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K Street firms post big earnings gains for 2019

Trade, health care and immigration issues paced lobbying spending last year

Lobbying firms are working with clients about their agendas for 2021, which will be hugely dependent upon who wins the White House this November. (CQ Roll Call file photo)
Lobbying firms are working with clients about their agendas for 2021, which will be hugely dependent upon who wins the White House this November. (CQ Roll Call file photo)

K Street’s top-tier firms posted sizable gains last year, fueled by technology, pharmaceutical and big-business interests concerned with such policy matters as trade, health care, taxation and government spending.

And lobbyists say impeachment proceedings and the 2020 campaigns haven’t yet derailed the influence industry’s agenda this year.

“Maybe I’m an optimist, but out of impeachment could come a mutual interest in actually trying to address some issues to respond to the American people’s interest in bipartisan work,” said Marc Lampkin, who leads the Washington office at Brownstein Hyatt Farber Schreck. “You’ve got an electorate that wants to see their Congress and the executive branch get some things done.”

[The swamp successfully boils and bubbles in 2019]

Brownstein Hyatt’s federal lobbying revenue increased by about 30 percent between 2018 and 2019, according to recently filed disclosure reports filed with Congress under the Lobbying Disclosure Act. The firm hauled in about $40.8 million from such clients as T-Mobile, the Cannabis Trade Federation and McDonald’s Corp.

Lampkin says he sees room for collaboration in 2020 between the Trump administration and Congress on prescription drug pricing, for example.

The city’s biggest lobbying practice, Akin Gump Strauss Hauer & Feld, also reported an uptick in business in 2019, disclosing that clients paid the firm $42.6 million. That’s up from $37.7 million the year before. The firm’s roster of clients includes the drug industry’s lobby, Pharmaceutical Research and Manufacturers of America, as well as private prison company CoreCivic and the Gila River Indian Community.

Hunter Bates, who leads Akin Gump’s lobbying team, said the fourth quarter of 2019 was the firm’s biggest quarter ever, as lawmakers completed work on a spending measure that included the permanent repeal of health care and medical device taxes as well as a seven-year reauthorization of the Export-Import Bank. The House also approved a revised trade deal between the United States, Mexico and Canada, which senators OK’d this month.

“The last three quarters were exceptionally strong with trade, health care and taxes dominating the agenda and culminating in a number of successes for our clients in the year-end legislative packages and trade deals,” said Bates, a former top aide to Senate Majority Leader Mitch McConnell.

Some downturns

Still, some of K Street’s biggest spenders reported a decrease in their investments. The top-spending U.S. Chamber of Commerce, and its affiliates, reported shelling out about $76.1 million in 2019, down from 2018’s $93.9 million.

Tech giant Google, too, reported a 44 percent slide in its spending on federal lobbying as it restructured its K Street operation, with $11.8 million in 2019, down from $21.2 million in 2018.

The National Rifle Association reported a 35 percent decrease in spending on federal lobbying in 2019 with $3.1 million, down from $4.8 million in 2018. A senior NRA official said the decline, in part, reflected a decrease in the salaries for the group’s top lobbyists. NRA’s longtime chief lobbyist Chris Cox, for example, departed last year amid other personnel shuffling.

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The lobbying practice at K&L Gates reported a small dip in its federal lobbying revenue, but Darrell Conner, who chairs the policy practice, said his shop still had a “terrific” year when factoring in revenue from work not captured by the federal lobbying disclosures.

The firm reported bringing in about $17.7 million in lobbying fees for 2019, down from $18.3 million in 2018. He expects the first half of this year to be a “burst of activity,” followed by a summer and fall lull when the campaigns hit full swing. “As I look at 2020, impeachment in some respects is a bit of a sideshow in the legislative and policy context,” Conner said.

Lobbyist Stewart Verdery, who runs Monument Advocacy, said his shop was up about 9 percent in 2019 with $8.9 million in federal lobbying revenue. Trade policy was a major driver of the firm’s business last year, he noted.

Trade and technology

“The trade wars, that was certainly No. 1,” he said, noting trade negotiations with China as well as the U.S.-Mexico-Canada pact and ongoing fallout from tariffs. “We were playing offense in some respects and defense in others.”

The firm also represents several technology interests, including Amazon, Microsoft and Zillow. Tech companies are grappling with issues around facial recognition and bias in algorithms as well as data privacy and cybersecurity, he added.

Into 2020 and beyond, tech companies “are going to have to explain how they’re helping on the workforce-of-the-future issues,” Verdery said. “Policymakers are getting more and more worried about how companies can do more and more with less jobs.”

Firms also are working with clients about their agendas for 2021, which will be hugely dependent upon who wins the White House this November. If a Democrat wins, then corporate clients could be in for a major shift on climate and energy matters, health care and taxes, said Democratic lobbyist Steve Elmendorf of the firm Subject Matter.

“A new Democratic president will create a lot of activity, and people should start getting prepared for this this year to make sure they have members on the relevant House and Senate committees who are friendly and understand their agenda,” he said.

But, said Verdery, that’s a tougher struggle. The Democratic Party is wrestling with an energized progressive wing, while “Republicans are less reflexively in support of big business,” he said.


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