Tom Donohue, president and CEO of the U.S. Chamber of Commerce, whose lobbying arm the Institute for Legal Reform would have qualified for PPP funding.

Corporate Lobbyist Bailout: DENIED

in Sludge
on December 31, 2020

In this year’s coronavirus bailout bills, lobbyists earned their pay by helping Big Business make off like bandits with public funds.

Around the March CARES Act, well-connected lobbying groups worked the phones to ensure the bill was tilted towards aiding the largest corporations and wealthy investors. More than half of the money from the bill’s Paycheck Protection Program (PPP), which was supposed to be for small business, ended up going to only 5% of recipients, especially 600 large companies, according to the most recent data. The bill also included a $454 billion slush fund for the Treasury Department to bail out large corporations. 

In April, as Democrats readied another relief package, progressive activists who follow Congress began hearing rumblings that the bill would throw open PPP to a host of political influence-peddlers, including top lobbying groups for the largest corporations and industries. Adam Eichen, one of four co-founders of the non-profit Democratic Policy Center, told me that he and his colleagues tracked plans for a stand-alone lobbyist bailout bill as it was first introduced on May 5 by Rep. Chris Pappas (D-N.H.) and Rep. Brian Fitzpatrick (R-Pa.). The bill proposed PPP eligibility for 501(c)(6) organizations—including trade associations and politically-connected lobbying organizations for industries that oppose the Democratic Party’s agenda, from negotiating more affordable drug prices to passing laws that encourage wage growth.

“The bill was stunningly bad—it would allow any (c)(6) organization into PPP, assuming it had 300 or fewer employees. We were the first to put together a dataset of how many employees were at the largest corporate trade associations and we found out the bill would have included 99.8% of all lobbying groups—including pharma, health insurers’ AHIP, the Koch network’s Stand Together Chamber of Commerce,” Eichen said. The dataset is available online as a spreadsheet for anyone to see the number of employees at 727 groups, from the largest, American Chemistry Council and PhRMA, to somewhat smaller players like the Technology CEO Council and the Satellite Industry Association. 

“Making them eligible for PPP would amount to Congress donating to the lobbying campaigns intended to influence them,” wrote journalist David Dayen in The American Prospect. “They would be paying the salary, in the short term, of the people that come to them looking for special assistance for their corporate clients.”

“We were shocked at how poorly the bill was written, with minimal restrictions,” Eichen said. “The bill kept getting traction past 100 cosponsors, and we were kind of appalled. We wanted to form a progressive war room for some of the battles that were falling through the cracks of the progressive sphere. We decided to launch the Democratic Policy Center earlier than we expected.”

Two days after the Pappas bill was introduced, the Democratic Policy Center (DPC) launched with a tweet against giveaways to corporate interests. As they started up, the 501(c)6 bailout bill had momentum from well-connected backers in the lobbyist groups’ lobbying group, the American Society of Association Executives (ASAE). The week after it was introduced, around 100 more representatives, a mix of Democrats and Republicans, signed on as cosponsors of Pappas’ bill, and the trade group bailout had the support of Speaker Pelosi. On May 11, DPC tweeted out a petition against allowing PPP loans—in practice, forgivable grants—to go to Washington lobbyists, calling it out as a kind of donation from Congress back to their most-connected campaign contributors.

When the House Democrats’ HEROES Act was introduced on May 12, not only was the Pappas legislation included in the relief package, but also it was expanded to include more influence-peddlers such as 501(c)(4) social welfare organizations and “dark money” nonprofits that spend money to influence elections without revealing their donors. The HEROES Act even set aside a special loan fund for what it called “small nonprofits” with fewer than a whopping 500 employees, which in practice would have covered 727 of the 733 trade groups that ply their trade around K Street. While the HEROES Act was passed in the House a few days later, it lay dormant in the Republican-controlled Senate for most of the year. The Pappas bill, though, continued to attract bipartisan support through August, ending this Congress with 126 cosponsors signed-on. 

Poll: Public Doesn’t Love Idea of Bailing Out Corporate Lobbyists

Eichen said the Democratic Policy Center (DPC) commissioned a poll out of their own pockets with the firm Data for Progress on the proposed lobbyist bailout, and the results in early June came back ringing: 48% of respondents strongly or somewhat strongly opposed corporate lobbyists getting PPP funding, and 70% supported coronavirus relief priorities other than political-insider trade groups. 

An August op-ed by Eichen in the Philadelphia Inquirer kept the pressure on the next legislative phase in Congress to hold trade associations at bay from their lobbying groups getting PPP funding. When negotiations started back up between the Democratic House and the Republican Senate on the next pandemic relief package, Eichen says that congressional staff reached out to DPC to solicit input on how to craft provisions that would exclude well-heeled lobbying shops. 

Last week, Congress came to an agreement and passed another pandemic relief package, and Eichen says the DPC watchdogs had the climactic moment of text-searching the bill that was rushed through the House and Senate. He says they didn’t know for certain that their policy recommendations would be included until they saw the version the Senate passed. 

They were able to declare a victory because the omnibus bill passed by the House and Senate incorporated language barring groups that spent more than $1 million or more than 15% of their total expenditures on lobbying last year from applying for PPP grants. The $600 second stimulus checks included in the package are a pittance compared to the lion’s share that went to large corporations in the CARES Act, but Eichen says at least now the groups of influence peddlers can’t access taxpayer funds meant for pandemic relief. 

“Bailing out lobbying groups was too much of a PR nightmare,” Eichen says, of what kept up the momentum to prevent lobbyists for huge industries from qualifying for PPP funds. “There was a sense that people wanted to do the right thing to get relief to people who needed it.”

“This shows the importance of getting information that benefits the public interest into the hands of people that can use it,” Eichen said. “One of the ways lobbyists exert influence is sharing information, presenting their point of view to make them look sympathetic, convincing legislators and staffers to move in a direction that benefits these groups. This victory underscores the need for DPC and progressive groups out there, doing the hard work of figuring out what issues are in front of Congress, which ones are really bad and need to be stopped, and how to work towards something better.” 

Read more Sludge at The Brick House Cooperative:

GOP Reps Who Voted Against $2,000 Checks Received Millions in COVID Bailout Funds

Richard Neal Got a Surprise Billing Deal for His Private Equity Donors

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