Authors: Hedrick Smith
It is not unusual for lobbying partners to wind up on opposite sides of political campaigns. One striking example is the highly respected firm of Wexler, Reynolds, Harrison & Schule, which principally pairs Anne Wexler, a liberal Democrat from the Carter White House, and Nancy Reynolds, a close confidante and White House aide to Nancy Reagan. In the hot 1986 Senate campaign, their rivalries stretched across the country; Wexler and Reynolds ran fund-raisers for rival candidates in Senate races from Florida and Maryland to Idaho and Nevada. “We don’t think anything of it,” Anne Wexler told me. “Our having contacts on both sides benefits our clients.”
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The swarm of lobbyists is so great that members of Congress have grown jaded—quick to challenge Washington lobbyists for evidence that their case has real pull among the voters. Danny Rostenkowski, chairman of the House Ways and Means Committee, told me that while his committee was drafting the 1986 tax bill, he refused to see Washington lobbyists—though he would grant time to constituents from home. And Tom Korologos, an old-breed lobbyist who learned the power game in the 1960s under Utah Senator Wallace Bennett and as congressional liaison in the Nixon White House, concedes. “We have a different breed of congressman who is more active, more publicity prone, more responsive to his district.…
“On the Senate side in the old days you could go talk to two or three committee chairmen,” Korologos recalled, “you could talk to John Stennis and Russell Long and Allen Eilender and Warren Magnuson, and you had a policy. You had a defense bill. You had an oil policy. Now, you’ve got to talk to fifty-one guys. So you fly in the Utah plant manager to see Orrin Hatch and Jake Garn [Utah’s two senators], and the Utah plant manager gets in to see ’em. If he doesn’t get in, he goes back home and goes to church on Sunday and bowling on Monday and to coffee on Tuesday and says, ‘I was in Washington, and the son of a bitch wouldn’t see me.’ And let that spread around for a while. Political graveyards are filled with statesmen who forgot the folks back home.”
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“The logistics of trying to persuade Congress have changed enormously,” agreed Jim Mooney, for years a top House Democratic staff aide and now chief lobbyist for the cable-television industry. “What’s changed is there are so many more groups now and simultaneously a diminution of power in the power centers of Congress. You’ve got to persuade members one by one.”
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In the new game, another maxim is that lobbyists must demonstrate that the home folks are with them to prove their political legitimacy. “There’s a suspicion on the part of elected officials toward paid lobbyists,” acknowledged David Cohen, the public-interest lobbyist. “They often sense a gap between leaders and the rank and file, whether labor unions or other organizations like church groups. I don’t think you’re a player unless you have a constituency to mobilize.”
In an earlier era, labor unions had a near monopoly on lobbying with a mass base. Disgruntled farmers also rolled their tractors onto the Capitol Mall to demonstrate mass anger. Business has now entered that game. Mass-marketing techniques are being used even by people like Charls Walker, a traditional Washington insider whose normal style is lobbying at intimate dinners for selected members of Congress. After serving as an inside tax adviser to the 1980 Reagan campaign, Walker got important tax write-offs for business written into the 1981 tax bill. But more recently he has enlisted help from new-breed lobbyists.
“When a member says to you, ‘Go convince my constituents,’ then you are thrown into those arenas,” Walker explained to me. “You get into targeted mail and all that sort of stuff. The lobbying business is moving toward a full service which will include not just your legislative experts and administration experts, but your public-relations experts, experts in grass-roots communications, targeted communications, cluster-group approaches, grass-roots coalition building.” Charls Walker
was talking the lingo of the modern political campaign, and in fact, the old-breed lobbyists are turning increasingly to campaign consultants.
Campaign-Style Lobbying
For organizations like AIPAC, the National Rifle Association, and the American Association of Retired People, a natural constituency is out there, ready to be activated. The Jewish community, the gun lobby, and the gray lobby all have a long history of political activism. Their issues are emotional flash points that engender powerful, visceral reactions. Antiabortion conservatives or New Right advocates of school prayer are armed with similar grass-roots dynamite. But the modern, high-tech part of the lobbying industry has learned how to tickle other free-floating “hot buttons” in the public consciousness. Washington lobbyists or trade associations can now go out and “buy” their own grass-roots movement. Rather than wait for emotions to gestate spontaneously, new-breed lobbyists engage in artificial insemination. Campaign-style, they plant, nurture and orchestrate coalitions.
When the American Trucking Association was trying in 1980 to stave off deregulation of truck routes and rates, they paid $3 million to Hill & Knowlton, Washington’s biggest P.R. firm, not just to publicize their case with speeches and press conferences—but to inject deregulation into the presidential campaign. It was an ingenious gambit, the brainchild of Bob Gray, head of Hill & Knowlton’s Washington office. Gray’s idea was to use the six months before the February 26, 1980 primary to persuade the New Hampshire press that trucking deregulation would grievously damage the state’s economy. He reckoned that if the New Hampshire press produced a slew of editorials, presidential candidates would feel pressure to take a stand while the national political spotlight was on New Hampshire—and that would magnify the appearance of public opposition.
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In October 1979, Gray sent Betsy Weltner, a twenty-seven-year-old P.R. specialist, daughter of a former congressman from Georgia, to New Hampshire to preach the dire effects of deregulation. To a region hard hit by the loss of textile mills, Weltner made the pitch “that if there were deregulation of trucking, the small towns would be deserted because those aren’t profitable truck runs.” The Manchester, New Hampshire,
Union Leader
, which hated the two main backers of deregulation, President Carter and Senator Edward Kennedy, was happy to find a new issue for savaging them. Other papers in Berlin, Claremont, Keane, and Concord ran editorials picking up Weltner’s
line. Weltner ghostwrote op-ed articles for local truckers. She got other truckers on radio call-in shows. A few civic organizations passed resolutions. In four months, Weltner manufactured enough clippings to pressure the presidential campaigns.
John Connally, the former governor of Texas, was the first to come out against deregulation. “Connally really helped us. He was desperate” for an issue with local appeal, Weltner recalled. California’s Democratic Governor Jerry Brown followed suit. But the big moment came when Weltner cornered George Bush at a truck stop near Manchester. A truck driver, coached by Weltner, bearded him on deregulation and Bush came out against it. The Manchester
Union-Leader
made the encounter a front-page photo. Hill & Knowlton flashed Bush’s comments across the country. One national news agency suggested that trucking deregulation might be a “sleeper issue” in the presidential race.
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On her solo political campaign, Weltner got a lot of visibility for the truckers; but there was not much genuine public interest. Deregulation was too popular to prevent, but this unusual lobbying technique did water down the change.
Another new-breed lobbying technique is to activate the state-level political networks that most senators and members of Congress depend on for their reelection campaigns. Roger Stone, a brash thirty-three-year-old, $450,000-a-year Republican political consultant turned lobbyist, put it bluntly: “Political power in Washington emanates from outside Washington—the gun behind the door, as Woodrow Wilson used to say. All politicians are preoccupied by reelection. They respond to the power brokers back home, especially those who might want their seats. So you mobilize those guys, and Congress pays attention.”
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Ironically, Stone, a razor-sharp Republican partisan who ran Reagan’s 1984 presidential campaign in the Northeast, teamed up with Robert Beckel, Walter Mondale’s national campaign manager. Only a few months after warring across the campaign trenches, they joined forces on behalf of the Public Securities Association (PSA), a group of big banks and investment houses on Wall Street which wanted to keep Congress from taking away the tax exemptions of the municipal bond industry. Beckel, who was the linchpin of the PSA lobbying operation, hired Stone; Jim Johnson, Mondale’s former campaign chairman; and Jim Lake, who was Reagan’s campaign press secretary in 1976, 1980, and 1984.
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The PSA paid more than $1 million for their campaign-style lobbying effort.
Beckel personifies the new lobbying game. By his own account, at thirty-nine, he is “a battered, beat-up” veteran of 150 campaigns who
felt it was time to come in from the cold and turn his political skills into earning a six-figure salary. When I saw him in the zany atmosphere of Mondale’s 1984 campaign headquarters, Beckel was a rumpled, frazzled figure in jeans and a worn polo shirt. Beckel was the aide who urged Mondale to challenge Gary Hart with the Wendy’s Hamburger ad slogan, “Where’s the beef?” When Mondale said he had never seen the ad, Beckel got down on his knees and imitated the little old lady who spouted the colorful punch line. The new Beckel turns out in a dignified dark suit and vest.
His background and Democratic network made him an ideal middleman for the Public Securities Association. The bankers, hardly blessed with a populist image, could not do their own grass-roots organizing. “Nobody likes investment bankers,” Beckel smiled wryly. “If we’d said we need to protect the investment-banking community in New York, we’d have gotten a big yawn.” But after years of working the vineyard of mayors, legislators, and local power brokers all over the country, Beckel quickly discovered that his old political network was a natural constituency to support tax breaks for those bonds. The bonds are used to finance hospitals, stadiums, airports, university dormitories, multifamily housing, convention centers, sewage plants, and industrial development parks. Their natural proponents range from city finance officers to local industry, trade unions, college presidents, and charities.
Beckel laid out the basic theory of new-breed lobbying. “What we do is take campaign techniques and go out to the districts of these guys in Congress and organize the districts like a campaign,” he explained. “What we can do is get some real honest-to-goodness back-home pressure. We do a lot of subcontract work for lobby firms who say, ‘We got a real problem with Congressman X on this issue.’ And so we’ll go into his district, and because we invariably know a lot of people in every district in the country, we’ll find somebody who in a sense becomes a campaign manager for us. And we go to work on the congressman.”
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Roger Stone tapped his network on the Republican side. In Houston, Beckel told me, “We had people from the Sisters of Mercy to labor guys to businessmen from downtown. The labor guys and the businessmen hadn’t talked to each other in fifteen years. They didn’t like each other, but they had one reason to be in the room together. They both had an economic interest in these bonds. They didn’t talk much, except they all agreed to contact their congressman and say this is important.”
That kind of back-home coalition has built-in clout with Congress.
Beckel’s lobbying target was the House Ways and Means Committee, which was working on the tax bill. The committee has thirty-six
members; Beckel and Stone set up campaign-style coalitions in nineteen of their districts. Initially, tax-free bonds faced opposition from Chairman Dan Rostenkowski and other ranking Democrats. But when committee members went home for weekend visits, the local coalitions lobbied them and began lining up support—from Charlie Rangel of New York, Robert Matsui of California, Jack Murtha and William Coyne of Pennsylvania, Ronnie Flippo of Alabama, Henson Moore of Louisiana, Wyche Fowler of Georgia, Bill Frenzel of Minnesota, Bill Archer of Texas. These members bargained to protect their pet local tax-free bonds.
The changing mood of the committee meant billions of dollars to the bond industry and the localities. The Treasury Department reckoned on $13 billion in tax revenues over five years by killing tax exemptions for the $200 billion-a-year private-purpose, municipal bond business. When the tax bill left the House Ways and Means Committee, exemptions had been restored for fifty-five to sixty percent of the bonds, and the tax burden had been cut to $6 billion. In the Senate, the Beckel-Stone operation restored more exemptions and cut the tax burden to about $3 billion—an enormous gain for the Public Securities Association, impossible to achieve through old-breed lobbying.
In short, campaign-style lobbying paid off handsomely for the bond industry. It worked so well that Beckel’s firm, National Strategies, became known as the “Kelly Girls” of lobbying because they could quickly form and rent out lobbying operations in virtually every congressional district in the country. They could focus heavy pressure for corporate clients on two or three swing members on pivotal committees on any issue.
The Beckel-Stone operation was successful because it followed the first commandment of the new lobbying game:
The most influential voices with Congress are power brokers back home
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Finding “Hot Spots” to Turn on Voters
Arousing voters themselves can be even more effective. The banking industry did that in 1983, by borrowing yet another campaign technique to score a stunning lobbying triumph—after traditional, old-breed lobbying had failed.
The banks were outraged by an amendment to the 1982 tax law which required them to withhold ten percent of their customers’ income from interest and dividends, just as employers must withhold taxes on workers’ earnings. The law, backed by President Reagan,
Senator Bob Dole, and other congressional leaders, sought to collect an estimated $7.5 billion a year in tax revenues that people owed but were not paying.