Lobbying and Policymaking: The Public Pursuit of Private Interests

Whether lobbying the legislature, the president, or the bureaucracy, lobbyists must understand and account for three streams of information about the policy they seek to influence: they must know the substance of the issue, the process that governs the policy, and the people who will make key decisions along the way. Every successful lobbying effort requires correctly moving the substance, process, and people at the right time. Substantive knowledge refers to an understanding of the technical aspects of a policy and the political environment surrounding the issue. Lobbyists who lack substantive expertise are unable to provide quality information, generate accurate analyses, or request realistic policy adjustments for their clients. Lobbyists must also know the process by which the policy decision will be made. This includes when the process is vulnerable to outside influence, where in the process the critical decisions will be made (and by whom), what types of information will be most persuasive at those times, and how to structure the policy outcome so that its impact will be long lasting. Finally, a lobbyist must know the people who will decide the policy. Better yet, she should know these policymakers personally. The decision makers must trust that the lobbyist will protect their interests, is telling the truth, and can deliver what she promises. For example, if a lobbyist is attempting to convince a policymaker at the Nuclear Regulatory Commission that changing a proposed regulatory rule will not jeopardize safety, the policymakers must have confidence in the lobbyist's expertise and information. Most importantly, the policymakers must have confidence in the integrity and truthfulness of the lobbyist herself.

Failing to account for any of the three streams of information leaves a lobbying strategy vulnerable to unexpected obstacles at inopportune times. Every lobbyist interviewed by the authors explicitly stated the importance of addressing each [Page 216]of the three categories, although different lobbyists and/or firms weight the three aspects differently. In other words, some lobbyists and firms specialize in substantive expertise, others concentrate on influencing a specific subset of policy processes, and still others rely upon key contacts within government to move policy. Regardless of specialization, however, a firm must possess or purchase a sufficient degree of control over all three categories to have sustained policy influence. We now examine how the search for the three skill sets drives the hiring and training of executive branch lobbyists.

There was a consensus among the heads of lobbying firms that individuals who lobby the executive branch should have sufficient expertise in a substantive area to present a client's case to knowledgeable decision makers. Executive branch lobbyists tend to have advanced degrees in law, business, economics, public policy, or in a substantive area such as agriculture, water resources, or engineering. After completing his or her formal education, a future lobbyist gains further substantive expertise by working in government, in a consulting firm, or for industry. The preparation of Erik Godwin, the coauthor who worked for the executive lobbying firm the EOP Group, is typical of executive branch lobbyists. He did graduate work in environmental science at Oxford University in England, earned a master's degree in public policy at the University of Michigan, worked for the environmental consulting firm Industrial Economics Inc., and then worked on environment and energy issues in the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB). Only after all of that training and job experience did he join the EOP Group, where he lobbied on environmental issues.

The heads of contract lobbying firms saw substantive knowledge as the easiest type of expertise for the firm to acquire. Firms can have their existing lobbyists learn the substance of an issue, they can partner with other interest groups, or they can simply hire someone who already has the necessary expertise. A recent example of how corporations and trade associations hire substantive expertise is the eruption of hiring that followed the passage of the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act.4 Hailed as the most important financial regulation since the Great Depression, the law is 851 pages long and contains 1,601 provisions, almost all of which will result in new rules and regulations from the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, and other federal agencies. The act immediately became the “Financial Lobbyist Full Employment Act” as banks and other financial institutions rushed to hire the legal and financial expertise necessary to lobby the regulatory agencies working on the new rules.5

Lobbying firms can also obtain substantive expertise by taking advantage of the work conducted by the numerous think tanks that specialize in particular fields. For example, Resources for the Future (RFF) is a think tank located in Washington, D.C., that focuses on environmental economics. RFF produces [Page 217]excellent issue-specific analyses that are designed to resonate with federal decision makers. Some think tanks are clearly partisan and ideological. For instance, the American Enterprise Institute (AEI) is a conservative think tank that favors the Republican Party, the Brookings Institution is more liberal and favors the Democratic Party, and the Cato Institute supports the libertarian ideology. The partisan affiliations of think tanks often serve as useful cues that help decision makers evaluate the political implications of the work products. For example, our estate tax case study showed how Patricia Soldano used an economic report prepared by AEI to convince Republican lawmakers that the estate tax reduced jobs and economic growth. Because of AEI's conservative stance, the Republican audience had greater confidence that the information was consistent with the preferences of the conservative agenda.

Substantive expertise is often the fastest route into lobbying for newly minted college graduates. Lobbying firms often hire within such defined areas of policy knowledge as renewable energy, biotechnology, labor economics, or aerospace engineering. Students spend their collegiate careers acquiring significant technical skills that make them attractive to firms that need to increase technical knowledge. Note, however, that new substantive specialists generally have a very limited initial role in the lobbying process. They are technical resources and are good for answering technical questions. Joining a lobbying firm or interest organization as a substantive specialist is one of the fastest and easiest ways into lobbying, but you must still develop expertise in process and people.

In summary, there are lobbying firms that specialize in every major substantive area in which the federal government is active. These firms supply expertise to corporations, trade associations, citizen action groups, and to other lobbying firms. If you are thinking of becoming such a lobbyist, look at Figure A.1. It provides a short synopsis of the education and career paths of Dan Barolo, James Aidala, and Linda Fisher, three lobbyists who specialized in pesticides.

FIGURE A.1 The Career Paths of Three Pesticide Lobbyists

There is a consensus among the heads of the contract lobbying firms that a lobbyist who thoroughly understands the political structures and the policy processes surrounding a given issue is a vital part of a successful firm. We have seen throughout this book that policy change is dynamic, with key decisions occurring at different times in the policy process. Successful lobbyists know when these decisions will occur, which procedural stages are vulnerable to influence, and what types of lobbying are most persuasive at each stage. One head of a lobbying firm stated that more than 50 percent of his firm's business involved using bureaucratic processes to speed up, slow down, or stop a given policy change. Political scientists have long recognized the importance of process mastery to lobbyists. Stanford political scientist Terry Moe, perhaps the preeminent bureaucracy scholar over the past 25 years, wrote the following:

Who is most likely to understand the political structures and policy processes? The answer is those individuals who have worked in the government. A major reason that there is a constant movement of government officials to lobbying organizations is that ex-bureaucrats understand where in the policy process structural decisions are made, where in the decision process to devote lobbying resources, and how a policy should be written to ensure that its implementation is effective (or ineffective). For instance, environmental organizations want the Environmental Protection Agency (EPA) not the U.S. Department of Agriculture (USDA) to be in charge of pesticide registration and review. Interest organizations that oppose a regulation, conversely, will want its implementation assigned to an agency whose mission opposes the regulation's goals. For example, imagine how different safety in the workplace might be if the U.S. Department of Commerce and Industry rather than the [Page 220]Occupational Safety and Health Administration (OSHA) were in charge of regulating worker safety.

Our case studies demonstrate the value of using process knowledge to either facilitate or undermine policy changes. In the case of the Data Quality Act (DQA), lobbyist Jim Tozzi wanted the DQA to serve industry's preference for stringent evaluation of information. He made sure that OIRA would oversee the implementation of the new law. OIRA's statutory mandate calls for the office to maximize the societal benefits of new regulations. The result of the agency's mandate was a bureaucracy in which economic efficiency was the dominant value. Efficient outcomes are extremely difficult to generate when policy decisions are made using poor quality data, and OIRA had a long history of turning back agencies’ attempts to collect and/or generate substandard information. By placing the implementation of the DQA within OIRA, Tozzi ensured that an agency committed to information quality and economic efficiency would oversee agencies’ compliance with the new law.

Skilled lobbyists can also use their knowledge of the policy process to prevent new policies from being successfully implemented. When the pharmaceutical company lobbyist wrote the Cochran Amendment to the Prescription Drug Reimportation Act, she knew that the U.S. Food and Drug Administration (FDA) was unlikely to certify that all imported drugs were safe. The FDA's mission to protect consumer safety made it functionally impossible for the agency to certify the safety of all reimported drugs. The lobbyist also knew that legislators would be wary of voting against an amendment that ostensibly was designed to increase consumer safety.

The need for process expertise creates endless opportunities for individuals to enter into the lobbying profession. Because government structures and policy processes are so complex, numerous lobbying agencies specialize in particular parts. So, for example, some firms can specialize in the regulatory process of a specific agency such as the EPA, the SEC, or the Nuclear Regulatory Commission. As a lobbying firm increases the number of issue areas on which it is active, the firm must hire individuals who understand the institutional structure and policy process of each substantive issue area. To be hired as a process specialist, however, a prospective lobbyist will ideally have worked within the policy processes that she seeks to influence. In the case of the DQA, for example, Jim Tozzi had directed OIRA earlier in his career. He therefore not only had exhaustive knowledge of the processes but he also understood how the economic preferences of OIRA as an institution shaped its discretionary application of those processes.

That level of process expertise is extremely expensive for firms to develop in-house, and all of the firms interviewed stated a preference for hiring lobbyists who were already procedural experts. Hiring out of the agencies has another key advantage in terms of process knowledge—accuracy. Government processes inevitably evolve over time as they respond to changes in the policy environment. By hiring recent government practitioners, lobbying firms can stay current on the procedural stages and exploit new procedural opportunities. [Page 221]In fact, bureaucrats often have substantial discretion to change federal decision-making processes. This makes them the world's experts on the new processes that they designed.

Finally, one lobbying firm founder stated that the principal reason he liked to hire process specialists out of the bureaucratic ranks is that they typically make far fewer mistakes than those who had not spent time in government. When asked why, he said, “Lobbyists can't afford to ask for the impossible. Some things simply cannot be done at certain times in an agency's process. Ex-bureaucrats are sensitive to this, and ask the right person, for the right thing, at the right time, in the right way.” Notably, a comprehensive knowledge of the process depends upon identifying who is making the key decisions and what the policy preferences of those individuals look like. We turn now to how people expertise factors into the hiring decisions of lobbying organizations.

During an interview with the head of a lobbying firm, one of the authors of this book was permitted to observe a job interview between the firm partner and a candidate seeking to join the firm as a lobbyist. At one point, the partner slid a legal pad across the desk to the applicant and said, “Write down the name and position of everyone at the EPA who will take your call without pushing it to voice mail.” When the author asked about the question later, the partner replied, “I need to know who this guy can reach out and touch. Substance and process are vital, but people are where we make our money.” All of our interviews confirmed that the worth of lobbyists is strongly related to their access to decision makers. In this age where every bureaucrat has caller ID, the ability of agency personnel to systematically ignore an interest organization makes access increasingly difficult.

Interest-group scholars and journalists tend to discuss this type of expertise when writing about the legislative branch. It is quite common, for example, for lobbying firms to hire ex-congresspersons and senators, a legislator's key staff member, or a staff member from an important legislative committee. For example, the lobbying firm Greenberg Traurig gives the following biography for Nancy Taylor, one of their partners:

Taylor, an attorney, was listed in 2007 by the Washingtonian as the thirty-third most influential lobbyist in Washington with revenues of well over $1 [Page 222]million per year. The Washingtonian reports that Taylor's close relationship with Sen. Orrin Hatch, R-UT, a member of the Senate Labor and Human Resources Committee, accounts for much of her success in lobbying on health care.10 Out of the fifty top lobbyists listed by the Washingtonian, thirteen are previous members of Congress, twenty-one are ex-congressional or ex-agency staffers, and three are family members of serving members of Congress.11 The lobbyists listed at the very top of the list were Hale Boggs and Bob Dole. Boggs's mother and father were members of Congress, and his sister is an important journalist in the Washington community. His lifelong connections with key personnel throughout the Democratic Party provide him with unmatched access to Democrats in Congress. Similarly, Bob Dole was the Senate majority leader and a Republican nominee for president. Until 2008, his wife was a senator from North Carolina.

In an important paper, Jordi Vidal, Mirko Draca, and Christian Fons-Rosen examined the income of lobbyists who joined a contract lobbying firm after serving as congressional staffers. The authors found that lobbyists connected to U.S. senators have an annual income that averages more than $300,000. These lobbyists suffer an initial loss of $160,000 in their annual revenue when their previous employer leaves the Senate. Although these lobbyists regain about half of this annual income after a five-year period, they are unable to reach their previous income level. Many ex-staffers leave lobbying shortly after their senator leaves.12 Vidal et al. interpreted this finding as evidence that a key determinant of the revenue that a congressional lobbyist can generate is her close relationship with a congressperson. In other words, lobbyists “cash in on their connections.”13 Although no one has collected similar data on lobbyists who specialize in lobbying the executive departments and regulatory agencies, a quick examination of Figure A.1 and the websites of powerful executive-branch lobbying firms shows that government connections are a key attribute of the lobbyists. You will find a similar pattern if you go to the web pages of major trade associations and examine the personal pages of their government relations staff.

Why are these relationships so important? The answer is partly structural and partly reputational. Structurally, the most obvious answer is that a person who has worked closely with other members within a policy system is more likely than an unknown outsider to have her phone call accepted, to meet the policymakers for lunch, and to receive time to discuss an issue. This effect is particularly powerful if the lobbyist used to work within the agency and hired, trained, or promoted the people she now seeks to influence. Several of our case studies also showed the importance of forming coalitions with other lobbying organizations. This is much easier to do if you know the lobbyists in those organizations and you have developed a high level of interpersonal trust. These individuals often have political information that will be extremely useful to your lobbying efforts. They also can assist you in developing lobbying strategies and monitoring what an agency is doing.

[Page 223]The importance of personal contacts, however, goes far beyond a lobbyist simply knowing the players on an issue. A lobbyist who is personally familiar with the individuals involved also has knowledge of their policy preferences. The decision processes used by each individual tend to follow predictable patterns—patterns that lobbyists must account for when crafting a strategy. For example, if a lobbyist knows that a key decision maker believes strongly in market incentives then the lobbyist will approach the bureaucrat with economic arguments. Conversely, a lobbyist would take a different approach with a bureaucrat who is more concerned with equity issues.

Finally, no conversation of lobbying would be complete without recognizing the importance of reputation when dealing with the people making decisions. Lobbyists are more successful when they know decision makers, but lobbyists are also much more successful when decision makers know and trust lobbyists. Building this trust often takes repeated interactions in multiple venues. Trust is difficult to gain but easy to lose. The reputation of a lobbyist is one of her most precious possessions because lobbyists rely upon access so heavily. Executive branch personnel rarely grant access to lobbyists who have proven themselves untrustworthy in the past. As the head of one lobbying firm stated, “If you have to choose between sinning against God or the bureaucracy, choose God. He forgives.”

In summary, having good relationships with policymakers and with other lobbyists is critical in lobbying agencies. As we saw in our case studies, important issue areas such as corporate taxation, agriculture, energy, pesticides, transportation, and health care have issue networks made up of government officials, lobbyists, and others who have sufficient substantive knowledge to participate. The success of a lobbyist in representing her client's interest may depend on her personal relationships with other participants in an issue network, both government officials and other lobbyists.

In every contract lobbying firm and in every effective lobbying organization, there must be all three types of expertise: (1) substance, (2) process, and (3) people. Obviously, these three sets of skills are related. Persons who have process expertise on an issue also will know a great deal about the substance of that issue, and they will know many of the policymakers. This helps to explain why ex-government officials are sought after by lobbying firms. Say, for instance, the Natural Resources Defense Council (NRDC) or Dow Chemical Company wants expertise concerning the renewal of a particular pesticide. It can hire specialists from such lobbying firms as Jellinek, Schwartz & Connolly or Bergeson & Campbell. These firms hire ex-bureaucrats who dealt with pesticides while working at the EPA. For example, Jellinek, Schwartz & Connolly hired Daniel Barolo, the ex-director for the EPA's Office of Pesticide Programs, and James V. Aidala, the ex-assistant administrator for EPA's Office of [Page 224]Prevention, Pesticides, and Toxic Substances. Barolo had done graduate work in environmental engineering at Vanderbilt, and Aidala had done graduate work in chemistry at Harvard.14 These individuals understand the scientific information about pesticides, know what types of information are most important to the EPA officials who will make the policy decisions, and Barolo and Aidala probably recruited many of the policymakers in the EPA whom they later lobbied.

Lobbyists who command the highest salaries and lobbying fees are those who can bring all three types of expertise to bear on issue quickly and cleanly. Dr. Jim Tozzi provided the clearest example of how having all three types of knowledge increases a lobbyist's value. First, the bureaucratic process that he was seeking to change was not specific to any one department or agency. To change it, therefore, required more than simply convincing a single agency to amend its process for evaluating the quality of data; all of the agencies would have to accept the new system. Since some agencies were quite happy with the existing process, Tozzi needed to use Congress to force widespread change. Tozzi's relationships with the right people were critical to DQA's success. Specifically, he successfully convinced two policymakers to help him: Rep. Jo Ann Emerson, R-MO, in the House and Sen. Richard Shelby, D-AL, in the Senate. Emerson attached two short paragraphs to an appropriations bill. Tozzi understood the substance of the issue perfectly, and he knew precisely how to word the two seemingly innocuous paragraphs. The two paragraphs caused a dramatic shift in the types of information that the executive departments and regulatory agencies could use in licensing and renewing products. This changed the tug-of-war between industry and citizen groups by tilting the playing field in favor of industry. Senator Shelby then ensured that the amendment remained part of the appropriations bill in the Senate. Tozzi had the information necessary to convince these two key legislators that the regulatory process was rigged against industry and that this imbalance created economic harm to the nation. Most important, because he had served as the director of OIRA, Tozzi understood how to restructure the process of federal information gathering in a way that favored producers. He made use of OIRA's existing infrastructure, personnel, and preferences to ensure that the implementation stage was successful.

Similarly, Mexican president Carlos Salinas knew that the best approach for getting the North American Free Trade Agreement (NAFTA) on the political agenda was not to approach President George H. W. Bush directly but to convince the American business community that a free trade agreement was in its interests. Salinas also knew that the most influential business lobby was the Business Roundtable, and he had close personal relationships with several members of that organization. Patricia Soldano was able to lobby successfully for a temporary end to the estate tax because she knew how to create a coalition, frame the issue in a way that would appeal to the public, and generate the information necessary to justify the legislation. Finally, the chief lobbyist for a major pharmaceutical company convinced Sen. Thad Cochran, R-MS, to add an [Page 225]amendment she wrote to the drug reimportation legislation. The amendment required the secretary of Health and Human Services (HHS) who represented the FDA, to certify that all pharmaceutical drugs imported to the United States would be completely safe. The lobbyist understood that this would be impossible for the FDA to guarantee, and the Cochran Amendment totally eviscerated the drug reimportation legislation. In each of these cases, the lobbyists had all three types of knowledge. They knew the policymakers who could make the decisions, understood what political and substantive information would convince them, and understood how to write the proposed policy so that it would have the desired effect. Often, however, the interest group wanting to make a policy change must hire several lobbyists to achieve all three types of expertise.

As Figure A.1 indicates, becoming a super-lobbyist of the bureaucracy is difficult. It requires graduate training, often requiring multiple graduate degrees. It requires working in a firm or in a government agency to gain further substantive knowledge of a policy area. It also requires service in government at a sufficiently high level to develop personal relationships with policymakers and to gain the knowledge of government structure and process necessary to be effective. So, do you really want to become a lobbyist? It is a long road from graduating with a degree in political science to becoming an effective lobbyist.