Michael Herson in the News

Even in tough times, K Streeters know where to find business

By T.R. Goldman

Washington Post



Even in tough times, K Streeters know where to find business By T.R. Goldman, It’s the lobbyists’ conundrum: What might be bad for the country could be good for K Street, especially veteran defense lobbyists like Mike Herson.

“If the pie is shrinking,” he says of the sequester’s mandated $43 billion in defense cuts, “a lot of people decide they have to put more resources into getting their share of the pie.”

How that defense pie (pork pie, perhaps?) will contract is far from preordained. And therein lies the Good, the Bad and the Profitable.

“We’re about to enter hand-to-hand combat,” says Steve Hart, who runs the lobby boutique Williams & Jensen. “It will be this new, shiny airplane versus that new, shiny destroyer.”

For K Street, there was little business to be had in the run-up to the sequester. “It’s hard to lobby something that comes down to [House Speaker John A.] Boehner and the president in a room,” notes Hart. But many among the city’s estimated 10,000 or more lobbyists hope the sequester itself — a budget bludgeon of either salutary or iniquitous value, depending on your point of view — might actually provide a slight uptick in billings.

And surely no one would want to deny the good men and women of K Street a better 2013 than the past few years. After all, like the rest of the country, they’ve been suffering too, in a K Street kind of way. “We’ve absolutely cut back on costs,” says Prime Policy’s Chuck Merin, from trimming bonuses to moderating the “staggering” expense of online subscriptions. The OB-C Group’s Larry Harlow reports that, among other cost-cutting measures, “we trimmed the health plan a little bit . . . and made some adjustments with regard to the plants.”

It has been a bit stressful, if lobbyists are allowed to say so themselves. For some time now, K Street’s primary meal ticket — the 535 members of the House and Senate — has been immobilized in a rictus of partisan gridlock, and the lobbyists’ mostly corporate clients have been hammered by the worst recession in decades. When companies are forced to cut costs, they often don’t make an exception for their stable of outside consultants, as contract lobbyists are euphemistically known. Indeed, trying to retain or add business in the face of corporate budget cuts is perhaps a lobbyists’ toughest sell. “

At least one of the top four [defense contractors] cut one-third of their consultants — just fired them,” says one lobbyist who did not wish to be named. “Another company had four consultants — and they fired three. I’m the last person standing, and I got a 50 percent cut.”

Few people expect this new Congress to be much more proactive than the last, the most sclerotic in decades, where naming post offices and courthouses actually passed for getting something done. But there is reason for hope.

“I wouldn’t go so far as to call it a thaw,” said Patton Boggs lawyer Stuart Pape, who for years was the managing partner at the firm, one of the city’s perennial lobbying stalwarts. “But there’s a little melted water on the street.” Say, a puddle of potential business for cybersecurity and immigration reform, important to several sectors of the business community, perhaps a bit of energy work, a potential cloudburst for tax reform — if it were to actually achieve critical mass. And on the regulatory side, a veritable hurricane of billable hours as the Securities and Exchange Commission figures out how to implement the Dodd-Frank Wall Street reforms and the Department of Health and Human Services works out the kinks in the Affordable Care Act.

So what’s a lobbyist to do in 2013 in pursuit of a few bucks?

●Hope like heck that there’s a resumption of “regular order” so that bills make their way from the committee to the floor — leaving ample room for some lobbying intervention — instead of originating with leadership, a far more closed and hermetic process. “Regular order,” notes Hart professorially, “is helpful to the lobbying community.”

●Believe that Senate Finance Committee Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Dave Camp (R-Mich.) are serious about tax reform, bearing in mind, as Capitol Counsel’s John Raffaelli puts it, that under House GOP rules Camp has only two years left in his chairmanship, “so there’s no ‘we’ll do it next year.’ ” Both members have recently made encouraging signs about moving forward.

●Concentrate on highly focused legislation of extreme importance to particular clients. “It’s sort of anomalous because a lot of people think it’s all gridlock, but government has to function, and there are rifle-shot changes that can be done,” says VH Strategies’ Bob Van Heuvelen, who spent 10 years as chief of staff for former Senate Budget Committee chairman Kent Conrad (D-N.D.). “Pinprick issues,” Stewart Hall calls them. “We might take a lick at a regulation in an approps [appropriations] bill, but it would be real narrow stuff, and possibly a couple of reauthorizations, the Commodity Exchange Act, but who knows?” says Hall, who co-founded Crossroads Strategies and was legislative director for Sen. Richard C. Shelby (R-Ala.) in the early 1990s.

●Remember that with the reelection of Obama and the failure of Republicans to capture the Senate, three of the administration’s most contentious pieces of legislation — the Affordable Care Act, Dodd-Frank and the creation of the Consumer Finance Protection Bureau — are indisputably here to stay. “With that reality comes pressure from the communities who have to live with these realities, and now we’re talking about real-world problems,” explains Raffaelli, a Senate tax counsel in the early 1980s. “So they will need to get better clarification [from Congress], and that creates opportunities to educate members,” he added, using the standard industry euphemism for lobbying. ●Think creatively to find a way to pluck some business out of the few issues — such as gun-control legislation — that are a near certainty. Though “fairly limited in terms of driving activity, it will take up a reasonable amount of congressional time and could take the oxygen out of the room as well,” says Harlow of the OB-C Group, whose firm is lobbying for Mayors Against Illegal Guns, the coalition led by New York Mayor Michael R. Bloomberg (I). Ditto for certain critical infrastructure spending — on highways and harbors, for example — whose funding mechanisms are sorely in need of updating, explains the Smith-Free Group’s Jim Free. “There’s a role for the lobbyist in all this, to make sure the right projects get prioritized. You do that through Congress, since the authorization and approps committees still make decisions on how these things are funded.”

●Remind your clients of two things: that a lobbyist’s institutional memory is increasingly important in a Congress where there are fewer and fewer members who have served for any great length of time, and that they will need your help getting to know all these recently elected members. “If I’m XYZ Company and I have any desire to effect public policy, I sure can’t rely on my own knowing these people,” says Free, a member of the Jimmy Carter White House who’s been lobbying for three decades. “And to make sure my point of view is known to this enormity of new members — there’s business there to be had.”

●Bear in mind one of the few truisms of the influence business: For the most part, lobbying is the very rich fighting the very wealthy. For lobbyists in town, the good news is that a few crumbs from that table can go a very long way.

Goldman is a freelance writer.


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