Campaign Finance & Lobbying by the Numbers

by Ben Lorica (last updated Oct/2011)

A central concern of the Occupy Wall Street movement is the growing importance of money in politics. The financial sector in particular is seen as an effective lobbying force in Washington.
According to the Center for Responsive Politics, in 2010 the financial industry flooded Congress with 2,565 lobbyists. They were financed by the likes of the Financial Services Roundtable, which, according to the Center, paid lobbyists $7.5 million, and is on its way to spending as much or more this year. The Chamber of Commerce spent $132 million on lobbying Washington in 2010. The American Bankers Association spent $7.8 million. As for individual banks: JPMorgan Chase, which received $25 billion in TARP funds from taxpayers, spent nearly $14 million on lobbying during the 2009-10 election cycle; Goldman Sachs, which received more than $10 billion from taxpayers, spent $7.4 million; Citigroup, which was teetering on the brink of insolvency and received a $45 billion infusion, has paid more than $14 million to lobbyists since 2009. And none of this money includes the direct campaign donations these organizations, and their surrogates, made to members of Congress.

The banks "do not like to lose," says Ed Mierzwinski, of the National Association of State Public Interest Research Groups, which was part of the grossly outmatched consumer coalition that managed to scrape together a paltry $2 million to lobby in favor of reform.

To help you understand the role of lobbyists and other influence groups I've assembled a few graphs that place the growth in corporate spending in politics, in historical perspective. Besides the amount of money that goes into influencing legislators and legislation, I'll also tackle sources of campaign funds. The fact that elections have gotten so expensive is what makes many members of Congress vulnerable to lobbyists.  


OpenSecrets has a nice summary of top lobbyists from 1998-2011 which frankly took me by surprise. Granted these are 12-13 year totals, I still found the amount of money shocking. Since the media writes lots of stories on elections I was aware of the large sums required for Congressional elections. But until I pulled together these charts I was unaware of the large sums of money spent on lobbying. In 2010 alone over $3.5B was (officially) spent on lobbying activities. $3.5B is serious money and who knows if there are perks that escape the official tallies. How can ordinary citizens or public interest groups compete with that? A few observations:
  • Top Sectors: While traditional allies of the Democrats (Labor, Lawyers) spent considerable sums (over $470M in the case of Labor), they pale in comparison to sectors that lean towards Republicans (Energy & Defense).
  • Top Industries: As a sign that the tech world has increased its Washinton presence the Computers/Internet industry spent roughly the same amount as the Energy (Oil & Gas) industry. But no one comes close to Healthcare!
  • Top Spenders: My sense is that the individual companies on this list wouldn't be spending upwards of $100M if they didn't think lobbying worked. So how exactly can individuals and public interest groups compete in shaping legislation, if companies have PACs and lobbying funds on this scale. The combination of GE and the Chamber of Commerce alone accounted for over a billion dollars in lobbying activity. Besides Healthcare and Defense, noteworthy top spenders include utilities (PG&E. Edison) and telecom (AT&T, Verizon).
  • Top Lobbying firms: Some firms spent over $200M in lobbying related activities. Since many politicians become lobbyists, I'm assuming their margins are quite healthy!
  • Select Ranking:   

    Total Spent on Lobbying
    [ ]


    Non-party Spending on Elections

    The main reason why member of Congress are vulnerable to lobbyists is that elections have gotten so expensive to win, thus politicians are in perpetual fundraising mode. The bad news is campaign spending is about to explode: the Citizens United v. Federal Election Commission decision in 2010 guarantees that election spending by third-party, "independent", organizations will rival and even exceed money raised by major political parties and candidates. Numbers from the 2010 election cycle bear this out: non-party spending dwarfed money spent by the parties during the 2010 mid-term elections ($279M vs. $179M).

    Spending by Non-candidate Entities in Congressional Elections, 2006-2010:
    [ The Campaign Finance Institute ]

    Non-party spending includes 527 organizations that are technically not allowed to advocate for specific candidates, but routinely advertise against individual candidates. The most famous 527 campaign was carried out by the Swift Boat Veterans for Truth during the 2004 presidential elections.  

    Political Action Committees

    Political Action Committees (PAC's) have a longer history than 527's and many companies and industry groups have had PAC's that have been active for years. PAC's are either connected to businesses, labor unions, companies, or trade organizations, or are usually established by members of Congress, political figures, or single-issue advocacy groups (these are called non-connected PAC's).

    The following chart looks at PAC contributions by type. For the record, since 2004 Corporate PAC's have spent more than twice their Labor counterparts.

    [Use the drop-down to toggle between amount and percentage share.]

    PAC Contributions to Congressional Candidates 1978-2008:
    By Type of PAC

    [ The Campaign Finance Institute ]

    The next set of charts let you compare the proportion of contributions that went to each of the two major political parties. Inspired by the Occupy Wall Street movement, besides examining types of PAC's I also looked at election spending for Finance related PAC's. A few observations:
  • All PAC's: Confirming the adage that donors like to back winners, for the first time since 1996, more PAC money went to Democrats than Republicans in 2008. But many observers expect Republicans to raise more money than Democrats in 2012.
  • Labor & Corporate PAC's: No surprise that Labor contributes primarily to Democrats, and the much larger Corporate PAC's lean Republican. As previously noted, Corporate PAC's spent more than twice as much as Labor in recent election cycles.
  • Commercial Banks: Leans Republican, and includes some of the "too big to fail" banks like B of A, Wells Fargo, JPMorgan Chase, Citigroup, and many other large banks. More importantly, it includes a powerful and active trade group (the American Bankers Association) that is poised to be very active in 2012.
  • Securities and Investment: Includes Goldman Sachs, Morgan Stanley, mutual funds, stock exchanges among others.
  • Insurance: Among segments of the finance sector, Insurance PAC's are the heavy hitters: Insurance PACs spent twice what Commerical Banks did in the 2008/2010 election cycles. Leans Republican.
  • Communications/Electronics: A disparate group that includes PACs established by technology & telecom companies, plus publishers and media companies.
  • Health: Includes PACs established by associations of health professionals, HMO's and insurance providers, hospitals, and pharmaceutical companies.
  • Lawyers & Lobbyists: That Lobbyists have their own PACs is hardly surprising, but lawyers raise way more money than lobbyists.
  • Select Type of PAC:   

    Contributions of PACs to Congressional Candidates by Election Cycle:
    Percentage Share to Each Party

    [ The Campaign Finance Institute and ]

    Related resources:
  • U.S. Income and Wealth Inequality: Share of Top Earners (1917-2010)

  • Wall Street Bonuses by the numbers

  • U.S. Federal Income & Capital Gains Tax Rates, and the Buffett Rule

  • CEO Compensation: US and other countries
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