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The phenomenon of local governments paying lobbyists to seek “earmark” federal funding

I’m bothered by (and have commented previously on) the City of Oak Ridge’s lobbying activities in Washington, DC. An article earlier this year in The New York Times, titled “Hiring Federal Lobbyists, Towns Learn Money Talks”, describes the disturbing national trend in which Oak Ridge is eagerly participating.

This hot trend is for local governments to hire professional lobbyists to help them gain Congressional “earmarks” — federal pork-barrel funding quietly inserted into bills, bypassing Congressional debate and the federal agency processes that are supposed to select projects for funding based on their merit (and priorities set by Congress).

According to the July 2, 2006, article:

Since 1998, the number of public entities hiring private firms to represent them in Washington has nearly doubled to 1,421 from 763…. Most of these new clients had never sought earmarks — some had never even heard of them — before someone knocked on their door, essentially offering big pots for a pittance. Others had read in the newspaper about neighbors with lobbyists building bridges or beach walks and felt pressure to keep up with the municipal Joneses. “We’re all in competition for the same dollars, and you want all the advantages you can have,” said John Litton, city manager in Lake Mary, Fla., about 20 miles north of Orlando.

The collective bill over eight years has topped $640 million. Enlisted almost exclusively to land earmarks, lobbyists for local governments have boomed alongside a broader explosion in such appropriations, to 12,852 items worth $64 billion last year from 4,219 pet projects totaling $27.7 billion in 1998. The prolific earmarking does not change the overall budget’s bottom line, but how the pie is cut: dollars are doled out, often in secret, at the whim of a lone legislator — often under the influence of a lobbyist — rather than through a competitive process.

It is against the law to use federal money to hire lobbyists. Yet local officials’ near-unanimous justification is that the lobbyists pay for themselves many times over through the infusion of federal funds.

Ronald D. Utt, a senior fellow at the Heritage Foundation and a frequent critic of earmarks, said he was most troubled at seeing firms solicit public clients with virtual guarantees that they could deliver “dollars for pennies” (or billions for millions). “The mystery to me is the way they are able to promise returns,” Mr. Utt said, pointing to the revolving door between Congressional appropriators’ payrolls and lobby shops, as well as to lobbyists’ generous campaign contributions. “It goes beyond mere influence peddling to just outright, classic third-world corruption.”

Beyond any question of quid pro quo, some critics say the new ubiquity of private lobbyists paid with public money perverts basic democratic tenets. Of the 250 top-grossing firms in Washington, 48 have state, local and tribal governments as their leading source of revenue, far more than any other sector, according to the Center for Public Integrity, which monitors lobbying.

Tim Phillips, president of Americans for Prosperity, one of several Washington watchdog groups critical of earmarks, said it was local politicians’ mandate to make their needs known — and the job of members of Congress to look out for them.

“If you’re a mayor or a city councilman and you have to hire a lobbyist, what a gross admission of failure on your part,” Mr. Phillips said. “I would think they have a fiduciary responsibility to not put taxpayer dollars into lobbyists when they’re elected to be, really, the lobbyist for the people.”

The mayors and city council members, though, point to the special appropriations as proof of their fiscal prudence.

Alcalde & Fay is one of three firms — along with Patton Boggs and the Ferguson Group — that collected $25 million from public clients in the past eight years, much more than any other lobbyists. A close look at Alcalde & Fay’s 44 public clients in Florida alone shows that, since 2001, $9.8 million in lobbying fees translated into $173 million in earmarks, or a return of $18.41 on every dollar spent.

A snapshot analysis shows that hiring a lobbyist seems to help. North Miami Beach and Homestead, Florida, Alcalde & Fay clients with about 40,000 residents each, got a combined $13 million in earmarks in the past five years, while six cities of similar size got none. (Dunedin, population 35,691, lacked a lobbyist but got three earmarks totaling $2.7 million while its congressman, Mr. Young, ran the Appropriations Committee.)

Local leaders say they lack both the knowledge of bureaucratic procedures and the political contacts to navigate the complex world of federal appropriations. Besides, they are thousands of miles from Washington, picking up garbage and running recreation programs and putting police officers on beats.

Large governments — along with ports, airports and public utilities — have long had people in Washington looking out for their interests. What has changed in the past few years is the number of smaller entities looking to get in on the action.

The number of cities with lobbyists, for example, has grown to 511 from 234 in 1998, and the number of counties has also doubled, to 186 from 85. Fifty-nine public school districts had lobbyists last year, up from 19 in 1998, while the number of police and fire departments with their own paid representatives jumped to 16, from just 2.

One Congressional staffer told the Times (describing his boss):

“When asked the question whether a city or county needs to hire a lobbyist, he has always told them they don’t need to hire a lobbyist to work with their own congressman. That’s his job. Those are the people he was elected to represent. He doesn’t need to work through somebody else to schedule a meeting with a mayor or a city council member.”

In a July 10, 2006, editorial
Lobbyists, Yes. The People, Maybe the Times editorialist said:

The news that the Washington lobbying industry is rapidly extending its tentacles into cities, towns and school districts across the country should be an outright embarrassment to Congress. Elected lawmakers — not high-paid lobbyists — are supposed to be best attuned to meeting the needs of their localities. But not in the booming marketplace called earmarking — the rapid-fire, debate-free amending of budget bills with millions in special-interest boons for favored pleaders. In this case, lobbyists are shopping themselves as gifted middlemen for mayors and school boards. And localities are biting, having seen the sorry evidence that lawmakers tend to deliver earmarks more readily for Beltway lobbyists than for hometown nobodies.

In Florida, 44 public sector clients of one well-connected lobbyist netted $173 million in earmarked projects since 2001. This is a return of better than $18 federal dollars for every local dollar spent on lobbying, according to a report by Jodi Rudoren and Aron Pilhofer of The Times. The founding fathers surely didn’t envision such a lucrative warping of the federal-local relationship. But lawmakers do very well by it. They not only deliver tailored pork back home, but they also are rewarded by the circular money game where grateful lobbyists and special interests raise vast sums for the re-election campaigns of cooperative incumbents.

The City of Oak Ridge was one of only a handful of Tennessee local governments listed in the article as having lobbyist representation in Washington. Our current lobbyist, the Ferguson Group, named in that article as one of the lobbying firms that makes the most from local governments; their contract with Oak Ridge is worth more than $100,000 a year of local taxpayers’ money.

City officials claim that this is a winning arrangement for the city, because the size of the grants received exceeds the “investment” in the lobbying firm. On the contrary, I think the only winner in this arrangement is a booming political-manipulation industry in Washington, DC that we are supporting with our local dollars. We are paying these to manipulate the political process so we can get federal grants (for example, a DOT grant to complete the next phase of the Melton Lake Greenway) that we probably would qualify for anyway through normal agency processes (the same way we got previous grants for the greenway), and that generally still require that the city contribute local matching funds. This is a losing arrangement for taxpayers, and for the cause of good government, in general.

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