On financial reform bill, 52 percent of lobbyists worked in government

Introduction

More than half of the lobbying force seeking to influence landmark financial reform legislation is made up of former members of Congress, Capitol Hill staffers and executive branch employees, according to a Center for Public Integrity analysis.

Of the 3,000 financial reform lobbyists, the Center found 1,556 have gone through Washington’s revolving door by working in the legislative or executive branch before being hired by private firms. An analysis of lobbying disclosure data for all of 2009 and the first quarter of 2010 showed more than 850 banks, insurers, companies, business associations and other organizations with an interest in financial regulation reforms spent a total of $1.3 billion on their overall lobbying efforts. But the disclosure law does not require lobbyists to itemize how much is spent on specific issues — nor does it require lobbyists to clearly identify former jobs with government agencies or on Capitol Hill in every quarterly report.

Lobbyists are hired in part for their inside knowledge, contacts and access to the legislative process, which gives former government officials considerable advantages. However, some lobbyists dismiss Washington’s revolving door as simply a way for people to gain experience in a specific field.

“It is so crowded on Capitol Hill and the noise level is so high, that if I wanted to get to a member and just get my issue considered, I have to go through somebody who knows how to get access,” said Tom Susman, director of the office of governmental affairs at the American Bar Association and a former staffer for 12 years on the Senate Judiciary Committee.

Susman said the people who most wanted to work with him after he left the Hill had business before the Judiciary Committee. Now as a registered lobbyist, he employs a similar strategy when he wants access to a member of Congress or committee staffers. “I look for people who can cut through the noise, who can get heard with the right message.”

Lobbyists have a dwindling number of days left to influence the sweeping reform bill that aims to overhaul banking and capital markets regulation. Senate and House negotiators begin meeting this week to reconcile differences in the two chambers’ reform bills, and plan to send a final version to the White House by July 4. Among the most contentious issues still on the table are whether the bill should limit risky trading and investing by big banks for their own accounts, force banks to sell their lucrative derivatives trading units, regulate auto dealers’ lending through a new consumer financial protection agency, and impose new restrictions on credit rating agencies.

Contacts in Congress can help, but there is more to lobbying than knowing the right people, according to Ed Kutler, senior partner at Clark & Weinstock, a firm that lobbied for financial reform on behalf of the American Institute of Certified Public Accountants. “Relationships are part of it, but these are smart, capable people who have a depth of experience and institutional memory in the financial services world,” Kutler said.

Some lobbyists argue that the prior government experience helps them become experts in their field and making contacts is a secondary concern. “It gave me a background in banking law, just like anyone else working in the field gets background and experience,” said Raymond Natter, a partner in the law firm of Barnett Sivon & Natter, who lobbied on behalf of Citigroup Inc. and the Financial Services Roundtable. Natter worked 10 years at the Office of the Comptroller of the Currency, which regulates some of the largest U.S. banks. The vast majority of his current practice does not involve the OCC, but when he does represent matters before the agency, Natter said he does not receive any special treatment.

Former government officials are not the only lobbyists with inside connections. Brothers, wives, children and other relatives of members of Congress face no lobbying disclosure requirements. For example, Brian Moran, brother of Rep. Jim Moran, a Virginia Democrat, lobbied on behalf of the Career College Association, on the financial reform bill. Also, Bo Chambliss, son of Sen. Saxby Chambliss, a Georgia Republican, lobbied for giant futures exchange CME Group Inc. Kimberly Dorgan, the wife of Sen. Byron Dorgan, a North Dakota Democrat, lobbied on behalf of American Council of Life Insurers. The Center did not include family member connections in its latest revolving door calculations.

Hard to spot all ex-government employees

The Center’s examination of financial reform lobbying disclosure data for all of 2009 and the first quarter of 2010 found only about one-third of lobbyists who were once on the government’s payroll listed their former jobs. The remaining 1,000 did not report their government ties on the disclosure forms analyzed by the Center. The law requires lobbyists to disclose a “covered position” – the term for a former government job – only once, either when registering as a lobbyist or on a lobbyist’s first quarterly disclosure form. This means a lobbyist can leave the “covered position” field blank when submitting succeeding quarterly forms, making it difficult for the public to identify former Congressional or government employees.

“The lobby disclosure forms are often vague,” said Lisa Gilbert of consumer advocacy group U.S. PIRG. “The ramifications of that make it hard to follow whether people are part of the revolving door process or not.”

This confusion could be rectified if lobbyists were required to report a covered position each time they fill out a quarterly disclosure form, Gilbert said.

The ABA’s Susman said such a requirement would not be a major burden. “It could be disclosed every filing,” he said. “It’s just one more line they have to report.”

Other lobbyists were cool to the idea, saying another quarterly disclosure requirement would increase the chances of an accidental omission of information that could lead to a fine.

Dana McCallum, a spokeswoman for the secretary of the Senate Administrative Services, which operates the Senate lobbying disclosure system, defended the system. “The database is user-friendly, based on feedback we receive from the filing community,” McCallum said in an e-mail to the Center.

But Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said the Senate website should do more to disclose lobbyists’ relationships with government officials. She questioned the functionality of the database for the public, the media, and other watchdogs. “I guess that they have it on the Internet at all is their definition of user friendly,” Sloan said.

Staff writers Josh Israel and Aaron Mehta and Soles Fellow Dan Ettinger contributed to this story.