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Big K Street players spend more as election uncertainty brews

After some shops saw gains from mega bills, now lame-duck action looms ahead of possible shift in party control

The final defense authorization bill pending before he retires is named after Sen. James M. Inhofe of Oklahoma, the ranking Republican on the Armed Services Committee.
The final defense authorization bill pending before he retires is named after Sen. James M. Inhofe of Oklahoma, the ranking Republican on the Armed Services Committee. (Tom Williams/CQ Roll Call file photo)

K Street’s 10 biggest spenders have shelled out a combined $238.3 million on federal lobbying so far this year, as the influence industry now gears up for brewing uncertainty when lawmakers return after the midterm elections.  

Year-to-date spending through Sept. 30 is up from last year’s level of $200 million for the top 10, but is comparable to 2020’s total of $230 million, according to disclosure reports filed to the House and Senate. Business groups, led by the U.S. Chamber of Commerce, as well as health care, pharmaceutical and technology interests, topped spending in the first three quarters of this year, as Congress moved climate, health and tax legislation and a new law to boost domestic semiconductor manufacturing. 

Those biggest K Street clients, and the firms that represent them on Capitol Hill and before the executive branch, are now shifting to preparations for a consequential lame-duck period when lawmakers are expected to wrap up an annual defense measure and government spending. 

Lobbyists said a top priority now is also to make sure their teams will have sufficient reach into the new Congress, its leaders and committee heads — all of which hang in the balance of the midterm elections that could shift control of the House and Senate. Even before the elections on Nov. 8, more than 60 lawmakers already are heading for the exit, either because they lost primaries or opted to retire. 

That makes for a major transition not only on Capitol Hill but also on K Street, where most expect the House, and potentially the Senate, to flip to GOP control. That would likely include a robust oversight agenda from House Republicans as well as some expected legislation next year, including a reauthorization of agriculture policies known simply as “the farm bill” along with annual defense and government spending measures. 

“At our firm, Invariant, we have really been focused on planning for divided government for over a year now,” said lobbyist Lindley Kratovil Sherer, who previously served as chief of staff to New York Rep. Elise Stefanik, who chairs the House Republican Conference. “So our preparations are constantly ongoing. We’ve been bringing in great Republican talent throughout the year.”

Invariant, a bipartisan firm with such clients as Apple Inc. and Cigna Corp., has disclosed $28.2 million in federal lobbying revenue in the first three quarters of this year, up from $22.1 million during the same period last year, the firm said.  

Sherer noted that some of the lawmakers planning to retire hold top spots on pivotal committees and will want to wrap up any legacy items in the final days of the 117th Congress. 

Sen. Patrick J. Leahy, D-Vt., who chairs the Appropriations Committee, and that panel’s top Republican, Sen. Richard C. Shelby of Alabama, are both retiring. So is Sen. James M. Inhofe of Oklahoma, the top Republican on the Armed Services Committee. No matter the outcome of the elections, those members will want to put their stamp on their last defense authorization — the bill is actually named for Inhofe this year — and spending bills, lobbyists said. 

“So I think you’ll see a very busy lame duck getting those items done that need to be done,” Sherer said. 

Executive branch focus

The Hill won’t be the sole focus. Lobbyists are also continuing to lean on the federal agencies tasked with implementing recent laws. 

That executive branch work, along with congressional lobbying, has helped fuel the business at Brownstein Hyatt Farber Schreck, the city’s biggest lobby practice so far this year. Brownstein  has brought in $45.6 million so far, compared with last year’s $40.4 million, according to the firm’s calculations of federal lobbying reports, which disclose such recent clients as the U.S. Chamber of Commerce, Apollo Global Management and Johnson & Johnson. 

The firm this month hired Will Dunham, who was deputy chief of staff for policy to House Minority Leader Kevin McCarthy, the California Republican in line for the speaker’s gavel if his party wins control of the chamber. 

Marc Lampkin, who chairs Brownstein’s government relations practice, said the firm looked at its personnel roster “to see if there were any places where we could strengthen our team, and we did that when we hired Will Dunham, who’s an absolute rock star.”

Though many of the city’s biggest shops did post gains this year, in many cases even beating the high rate of inflation, Washington’s second-biggest lobbying practice, at Akin Gump Strauss Hauer & Feld, reported a slight decline, with $39.1 million compared with last year’s $39.9 million for the first three quarters. The firm brought in more revenue in the third quarter than in the second quarter, though.

“Election years are often down years for legislative activity, but that has certainly not been the case this year,” the firm’s Hunter Bates, a former aide to Senate GOP Leader Mitch McConnell, said in a statement. “We had another really strong quarter, driven in part by the consideration, passage, and now the implementation of the Inflation Reduction Act and the CHIPS Act. Activity in the 4th quarter will depend quite a bit on the outcome of the election, but we expect an active lame duck agenda with an omnibus spending bill, NDAA health policy riders, tax extenders, and possibly some international trade measures.”

Other firms that reported an increase this year include Holland & Knight, Monument Advocacy and Ferox Strategies, a growing boutique firm whose clients include Walmart and TelevisaUnivision. 

Mark Williams of Ferox said shops with reach into both sides of the aisle will likely benefit the most from the coming changes in the next Congress. “Especially those with robust House Republican connections, since that looks to be the most likely body to change hands,” said Williams, a former House GOP aide. “At the end of the day, clients are going to need firms that can still maneuver within the administration, a close Senate whose control could go either way and a Republican-controlled House.”

BGR Group’s lobbying revenue increased more than 11 percent between this year and last year, said the firm’s Loren Monroe, bringing in almost $29 million so far in 2022. Monroe said the firm and its clients are “fully engaged on expected lame-duck debates on [the National Defense Authorization Act], tax provisions and appropriations bills as well as the 2023 legislative and oversight agendas.” 

Holland & Knight experienced dramatic growth in recent years, said lobbyist Rich Gold, who runs the practice. So far this year, the firm brought in $32.2 million, compared with $25.2 million in the first three quarters of last year. Over all, he said, his shop is up some 60 percent from where it was in 2019, reflecting the boom in work that began in March 2020 as lawmakers scrambled to rescue the economy and respond to the COVID-19 pandemic. 

“This has been probably the most robust legislative time in my 30 years in advocacy,” Gold said. “These are generational pieces of legislation. These have been incredibly important historical pieces of legislation.” 

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