave Levinthal, The Center for Public Integrity

    Congress’ fiscal cliff fiasco, a flurry of lame duck legislation and election-season politics drove some of the nation’s most powerful lobbying forces to double down on their governmental influence efforts late last year, newly filed reports show.

    Such an uptick foreshadows what could be ever-more-aggressive lobbying on federal finances, taxation, energy and social issues like immigration and gun ownership as President Barack Obama enumerated in his inaugural address Monday.

    The trend may end a prolonged lobbying spending slowdown largely prompted by Capitol Hill gridlock and a dearth of meaningful legislation receiving consideration during much of 2011 and 2012.

    In all, about half of the year’s top 100 lobbying organizations spent more on lobbying in the fourth quarter of last year than in the third quarter. About half also showed an overall increase in spending for 2012, a Center for Public Integrity analysis of congressional disclosure reports and Center for Responsive Politics data indicates.

    The U.S. Chamber of Commerce’s year-over-year lobbying spending skyrocketed more than 88 percent, from $66.4 million to more than $125 million, to easily lead all other organizations.

    Prominent business and financial lobbies, meanwhile, rank among organizations that spent significantly more during the fourth quarter of 2012 than they did during the third quarter, including the National Association of Realtors ($15.4 million from $9.8 million), the Business Roundtable ($4.8 million from $4 million), JPMorgan Chase and Co. ($3.2 million from $1.4 million) the American Bankers Association ($2.1 million from $1.8 million) and Visa ($1.7 million from $1.1 million), records show.

    For the business roundtable, the jump represents an “intensified effort” to influence fiscal cliff negotiations, permanent normalized trade relations with Russia and tax reform, said Tita Freeman, an organization spokesperson.

    But percentage-wise, the greatest lobbying spending growth late in 2012 comes from companies representing a variety of industries aghast at the package of automatic tax increases and spending cuts that had been slated for implementation had Congress not struck a last-minute deal to avoid them.

    They include information technology behemoth Oracle Corp. ($1.8 million during the 4th quarter from $640,000 during the 3rd quarter), energy giant Southern Co. ($5.1 million from $2.5 million), Duke Energy ($2.3 million from $1.3 million) and Dow Chemical ($2.6 million from $1.6 million), according to congressional records.

    Defense contractors Northrop Grumman, Lockheed Martin, Raytheon Co. and General Dynamics also reported moderate increases from the third quarter to the fourth. These and other companies that rely on government contracts stood to potentially lose billions of dollars had automatic federal spending cuts been put in place at the end of 2012.

    While not yet among the nation’s biggest-spending lobbying forces, the National Rifle Association and the affiliated NRA Institute for Legislative Action together fueled their 2012 lobbying efforts with about $3 million – more money than during any other single year.

    The NRA’s lobbying comes as the association finds itself in the midst of a nationwide conversation, and looming political battle, over gun ownership restrictions following the December massacre of 26 people at a Connecticut elementary school.

    The gun rights lobby also faces a host of new and moneyed lobbying opponents this year, most notably organizations led by former Rep. Gabrielle Giffords, D-Ariz., and New York City Mayor Michael Bloomberg, independent. Pro-gun advocates have historically and exponentially outspent gun control interests.

    Facebook, for its part, posted its priciest quarter ever — $1.4 million in the fourth quarter — and passed the seven-figure threshold for the first time during a three-month period. The social media company, which didn’t invest a cent in federally reportable lobbying until 2009, spent nearly $4 million in 2012, or about three times the $1.35 million it spent in 2011, and shows no indication its slowing its rapid expansion into the political sphere.

    Generally, federal legislation, congressional activities and regulatory action prompt most lobbying spending, although recent dollar-figure spikes are caused, in part, by national elections.

    Take the U.S. Chamber of Commerce and the National Association of Realtors.

    The two business organizations are among a small group of lobbies that opt to disclose their state- and grassroots-level lobbying (and sometimes political organizing) costs alongside their federally focused efforts.

    The pending disclosures do not, however, appear to include the tens of millions of dollars collectively spent on directly attacking or supporting political candidates, primarily through television and radio advertisements, during the 2012 election.

    “Our 2012 lobbying figures reflect that it was an election year, where the Chamber engaged in an unprecedented voter education campaign to educate the public about candidates' positions on issues critical to free enterprise, such as health care, regulation, energy production and taxes,” Chamber spokeswoman Blair Latoff Holmes said.

    The Realtors also engaged heavy political field organizing efforts, said Jamie Gregory, deputy chief lobbyist for the association, which reported $41.4 million in spending during 2012 in its federal lobbying reports.

    That figure trailed only the Chamber and put it ahead of General Electric (General Electric is minority owner of NBCUniversal), the National Cable & Telecommunications Association, American Hospital Association, the Pharmaceutical Research & Manufacturers of America, Google, Northrop Grumman, AT&T and the American Medical Association among the nation’s top 10 lobbying spenders last year.

    “Accordingly, we expect a drop in spending during 2013, and in 2014, expect it to go back up,” Gregory said.

    (Comcast Corp., majority owner of NBCUniversal, spent $14.75 million on lobbying in 2012, a decrease of nearly 25 percent from the previous year, ranking it 15th on the list.)

    Several corporations known to have donated money to Obama’s inauguration committee are also among top lobbying forces of 2012: AT&T spent $17.4 million on federally reportable lobbying last year, followed by Southern Co. ($15.6 million), FedEx Corp. ($11.9 million), Microsoft ($8.1 million), and Coca-Cola ($4.8 million), disclosures show.

    The Center for Public Integrity is a non-profit independent investigative news outlet.  To read more of its stories on this topic go to  http://www.publicintegrity.org/politics/consider-source 

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  • 'Pop-up lobbying' a new trend in convention influence peddling

    By Michael Isikoff, NBC News
    The political conventions have always been open season for big money influence peddling. But this year, ever-creative Washington lobbyists have devised a nifty new technique to bypass pesky ethics rules that were supposed to bar them from throwing lavish convention parties for lawmakers.

    NBC's Michael Isikoff and Time Magazine's Michael Scherer discuss the ways the GOP convention is bowing to its mega-donors – and new poll numbers that show Mitt Romney trailing badly among the middle class.

    The method:  Set up a consulting firm to throw your party and honor your favorite members of Congress. Then sell "sponsorships" to the event for as much as $50,000 a pop, thereby allowing lobbyists and their corporate clients to party it up – and curry favor – with lawmakers  just as they always have.  

    Consider a late-night soiree Monday for members of the House and Senate transportation committees. Its official host — as in a Tuesday night "Boots on the Bay" party for the Oklahoma delegation and a Wednesday night “On the Dock by the Bay” party for the congressional “western caucus” – is an obscure entity named “GOP Convention Strategies.”

    Who’s behind it? A team of top GOP fundraisers, consultants and lobbyists, including Rick Shelby, an  executive vice president of the American Gas Association, according to a list of principals on the firm’s website.

    Calling the GOP convention “a tremendous opportunity to sell your ideas” [and] “highlight your issues,” the firm is offering corporate clients multi-level sponsorships for its convention events (“platinum,”  “gold” and “silver,”  according to one invite) with “prominent billing and signage” or “generous billing and signage” depending on which level is purchased. 

    Shelby and other principals of GOP Convention Strategies did not respond to multiple messages. But the firm (which has a sister company set up for next week’s Democratic convention that also includes top D.C. lobbyists) is part of a new phenomenon that is on display at this year’s conventions, allowing a veritable orgy of “influence peddling,” says Craig Holman, a lawyer who has long tracked lobbying and ethics issues for Public Citizen, the D.C.-based watchdog group.   

    “I would call these pop-up front companies,” says Holman of the new party consultng firms. “Their whole purpose is to sponsor parties at the conventions that otherwise might be in violation of congressional ethics restrictions. … This is a brand new wrinkle. I’ve never seen this before.”

    The problem for the lobbying firms, according to Holman,  is the “Honest Leadership and Open Government Act,” a sweeping reform measure enacted by Congress in 2007 in the aftermath of the conviction of Jack Abramoff in a highly publicized lobbying scandal. It included a rule that forbids members of Congress from “participating” in any lobbyist-sponsored convention “event”  that honors them or where they are the “special guest.” (The excesses didn’t begin with Abramoff, of course. As Holman noted a recent memo, at the 2004 Democratic convention, media companies seeking legislation before Congress threw a $300,000 “Caribbean Beach Bash” for then-Sen. John Breaux, a leading advocate of media interests who left Congress the next year to become … a lobbyist.)

    As a practical matter, the lobbyist convention rule has already been weakened through a House Ethics Committee interpretation saying that the ban only applies to parties that honor individual members, not groups of members. Although the Senate Ethics Committee has issued tighter restrictions, the House ruling has opened the door to collective parties such as one this week honoring the “Congressional Yacht Caucus” or the events being thrown by GOP Convention Strategies.

    And there are plenty of other examples of big D.C. lobbying interests staging lavish bashes for lawmakers and delegates here in Tampa this week. On tabs for tonight: “Celebrate the Spirits of Tampa,” sponsored by the Distilled Spirits Council, the Chamber of Commerce and the National Association of Realtors. On Thursday night, “Vote4energy”—a group set up by the American Petroleum Institute—is throwing a “Fueling the Future” bash. And not to be outdone, Google – in partnership with “YG Network,” a group set up by former aides to House Majority Leader Eric Cantor — is throwing an “American Innovation” bash at the Tampa Museum of Art.

    The net rule, says Holman, is that the reforms of 2007 are perilously close to being out the window. As he wrote in a memo on the eve of the two party conventions, its “lobbyists gone wild.” 

    J. Scott Applewhite / AP

    Chairman of the Republican National Committee Reince Priebus speaks to delegates during an abbreviated session the Republican National Convention in Tampa, Fla., on Monday, Aug. 27, 2012.

  • Railroad companies fight safety rules, with help from GOP and Obama

    Kelly B. Huston

    The Chatsworth rail disaster in 2008 caused 25 deaths and 135 injuries in Chatsworth, Calif., on Sept. 12, 2008.

    By Justine Sharrock, Laurie Udesky and Stuart Silverstein
    FairWarning.org

    Less than four years after a California train disaster spurred passage of major safety legislation, railroad companies are pushing hard to relax the law’s chief provision.

    They have won over key Republicans, and extracted a major concession from the Obama administration, in their bid to scale back and delay a system to prevent crashes such as the head-on collision that caused 25 deaths and 135 injuries in Chatsworth, Calif.

    The Rail Safety Improvement Act, passed in late 2008 soon after the Chatsworth disaster, mandated the $13 billion project and stuck railroad companies with nearly all of the cost. The law calls for installation of a technology known as Positive Train Control, or PTC, that automatically puts the brakes on trains about to collide or derail.

    Railroads are required to install PTC by the end of 2015 on an estimated 70,000 miles of track used by trains carrying passengers or extremely hazardous materials such as chlorine.

    The technology’s champions include the National Transportation Safety Board, an independent advisory and investigative agency. It has advocated PTC for more than two decades to prevent accidents resulting from human error, the main cause of rail crashes.

    Investigators with the agency have identified 21 train wrecks since late 2001 that, they say, would have been averted by PTC. In all, the accidents caused 53 deaths and nearly 1,000 injuries.

     “PTC can prevent these human errors from causing collisions, hazmat releases, passengers killed and injured, and train crews being killed,” said Steven Ditmeyer, a former rail industry executive and federal official who now teaches in Michigan State University’s railway management program.

    Serious train crashes, he said, “are very rare events, but they still occur.”

    PTC supporters such as Paul Hedlund, a lawyer for many families of Chatsworth victims, say they are appalled by efforts to relax the mandate. It’s a “scary step backwards,” Hedlund said, calling existing protections “horribly archaic.”

    Since 2008, he added, “We haven’t had another crash of the magnitude of Chatsworth that would be affected by this but we are going to.”

    Centers for Disease Control and Prevention

    The 2005 rail crash in Graniteville, S.C., killed nine people and caused the evacuation of 5,400.

    But the railroad industry and its allies, arguing that the project is unaffordable, have put up stiff resistance. They also maintain that the technology still needs to be refined, even though Amtrak already operates a similar system from Boston to Washington, D.C.

    PTC critics have argued for delaying the installation deadline by three years, exempting as much as 20 percent of the track and allowing railroads to use other safety systems that might be cheaper, but also less effective.

    The industry is bolstered by a political climate that is hostile to federal dictates, a factor behind the executive order President Obama issued early last year to streamline regulations. They have extra leverage because federal agencies are divided on the merits of the PTC mandate.

    PTC opponents also are drawing ammunition from a 2010 report by the Government Accountability Office. The GAO assessment didn’t address PTC’s effectiveness but said technological hurdles could delay completion of the project beyond the 2015 deadline.

    “What you hear from all the railroad companies is that everyone supports PTC in theory, but the realities of how difficult it is financially and technologically to install [mean] it can’t happen by 2015,” said Matt Ginsberg, director of operations for the National Railroad Construction and Maintenance Association, which includes contractors that work on PTC installation.

    The industry’s strategy, he added, is that “instead of an outright repeal, they will slowly chip away at it, making small little tweaks that will make a big change overall in the effect of the rule.”

    Leading the resistance are the Association of American Railroads, which represents freight haulers and Amtrak, along with the American Public Transportation Association, which represents commuter rail systems. They have called PTC the biggest federal mandate the industry has faced in more than a century, and say they anticipated that the government would step up its financial support.

    To deliver their message on PTC and other issues, railroad interests spend heavily on lobbying. According to the watchdog group Citizens for Responsibility and Ethics in Washington, the railroad industry poured $73.4 million into lobbying in 2009 and 2010, and another $8.75 million in the first quarter of 2011.

    The industry also has retained dozens of lobbyists, including the firm of former Senate powerhouses John Breaux, D-La., and Trent Lott, R.-Miss.

    Meanwhile, as political currents have shifted and PTC has fallen out of the spotlight, the technology has fewer forceful advocates.

    Former U.S. Rep. James L. Oberstar, a Minnesota Democrat who led the push for PTC in the House and who argued for it since the 1990s, was voted out of office in 2010, when Republicans took control of the lower chamber.

    The Democrat who perhaps was most pivotal in getting the rail safety act through Congress and signed into law was Sen. Dianne Feinstein of California. Days after the Chatsworth crash in September 2008, she said the failure to install PTC would amount to “criminal negligence.”

    Today, she still favors PTC but no longer is a leader on the issue and is not a member of the panel with jurisdiction over railroads, the Commerce Committee.  Feinstein’s office quoted the senator as saying that she has urged colleagues to maintain the current deadline.

    PTC systems include GPS and wireless communications technology and central control centers. They can monitor trains and stop them if they enter the wrong track or are about to run a red light.

    According to the National Transportation Safety Board, one of the accidents that PTC would have prevented was the freight train-commuter train collision in Chatsworth. The NTSB investigation blamed the accident on an engineer on the commuter train who ran a red light while text-messaging on a cellphone. (Metrolink, the rail system that operates the Chatsworth commuter line, hopes to finish installing its PTC system by mid-2013.)

    The NTSB said the January 2005 rail crash in Graniteville, S.C., that killed nine people and injured 554 also would have been prevented by PTC. The crash punctured a chlorine tank car, releasing a toxic, greenish cloud that led to the evacuation of about 5,400 residents.

    However, the agency responsible for enforcing the deadline has expressed ambivalence about PTC. The Transportation Department’s Federal Railroad Administration concedes that PTC increases safety. But the agency says PTC would save only about four or five lives a year, not nearly enough to justify the  cost – though the agency analysis was completed in 2005, before the Chatsworth disaster.

    PTC advocates say the agency’s analysis ignores the enormous business benefits that the technology could provide by, not only preventing accidents, but also by coordinating train traffic more efficiently and cutting shipping times.

    Still, after the Transportation Department spelled out its rules for enforcing the PTC law, it was sued in November 2010 by the Association of American Railroads. The industry group accused the agency of issuing “a regulation that imposes a staggering and unjustified burden” that went beyond the intent of Congress.

    Among other grievances, the industry said federal officials wrongly required railroads to put PTC on track that by 2015 will no longer be used to haul chlorine or other extremely hazardous materials.

    The Transportation Department, to settle the litigation, offered to reduce the amount of track required to have PTC. The proposal, expected to be adopted in some form this spring, would remove 7,000 to 14,000 miles of track from the mandate, a cut of about 10 percent to 20 percent.

    In an Aug. 23 announcement, Transportation Secretary Ray LaHood characterized the move as being in line with the Obama administration’s initiative to streamline regulation.

    NTSB officials, however, say the proposal also could have a pernicious effect. They say it could crimp regulators’ flexibility to require PTC on troublesome track not specifically designated by the statute.

    For instance, regulators can insist on PTC when they are concerned about the safety of track where freight trains haul, say, ethanol – a dangerous material, but not one of the extreme hazards specified in the law. But the head of the NTSB, Deborah Hersman, said her agency is concerned that the “ability to identify other high-risk corridors will be hampered” because, under the proposed change, the railroads no longer would have to provide the government with as much risk data.

    Separately, House Republicans have advocated relaxing the PTC requirements. One of the leaders is U.S. Rep. John Mica of Florida, chairman of the House Transportation Committee.

    According to Citizens for Responsibility and Ethics in Washington, Mica is one of the biggest recipients of railroad industry campaign contributions, with $182,298 since 2008.

    He is working on a long-term surface transportation authorization bill that is regarded as a likely legislative vehicle for key breaks sought by the railroads. Lawmakers are expected to resume working in earnest on the authorization bill by the beginning of February.

    Mica has voiced support for extending the PTC deadline by three years and allowing trains to use so-called non-technological safety systems. 

    Such systems, unlike PTC, can’t automatically counter human error, which the Transportation Department says causes 40 percent of train accidents. Mica has described his goal as to “protect against overly-burdensome regulations and red tape.”  

    Another vocal critic of PTC is U.S. Rep. Bill Shuster, R-Pa., chairman of the railroads subcommittee.

    According to The Center for Responsive Politics, railroads were the top-contributing industry to his 2008 and 2010 election campaigns. Shuster has received $165,800 in campaign contributions from railroad interests since 2008.

    He has criticized the PTC mandate ever since it was adopted. At a March hearing,  Shuster advocated extending the deadline beyond 2015 and reducing the amount of track covered, while calling the existing requirements “regulatory overreach.”

    Talk of accommodating the industry, however, infuriates union leaders. “It’s hard for me to believe that anyone can go to Congress and say with a straight face that seven years after the bill passed is ‘not enough time for us to do this,’’’ said James Stem, legislative director of the United Transportation Union.  “But that’s what’s going on.”

    Frank Kohler, severely injured in the Chatsworth train wreck.

    It’s also distressing to crash victims such as Frank Kohler.

    Kohler was one of those injured in the Chatsworth disaster.  He woke up after the collision lying on the ground with his head split open; he suffered a brain injury that, Kohler says, causes him to get confused and has ended his 36-year career as an emergency responder and registered nurse.

    If PTC has been in place three years ago, Kohler said, he would have arrived home safely. Kohler added, “I would still have my professional life intact and I would be a productive member of society.”  

    FairWarning is a nonprofit, online investigative news organization focused on public health and safety issues.