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Shadow lobbyists run rampant in 'the swamp'

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Shadow lobbyists run rampant in 'the swamp'

Donald Trump acknowledged the problem of unregistered lobbying in Washington during his 2016 election campaign when he made calls to 'Drain the Swamp'. But how extensive is unregistered lobbying in US politics?

The US has always had to balance the freedom to lobby against obligations to report on the nature of lobbying activity. Since 1996 the Lobbying Disclosure Act (LDA) has required anyone who spends more than 20% of their time lobbying to register and report their lobbying activities. However, new research from CAGE Director Mirko Draca, Rocco D'Este (University of Sussex) and Christian Fons-Rosen (Universitat Pompeu Fabra) has found that unregistered lobbyists, including former members of congress, are a key resource for lobbying firms.

The researchers looked for evidence that unregistered lobbying is taking place in the financial records of lobbying firms. They analysed what happens to firm revenues when ex-congress members and major ex-congressional staffers join or exit the firm: do revenues increase when these potential unregistered lobbyists join a firm? And does this increase exceed what we'd expect from someone only spending 20% of their time lobbying?

The findings of the study unveil new evidence of unregistered 'shadow' lobbying:

  • There were 109 potential shadow lobbyists working as part of Washington lobbying firms between 1998 and 2012.
  • The revenue of firms rises by between 10% and 20% when a shadow lobbyist joins.
  • The size of this effect is equivalent to a median registered revolving door lobbyist. (This despite the fact that the shadow lobbyist is notionally providing one-fifth as much of the time inputs of the registered lobbyists.) This implies that, in order to be in compliance with the LDA, the shadow lobbyists must be hyper-productive 'superstars' relative to their registered counterparts.
  • Shadow lobbying accounts for 4.9% of the growth in revenues for relevant firms.
  • 1 in 30 lobbyists at these firms are unregistered shadow lobbyists.
Read the research

Shadow lobbyists run rampant in the swamp: Ineteconomics

Rocco D'Este, Mirko Draca, Christian Fons-Rosen, 'Shadow lobbyists', INET Working paper no. 139