http://www.msnbc.msn.com/id/11334751/

Quote :

"Clients’ rewards keep D.C. lobbyists thriving Compared to expenses, benefits to companies can be great A few years ago, a coalition of 60 corporations -- including Pfizer, Hewlett-Packard and Altria -- made an expensive wager. They spent $1.6 million in lobbying fees -- a hefty amount even by recent K Street standards -- to persuade Congress to create a special low tax rate that they could apply to earnings from their foreign operations for one year. The effort faltered at first, but eventually the bet paid off big. In late 2004, President Bush signed into law a bill that reduced the rate to 5 percent, 30 percentage points below the existing levy. More than $300 billion in foreign earnings have since poured into the United States, saving the companies roughly $100 billion in taxes. Although not every political battle yields $100 billion, the return on investment in lobbying is often so substantial that experts and insiders agree that Washington's influence industry will continue to thrive no matter how lawmakers decide to rein it in. Congress is crafting restrictions on lobbyists this year after the Jack Abramoff political corruption scandal. The initial revisions from both Republicans and Democrats would reduce the amount of travel and dining that lobbyists could cover for lawmakers and require more disclosure of their activities. Other proposals would decrease the number of narrowly targeted appropriations, called earmarks. But the new House majority leader, John A. Boehner (R-Ohio), has said he preferred more disclosure without the travel and meal restrictions. And the legislation under discussion would not eliminate earmarks entirely. No one on Capitol Hill is suggesting a ban on lobbying, a change that would run counter to the First Amendment to the Constitution. As a result, "lobbying will continue to grow," said Stephen J. Wayne, a political scientist at Georgetown University. The principal reason, said James A. Thurber, a lobbying expert at American University, is that "the investment in lobbying is minimal compared to the outcomes." 1-to-100 ratio The Carmen Group Inc., a mid-size lobbying firm, is so proud of its performance that it annually publicizes its clients' costs and compares them to the benefits they receive. In 2004, the latest year available, Carmen said, it collected $11 million in fees and delivered $1.2 billion in assistance to its clients -- a ratio of less than 1 to 100. The payoff is large but fairly typical of modern-day lobbying, said David Carmen, the firm's president. Take Carmen Group's experience with the General Contractors Association of New York. The association paid Carmen $500,000 to persuade the federal government to cover its members' insurance premiums for cleanup work at Ground Zero after the terrorist attacks of Sept. 11, 2001. After three years of lobbying, the government agreed to pay $1 billion. Congressional critics complain that average voters are left out when private lobbyists rush in. And some lobbying campaigns fail. The most recent and high-profile example was the oil companies' attempt to open part of the Arctic National Wildlife Refuge for oil and gas drilling. But from a business perspective, the rewards that come from lobbying are significant. Such outsize returns are made possible by the immensity of the federal government -- with its nearly $2.8 trillion annual budget -- and the willingness of Congress and the Bush administration to dispense that money widely. The ability of lobbyists to operate effectively in such a climate has made their work "a relative bargain," said Joel Jankowsky, the longtime head of the government relations practice at Akin Gump Strauss Hauer & Feld LLP. Kansas paid Akin Gump $240,000 to prevent the Defense Department from closing the state's four military bases. The law firm's efforts helped persuade the base-closing commission to spare the facilities last year. As a result, about $190 million in new investment will go to Kansas. Further, bases that were already spinning off $1.7 billion in income to its residents are still open, according to the state's figures. Akin Gump scored a similar coup for Hanson Building Materials America Inc. Over 18 months starting in 2004, the producer of crushed stone, sand and gravel paid the law firm $450,000 to keep federal highway money flowing. Passage of the highway bill in 2005, which Akin Gump pushed, means the company will receive hundreds of millions of dollars in sales and tens of millions in profit over the next six years, an industry executive familiar with Hanson's situation said. Lobbying helped keep Northwest Airlines Corp. out of bankruptcy court in 2004. The Pension Funding Equity Act that year allowed Northwest to delay paying an estimated tens of millions of dollars into its pension fund -- enough to allow the airline to put off filing for bankruptcy protection, according to Andrea Fischer Newman, a Northwest executive. Northwest's total spending on federal lobbying in 2003 and 2004 was $4.8 million, and only part of that went to influence the pension proposal. The costs and benefits of lobbying can sometimes be difficult to quantify. A coalition of technology firms recently spent $850,000 to persuade Congress to set a deadline for the transition to digital television and the accompanying auction of airwave spectrum rights. At the same time, several individual companies spent untold thousands on their own. It is also unknowable what the value of the legislation will be to the wireless communications providers and to makers of wireless devices that will benefit most from the auction. ‘Not everybody wins’ Yet the companies are anticipating that the payback will be huge compared with the lobbying expenses. New product sales generated by the new law "will be well into the billions of dollars," said Ralph Hellmann, senior vice president of the Information Technology Industry Council. Sometimes lobbying doesn't succeed at all, of course. "Sure, lobbying can mean millions of dollars, but only if you win, and not everybody wins," said R. Bruce Josten, executive vice president of the U.S. Chamber of Commerce. "For every lobbyist on one side, there's a counterforce on the other." Watchdog groups also worry that the broad public loses out to the corporations, labor unions and interest groups that can afford lobbying fees. "Lobbying is cost-effective only for those who can pay for lobbyists," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "Those with an opposing view won't be heard as well as those with lots of money." Nonetheless, well-heeled interests continue to risk significant amounts of money on Washington's influence industry in anticipation of large returns. The current debate on asbestos legislation is an example. After years of dispute, companies seeking legislation that would end asbestos lawsuits by creating a trust fund have spent $130 million on lobbying, according to Democratic calculations. Opponents have spent a like sum and a final resolution hasn't yet occurred. But neither side shows any sign of relenting. "This is a critical issue, so if that means continuing to hire lobbyists and consultants on Capitol Hill, so be it," said Timothy J. Keating, senior vice president of Honeywell International Inc., a leader among the asbestos bill's many advocates. Congress is considering several plans to crack down on lobbying. But the growth of lobbying was not slowed by the most recent changes in the law, a decade ago, which increased disclosure and limited what lobbyists could buy for lawmakers. 40 percent increase since 1999 Annual fees paid to registered lobbyists reached $2.1 billion in 2004 -- the latest full year for which figures are available -- a 40 percent increase from 1999. For 2005, lobbying revenues are on pace to rise by at least $300 million. The $100 billion tax bonanza that companies saved on foreign earnings helps explain the surge. Former representative Bill Archer (R-Tex.) championed the idea of bringing the earnings home tax-free when he chaired the House Ways and Means Committee in the 1990s. But it wasn't until he retired and became a lobbyist in 2001 that the effort finally got some legs. He was asked to lead the coalition and pressed the case for two years before the tax holiday became law. Some of the provision's backers say that $100 billion overstates the savings because some of the money wouldn't have come back without the lower rate. But for the companies involved, it's still a very good deal. "Even if the actual tax benefits are less than the estimate, they clearly dwarf the lobbying expenses," said Donald G. Carlson, a partner of Archer's at PricewaterhouseCoopers LLP, which led the coalition. © 2006 The Washington Post Company"

How this makes sense in a self-described egalitarian society is beyond me, of course, but hell, it's good for business!

2/14/2006 12:43:12 AM

If not for the 1 year change in the foreign earnings tax rate, the vast majority of that money would have gone unreported due to the tax deferral on overseas income. This is good for investors, good for business, and good for the IRS given that it actually brought a lot of money into the treasury.

The American Jobs Creation Act is somewhat flawed in that it doesn't have any way of tracing the money that companies repatriate. The law says that the money is not supposed to be used on executive compensation or boosting dividends, but the fungible nature of money makes it unenforceable.

2/14/2006 1:15:31 AM

They're just letting the free market run the government

2/14/2006 1:16:22 AM

6,250% Cumulative ROI

2/14/2006 1:28:38 AM

It doesn't work like that. They would have just reinvested those foreign earnings overseas if not for the AJCA of 2004.

2/14/2006 1:32:54 AM

Your one case doesn't undermine the myriad of other examples in which similar ROIs were accomplished through lobbying.

2/14/2006 2:42:54 AM

true.

We need lobby reform, particularly with respect to earmarking. The whole process needs to be more transparent.

I hate the stigma associated with business lobbying, though. Most businesses play by the exact same rules that environmental and labor groups do, but they (along with pro-business politicians) are constantly villified for perfectly legal lobbying tactics.

For example, just about every day leading up to Arnold's initiative campaign, the LA times would post a front-page article saying how much money he got from such-and-such business and how it might have influenced his politics. Meanwhile, organized labor spent more than twice as much as business advocates did, over 100 million dollars, blatantly influencing the Democrat-controlled state senate. But that didn't make headlines because it doesn't sound as shady as a business spending money to get some face-time with a politician.

The businesses that break the rules and buy off politicians should burn in hell, though.

2/14/2006 2:54:33 AM

A simple amendment to the Constitution could fix the lobbying problem...

Any law passed must apply to all citizens equally.

2/14/2006 3:08:45 PM

How do you make an anti-lobbying amendment that doesn't conflict with the first amendment?

[Edited on February 14, 2006 at 3:17 PM. Reason : that's where i get hung up every fucking time]

2/14/2006 3:17:40 PM

^^ I could have sworn that was already in there

^ You can't.
That said, it is largely unnecessary to do so. In some respects, the current explosion of lobbyist activity was created by the most recent lobying and campaign finance reform bills.

[Edited on February 14, 2006 at 3:31 PM. Reason : .,.]

2/14/2006 3:29:20 PM

There might be an equal protection case to be made here, actually. How do we allow a system in which one person with a deep pocket has more of a right to be heard by his elected representatives than another person without money to spare? If that's equality, I'm a fish.

[Edited on February 14, 2006 at 3:34 PM. Reason : doesn't address the 1st amendment conflict, though...just food for thought]

2/14/2006 3:34:11 PM

Quote :

"How do you make an anti-lobbying amendment that doesn't conflict with the first amendment?"

My amendment has no effect on the first amendment. You can lobby all you want. But politicians can no longer game the law so it helps one group at the expense of another.

2/14/2006 5:15:15 PM

Yes, let's ban the lobbyists! That way we can let rich people like Warren Buffett or George Soros run the country without competition

[Edited on February 14, 2006 at 7:16 PM. Reason : ---]

2/14/2006 7:14:45 PM

Let's revive hyperbole and toss red herrings to the wind!!!

And just how to rich people not run the country through direct or indirect means anyway?

[Edited on February 14, 2006 at 9:24 PM. Reason : ...]

2/14/2006 9:23:39 PM

Quote :

"TGD: That way we can let rich people like Warren Buffett or George Soros run the country without competition "

[Edited on February 14, 2006 at 9:41 PM. Reason : let me know if you need to have a conversation on how teh g0v works... ]

2/14/2006 9:41:23 PM

How T3h Gov Works: The rich decide who will best serve their interests (whichever interests they may be), donate heavily to their campaigns, and virtually ensure that they get into t3h gov.

What I don't understand is how you don't think the rich don't compete with one another...

2/15/2006 2:48:15 AM

What I don't understand is how you don't think the poor can band together, hire a lobbyist, and compete with the rich...

2/15/2006 7:32:04 AM

encumbent politicians already have money, the purpose of non-existant campaign finance laws was to allow a challenger to compete.

2/15/2006 10:05:28 AM

Quote :

"The rich decide who will best serve their interests (whichever interests they may be), donate heavily to their campaigns, and virtually ensure that they get into t3h gov"

It's not always true that the richest guy gets elected. Ross Perot spent millions of his personal money and was rejected by the voters. Steve Forbes has also spent millions to no avail. George Soros donated heavily to many causes in order to get Kerry elected.

Quote :

"the purpose of non-existant campaign finance laws was to allow a challenger to compete. "

Another example of good intentions gone bad. The current campaign finance reform law should be renamed "The Incumbant Protection Act"

2/15/2006 11:41:36 AM

FUZZY MATH

2/15/2006 12:16:32 PM

Quote :

"TGD: What I don't understand is how you don't think the poor can band together, hire a lobbyist, and compete with the rich..."

The odds are much better that the poor:

1. Don't have the time to band together in the first place.
2. Don't know a lobbyist or how to find one.
3. Don't have enough resources to compete with the rich.

I mean, sure, the poor can "compete" with the rich in the same sense that RC Cola competes with Coke for market share. It's not much of a competition, though.

In your example, you admit the poor would have to band together, presumably en masse in order to compete with the interests of the rich. Explain to me how that squares with egalitarianism. Why should ten million poor people need to band together to have the level of consideration of their interests levelled with the interests of the rich?

---

Quote :

"EarthDogg: It's not always true that the richest guy gets elected."

It's a good thing I didn't suggest that the richest guy gets elected, isn't it?

2/15/2006 5:04:10 PM

Quote :

"TGDboonedocks: That way we can let rich people like Warren Buffett or George SorosRupert Murdoch run the country without competition "

AND WHO DOESN'T LIKE WARREN BUFFET?

2/15/2006 5:45:45 PM

Quote :

"It's a good thing I didn't suggest that the richest guy gets elected, isn't it?"

You're much better at twisted semantics than I am, but still I think the rich cannot always buy an election.

2/15/2006 10:58:22 PM

Quote :

"Gamecat: Explain to me how that squares with egalitarianism. Why should ten million poor people need to band together to have the level of consideration of their interests levelled with the interests of the rich?"

Because your people enacted campaign finance limits that drive up the cost of campaigning as the same amount of $texas gets spread around more entities now competing over the same scarce media resources, thereby forcing anyone who actually wants to accomplish anything in politics to pander to big-money donors to get re-elected?

Of course it doesn't "square with egalitarianism"...

2/16/2006 12:57:22 AM

Who are my people? John fucking McCain????? You're getting slow in your trolling, and are still wrong to boot.

When, even prior to the passage of the dreaded campaign finance laws, has a rich individual's interest ever received the same consideration as a poor person's interest? According to the Constitution, they ought to be equal.

You're implying that the world was all peachy before McCain-Feingold. Jonathan Last would shit himself if he knew.

[Edited on February 16, 2006 at 6:38 PM. Reason : ...]

2/16/2006 6:37:51 PM

^
McCain-Feingold were the first campaign finance regulations ever enacted? Damn that's news to me.

And I'm getting slow in my trolling...

2/16/2006 6:49:43 PM

Perhaps the third time's the charm...

Quote :

"Gamecat: When, even prior to the passage of the dreaded campaign finance laws, has a rich individual's interest ever received the same consideration as a poor person's interest?"

Money isn't supposed to vote. People are.

[Edited on February 16, 2006 at 6:57 PM. Reason : ...]

2/16/2006 6:55:59 PM

So are you claiming there has never been anything resembling egalitarianism in the US government at any time since our founding?

2/16/2006 8:59:33 PM

If there was, I'd like to know when.

Are you claiming that we live in that world now? Or that campaign finance laws are what tipped the scale in the first place?

If it's the latter, please explain.

2/16/2006 9:57:34 PM

EarthDogg, Perot didn't want to win the presidency. he just didn't want Bush to win it, and he succeeded.

2/17/2006 12:20:50 AM

Still wondering...

3/13/2006 2:55:47 AM

Quote :

"A simple amendment to the Constitution could fix the lobbying problem... Any law passed must apply to all citizens equally."

Targetted tax breaks are so morrally repugnant it hurts. Nevermind that they are already illegal, the constitution already contains the above requirement. But the Progressive movement in the 20th century "evolved" the constitution in order to remove such sticky restrictions. How can you play god with the economy without targetted tax breaks and targetted regulation?

The sad part was that instead of changing the old liberal order by constitutional amendment, they simply broke it by appointing judges that can't read. Now that we know progressivist doctrine fails to make America better, we are left with a court history replete with silly decisions, and no real way back, short of starting over with a new constitution that says, basically, the exact same stuff as the old one. Perhaps a new amendment requiring "All parts and amendments to this constitution shall retain their understood meaning from the time they were enacted."

While SCOTUS might just "evolve" a new amendment to meaninglessness, at least they would look silly doing it.

[Edited on March 13, 2006 at 9:43 AM. Reason : amend]

3/13/2006 9:36:00 AM

I guess we've got a "no comment" from TGD.

3/13/2006 10:54:52 AM

^
Some of us have lives my friend...especially when we're busy corrupting the body politic

Quote :

"Gamecat: If there was, I'd like to know when. Are you claiming that we live in that world now? Or that campaign finance laws are what tipped the scale in the first place?"

Depends on how broad you want to make your definition of "egalitarianism." If we use your past standards as an example, there's never been "egalitarianism" in government since the invention of government itself.

But on a relative scale, we were certainly a lot closer before incumbency protections campaign finance reforms were enacted

3/13/2006 11:17:47 AM

One more:

Quote :

"When, even prior to the passage of the dreaded campaign finance laws, has a rich individual's interest ever received the same consideration as a poor person's interest?"

3/13/2006 11:34:43 AM

Quote :

"TGD: If we use your past standards as an example, there's never been "egalitarianism" in government since the invention of government itself."

3/13/2006 1:15:17 PM

Check out the history of Athens sometime. Still not a perfect example, but a lot closer to egalitarianism than what we have now.

3/13/2006 1:24:04 PM

Check out the history of the Jackson administration sometime. Still not a perfect example, but a lot closer to egalitarianism than what we have now.

3/13/2006 1:27:07 PM

How can you even compare the two? Are you referring to Jackson's spoils system or the issue over the bank?

3/13/2006 1:34:08 PM