07/16/10 Alexandria, Virgina — Our friend Barry Ritholtz over at The Big Picture recently came across a Time article that sheds a little light on how lobbyists so effectively spin straw into gold for companies with deep pockets.
As he puts it, the subtitle for the piece tells you everything you need to get the idea,“Why Lobbying Is Washington’s Best Bargain; Lobbyists say for just a few million, they can make clients billions.”
Here’s the quote Ritholtz cites from Time:
“Lobbyists [are] the best bargain in Washington. Capitol Tax Partners, for example, is one of 1,900 firms that house more than 11,000 lobbyists registered to operate in Washington. Last year, according to the Center for Responsive Politics (CRP), firms like Capitol Tax were paid a total of $3.49 billion for unraveling the mysteries of the tax code for a variety of businesses.
“According to Capitol Tax co-founder Lindsay Hooper, his firm provided “input and technical advice on various tax matters” to such clients as Morgan Stanley, 3M, Goldman Sachs, Chanel, Ford and the Private Equity Council, which is a trade group trying to head off a plan to increase taxes on what’s called carried interest, a form of income enjoyed by the heavy hitters who run venture-capital and other types of private-equity funds.”
He also points out this particularly egregious example of lobbyist alchemy:
“Auto Dealers made out even better: They dropped less than $10 million dollars ($6.3 million on lobbying, and an additional $3.4 million in campaign contributions). For their troubles, the dealers get to keep $20 billion each year in undisclosed added interest and fee kickbacks to over-priced loans.”
It’s not necessarily true throughout history or for all its members, but the purchasable decision-making in Congress seems to no longer even bother being discreet. Sheesh. You can read Ritholtz’ complete thoughts on the matter, including a derivatives trading banks example, in his Big Picture post on government for sale.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of The Daily Reckoning. Previously, he was founding publisher of UrbanTurf and RFID Update, which he operated from Brazil, Chile, and Puerto Rico, and associate publisher of FierceFinance. He specialized in direct marketing at MBI, facilitated MIT Sloan School of Management programs, and has been featured on CBS. Vega graduated with honors from Harvard University, where he was on the board of Let’s Go Publications and directed business programs involving McKinsey, Goldman Sachs, and Harvard Business School faculty. He is also enrolled at the Stockholm School of Economics.
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Wow, how do I sign up to be a government lobbyist? I can provide the technical advice.
Some in the 1930s, more in the war, then it just about stopped happening until the 1960s. Interesting. And more recently, of course, it became rarer because CG of all sorts became rarer.