Itʼs who you know.
Experience has taught us friends and supporters are far more effective at opening doors than smarts and hard work alone. True, substance matters, but only if the right people are listening.
Itʼs why Kremlin-controlled OAO Gazprombank has paid $300,000 to the lobbying firm of Former Senate Majority Leader Trent Lott since Russian sanctions began last year, according to Bloomberg News. Likewise, foreign governments have accounted for one-third of donations exceeding $1 million to The Clinton Foundation, as reported by The Washington Post. Again, who you know makes a difference.
The Center for Responsive Politics (https://www.opensecrets.org/lobby/) tracks data published by the Senate Office of Public Records and lists 11,800 registered lobbyists which collected $3.24B in 2014. While only a fraction compared to the $540 billion spent globally on advertising (CMO Council data), lobbying targets influencers and Wall Street has started paying attention.
Strategas Research Partners has created a proprietary list of the 50 companies in the S&P 500 Index which “exhibit the greatest lobbying intensity” in Washington (click here for a ranking of actual lobbying dollars spent by company https://www.opensecrets.org/lobby/top.php?indexType=s&showYear=2015). Policy expert Dan Clifton rebalances his list each year and since 2002, these companies have outperformed the broader index nearly three to one. Wall Street rewards companies with an edge, especially when the edge involves friends in high places.
As weʼd expect, healthcare companies account for one fifth of the group, though industrials command the top spot at 28 percent. As Dan notes to clients, involvement of U.S. multinationals industrials this year likely reflects a congressional agenda tilted towards highway funding and trade, including potential Trade Promotion Authority (TPA) for the President and the much-discussed Trans-Pacific Partnership (TPP). Dual Republican control has also expedited debate.
The message to companies is clear: If public policy affects your business, hire a lobbyist and make sure you tell Wall Street. Explain why you’ve hired a lobbyist, what you expect to accomplish, and how it will impact your growth. Who you know matters.