Who Needs Lobbyists
This story was revealed by The center for Public Integrity, a nonprofit, nonpartisan investigative information group in Washington, D.C.
Overlook lobbying. When Washington, D.C.’s greatest trade associations wish to wield influence, they usually put far more of their money into advertising and public relations, in response to a new Middle for Public Integrity investigation.
Take, for example, the American Petroleum Institute. The oil and gas trade trade group spent more than $7 million lobbying federal officials in 2012. But that sum was dwarfed by the $85.5 million it paid to 4 public relations and promoting companies to, in impact, foyer the American public — together with $fifty one.9 million simply to world PR giant Edelman.
From 2008 by means of 2012, annual tax filings show, the API paid Edelman a staggering $327.Four million for promoting and public relations services, more than any other contractor.
It’s been properly-publicized how much business spends on lobbying the federal government, but not a lot is thought about how a lot cash goes toward influencing the public. In an effort to find out more, Center for Public Integrity reporters examined the tax returns for trade associations that spent greater than $1 million on lobbying in 2012. The IRS requires the groups to report their top five contractors.
Of $3.4 billion in contracts reported by the 144 commerce teams from 2008 through 2012, more than $1.2 billion, or 37 p.c, went toward promoting, public relations and advertising companies, greater than any other class. The second-highest total, $682.2 million, or 20 percent of the entire, was directed towards legal, lobbying and authorities affairs.
By industry sector, the largest clients of PR, advertising and marketing and advert companies had been vitality and natural assets associations.
The general public relations business is on a progress tear while the number of federally registered lobbyists is definitely shrinking. Public relations work, in contrast to lobbying, is not subject to federal disclosure rules, and PR and promoting campaigns can doubtlessly influence a broader group of people. In addition to Edelman, among the opposite main gamers are President Barack Obama’s go-to advert agency GMMB, “issue-advocacy” agency Goddard Gunster and authorities coverage specialists Apco Worldwide.
While not an entire accounting of spending, the analysis provides a glimpse into simply how necessary the general public relations trade is to groups seeking to influence public policy.
Large vitality leads spending
Boosted by the $327.Four million-value of contracts Edelman inked with the American Petroleum Institute — persistently the biggest contracts the middle found in 5 years of collected data — the vitality and natural assets industry outspent every other sector on advertising and public relations.
The API, Development Vitality — which represents ethanol producers — and other vitality and natural resources trade groups collectively spent greater than $430.5 million on PR and advertising to assist burnish their picture between 2008 and 2012.
It’s not clear how much of the overall went into the bank accounts of the PR and advertising companies and the way much was passed on to media firms, however. Edelman declined to remark with Center reporters for this story. Edelman doubtless left some of the work for the API to its Blue Advertising subsidiary, which affords media planning and placement in its providers and discloses work for the oil large on its website.
Different high power and pure resources pursuits included the National Fisheries Institute, which represents seafood harvesters, wholesalers and retailers, and the National Biodiesel Board, whose members take recycled cooking oil and animal fats and switch them into gasoline.
Enterprise associations — led by the U.S. Chamber of Commerce — represented the second largest business class, paying PR and advertising corporations a complete of no less than $214.9 million from 2008 through 2012. The U.S. Chamber, the nation’s greatest lobby and a prolific spender on political ads, paid $173.5 million to its prime promoting companies in the course of the 5-year interval.
In 2010 and 2012, all five of the commerce group’s prime contractors have been promoting businesses.
The U.S. Chamber paid Republican media-shopping for firm National Media Research, Planning & Placement more than $60.8 million for promoting services in 2009 alone. National Media, based in Northern Virginia, researches voter demographics and behaviors and locations adverts in key media markets.
One other prime advertising contractor for the U.S. Chamber was Revolution Agency, which the trade group paid greater than $38.2 million from 2010 through 2012.
Revolution is a Northern Virginia-based advocacy firm that possesses the “Creativity of Madison Avenue” and the “Strategic Discipline of a Political Campaign,” in keeping with its website. Its companions all previously labored as staffers or consultants for Republican lawmakers, and the firm’s shoppers have included business groups and the telecommunications trade.
The company was behind an award-profitable public affairs marketing campaign targeting the proposed Consumer Financial Protection Bureau, an agency birthed out of the 2008 financial disaster. The campaign on behalf of the U.S. Chamber included a Television ad that attacked the proposed bureau as a “massive new federal company that can create more layers of regulation and bureaucracy.”
The finance, insurance coverage and real property sector ranked third in contracts with promoting and PR companies, paying $184.5 million to contractors, including favorites essentially the most Group, a West Coast advertising company, and Locust Avenue Group, a “grassroots” advocacy agency. The sector was led by the Nationwide Affiliation of Realtors and America’s Medical insurance Plans.
The most Group, primarily based in Orange County, California, earned greater than $116.7 million from 2010 by way of 2012 for its work to promote the National Association of Realtors in a nationwide advertising marketing campaign.
Fourth in PR spending based mostly on prime contracts was the meals and beverage trade, which paid out $104.5 million from 2008-2012. Large spenders included the American Beverage Affiliation, which has been shelling out millions to try and keep cities and states from taxing sugary drinks.
Rounding out the top 5 industries for PR and promoting spending was communications and electronics, led by CTIA — The Wireless Association, which represents telecommunications companies like AT&T Inc. and Verizon Communications Co. Also in that category: the Software program Alliance.
Steve Barrett, editor-in-chief of trade magazine PR Week, says it’s clear why trade associations rely so closely on PR and promoting.
“They certainly need to affect most people,” he says, “because most of the people will then influence the politicians, the lawmakers or the regulators in that individual business.”
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Edelman leads PR corporations
The Center’s analysis consists of the highest 5 contractors for each commerce affiliation. Annual totals have to be a minimum of $a hundred,000 to be reported. The center looked only at trade associations that spent greater than $1 million on lobbying in 2012, in response to the middle for Responsive Politics. [See Methodology.]
Edelman’s lucrative contracts with the American Petroleum Institute helped the PR big earn $346.8 million, significantly more cash from prime commerce associations than every other advertising or public relations firm, in keeping with the Center’s analysis. But the oil business trade group wasn’t the firm’s solely shopper.
Others included the Enterprise Roundtable ($9.9 million), a gaggle of CEOs who advocate for business-friendly insurance policies, the Software program Alliance ($2.5 million) and the Grocery Manufacturers Affiliation ($1.8 million).
The meals-business commerce group paid Edelman greater than $1 million in 2011 for work related to its campaign to put select nutrition details on labels — a transfer that some health specialists criticized as a solution to head off the Food and Drug Administration’s effort to require more complete labeling.
Edelman is the country’s largest impartial public relations agency. It employs more than 5,000 workers and maintains subsidiaries focusing on grassroots communications and advertising.
The firm’s Washington workplace has a staff of 225, which includes “former journalists, campaign veterans, political speechwriters, White House staffers and legislative aides,” in accordance with the firm’s web site. Amongst them: Steve Schmidt, a senior advisor to Arizona Republican Sen. John McCain’s 2008 presidential marketing campaign; former White Home deputy press secretary Jamie Smith; and former Sens. Judd Gregg, R-N.H. and Kent Conrad, D-N.D.
Edelman is understood for its at-times controversial tactics. In 2006, the firm was forced to apologize for creating a deceptive grassroots marketing campaign for Wal-Mart. To polish the company’s repute, the company had created “Working Households for Wal-Mart,” for which a couple drove throughout the country blogging optimistic accounts of the retail giant’s employees and clients — initially without disclosing that they were compensated. The marketing campaign, which launched amid bad press concerning the company’s employment practices, sought to portray Wal-Mart employees as blissful center-class families.
Extra not too long ago, leaked paperwork revealed Edelman’s aggressive plans to assault opponents of a pipeline being developed by TransCanada Corp. Within days of the leak, TransCanada announced that it was severing ties with Edelman.
In both instances, in keeping with studies and leaked documents, Edelman maintained the identical three-step approach: promote constructive messages, reply to criticism and pressure opposition groups.
Michael Bush, a spokesman for the firm, declined to comment for this story. In an email, he wrote, “We do not discuss concerning the work we do for clients.”
Public relations and advertising companies boast of their communications savvy, however companies contacted for this story were mum. Some, like Edelman, declined to comment, while others didn’t return repeated cellphone calls and emails seeking comment.
Most commerce associations also didn’t reply to the Center’s inquiries.
Lisa Graves, executive director of liberal watchdog group the center for Media and Democracy, which operates the web site PRWatch.org, says commerce associations are designed to be a “shield and a sword” for his or her company members.
“It’s vital for individuals to know extra about how the commerce associations operate and which PR operations they’re funding,” she says, “because these nonprofit entities are extremely highly effective special interests in Washington, D.C.”
‘Turning the tide’
Communications agency GMMB ranked second behind Edelman. The agency, which has places of work in Washington, D.C. and Seattle, introduced in $123.5 million from contracts with 5 different associations in the beverage, communications, transportation and business industries from 2008 via 2012.
Recognized most prominently for its political work on behalf of Barack Obama’s presidential campaigns — GMMB’s management crew consists of Obama’s marketing campaign advisor Jim Margolis — the agency has created ad blitzes for trade groups together with CTIA and the American Beverage Affiliation, whose members include Coca-Cola and PepsiCo.
From 2009 by means of 2012, the wireless association paid GMMB $forty.5 million to supply adverts, including one Television spot with the message that “wireless is freedom.” The beverage affiliation, which teamed up with GMMB on a 2012 ad marketing campaign to advertise new prominently displayed calorie labels, paid the agency more than $55.2 million.
Essentially the most Organization and National Media Research, Planning and Placement had been the third- and fourth-highest paid contractors for advertising and public relations companies. Goddard Claussen (now Goddard Gunster) came in fifth, adopted by Revolution Agency, which was sixth, thanks mostly to its work for the U.S. Chamber of Commerce, based on the Center’s knowledge evaluation.
Apco Worldwide, which ranked seventh, earned $42.9 million from trade associations. The Washington, D.C.-based agency is thought for its work for the tobacco and health care industries. Mike Tuffin, a managing director within the firm’s Washington workplace, joined Apco in 2012 after serving as govt vice president of America’s Medical insurance Plans, a commerce group that represents health insurers.
On behalf of AHIP, the agency created entrance group Health Care America to assault filmmaker Michael Moore’s 2007 documentary Sicko, which demonized American well being insurers, in response to Wendell Potter, a former business-govt-turned-whistleblower. (Disclosure: Potter is a daily columnist for the middle for Public Integrity.)
In the 2 years earlier than Congress crude oil producers passed health care reform in 2010, Apco won at the least two contracts with AHIP, totaling greater than $5 million.
Among former authorities officials at Apco are ex-Gov. Bill Richardson, D-N.M. and ex-Congressmen Don Bonker, D-Wash. and Tim Roemer, D-Ind.
Ogilvy & Mather came in simply behind Apco, incomes nearly $41 million from four commerce associations during the five-year period reviewed by the center. But the agency, a subsidiary of communications big WPP, earned virtually all of its cash from the American Chemistry Council, which represents chemical firms.
The American Chemistry crude oil producers Council paid Ogilvy greater than $15 million in 2008 alone. That year, the agency led a couple of PR and advertising campaigns on behalf of the commerce group, including one which discouraged Americans from supporting a ban on products containing phthalates, a group of chemicals found in plastics and suspected of causing modifications in hormone levels, beginning defects and different health results.
The firm earned awards for the phthalates marketing campaign, which it dubbed “From Toxic to Truthful: Turning the Tide on Phthalates.” Though Congress ultimately banned the use of certain types of phthalates in children’s toys, the firm patted itself on the back for helping to “neutralize damaging coverage” and produce “a noticeable shift in the public temper.”
FleishmanHillard ranked ninth, in keeping with the Center’s analysis. Its public relations and promoting purchasers included the American Petroleum Institute ($27.6 million) and CropLife America ($1.5 million), which represents the manufacturers of pesticides and agricultural chemicals.
The firm, which describes itself as being pushed by “the energy of true,” has persistently ranked inside the top three of the world’s highest-paid public relations corporations for the past 5 years, in accordance with the World PR Report printed by the Holmes Report. Its D.C. office is led by Kris Balderston, a former State Department official and deputy assistant to former President Invoice Clinton.
Preserving the players straight within the promoting and public relations game isn’t any simple process as a result of a sequence of massive mergers that have taken place over the past decade or so. GMMB, for example, is definitely a subsidiary of FleishmanHillard, which is owned by the giant advertising and communications holding company Omnicom Media Group, primarily based in New York City.
But most of the subsidiaries perform underneath their very own names.
Locust Street Group rounds out the top 10 firms for PR and advertising companies. The Washington, D.C.-based mostly agency earned $23.6 million in commerce group cash from 2008 by way of 2012, nearly all of which got here from America’s Medical health insurance Plans. It’s unclear what exactly the company did on the insurance coverage group’s behalf — the firm’s founder, David Barnhart, declined to answer questions for this story — but Locust Street Group’s website says it builds “boots on the ground” coalitions and creates social media campaigns to assist influence lawmakers.
“D.C. may have Okay Road with tons of lobbyists,” the firm’s slogan says, “but small towns all over America have a Locust Street.”
Excessive stakes, huge reward
For public relations agencies, touchdown a contract with a large commerce affiliation is a giant deal.
“The stakes are high, and the competition is intense,” says Larry Parnell, director of George Washington University’s master’s program in strategic public relations. “But as you’ll be able to see, successful one in every of these things is very lucrative.”
It’s difficult to draw sweeping conclusions from the information analyzed by the middle. Commerce teams often vaguely describe the companies their top contractors provide as “professional fees” or “consulting.” Many corporations provide a wide range of providers, at instances making it unclear exactly what sort of labor was finished on the trade associations’ behalf.
Because the middle solely reviewed essentially the most politically lively trade associations, the information didn’t embody some trade groups that fell below the $1 million lobbying threshold but nonetheless spent closely on public relations and advertising.
However the contractor information offers an inside look at the way trade associations use PR and advertising to ply the American mind. Commerce teams decided to battle regulations and increase profits of their members have spent closely to affect how the general public perceives insurance policies that have an effect on every little thing from the air we breathe to the beverages we drink.
The strategy, public relations specialists say, just isn’t designed to change lobbying so much as it is to boost it.
“You can leverage [public relations work] so your lobbying is to a finer level,” says Parnell, noting that lobbyists can higher influence lawmakers by displaying them polling gathered by “grassroots” PR campaigns. “It offers air cover.”
“People and organizations are getting more and more subtle with their communications strategies. They’re extra multi-dimensional,” adds Anne Kolton, vice president of communications for the American Chemistry Council. “With any advocacy [effort], the hot button is to create an echo chamber so people hear your message in numerous venues.”
There are some benefits to putting tens of millions into PR rather than lobbying. For instance, a trade association may be pushing a particular coverage that is not so widespread with the public. As long because it doesn’t instantly contact a government official, it want not report who it has employed to do the PR work. Lobbying companies generally should report how a lot they are paid, who their shoppers are and what subject areas they’re crude oil producers engaged on.
PR companies may additional obfuscate their function by creating so-known as “front groups” that seem like grassroots organizations, in an effort to push their clients’ messages. It is usually difficult to discern who’s behind these manufactured entities, though typically information can trickle through.
For instance, the tax type for the Nationwide Mining Affiliation confirmed that it paid $four million to Weber Merritt, a Northern Virginia public affairs firm, as an unbiased contractor. The companies were listed as “Count on Coal” in 2012, based on IRS filings.
Depend on Coal calls itself a “grassroots group” that educates individuals on coal-powered electricity. Its social media and on-line petitions, which criticize authorities proposals to cut carbon emissions, all omit ties to the mining affiliation.
While this kind of “grassroots” mobilization is more and more pushed by an industry or paid consultants, it is only one piece of the rising demand for communications professionals, who concentrate on everything from crisis management to social media advocacy.
In 2013, the global public relations business grew 11 p.c over the earlier yr to $12.5 billion, based on commerce journal The Holmes Report.
The regular rise in public relations worldwide spending has been accompanied by an total drop in lobbying spending, beyond the trade group sector.
Lobbying expenditures peaked in 2010, when special interests spent $three.6 billion on lobbying federal lawmakers. Since then, they’ve declined steadily, falling to $3.2 billion in 2013, according to the center for Responsive Politics. The whole number of registered lobbyists has also dropped.
Some say the change indicates a shift toward so-referred to as “soft lobbying,” a method that permits industry groups and unions to influence public coverage not only with public relations, but by means of assume tanks, nonprofit organizations and grassroots teams that aren’t topic to federal disclosure guidelines.
The golden age for PR has coincided with the decline of mainstream journalism, particularly newspapers, which have suffered from plummeting advert income that has necessitated layoffs in newsrooms across the nation.
Right this moment, not solely are PR professionals outnumbering journalists by a ratio of 4.6 to 1, but the wage gap between the two occupations has grown to virtually $20,000 per year, based on the Pew Analysis Center. The widening employment and income disparities have left journalists underpaid, overworked and more and more unable to undertake impartial, in-depth reporting.
Rick Edmonds, a writer for the Poynter Institute who covers the enterprise of journalism, says the shift has been notably evident within the protection of science and health information. Many information organizations that after reported extensively on those points not have the assets to cowl them adequately, and particular interests have crammed the void.
“A great deal of science and well being news is coming from the PR facet,” Edmonds says.
For commerce associations like the American Petroleum Institute, that’s a part of the larger public relations strategy that makes lobbying federal lawmakers so much simpler.
“If we’re involved about a selected member [of Congress], we’ll educate that constituency and encourage individuals to weigh in with their elected official,” Jack Gerard, the American Petroleum Institute’s president and CEO, told The Washington Submit in a 2012 interview explaining the mentality behind the commerce group’s PR offensive. “Congress is a lagging indicator. Congress is aware of the American people. That’s why a nicely-educated electorate is a key to sound coverage.”
The gradual shift from a deal with traditional lobbying toward better use of the “outside recreation of politics,” or communications like PR, has been happening for at the least a decade, close observers say, however is now accelerating with advances in technology, social media and digital methods, says Doug Pinkham, president of the general public Affairs Council, an association of public affairs professionals who concentrate on corporate PR, lobbying and grassroots advocacy.
Not all the commerce associations reviewed by the middle spent more cash on top contracts for public relations and advertising than on those for lobbying and legal services. However the data seem to help broader developments in the so-known as “influence business.”
“In the world we dwell in now,” says Pinkham, “if you have got an issue that is visual and has a compelling narrative, we’re higher off spending more resources on attempting to coach the public” than counting on conventional lobbying.
Troubled industries turn to PR
The commerce associations that rely most on PR and promoting campaigns are usually these representing industries facing the heaviest regulation and probably the most public contempt, says Edward Walker, a sociology professor at the College of California, Los Angeles, and author of the guide Grassroots for Rent.
And the campaigns are often tied to specific public policy crises. As Walker says, they often launch “when industries really really feel threatened that they could truly lose a coverage battle.”
Over the previous few years, each the American Petroleum Institute and the American Beverage Association have used PR campaigns to defend their respective industries throughout heated debates over issues like the proposed Keystone XL pipeline and proposed taxes on sugary drinks.
At the outset of 2012, the American Petroleum Institute announced a “Vote4Energy” campaign to promote the business in a contentious election 12 months. Its social media endorsed the idea that home oil manufacturing would carry jobs, revenue and national safety.
With Edelman’s help, the American Petroleum Institute also organized a speech and panel dialogue targeting “key influencers” in attendance, together with suppose tanks, government officials and the media. Online groups additionally emerged, like “Energy Tomorrow,” which hosts a weblog by Mark Green, a journalist-turned-trade-blogger.
Along with Edelman’s work, the petroleum group paid FleishmanHillard $22.8 million in 2012 for advertising to advertise hydraulic fracturing, or fracking, to skeptical citizens. Television advertisements focused a half-dozen shale gas-producing states, together with Pennsylvania, Texas and North Dakota, emphasizing small-city reliance on power and downplaying environmental impacts, as part of its Power from Shale campaign.
Few industries have felt extra threatened lately than soda makers.
Since 2009, the makers of sugary beverages have discovered themselves below attack from authorities officials and public well being advocates who have blamed tender drinks for the nation’s increasing waistlines and have favored taxing in style sweetened beverages.
The American Beverage Affiliation has fought back — vigorously — with the help of Goddard Gunster, a Washington, D.C.-primarily based firm well-known for creating the “Harry and Louise” advert campaign that helped bury President Clinton’s well being care reform proposal in 1993 and 1994.
Goddard has produced anti-tax ads and created front groups in cities and states considering soda taxes. In 2012, the agency helped the affiliation defeat two soda-tax ballot measures in Richmond and El Monte, California — campaigns that preceded its 2014 ballot-box battles in San Francisco, where voters rejected a soda-tax measure, and Berkeley, where a sugary-drink tax handed.