Lobbyists’ Business Booming in D.C.

Haley Barbour, in partnership with about three dozen other high-powered Washington lobbyists, owns a piece of a restaurant in downtown Washington. In the week after the Sept. 11 terrorist attacks, business at the Caucus Room fell by almost 75% from the week before.

But by the end of October, business was back to 90% of normal, and now it is booming, said Barbour, a former chairman of the Republican National Committee.

The rapid recovery of the restaurant could serve as a metaphor for the main occupation of its lobbyist-owners. The economy is in recession, and the economic downturn was exacerbated by the aftershocks of the terrorist attacks. But while hard times have caused companies in some sectors of the economy to reduce their Washington lobbying, lobbying firms overall continue to flourish, according to several veteran lobbyists.

Technology and telecommunications firms are among those that have been hurt most by the economic slide. As a result, some companies have cut back on their lobbying, said Edward Black, president of the Computer & Communications Industry Assn.

But, Black added, “it’s definitely not across the board. . . . There are some companies that lost 80% of their value in the market that nonetheless made decisions to retain their Washington presence.”

For some companies, the decision on whether to cut back is easy. “When you have billions of dollars at stake, what’s a couple of million dollars in lobbying?” Black asked. He cited the case of a telecommunications firm that is seeking a crucial decision from the Federal Communications Commission.

“Without [FCC] approval, they don’t have a business,” he said. “With it, they think they have a great business. They’re not going to stop” lobbying.

There is a paradoxical relationship between the health of the economy and the role of Washington lobbyists, noted Tom Korologos of Timmons & Co., a lobbying firm. “Traditionally, when things go bad in the economy, corporate America turns to us for help,” he said. “When things are going swimmingly, it’s, ‘Why do we need those Washington guys?’ ”

Lobbying is also driven by the Washington agenda, regardless of the economic climate. “Health care is always going to be there,” Korologos said. “Another is transportation. What is the Hill going to do? Is there going to be a trade bill? Then everybody who’s involved in trade runs up there. The agenda is driven by what goes on in the Capitol.”

Barbour and others said the public relations and public affairs consulting firms, which often work closely with lobbyists, have been hurt more by the economy than straight lobbying operations. “P.R. is one of the first things that corporate executives look at for budget cuts,” said Nels Olson, head of the government affairs section at Korn/Ferry International, an executive recruiting firm.

Jody Powell, chairman of Powell Tate, a public affairs and crisis communications company, said that after Sept. 11, “people were just frozen. They were distracted.”

Even before the attacks, Powell said, there was a noticeable slowdown of business with high-tech companies. That was followed by what he described as the inevitable “second hit from your receivables.” “People who are slow to pay go from slow pay to no pay,” he said.

As for the future, Powell said, “the expectations are positive. What is lacking is a whole lot of tangible proof that those expectations are going to become reality.”

R. Bruce Josten, executive vice president for government affairs at the U.S. Chamber of Commerce, said that in an economic downturn, smaller companies tend to be the first to pull back their Washington lobbying. But he said there is a permanence to the clash of economic interests in the nation’s capital that makes the lobbyist a part of the natural landscape.

He cited the long-running battle over possible telecommunications legislation that has led to an expensive battle between competing companies. “They’re not going to stop,” Josten said. “There’s too much at stake. Whatever they are spending, it’s kind of chump change, compared to what’s at stake.”

Josten also notes that “there are no permanent victories” in the capital: “This is a town where if you are not in the game, chances are you are going to be taken advantage of.”