Lobbying in the United States

The emergence of lobbyism

Lobbying in the United States arose at the same time as the state itself, and the democratic system of government contributed to its rapid development. Frequent elections, for example, have always meant politicians' dependence on public opinion, and checks and balances have dictated the need for constant dialogue between different branches of government. Thus, a whole layer of professional politicians appeared in the country, who needed to know the needs of their voters, and, if necessary, the mechanisms for influencing their colleagues within the framework of the law.

The legal foundation for lobbying activities in the United States is the first amendment to the Constitution, which, in addition to religious freedoms, guarantees the right to freedom of speech and the ability to appeal to Congress.

For much of the 19th century, federal lobbying remained less common in the United States than at the state level. The situation changed at the beginning of the "Gilded Age" (1870-1890s), and later during the Progressive era (1890-1920s). The rapid economic development of the country and the increase in the powers of the federal authorities caused a surge of interest in influencing political life in the capital^[1].

Another factor that contributed to the development of lobbying was the emergence of powerful corporations. Big business was not shy about using both illegal methods, including bribery, and quite legal ones - sponsoring politicians, public organizations and the press. By the beginning of the 20th century, congressmen, senators, judges and senior officials were entangled in a network of various lobbying structures. During the 1912 presidential election campaign, its future winner Woodrow Wilson stated that the US government was nothing more than an servant of influence groups, devoid of their own will.

Around the same time, the dependence of the authorities on big business became the subject of sharp criticism from society. The success of Democrat Wilson in the 1912 election was directly related to his promises to end corruption and the omnipotence of monopolies.

President Woodrow Wilson led the United States from 1913 to 1921. Photo: AP

Lobbying in Health Care

Main article: Lobbying in Health Care

Chronicle

2022: Sovcombank hires US lobbyists amid impending US sanctions

As it became known in early February 2022, Sovcombank hired American lobbyists amid impending sanctions in the United States. A Russian credit institution has enlisted employees of Mercury Public Affairs to represent it. Read more here.

IT companies' lobbying expenses

2023: Crypto companies dramatically increase funding for U.S. policymakers

At the end of December 2023, it became known that crypto companies sharply increased funding for American politicians in order to lobby their interests in. United States Congress Funds, in particular, provide a platform for buying, selling, transferring and storing, the Circle cryptocurrencies Coinbase stablecoin operator and the a16z venture fund founded by Mark Andressen and Ben Horowitz.

According to the Financial Times newspaper, the listed companies direct significant amounts to support lawmakers who advocate cryptocurrencies. Funds for financing American politicians are also provided by venture investors such as Ron Conway, Fred Wilson and twins Cameron and Tyler Winklevoss.

Crypto companies dramatically increase funding for US politicians to lobby for their interests in Congress

It is noted that participants in the crypto market invested $78 million in the Fairshake project, which allows candidates advocating for the support of the crypto industry to take an unlimited amount of money from corporations and individuals in the 2024 elections. According to reports, Coinbase in 2023 spent approximately $4 million on lobbying for crypto currency laws, while Circle has allocated approximately $760 thousand for these purposes since 2021.

However, as the Financial Times emphasizes, Washington's policies are increasingly taking into account the opinion of critics of the cryptocurrency market. Attacks on the crypto industry have intensified after the founder and former CEO FTX Sam Bankman-Fried of a cryptocurrency exchange was jailed for fraud.

We're going to do everything we can to depoliticise cryptocurrency. Our lobbying and Fairshake creates space for public debate on the merits, rather than using the crypto industry as a political soccer ball for demagogues who don't understand the social benefits of technology, says Faryar Shirzad, Coinbase's policy director.[2]

2020

Facebook and Amazon spent a record on lobbying

At the end of January 2021, it became known that Facebook and Amazon in 2020 spent record amounts on lobbying, with Mark Zuckerberg's company topping the list of companies trying to influence Washington.

Facebook has invested $19.7 million in lobbying - much more than in 2019. Amazon spent at least $18.5 million in 2020, up from $16.1 million a year earlier. The other three companies on the FAANG list - Apple, Alphabet and Netflix - did not set new records in 2020 for lobbying spending.

In 2020, Facebook and Amazon spent a record on lobbying

Apple said it paid $6.7 million, meaning its costs fell from $7.4 million in 2019. Google spent $8.7 million in 2020, while in 2018 the company's expenses amounted to $21.7 million. Netflix reported that in 2020 it spent only $750 thousand compared to the maximum cost of $1.3 million in 2015.

Big tech companies have increasingly come under scrutiny from U.S. lawmakers and regulators on a range of issues, with both Republicans and Democrats questioning the power of Silicon Valley companies.

Investors investing in the FAANG group, meanwhile, don't seem spooked by pressure from Washington, as stocks in all five companies beat gains in the S&P 500 over the past 12 months. Facebook's securities during this period increased by 23%, Amazon - by 75%, Apple - by 72%, Netflix - by 78%, Alphabet - by 27%, while the indicator strengthened by 16%.

According to the disclosures, Facebook has lobbied for issues such as online privacy, election security, work visas and freedom of expression, while Amazon has focused on postal reform, drones, payment processing, autonomous vehicles and annual spending on the country's defense.^[3]

Rising spending by Google, Amazon, Facebook and Apple

Google, Amazon, Facebook and Apple spent a total of $54.5 million lobbying their interests in Washington over the past twelve months (through June 30, 2020), up 35 percent from 2015 and up nearly 500 percent from 2010.

"These platforms were allowed to operate in free mode and without any restrictions," House Subcommittee Chairman David Sicillin said in an interview. - "Our duty is to clarify what the consequences may be from the lack of competition in the digital market."

2018: Apple, Microsoft and Google lobbying spending

At the end of January 2019, a US federal lobbying report was issued, according to which in 2018 the five largest technology companies in the country spent $64.3 million on lobbying government officials.

According to a federal report, Google became the largest "sponsor," paying $21.2 million in 2018. This is a new record for Google, which spent $18 million in 2017. Google has largely used the funds to lobby on issues such as cloud computing, cybersecurity, data protection, privacy, online advertising, global trade and immigration rules.

In 2018, Apple spent about $6.6 million on lobbying

In second place was Amazon, which in 2018 spent $14.2 million (in 2017 $12.8 million). Amazon has tried to influence lawmakers on issues such as cloud computing, data security and the Internet of Things. In third place is Facebook, which sent $12.6 million to the US capital ($11.5 million in 2017) to lobby lawmakers on issues such as cybersecurity, encryption and transparency of online advertising. But Apple and Microsoft in 2018 spent only $6.6 million and $9.5 million, that is, less than in 2017.

All of the companies had strong grounds for such spending - all facing allegations of privacy violations and disclosures that Russia used social media platforms and fake news to try to influence the 2016 U.S. presidential election. The spending also suggests that these big companies are concerned about Washington's scrutiny of issues such as privacy and data collection. Democratic senators recently introduced a new bill that would make tech firms no less responsible for protecting personal data than banking and health care.^[4]

2017: Record spending by Apple, Amazon, Facebook and Google

At the end of January 2018, it became known that the American IT giants Apple, Amazon, Facebook and Google in 2017 spent a record amount on lobbying their interests and trying to influence the American authorities - almost $50 million.

Among the issues the government handled in 2017, USA tech giants were most interested in immigration policy, tax reform, net neutrality and notorious Russian influence. Re/code learned about this from the mandatory reporting of companies in which they disclosed their lobbying expenses.

Apple, Amazon, Facebook and Google set aside record amount for lobbying in 2017

The most generous in terms of costs was Google Corporation: the Internet giant spent over $18 million on lobbying its own interests, more than any other technology company. Like other industry representatives, Google has tried to prevent the introduction of stricter content and advertising rules for its services, including Internet search and YouTube.

The world's largest online retailer Amazon spent $12.8 million on the same purpose, increasing lobbying costs by almost 4 times compared to 4 years ago. The company has sought policy easing on a wide range of issues, ranging from taxes on online sales to the introduction of commercial drones to deliver online purchases.

Facebook in 2017 also spent an unprecedented amount on lobbying - about $11.5 million, trying to resist tougher legislation regulating online content and advertising.

Lobbying expenses were also record for Apple - the company took about $7 million for these purposes. The iPhone creator has tried to influence policy on issues such as encryption use, immigration and tax reform.

Apple and Facebook refused to respond to requests for comment, and Amazon and Google did not respond to the emails sent to them.^[5]

2013: Facebook and Apple significantly increase lobbying spending

In the third quarter of 2013, Facebook and Apple significantly increased spending on lobbying in the United States. This was announced on October 22, 2013 with reference to the company's documents by the human rights resource Consumer Watchdog.

In total, Facebook spent $1.4 million on lobbyists, which is 47 percent more than in 2012. For the period from July to September 2012, the social network transferred 980 thousand dollars to lobbyists. Apple holds the championship in the dynamics of spending growth for lobbyists. Compared to the third quarter of 2012, her spending on lobbyists increased by 111 percent to $960,000.

Google has become the absolute leader in the high-tech sector in terms of spending on promoting its interests. In the third quarter of 2013, the company spent $3.4 million on agents of influence. This is 21 percent less than in 2012, when the proceedings of the Federal Trade Commission were conducted against her.

Microsoft increased deductions to lobbyists by 20 percent to $2.2 million.

Among telecommunication companies, she spent the most on lobbyists. AT&T She invested $4.3 million in promoting her interests. In second place was Verizon with $3.04 million.

Information about spending on lobbying goes to the House of Representatives of the US Congress and is available to the public. Among non-governmental organizations, according to The Huffington Post, the US Chamber of Commerce spent the most on promoting its interests - over $16 million.

Regulation of lobbying

The first serious attempts to regulate the lobbying industry were made already in the 1920s. In 1928, the Senate passed a bill requiring lobbyists to register with Congress, but the House blocked it.

1938: Foreign Agent Registration (FARA)

Due to the unstable situation in the world in 1938, Congress approved the FARA (Foreign Agents Registration Act). The law obliged organizations that act in the interests of other states to register with the Ministry of Justice and regularly report on their activities and sources of funding.

The FARA law has largely become a model for similar Russian legislation. In July 2012, the State Duma voted for amendments to the Law on Non-Profit Organizations. They obliged to register with the Ministry of Justice all organizations that receive funds from foreign sources. Even the rhetoric of the Russian authorities turned out to be similar to the American one - organizations should receive the status of a "foreign agent," which is a literal translation of the English term "foreign agents."

1946: Federal Regulation of Lobbying (FRLA)

After World War II, the Federal Regulation of Lobbing Act (FRLA), approved by Congress in 1946, was in effect in the United States. This law is notable for giving the first modern definition of who a lobbyist is. This is a person "who, either himself or through his agents or employed persons, directly or indirectly collects gifts, donations or other proceeds, which are then used primarily to directly or indirectly influence the legislative process in the US Congress." The law required lobbyists to register with Congress and report on their activities, particularly any more than $500 in donations to a member of Congress.

In 1954, the Supreme Court slightly narrowed the application of FRLA. Members of Congress were allowed to lobby without registration, provided that their own funds were spent on this, and not raised funds. In addition, groups that engaged in indirect lobbying, that is, creating public opinion, were excluded from the definition of lobbyists.

Such a narrow interpretation of the law affected its effectiveness. In the entire history of the FRLA, it has been used only once. In 1956, two Superior Oil Corporation lobbyists were fined for undue influence and donations of 2.5 thousand dollars to South Dakota Senator Francis Case.

A new stage of public discontent with lobbying, and on the other hand, the growing demand for the services of "agents of influence" fell in the 1970s. He was directly involved with the Watergate scandal and the general public's fatigue with corrupt Washington. The growing influence of lobbyists is evidenced by the fact that all attempts by the Senate to tighten control over them ended in failure. Lobbyists appealed to the first amendment to the Constitution, which guaranteed the legality of their activities.

1995: Disclosure of Libbist Activities (LDA)

The need to change the unsuccessful FRLA law and the next corruption scandals led to the adoption of the industry-landmark Lobbying Disclosure Act (LDA). Its discussion and coordination in Congress took three years - from 1992 to 1995. The law called a lobbyist anyone who receives over $2.5 thousand for his lobbying services in a three-month period and pays more than 20 percent of his time to lobbying. The organization is recognized as lobbying if in three months it intends to spend more than 10 thousand dollars to promote the interests of its clients. Companies and individuals involved in lobbying must register with Congress and report on their activities.

2007: Honest Leadership and Open Government (HLOGA)

LDA provisions were tightened in 2007 when the Honest Leadership and Open Government Act (HLOGA, Honest Leadership and Open Government Act,.pdf) was passed. He tightened his grip on lobbying companies, members of Congress and senior government officials. In particular, for senators who have left office, a two-year pause is provided before they themselves can begin to engage in lobbying practice. Senior officials have a lifetime ban on lobbying activities in the area they oversaw while in government.

Lobbyists have been barred from offering gifts to members of Congress whose acceptance violates ethics for lawmakers. In addition, congressmen and senators were obliged to pay the cost of a flight on private planes.

The HLOGA Act was supported by Barack Obama when he was a senator from Illinois. His opponent in the 2008 election - Republican John McCain - voted against. However, despite the approval of the future head of state and the general tendency to increase the transparency of lobbying actions, "influence traders" for 2013 only increase their power in Washington. As the state apparatus grows and the cost of election campaigns grows, politicians and officials are increasingly dependent on funding and organizational support from the population. In the realities of the United States at the beginning of the 21st century, this means an increase in demand for competent lobbyists. Paradoxically, this does not always lead to the financial prosperity of the lobbyists themselves.

Number of lobbyists and their income

Lobbying has been linked to behind-the-scenes deals and clandestine negotiations since its introduction. Despite efforts to increase the transparency of this area of ​ ​ the economy, frequent reservations are inevitable in its analysis that we are talking only about open statistics of K-street companies (a street in Washington, where the offices of the most successful lobbying companies are located).

In the United States, a number of organizations are engaged in civil control over lobbying companies and agents. These include, first of all, the following:

• Center for Responsible Politics,
• Public Citizen,
• Consumer Watchdog and a number of others.

All of them can also be considered lobbying structures to some extent.

According to the Center for Responsible Policy, which is based on official information from Congress, there were 11,455 lobbyists registered in Washington in 2013. This is less than in 2012, when 12,426 lobbyists operated in the capital, while the maximum number of registered "agents of influence" was observed in 2006 - almost 15 thousand. Obviously, the presidential election explains the significant spending on lobbyists in 2012, which amounted to 3.31 billion. In dollars 2013, according to official figures, only $1.62 billion was spent. The record was set in 2010, when the lobbying industry totaled $3.55 billion. Typically, the increase in spending on lobbyists coincides with presidential elections or midterm congressional elections.

From 1998 to 2010, lobbyist revenue grew by 153.3 percent from $1.4 billion to $3.55 billion. At the same time, a decrease in the profits of individual lobbying companies was recorded. Specifically, founded by former Republican National Committee chief Haley Barbour, Barbour, Griffith & Rogers reported a 38.1 percent drop in revenue - from $22.3 million in 2007 to 13.8 million in 2012. Another major company in the world of lobbying, QGR, lost more than half of its revenue from 2008 to 2012.

According to The Washington Post, in the first nine months of 2013, the combined revenue of the ten most profitable lobbying organizations in the United States fell by three percent - from $173.6 million to 168.3 million. The publication linked the industry's losses to a bitter standoff between Republicans and Democrats that makes it harder to pass laws and reduces lobbyists' interest in working with members of the House and Senate.

Lobbyist clients and project examples

Among the clients of lobbyists, the largest corporations and commercial associations are predictably leading. USA During the incomplete year of 2013, the Chamber of Commerce, the largest business lobby, spent 38.5 million on "pushing" its interests, the dollars National Association of Realtors - $17.6 million, and the industrial conglomerate - General Electric over $9.9 million. Given the Democrats' intentions to carry out a large-scale reform, health care the main clients of lobbyists are medical enterprises. Together they in 2013 invested over $117 million in creating a profitable image for themselves.

At the same time, it must be borne in mind that the huge range of activities of lobbying structures does not fall under regulatory actions. In particular, we are talking about television advertising, organizing political campaigns at the grassroots level, spending on advertising on the Internet; some of the lobbying spending goes on other items of spending, which prevents you from accurately assessing the state of the lobbying industry. This fact has been repeatedly pointed out by experts.

SOPA - Anti-Piracy Act

A symptomatic example of the effectiveness of lobbyists can also be an example of the SOPA (Stop Online Piracy Act) bill against piracy on the Internet. By the beginning of its discussion in Congress, the document was supported by both Democrats and Republicans. In addition, some lawmakers believed that the bill could become the main one for bipartisan cooperation, which only increased the chances of its adoption. In the business environment, SOPA was campaigned for by Disney, Mastercard, Visa, the Chamber of Commerce and a number of other powerful organizations.

Computer companies - Google, Yahoo, Twitter, Facebook - opposed. Their supporters conducted massive outreach, convincing the public that SOPA would violate their rights. Opponents of SOPA convinced congressmen that, once passed, the law would have a negative impact on the Internet and limit Americans' freedoms. As a result, only a few months later, Congress was forced to abandon SOPA.

The victory of "Internet lobbying" showed that in the future the industry will be increasingly present on the Web and use grassroots mobilization to achieve its goals. This is especially true because it does not (at least not yet) fall under most of the existing restrictions and is relatively accessible.

Key features of lobbyists "fight against SOPA reveal the heart of the lobbying industry. While lobbyists champion the interests of specific organizations, including large corporations, the success of their activities depends on public support. On a case-by-case basis, the lobbyist must convince politicians and the public that the legislation being passed or the new restriction serves the common good. In the case of SOPA, the fear of the majority losing access to information turned out to be stronger than the desire of some interest groups to guarantee themselves intellectual property rights and related income.

Military contracts

At the end of February 2013, in the United States, a military contract worth $950 million was won by the Brazilian company Embraer and its American partner, Sierra Nevada Corp. Their rival was the American corporation Beechcraft. The victory of foreigners in such a sensitive area for the United States as security was directly related to the efforts of Sierra Nevada lobbyists, who managed to explain to the public the advantages of Embraer products.

Oil contracts

2019: Unaoil pleads guilty in bribery case for customer companies

After a journalistic investigation, the US Department of Justice launched an investigation, the details of which were not disclosed until 2019. The investigation found that Unaoil was a major intermediary for Western companies that paid bribes to obtain energy contracts around the world. For more details see Unaoil

Lobbying in Europe

Main article: Lobbying in Europe

Notes