(The following story by Neil H. Simon appeared on the Richmond Times-Dispatch website on March 1, 2009.)
WASHINGTON, D.C. — Ten of Virginia’s top 20 revenue-producing public companies combined to spend more than $100,000 a day lobbying the federal government last year, records show.
As CEOs grappled with a sliding U.S. economy and then-candidate Barack Obama targeted corporate influence in Washington, eight Virginia-based companies — including the Richmond area’s Altria Group Inc., Genworth Financial Inc. and Dominion Resources Inc. — each spent more than $1 million in 2008 trying to influence lawmakers.
Altria, parent company of cigarette-maker Philip Morris USA, topped the lobbying list, spending $13.8 million to sway Washington politicians.
The median amount the top 20 revenue-earners spent lobbying was $465,000, according to an analysis of federal disclosure forms by Media General News Service. Lobbyists must report their spending every three months, listing issues they seek to influence.
The following is a look at some notable aspects of lobbying last year, including top spenders (and nonspenders), companies that got big government dollars and disclosure requirements that are short on details.
Big spenders
In moving its headquarters from New York to Henrico County last year, Altria became the state’s second-largest company, based on 2008 revenues. But on the lobbying list, it’s far and away No. 1, spending more than defense contractor General Dynamics Corp. (No. 2) and railroad company Norfolk Southern Corp. (No. 3.) combined.
Altria spent $13.8 million on five in-house lobbyists, 22 contractors and what the company’s government-affairs vice president, Bruce Gates, called a defensive strategy to minimize taxes on tobacco products.
“Our product is one that is constantly viewed as a source of income,” he said.
One of the first bills Obama signed into law as president increased the tax on cigarettes by 61 cents per pack to fund an expansion of children’s health insurance. Altria opposed the bill.
But Altria has bucked the tobacco industry by supporting a bill to empower the Food and Drug Administration to regulate tobacco products. (That wouldn’t be clear from disclosure forms, though. Reporting rules do not require lobbyists to indicate their position on issues, just to list the subjects on which they lobbied.)
Insurer Genworth Financial Inc. (No. 4 in lobbying) spent $3.4 million on government affairs in 2008, a year in which the insurer lost $572 million.
“It is important for policymakers and elected officials to better understand the issues we face in our industry . . . particularly in this economic environment,” company spokeswoman Yokima Cureton said.
Nearly a third of Genworth’s lobbying spending came in the last three months of the year as the company pushed for the $700 billion Wall Street bailout package. At the same time, Genworth pursued the acquisition of Minnesota-based InterBank. By owning a bank and becoming a savings and loan, Genworth would be eligible for the bailout funds. The deal to buy InterBank has not been completed.
Genworth also lobbied on housing and health issues, including bills related to Alzheimer’s family assistance and long-term-care trust accounts (neither passed). Genworth’s disclosure forms do not indicate positions taken.
Money takers
McLean-based Capital One Financial Corp., which received $3.6 billion under the bailout, also lobbied on banking and finance issues last year.
But long before bailouts were in vogue, Virginia-based companies held out their hats at Uncle Sam’s door. None has received more money in recent years than Falls Church-based Defense Department contractor General Dynamics.
General Dynamics spent $6.7 million lobbying on defense and homeland-security spending bills last year and $7.2 million the year before. It got government contracts totaling $30.6 billion, according to the Office of Management and Budget, the agency that tracks federal dollars. The company has ranked among the top five recipients of government contracts every year since 2000.
General Dynamics officials were hesitant to talk about their lobbying efforts.
“It’s an education process,” said Kendell Pease, the company’s vice president of government relations. “Many of our programs are very complex, and we have many requests by members [of Congress] asking for more information.”
In 2008, General Dynamics’ largest contracts were $1 billion to build a submarine in Connecticut, $613 million to make tanks and $538 million to produce armored Stryker vehicles.
All of those contracts — and 47 percent of the taxpayer dollars awarded to the company in 2008 — came without a competitive bidding process. The government lists General Dynamics as the “unique source” for the defense work.
“We don’t go into detail about our process,” Pease said.
The changers
Five of the state’s top 20 revenue-earning companies reported net income losses in 2008, though lobbying budgets can survive cost-cutting measures.
Most of the 20 companies increased or held steady their 2008 lobbying efforts compared with 2007. Five companies, including The Brink’s Co. and Dominion Resources, increased lobbying spending by 50 percent or more.
“When the government is handing out billions of dollars to help salvage the economy, lobbyists are going to be among the last people to lose their jobs,” said Massie Ritsch, spokesman for the Center for Responsive Politics. “They are people who can deliver revenue in terms of government loans, tax subsidies and contracts.”
Dominion increased its lobbying effort just as Congress began to tackle a sweeping climate-change bill last spring, which would have had a major impact on the energy company and its coal-fired power plants. Dominion lobbied against the bill, which the Senate killed in June.
“We believe in being engaged in the democratic process on behalf of our customers, employees and shareholders,” company spokesman David Botkins said in a statement.
Brink’s did not return calls seeking comment.
Railroad giant Norfolk Southern doubled its lobbying spending in 2008 to $6.3 million, focusing on transportation and environmental issues.
“[Trains] are easier on the environment. We are very fuel-efficient, and we can help take some of the strain off of the highway system. . . . It’s very important constituents know about that,” spokesman Frank Brown said.
Still secrets
Despite all the reporting requirements and that Congress displays lobbying forms online, few companies go as far as Norfolk Southern to detail lobbying efforts.
Its last lobbying report had specificity like this: “opposed section 105 that increases maximum truck weights to 97,000 [pounds].” The bill did not pass.
The rail company supported coal-to-liquid technologies in the climate-change bill and opposed the Railroad Antitrust Enforcement Act and on-time performance rules for passenger trains. None of those bills passed the last Congress.
Usually companies list the issues they lobbied or the bill numbers they worked, but they typically do not say whether they supported or opposed all or part of the bill.
“Companies tend to do the minimum,” said Ritsch at the Center for Responsive Politics.
Henrico-based international packaging company MeadWestvaco also reports clearly its legislative positions — opposing the climate-change bill, a so-called fair-pay bill and labor’s Free Choice Act, and supporting a free-trade agreement with Colombia. The fair-pay act became the first bill Obama signed into law. The other issues are pending.
Ritsch said the transparency of these two Virginia companies should be a “model for every company.”
But even this level of reporting fails to capture all the ways companies influence lawmakers, he said. “When a defense contractor puts an ad in the Metro station that members of Congress and their staffs use or that officials at the Pentagon use, that’s intended to influence decision-making, but that’s not lobbying.”
Nor do lobbying forms show campaign contributions that the companies’ affiliated political-action committees make to federal candidates. Thirteen of Virginia’s top 20 companies have such PACs. Combined, they gave $12.3 million to federal candidates in the last two-year election cycle.
What, me lobby?
Three of Virginia’s top 20 companies, including Hanover-based Owens & Minor Inc., reported no lobbying expenditures last year. But that doesn’t mean they sat out the legislative process.
“In the past, we’ve generally relied on our trade associations and coalitions to act on our behalf,” said Trudi Allcott, a spokeswoman for Owens & Minor, a medical-supply company. The Health Industry Distributors Association spent $110,000 lobbying the federal government last year for the 180 companies it represents.
Goochland-based CarMax Inc., which had not lobbied at all in 2007, hired a Washington firm last fall to successfully fight for tax incentives for car buyers and other issues in the bailout bill.
Companies that are veterans at the lobbying routine say it is simply part of doing business.
“There are lots of people with lots of ideas that may adversely affect our business,” said Smithfield Foods spokesman Dennis Treacy. “We need to be on guard.”