NILE Members discuss their profession.
In the wake of the General Election, many journalists and media personalities turned to NILE to offer commentary on the future of lobbying under the Trump administration. Following are a few of our recent appearances.
In defense of lobbying
By Marshall Matz
President-Elect Donald Trump and President Barack Obama sure agree on one federal policy: Lobbyists Need Not Apply. That is unfortunate. While it may provide a good one-day sound bite, the policy eliminates a host of well qualified people from public service at a time when talented thinkers are desperately needed. Further, as pointed out by Open Secrets.com “there is a whole set of statutes, regulations and executive orders that define ethical boundaries for current and former government employees and appointees.”
Lobbyists have an institutional memory that is important in the drafting of legislation and the development of national policy. Lobbyists know the experts and key players in an area.
Lobbyists represent large numbers of people who are joined together by a trade association, public interest group or a single corporation enabling them to participate in the political process by representing their views. There are now more than 300 million Americans. It is not realistic for all of them to charge up Capitol Hill to Congress or meet with the various Departments of government. They need representation and that is what lobbyists do…they represent constituents, educate and, yes, try to make the case for their client or employer.
There are some 10,000 registered lobbyists in Washington, D.C. But some outside experts estimate the actual number might be closer to 100,000. Why is the business of lobbying thriving if they are held in such low regard? The answer is that there is a market need and lobbyists are effective at filling that need. They provide a valuable service allowing both private and public interests to be heard in the administration and the Congress. The lobbying business has grown even while lobbyists have become the focus of much criticism because they are effective and provide an important and legitimate service. Market forces are at work.
Lobbyists get their power from several sources:
- Historical knowledge of the substantive area, as most lobbyists have worked in government;
- The constituents they represent;
- Their personal credibility; and
- Yes, from participating in the campaign and fundraising process (for both Democrats and Republicans.)
To be sure, crooks like Jack Abramoff and the occasional bribe-taking Congressman smear the profession. The public hates inside influence peddling and sees the potential for abuse. So, as a registered lobbyist, I am happy to comply with registration requirements.
Just like doctors, attorneys, and teachers, the vast majority of lobbyists are professionals who provide an honest and important service.
Much of the negative focus on lobbying can be traced to the Watergate break-in during the Nixon Administration and the image of his henchmen carrying around bags of cash. (When our law firm moved to the Watergate with former Senator George McGovern, who was the Democratic nominee against President Nixon in 1972, the Senator put out a one sentence press release that said: “I sure hope no one breaks into my office this time.”)
Lobbying goes back a long way. In the 1880’s there were political cartoons complaining that the Senate was being influenced by “big money.”
This famous cartoon, called “Bosses of the Senate”, first published in 1889, depicts corporate interests-from steel, copper, oil, iron, sugar, tin, and coal to paper bags and salt-as giant money bags looming over the tiny senators at their desks in the Chamber.
The Obama-Trump policy banning lobbyists is having a real world and, I would argue, negative impact on the development of sound public policy. In 2009, the Obama ban on lobbyists prevented many qualified lobbyists from public interest, non-profit organizations, trade association and corporate lobbyists with a passion for public service from serving in his administration.
Lobbyists from non-profit organizations who work on the school nutrition and food stamp programs were kept from public service because of the Obama administration’s blanket ban on all lobbyists. These days, almost all Americans are represented by lobbyists in Washington. Many organizations represents farmers, the National Association of Manufacturers represents the business community; the National Congress of American Indians represents Tribes; AARP represents senior citizens; States have lobbyists as do nurses, teachers, homebuilders and even the motion picture industry. Banning all lobbyists and painting with such a broad brush is unfair to the individuals involved and deprives the country of valuable expertise. Just recently, Michael Torrey, a highly regarded agriculture expert and lobbyist resigned from the President-Elect Trump’s transition team issuing the following statement, in part:
Statement from Michael Torrey regarding the presidential transition process:
I was asked several months ago to serve as a volunteer to help ensure a smooth transition at USDA. I have provided assistance since that time because I believe strongly in the importance of USDA’s mission and the people it serves. USDA impacts every American household every day and its importance truly cannot be measured.
Throughout my time assisting the transition effort, I have adhered closely to the code of ethical conduct and confidentiality agreement that was provided to me. Each transition has their own policies for the involvement of registered lobbyists. When asked recently to terminate lobbying registration for clients whom I serve in order to continue my role with the transition, I respectfully resigned from my role.
In short, in an effort to reform the system and prevent a conflict of interest caused by a “revolving door” there is no need to throw out the good with the bad. Lobbyists can be vetted like other applicants for public service and individual determinations made.
The First Amendment of the Constitution protects our freedom of religion, freedom of the press and free speech. It also protects our right “to petition the Government for a redress of grievances.” The public needs advocates who can represent their free exercise of that right, and that is the role of the lobbyist. It is an honorable profession. The bottom line is that lobbyists should not have to give up the opportunity to work in any administration and serve the public. It is bad national policy.
Special thanks to Mr. Matz and Agri-Pulse Communications, Inc. for allowing us to reprint this very thoughtful piece! You can learn more about Agri-Pulse and view his original post here: http://www.agri-pulse.com/In-Defense-of-Lobbying-12192016.asp.
Why doesn’t government affairs play a greater role in business strategy?
By Tommy Goodwin and Craig Fleisher
A few years ago, a McKinsey survey found that governments and regulators were second only to customers in their ability to affect a company’s economic value.
This should come as no shock to government affairs professionals. The potential business impact from government and regulatory intervention is significant. Depending on the industry, it can account for between 30-50 percent of a company’s EBITDA (earnings before interest, tax, depreciation, and amortization). New research from Boston University economist James Bisson takes it a step further and concludes that political activity and regulation accounted for much of the rise in company profits and valuation since 2000.
This speaks to the importance of the nonmarket environment. Stanford professor David P. Baron defined the nonmarket environment as consisting of “the social, political, and legal arrangements that structure interactions among companies and their public.” Not surprisingly, a wide range of nonmarket forces have a major impact on a company’s performance. Laws, regulations, activist movements, demographic shifts, standardization, judicial actions, and social media can each, and in combination, change the scope and trajectory of companies they impact. Dr. Baron argued that these forces require the same high level of attention in business strategy as do market forces.
Sadly, most government relations professionals know that this isn’t the case in their companies. Often nonmarket engagement is not viewed as a core component of business strategy, or worse, something that happens at arm’s length in the far-off Washington, DC, Ottawa, and Brussels offices or outsourced to third parties because “that’s what we’ve always done in these matters.”
But with so much at stake for companies, it leads us both to wonder: why doesn’t government affairs and nonmarket engagement play a greater role in business strategy?
Protecting and creating value: Government affairs and business strategy
On day one of their MBA programs, business school students are taught that company managers have two fundamental roles: (1) protect value and (2) create new value for the business. But think about it… isn’t that exactly what strategic government affairs professionals do?
Unlike widgets or aliens (or pornography!), most people—and especially business executives—know value when they see it. Whether it’s safeguarding intellectual property or pursuing access to new markets, government affairs professionals are simply leveraging the nonmarket environment to achieve core business goals. These can include achieving objectives such as increased freedom to operate, cost avoidance, market opportunity or advantage, leveling the playing field, speed to market, and higher productivity.
Consider the automotive industry for a moment. To level the playing field with local competitors abroad, U.S.-based manufacturers like Ford and General Motors could pursue new production and logistics efficiencies to reduce the costs of their new models. That’s one strategy to achieve the business goal of cost reduction. But so is lobbying for the Trans-Pacific Partnership (TPP), which would eliminate import taxes as high as 70 percent on U.S. automotive exports to TPP countries. Both strategies would reduce the cost of new models sold abroad, but one effectively utilizes government affairs and nonmarket engagement to create transformational market change.
Beyond merely managing a company’s business environment, government affairs professionals can design and execute nonmarket strategies that can tangibly deliver a much greater impact on business goals than their market-focused peers. Nonmarket engagement, whether through government affairs or other adjacent functions including communication, public relations, and corporate social responsibility, allows a company (or any type of organization, for that matter) to leverage its unique set of assets, capabilities and resources to create marketplace advantage by:
- addressing emerging nonmarket-driven opportunities and threats;
- shaping the structure of both existing and new markets, as well its strategic positioning within those markets;
- enhancing its brand and overall reputation; and
- working to find common ground with its external stakeholders.
When aligned, market and nonmarket strategies work in synergy to achieve business goals and drive stakeholder value.
So when Uber expands into a new city, for example, advertising and marketing (a market-based strategy) works alongside removing regulatory barriers to operate (a nonmarket strategy) to drive customer acquisition and profitability. And when the company replicates this process in each new geographic market it enters, it increases and enhances not only the value that Uber brings to a city’s citizens, but to the rest of the company’s stakeholders, as well.
Overcoming preconceptions: government affairs at the table
While many CEOs and business leaders see government relations and nonmarket engagement as critical to company success, the evidence we have witnessed throughout our careers, and still see today, suggests that far more do not. Ginger Graham, then CEO of Guidant (now part of Boston Scientific) once observed of her fellow CEOs, “To many, government is like the weather – an inescapable, often unpleasant fact of life best left to its own mysterious devices.”
But why is that? In a recent Harvard Business Review article, former GE general counsel Ben W. Heineman, Jr. summarized:
“Unfortunately, engaging in the necessary sophisticated work [of nonmarket engagement] across varying political cultures is not a natural act for many companies. Even with strong CEO direction, subordinate business leaders who are crucial to its success may not share the commitment or invest in the expertise or understand the time required. They might not have a realistic view of governmental/political processes or a feel for balancing public and private interests or understand the inherent contingency of policy efforts. Their business school education and their initial experience within narrower company functions (e.g., marketing, manufacturing, or finance) may leave them unprepared.”
Perhaps this helps to explain the following paradox: while half of McKinsey survey respondents said that managing external affairs ranks as one of the top-three priorities on their CEOs agendas, many companies cling to the outdated notion that government affairs and nonmarket engagement is a non-core business function, often left to contracted lobbying and public affairs firms.
This fails to account for the benefits of regularly engaging with governments, regulators, and other nonmarket stakeholders, regardless of immediate interest. Since nonmarket issues have the potential to be either beneficial or harmful to companies, companies need government affairs and nonmarket engagement leaders at the table with the CEO and business-unit leaders to provide subject-matter expertise, drive understanding of potential implications of nonmarket action, and create desirable policy proposals and responses.
Moreover, government affairs professionals are uniquely situated and qualified to straddle the market and nonmarket environments: serving as the trusted advisor scanning the nonmarket environment for business opportunities and threats, while also keeping a finger on the pulse of the market environment to determine the significance and urgency of emerging nonmarket issues to the company.
Breaking down silos: government affairs as a strategic business advisor
To play a greater role in business strategy, government affairs professionals must successfully navigate the external nonmarket environment, while working effectively across the organization to get—and keep—the respect and attention of senior management. How, you ask? To position government affairs internally as a strategic business advisor, consider these proven tactics:
- Leverage internal strategy development and strategic planning processes. McKinsey found that 67% of companies who influence policy “successfully” and manage reputation “very effectively” used strategic planning processes to align their external-affairs agendas with overall strategy, compared to 22% of all others. Government affairs professionals should take advantage of these opportunities to: (1) influence business goals and objectives using and analyzing nonmarket data, insights, trends, and intelligence and (2) create synergy between market strategies and nonmarket strategies, both laterally and vertically within the organization.
- Create, maintain, and regularly review a prioritized agenda of issues. While many companies develop an annual nonmarket engagement agenda—which generally includes offensive and defensive policies tied to business goals—far fewer prioritize and routinely update them on an ongoing basis. As Heineman recommends in his HBR piece, government affairs professionals should take the lead internally in securing CEO and other business leader involvement for making initial prioritization decisions on key nonmarket issues, as well as holding regular reviews “to oversee whether milestones are being met for formulation, enactment, and implementation,” confirm issue prioritization, and identify emerging nonmarket opportunities and threats for monitoring going forward.
- Orchestrate and integrate market-nonmarket activities across the organization. Without deep connections throughout the enterprise, government affairs professionals can’t effectively engage in their issues management, lobbying, and outreach work on the company’s behalf. Around the world, there are examples of government affairs bridging the market and nonmarket environments in their companies by serving as “brokers of intelligence” between business units, holding policy roundtables with functional groups across the organization, and cultivating cross-functional teams of business experts to support policy engagement. Government affairs professionals should explore replicating these best practices within their organizations, where appropriate, to establish a critical internal role for themselves: the centralized hub of market-nonmarket integration.
Taken together, these tactics have the potential to successfully position government affairs professionals as the go-to source for strategic nonmarket engagement within organizations. And as companies better understand the need to stretch the competitive playing field beyond the market through nonmarket engagement, government affairs leaders at the intersection of the market and nonmarket environments will not only play a greater role in business strategy… they will drive it in their companies going forward!
About the Authors:
Thomas F. (Tommy) Goodwin is a NILE member and Government Relations Manager for the Project Management Institute (PMI). He has nearly 20 years of experience leading federal and international government relations efforts, issue campaigns, and advocacy strategy work for leading corporations and associations. Additionally, he served as a research fellow at the Harvard Business School focused on the political and legal environment in which business operates. He holds a B.B.A. from The George Washington University, an M.B.A. from Auburn University, and executive certificates from Stanford University, the University of North Carolina at Chapel Hill, and Georgetown University. Email: firstname.lastname@example.org.
Dr. Craig S. Fleisher is a NILE member and co-editor/author of the SAGE Handbook of International Corporate and Public Affairs (2017), Handbook of Public Affairs (SAGE, 2005), and Assessing, Managing and Maximizing Public Affairs Performance (Public Affairs Council, 1997). He was president of a Canadian public affairs (PA) association, served on PA boards in 5 countries as well as on the Dean’s Advisory Board for the Graduate School of Political Management at George Washington University, and continues to teach executives about PA in the graduate EMScom program at the Universita della Svizzera Italiana (USI) in Lugano, Switzerland. Email: email@example.com.
Shadow Lobbying Cannot Become the Norm
By: Paul A. Miller, President, National Institute for Lobbying & Ethics
According to the latest numbers, it appears lobbying is on a major decline with the total number of registered lobbyists dropping to its lowest level since 1998 (9,600 registered lobbyists) when there were 10,405 registered lobbyists. This last quarter we saw a decline of 600 lobbyists, the largest number ever. And since 2008, when President Obama came into office, the number of registered lobbyists has declined by over 5,300.
These numbers are troubling, not because we are seeing a true decline in our profession or fewer “lobbyists” practicing today, but because what this trend is signaling is an ever-increasing number of once-registered lobbyists simply deregistering. The Obama Administration came into office and immediately issued an Executive Order barring lobbyists from serving in the Administration and from being appointed and serving in various other positions. This has had a direct impact on who is and isn’t registering today. Since 2008, we have seen a continued decrease in the number registered lobbyists. This quarter we set an all-time high with the number of lobbyists deregistering.
The question is, why the big jump in deregistrations this quarter? I think in part it is due to the pending presidential election. Donald Trump has run as the non-establishment candidate, which has meant turning his rhetoric towards the so-called special interests, who he (and others) have said caused the gridlock in Washington. When you have a candidate running on this platform and vowing to change Washington, just as President Obama did, it scares people. I believe you have people hedging their bets on who will win in November and if their candidate wins, they want to be best positioned to get a job, appointment, or be part of the non-establishment or special interest regime.
Whatever the reason, this trend should concern everyone in this profession as well as the general public at large. When you have an Administration sending the message that lobbyists or anyone who has been a lobbyist is not welcome, it will have professionals rethink what they do and how they do it. When you have a potential incoming President talking about special interests and how they have gridlocked Washington for too long and under his Administration he would change that, you again have people looking at what they do and how they do it. Since 2008 you have people re-evaluating how they conduct their business on behalf of their clients, and by the looks of these numbers, they are choosing to deregister rather than continue to live with the dreaded L label. This really shouldn’t be a surprise to anyone. This trend will continue until we change the perception of lobbyists, which probably won’t happen in my lifetime (maybe I’m too pessimistic), but what can happen today is an honest discussion of the current definition of lobbying and does it fit today’s world of “lobbying.”
The lobbying profession has changed dramatically over the past 10 years. Today lobbying campaigns and grassroots campaigns are more heavily reliant on the use of technology than ever before. On the one hand this has been good. The downside of this has been these same people using this technology don’t view themselves as lobbyists in the traditional sense and aren’t registering, even though they are having the same impact on public-policy as those of us who are viewed as traditional lobbyists.
Just because one doesn’t walk the halls of Congress and sit in a meeting with a staffer or the member doesn’t mean they aren’t lobbying. This is still an important part of any lobbying campaign, but lobbying today has evolved into so much more than what it was 10-20 years ago. Today we can get our message out in seconds versus the days and even hours that it used to be. Today we can have a direct impact in the matter of hours versus weeks that it used to be. Today lobbying campaigns involve a lot of very different strategies with the same goal of influencing policy. To some this isn’t lobbying, but just as how we impact policy has evolved, so too has the definition of lobbying and that is why it needs to be changed.
I know since the Obama Administration came in and implemented his Executive Order there has been a rush to call yourself something else other than the dreaded L word. We have seen the shift from the word lobbyist to government affairs professional, grassroots advocates, public-policy professionals and the list goes on. The reality is, regardless of what you call yourself, you are influencing policy and doing exactly what I am, the only difference being I am registered and you are not. The public can see who I am lobbying for, what issues I am lobbying on, and how much I am being paid. They don’t have that luxury with those not registering.
It really doesn’t matter why people aren’t registering or deregistering. What should matter to everyone who is registered, is that we will continue to be held in the lowest regard by the public when our profession comes off as if we aren’t willing to be transparent. What should concern those of you who are registered is that we will be judged by bad actors who are not registered. The public will simply blame us for their bad actions. I’m not saying those who aren’t registered are trying to do something shady. On the one hand, I can’t really blame them. When the current Administration makes you enemy number one and the possible next President has the same feelings about you, then yes, I can see why people might take a hard look at how they operate.
This profession isn’t going anywhere. We have a little document called the Constitution that protects our right to petition our government. We simply need to stop giving the Administration, Congress and the general public ammunition to further regulate us. If the trend of deregistering continues we will find ourselves caught up in another scandal. This time I’m afraid that the consequences won’t be some minor changes like eliminating the gift rules. I’m afraid it will be far reaching and a major overreach that we will not be able to do anything about.
Shadow lobbying cannot become the norm or something this profession accepts.
Are You Willing To Let Congress Legislate Away Your Right to Be Heard?
By: Paul A. Miller, President, National Institute for Lobbying & Ethics
I was asked recently why did we start the National Institute for Lobbying & Ethics? The answer was pretty simple – we started NILE because this profession needs a voice more than ever today. As a profession we have long dug in and waited out any firestorm or attacks. For me that has always been the coward’s way out. If we are proud of what we do, which we all should be, then we need to stand up for our profession and be willing to speak out and set the record straight. Each election year the drum beat gets louder and louder to do something to curtail the lobbying profession. This year is no different. What is different is the number of pieces of legislation introduced in this Congress that seek to eliminate our profession and our ability to speak for our clients.
When it comes to lobbying we are already the most regulated profession, but we are also the most transparent. Every quarter lobbyists file with the federal government a list of who their clients are, the issues they work on and the amount they are being paid for these activities. Twice a year we file forms with the federal government that states who we have given campaign contributions to and how much. All this information is easily accessible to the public, yet we are seeing a bigger and bigger push in Congress to regulate the profession even more. Since 2015 there have been 144 different pieces of legislation introduced (that I have been able to identify) that either look to restrict your Constitutional right to petition your government or limit your ability to participate in the political process. I know what many of you are thinking – so what, none of these will become law. I will agree with you on that point, but what should concern you is the increased number of legislation that targets our profession. What other profession has 144 different voices trying to trample on you and your clients’ Constitutional right to petition their government? What other profession is Congress looking to make it basically illegal or a crime if you practice?
What should concern you even more is what’s in these 144 pieces of legislation. I have long believed that if there are loopholes or things that need to be changed in how we do business, then let’s sit down and have an open honest discussion about it and see what changes we can come up with. Yet, Congress never seems to take us up on this. I get it, they don’t want to be seen working with lobbyists on lobbying or campaign finance reform issues because the public will perceive it in a negative way. The reality is, if you want real reforms that work, then you need to have lobbyists at the table working with you, not against you. None of us are looking to create more loopholes. None of us want to relive the Abramoff scandal. I know it may be hard for some to believe, but we want to do whatever we can to ensure our profession lives by a Code of Ethics. In order to do that, we need to be willing to step up to the plate and be heard. Instead of staying quiet and letting candidates use us as a campaign issue, we need to be out front setting the record straight. The fact that some want to serve in Congress and yet they clearly have not read the Constitution needs to be pointed out. What we do is protected by the Constitution and a right given to every citizen in this country. Some in Congress would like to change that so that this right only applies to issues and interests they deem worthy.
What should concern you is that Congress is looking to legislate away your right to petition your government. The reality is, without lobbyists at all levels our government won’t work. Lobbyists provide the most basic information legislators need and can’t get. Lobbyists point out issues and areas of injustice that would otherwise go unaddressed. Lobbyists speak for those who haven’t had a voice. Yes, these are all special interests and another term we should all embrace. With so many issues and so many pieces of legislation being introduced each year, lobbyists play a critical role in providing a voice to those constituencies and serves as a filter to those in Congress who are not experts on these issues and need help weeding out the rhetoric from the facts.
Even lobbyists need lobbyists and why we have NILE. NILE gives all of us an opportunity as a profession to be heard. NILE offers all of us an organization who can stand up and defend our profession. I don’t know about you, but I take my job seriously. We abide by the NILE Code of Ethics and subscribe to their public-policy certificate program and its mission. If lobbying reform begins to dominate the debate or actions are taken to regulate us even more, it will be NILE who will be out front leading the charge for the profession. It will be NILE who will be front and center defending the profession.
This isn’t a pitch to join. This is a pitch for our profession to become more willing to stand up and stand together. We all know the valuable role we play in the process, but that role may diminish if we don’t stand together and work together to ensure that any future lobbying or campaign finance reforms are effective and necessary versus some arbitrary action to appease some voting block or public misperception. This debate isn’t going away and we need to be at the table early talking about our role and the rules we live by. We need to be honest with ourselves and point out flaws in the system when they occur and be willing to address them head on and fix them.
So, with only 99 days left before election day, let’s set a new professional standard and be engaged and willing to stand up for what do and the people we speak for. It’s not just us professionally impacted by any new reforms, but those who need to be heard. Let’s stop accepting the boogeyman role and expect better from ourselves and those in Congress who are elected to protect every citizen’s rights to petition their government.
We give those who want to limit or ban our rights only more power when were silent. Just as we engage in lobbying and grassroots campaigns on behalf of our clients and their issues, we need to think in those terms when it comes to our own profession and livelihood.
This is why NILE exists!