Earmark Ban Hits Lobbyists’ Influence on Spending Bills

Posted November 15, 2013 at 2:45pm

If the lobbying world of K Street was as powerful as its public image, earmarks would be back in full force in Congress — or, maybe, they never would have gone away.

The modern lobbying business was built largely on helping clients secure member- directed pots of money in annual appropriations bills. And many of the firms that pioneered the practice have taken a serious hit since lawmakers banned earmarks in 2010.

But don’t expect K Street to mount a high-profile, big-dollar campaign to bring them back. Instead, in private meetings with members of Congress and their aides, lobbyists say they offer a pitch for how earmarks could help lawmakers, who are often frustrated that they can’t direct money to their districts, wrest more control of federal dollars.

And those making the case for earmarks aren’t just the ones whose paychecks depended on appropriations work.

“It’s never affected our bottom line,” said GOP lobbyist Alex Vogel, a partner with Mehlman Vogel Castagnetti. “It has very much affected the ability of the legislative branch and of government to function in a broader sense, so it’s affected everybody.”

Earmarks were at the heart of several political corruption scandals, including one that sent former Rep. Randy “Duke” Cunningham, R-Calif., to jail. The spending items became a target of budget-cutting lawmakers and outside groups.

But their absence, many earmark proponents argue, has contributed to the dysfunction and stalemate on Capitol Hill. Without earmarks, the argument goes, there is little leaders can do to lure votes for larger bills and enforce party discipline on measures deemed “must-pass” legislation.

The lack of earmarks, some say, was one reason House Republican leaders could not muster GOP votes for such measures as the Transportation-HUD appropriations plan that collapsed while on the House floor over the summer.

Plenty of members privately agree, and some will even say so publicly. But it’s a losing issue politically, and neither earmarks nor some creative new moniker for them will crop up before the 2014 elections.

The lobbying world, however, presses on.

“When we talk to members and the subject comes up, we talk about it and they agree,” said Michael Herson, who runs American Defense International. “In conversations, we explain to them on several levels: They’re relinquishing their constitutional power of the purse. They like to read the Constitution on the floor, but they’re not listening to what it says. They need to reassert their power.”

Fans of earmarks say the targeted directives don’t really increase the federal government’s overall spending — they simply tagged taxpayer dollars to specific projects. They were also a valuable tool to help leadership keep the rank and file in line, providing incentives for lawmakers to vote for measures that otherwise might have been too bitter to accept.

“As a non-Appropriations person, it was never the world I lived in,” said Vogel, who was a senior aide to Tennessee Republican Bill Frist when he was Senate Majority Leader. “But now some unelected person at [the Office of Management and Budget] is going to decide how to spend that money.”

When faced with massive spending bills, the demise of earmarks means the removal of “the political self-interest chunk, the sweeteners,” Vogel said. “Politically, how do we unring that bell? I would argue they need to rebrand the earmarks.”

But whatever members might dub them, the outside groups that helped make earmarks a dirty word won’t easily be fooled.

“There will always be a threat of going back to earmarks until we get a system in place that really replaces the perceived need for earmarks,” said Steve Ellis, vice president of Taxpayers for Common Sense.

Though his organization supported an end to earmarks, Ellis said his group would like to see Congress exercise more power of the purse by setting out spending criteria and metrics and holding the executive branch accountable through oversight.

He dismisses the calls to bring back earmarks as a remedy for stalemate as “an argument made mostly by people who never wanted earmarks to go away in the first place” and who are trying to find any lever to bring to them back.

“Maybe on the margins you could buy a couple of votes, but I don’t think in the bigger picture it would have solved that much,” Ellis said. “This idea that earmarks are the grease that makes everything go … is really preposterous.”

Whether earmarks made things go on Capitol Hill may be open for debate, but there is no doubt about their importance to fueling K Street business.

Some of the biggest shops in town pioneered the dash for earmarks.

One such firm, Cassidy & Associates, had the highest grossing fees (more than $27 million) back in 2000 as measured by the Lobbying Disclosure Act. Last year, Cassidy reported about $15.5 million.

In December 2010, on the cusp of the earmark moratorium, the firm restructured and laid off about a dozen employees. Like other firms at the time, Cassidy also was readjusting to the weak economy, and the firm has continued to diversify well beyond appropriations and budget matters.

Michael Fulton, president of the Arnold Agency’s D.C. office, says K Street would have a resurgence with a return of earmarks.

“While I have been able to reinvent myself by concentrating on more holistic funding opportunities for my clients … bringing back appropriations projects to the portfolio would boost my business and that of many other firms,” he said. “It will happen; it is just a matter of time.”

Rich Gold, who heads the lobbying practice at Holland & Knight, said most members of Congress he talks to are frustrated by the degree of power the executive branch wields over funding decisions, and he finds the administration’s spending decisions difficult to decipher.

“The problem with the grant process, it’s not transparent at all,” said Gold, who was an official in Clinton administration. “If you had a president who was more Lyndon Johnson-esque, he could use these projects to hold over members of Congress’ heads. That’s not going on because this administration doesn’t even know the name of that game, let alone how to play it.”

Gold said that the next Congress, when it convenes in 2015, might be ready to institute something that looks a lot like earmarks once did.

“I think we’re getting there,” he said. “The question remaining to be answered is: How will members tell mom and dad who vote for them that we’re going to do this again?”