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As Numbers Shrink, Lobbyists Seek More Rules

The latest data on the state of the lobbying industry point to a puzzling paradox: While lobbying expenditures in Washington, D.C., are growing, the number of registered lobbyists is shrinking.

“It’s an interesting phenomenon that bears scrutiny,” said Sheila Krumholz, executive director of the Center for Responsive Politics, which tallied the totals. Lobbying spending hit $3.51 billion in 2010, up about 0.6 percent from $3.49 billion in 2009, the CRP found. But 12,964 people registered as lobbyists last year, a more than 5 percent drop from the 2009 total of 13,705.

Krumholz said she has no easy explanation but placed her bets on the sweeping lobbying and ethics reform law enacted in 2007, which for the first time imposed criminal penalties on ethics violators. That gave Washington players who do only minimal lobbying an incentive to avoid registering unless absolutely necessary.

Thousands of lobbyists have also “deregistered” in recent years, the CRP has found — meaning they or their employers terminated their contracts. Such deregistrations spiked in 2008, according to a CRP analysis, immediately after the new ethics law took effect.

Some lobbyists say the real culprit is President Barack Obama, who they complain scapegoated their profession with new hiring, post-employment and other restrictions on lobbyists. Still others argue that the recession, coupled with this year’s Congressional earmarks ban, has forced belt-tightening on K Street.

In fact, all these factors — and a few more, to boot — have combined to put lobbyists on the defensive this fall.

Major lobbying fights over the health care and financial reform laws have moved from Capitol Hill to the agencies writing the regulations, handing more work to lawyers than to lobbyists. Throw in Congress’ consuming focus on the deficit, which has delayed work on a host of policy initiatives, and it’s little wonder that lobbyists are in a funk.

“I think that we’re at a critical crossroads,” said Howard Marlowe, president of the American League of Lobbyists. In the past three decades, he added, “we have become far more professional, far more ethical, far more transparent. But because of the demonization of lobbying … we are in danger of going backward.”

Lobbyists have responded with a paradox of their own: They are gearing up to lobby for tougher rules, restrictions and disclosure requirements for themselves. Marlowe’s group has set up a lobbying and campaign finance task force that will release recommendations at the end of this month. Its goal is to shop around a package of lobbying reform ideas that could turn into a bill.

Proposals on the table include lowering the threshold requirement for registration. Now, only federal lobbyists who spend 20 percent or more of their time lobbying per quarter must register. Rep. Mike Quigley (D-Ill.) has introduced a disclosure bill that would lower that threshold. The lobbyists’ league is also debating ways to constrain the role that lobbyists play in campaign fundraising.

“We know it’s going to be a long haul, but it’s time for us to stop being on the defensive,” Marlowe said.

The American Bar Association also recently approved a resolution that would expand disclosure and lobbyist registration requirements. The resolution would distance lobbyists from the lawmakers they raise money for with a two-year “cooling off” period. Like the American League of Lobbyists, the ABA is pushing for Congressional action.

“I think the consequential proposal is to try to divorce lobbying from fundraising,” said Thomas Susman, director of ABA governmental affairs. “And that hasn’t had as much public discussion as it will get. It steps into the minefield of campaign finance reform and disclosure, which is being fought out in the courts right now.”

Lawyers and lobbyists are calling for changes at a time when the Obama administration appears to have pushed lobbying reform to the back burner. The administration’s latest proposal — a controversial draft executive order that would have required federal contractors to report their campaign activities — has been stalled for months.

The delay prompted Democrats on Capitol Hill to call on the administration to follow through. Earlier this summer Rep. Anna Eshoo (D-Calif.) rounded up more than 60 signatures on a letter urging Obama to “respond forcefully” to the measure’s critics, who say it would politicize federal contracting.

“Given the time that has passed, I thought it would be important for Members to weigh in and tell the president we offer him our full support,” Eshoo said in an interview.

But the departure of White House ethics czar Norm Eisen, formerly special counsel to the president and now U.S. ambassador to the Czech Republic, has coincided with a White House shift away from ethics concerns and toward conciliatory meetings with Wall Street and business leaders.

“It’s kind of hard to make nice with business executives who are feeling skittish about the economy when you are saying their lobbyists can’t be trusted or their companies are evil for engaging in politics,” said Douglas Pinkham, president of the Public Affairs Council.

Others predict the anti-lobbying rhetoric will resume as soon as the presidential campaign heats up.

Regardless of whether the data show that the lobbying industry is expanding or contracting, lobbyists themselves agree on one thing: The status quo is not treating them well.

The American League of Lobbyists’ message to Members of Congress, Marlowe said, is “that the current situation has to change and that we want to work with them to effect that change. If it doesn’t, we both lose.”

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