BUSINESS
04/14/2010 05:12 am ET Updated May 25, 2011

It's Official: 2009 Was Record Year For Lobbying, Despite Recession

The final reports are in and we can now officially say that 2009 was the most profitable year ever for the lobbying industry.

The nonpartisan Center for Responsive Politics tallied lobbying income data from tens of thousands of disclosure filings, and the data show that special interests of all stripes spent $3.47 billion lobbying the federal government in 2009, up from $3.3 billion the previous year.

How did the influence industry manage such a banner year despite a battered economy? The simple answer is that the Obama administration's aggressive change agenda has prompted businesses to open their wallets to an unprecedented degree in the hope of preventing reform.

"Lobbying appears recession-proof," said CRP director Sheila Krumholz. "Even when companies are scaling back other operations, many view lobbying as a critical tool in protecting their future interests, particularly when Congress is preparing to take action on issues that could seriously affect their bottom lines."

A Republican lobbyist put it more bluntly:

"This agenda has been great for OUR economy," he said. "We get paid to get Republicans pissed off at Democrats, which they rightfully are. It's the easiest thing in the world. It's like getting paid to get you to love your mother. Everyone, Republican and even some Democratic lobbyists are laughing at Obama on their way to the bank."

One Democrat who profited immensely from the change regime is Tony Podesta, whose firm saw the largest gross revenue increase of any lobbyshop -- from $16 million in 2008 to nearly $25.6 million in 2009, according to CRP.

Podesta predicted his success at the beginning of the year: "The president has signaled defense acquisition reforms, defense budget cuts... The Hill will take up those issues, so there's a lot of work in that field," he told Legal Times. "We're doing a lot more work in financial services than we had done previously, and also doing more health care work and more energy work."

Every big sector spent more, first and foremost the pharmaceutical and health products industry, which spent $266.8 million -- "the greatest amount ever spent on lobbying efforts by a single industry for one year," according to CRP. Business associations spent $183 million, oil and gas interests spent $168.4 million and the insurance industry shelled out $164.2 million.

Yet somehow, despite this bonanza in lobbying, CRP notes that 2009 saw a decline in the total number of registered lobbyists, from 14,442 in 2008 to 13,742 in 2009.

The most common explanation for the drop in registered lobbyists is that the Obama administration's restrictions on lobbyists communicating with and working for the administration, coupled with the president's anti-lobbyist rhetoric, have pushed influence peddling underground. Ethics lawyers suggest that a huge surge in potential lobbying violations reported by the Secretary of the Senate can be attributed to lobbyists flaking on paperwork in the deregistration process.

Lobbyists said the administration's position would lead to deregistration from the start. More recently, two lobbyists specifically cited the administration's anti-lobbyist stance when they deregistered and started a new "non-lobbying entity" called K Street Research. The firm's founders said they worked closely with lawyers to make sure their work would not meet the definition of lobbying under the Lobbyist Disclosure Act.

The most prominent non-lobbyist is former Senate Majority Leader Tom Daschle, who eschews the title through a process some call "influence laundering."

In his State of the Union address, Obama signaled that he wanted to close a "loophole" that allows a person to avoid registering as a lobbyist if he spends less than 20 percent of his time for a particular client on lobbying activity. Congressional leaders have not acted on the proposal.