Report details the cost of government sector lobbying

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19 December 2008

In an effort to investigate the true costs of government sector lobbying, Phil Kerpen, policy directory for Americans for Prosperity, analyzed data compiled from Senate lobbying disclosures. His research shows that in the period between 1998 and the first half of 2008, government sector lobbying totaled $1.09 billion. The findings are detailed in the policy paper, "Taxpayer-Funded Lobbying: Runaway Government Growth."[1]

Lobbying increases

From 1998 to 2008, federal government spending has increased by $1.3 trillion, or 78.8%. That same time period has seen dramatic increases in federal lobbying by state and local governments, public universities, transportation authorities, and public water utilities. All combined these entities spent $138.1 million on lobbying in 2007, up 151% since 1998.[1]

Kerpen concludes that these efforts have led to a direct increase in earmarks, along with an overall breakdown in fiscal discipline. He points out that the actual figure for government sector lobbying is much higher than the $1.09 billion, as Senate disclosure reports are coded by industry group, but does not specify if it is private or public. Thus he was only able to use information on entities that could be identified as public. Alongside that, private lobbyists are held to strict gift rules - $50 limit in the Senate and an outright gift ban in the House. Lobbyists paid by tax dollars, however, are exempt from this rule and can give unlimited gifts, which do not have to be disclosed.[1]

Local governments

According to Kerpen, "Local governments lobby because it works."[1] Many local governments have found that a relatively small investment of local taxpayer dollars can result in a large amount of taxpayer dollars in the form of earmarks.

The most dramatic example Kerpen provides is that of Georgia's Tybee Island, population 3,731. In 2007 they paid the firm of Marlowe and Company $40,000 to lobby the federal government on their behalf. The result - an earmark for $6,319,248 for "construction" in the Energy and Water Appropriations bill.

Local governments across the county have seen similar results, leading them to spend $69.3 million to lobby the federal government in 2007, up from $20.3 million in 1998.[1]

Public Universities

The second group Kerpen analyzed was public universities. In 2007, 46 states employed lobbyists. Combined they spent $32.3 million in federal lobbying, up from $10.1 million in 1998. He found that earmarks are now becoming the preferred method of federal funding as opposed to the more traditional competitive grant process.

Competitive grants are subject to peer review, as projects are carefully selected to receive part of the millions of dollars available for research. Earmarks, however, take merit out of the equation and also open up a potentially unlimited amount of money.

In 2007 North Dakota State University, home to less than 13,000 students, paid Lee and Smith, PC $160,000 for lobbying efforts. In return the school received $28,236,135 in non-shared earmarks.[1]

Transportation authorities and water utilities

The study also chose transportation authorities and water utilities to look at as both are public sectors with abundant lobbying activities. From the ten year time period, lobbying expenditures grew 62.8% for transportation authorities and 132 % for water utilities.

Hall of Shame

Kerpen compiled those spending the most taxpayer dollars for lobbying in a "Hall of Shame." The top five offenders and the total they spent on lobbying from 1998 to the first half of 2008 include:

Conclusions

As Kerpen explains, "This problem is self-perpetuating. As more taxpayer money is spent on lobbying for bigger government, it drives an expansion of the federal government in the form of more earmarks and higher spending. That higher spending, in turn, is used to further boost lobbying expenditures to push for even more spending and higher taxes. Taxpayers are, often unknowingly, picking up the tab for a process that is spiraling upward toward ever larger and more intrusive government."

In the end he declares "The big government perpetual growth machine must be shut down." As he sees it, local and state governments are already represented by those the officials they have elected to congress, and lobbyists should be unnecessary. Tax dollars, then, should be used to deliver services instead. However, as long as local entities continue to receive returns from their investments in lobbyists, they have no reason to stop the process.

He concludes, "In light of this problem, strong prohibitions should be enacted on entities that receive tax dollars who are concurrently engaging in lobbying activities to end this practice once and for all."[1]

References