K Streeters Adjusting to Loss of Earmarks

Lobbyists Have Found New Ways to Secure Funding for Clients

Posted April 18, 2012 at 6:18pm

Winning Congressional earmarks wasn’t just big business on K Street. It was the business, and most everyone downtown had a piece of it.

That is, until a series of scandals and reforms to the appropriations process closed some lobbying shops, gutted the revenue of others and, at least temporarily, stopped the practice of steering taxpayer funds for local projects.

But as appropriators take up the first round of fiscal 2013 spending bills this week, K Street will again be close to the action. The remaining players, niche specialists in finding ways to secure federal funding for their clients, say they have survived earmark bans by working both ends of Pennsylvania Avenue, meeting with executive branch agency bureaucrats as frequently as they do with Congress.

“I won’t kid you. Losing earmarks hurts,” said Podesta Group lobbyist Jim Dyer, who spent more than a decade as staff director and clerk of the House Appropriations Committee. “I’ve lost clients over it.”

He’s hardly the only one.

Cassidy & Associates, which pioneered the earmark business, has seen its federal lobbying revenue dip in recent years — going from $32.1 million in 2001 to $19.8 million in 2011. In December 2010, the firm laid off 20 percent of its staff. And it’s a survivor.

Other earmarking firms, such as the PMA Group, rocked by a corruption scandal and federal investigation, shut down altogether.

Lobbyists at Cassidy & Associates and Van Scoyoc Associates, another appropriations-oriented shop, say their work today resembles the old way of doing business.

“It’s back to the future,” said Kevin Kelly, a vice president at Van Scoyoc and former staff director of a Senate Appropriations subcommittee that oversees funding for the Department of Veterans Affairs and other agencies.

Jordan Bernstein, executive vice president at Cassidy, said winning funding for a favored project had become too easy before the scandals that led the House and Senate to adopt earmark bans in the current Congress.

“The system was clearly broken when you could submit a one-sentence thing and get it funded,” said Bernstein, a self-described “ardent advocate” of earmarking. “It’s difficult again, and it is real hard work. There’s no skipping steps anymore.”

One of the biggest steps is corralling support from the executive branch, where agencies dole out grants and other pots of money  — lobbyists call them earmarks — to clients. Still, K Streeters say they can’t neglect the House and Senate Appropriations panels, which control how much discretionary money is in each agency’s kitty.

“Earmarks were different because you could just add them to the agency’s budget whether they wanted them or not,” said Van Scoyoc Vice President Ed Long, an expert in health appropriations and policy and a former staff director of a Senate Appropriations subcommittee. “Now you have to find win-win situations that work for the agencies and your clients, and you have to have champions within the agency.”

Lobbyists also say the must-pass funding bills — which often become vehicles for policy matters — are still ripe with opportunity for their clients.

Kelly said one of his clients, Smiths Detection, which makes security screening equipment, wants the Homeland Security Department to reveal what it might want to purchase in the future. Kelly worked last year to add language to the manager’s statement of the bill funding the agency encouraging officials to detail their plans.

For his clients, Vernon Simmons, a vice president at Cassidy, said he spends a lot of time on Capitol Hill defending programs that are already funded or explaining why “we disagree with cuts that have been made to those programs.”

“From my perspective, the bottom line is still how to help the companies get dollars for the programs that are important to them,” added Simmons, a retired lieutenant colonel in the Air Force.

There has been speculation that some Republicans on Capitol Hill, who backed the earmark moratorium but have grown frustrated that it gave more spending authority to the Obama administration, might welcome a return to the old system when the ban ends.

Most lobbyists say they won’t bank on such buyer’s remorse and will stay focused on driving a particular outcome for their clients, no matter the means they use to achieve it.

Beyond executive branch lobbying, Michael Fulton, who focuses on appropriations with the Arnold Agency, has found help championing clients’ issues from various coalitions of Congressional lawmakers that form around issues. Last fall, for example, members of the House Manufacturing Caucus did an event with his clients.

Even with those new strategies, Fulton, like other lobbyists, still pines for the return of earmarks.

“Earmarks are not the bad boy of Washington, D.C.,” he said.

The government, he added, doesn’t save much money by eliminating them, either. “They were carved out of already existing pots of money, so that money is being doled out by agency folks who decide where the dollars go.”

With a little help from lobbyists like Fulton, of course.