Aug. 13 (Bloomberg) -- Citigroup Inc., General Motors Co. and four other bailed-out firms subject to U.S. pay reviews cut 2009 lobbying costs 37 percent as pressure mounts from Congress and the public to rein in outsized bonuses, records show.

Spending by the companies, which submit reports tomorrow to U.S. pay master Kenneth Feinberg, fell to $14.2 million in the year’s first half from $22.7 million in the same period a year ago, according to quarterly reports with Congress. The companies lobbied on bonus limits, the bailout, mortgage legislation and environmental issues, the reports show.

“These entities are clearly subject to higher expectations and increased scrutiny with respect to how they spend their money,” said Kevin Petrasic, an attorney at Paul, Hastings, Janofsky & Walker LLP in Washington. “The difficulty is striking the right balance with respect to appropriate expenditures, understanding that this is part of the process for these companies to remain competitive.”

Citigroup and GM along with American International Group Inc., Bank of America Corp., Chrysler LLC, Chrysler Financial Corp. and GMAC Inc. will be filing pay plans for their 25 top executives. Feinberg, the Obama administration’s “special master” on compensation, will rule on the amounts and structure of the plans within 60 days after they’re completed.

Companies getting funds from the $700 billion U.S. financial bailout have come under fire from lawmakers and the public for paying bonuses after taking funds. AIG’s decision to pay $165 million in retention bonuses this year while getting a rescue package valued at more than $182 billion triggered outrage in Congress.

‘Relatively Arbitrary’

Citigroup and Bank of America, which each got $45 billion in U.S. aid, spent a combined $14 million to lobby in the 18 months ended June 30. The total may not account for activities such as commissioning a poll and talking with reporters, said Jeffrey Berry, a political science professor and specialist on interest groups at Tufts University in Medford, Massachusetts.

“What is reported is relatively arbitrary,” Berry said. “The amount of overhead and time spent outside of Washington tend to be systematically underreported.”

Among the six firms that filed lobbying reports, GM spent $18.7 million in the 18 months ended June 30 -- the most for any company. AIG was second with $11.7 million, including $2.2 million through six months this year, the reports showed.

GM, which filed for bankruptcy protection June 1 with $65 billion in U.S. aid, reported second-quarter lobbying on issues related to restructuring, economic stimulus and the environment. Spending fell 21 percent from January through June to $5.6 million from the 2008 period after GM terminated contracts with lobbying firms, spokesman Greg Martin said in an interview.

‘Doing Less’

“We’re just doing less,” Martin said. “Our lobbying activity is proportional to the issues that we’re working on.”

Chrysler, which got a $4.5 billion U.S. bankruptcy loan, lobbied on fuel economy, health care and bankruptcy.

“AIG has terminated its federal lobbying registration and, consistent with the policy announced last year, not lobbied on federal legislation since the third quarter of 2008,” spokesman Mark Herr said. The insurer’s second-quarter report said a majority of the lobbying focused on “state relations activities.” States regulate the insurance industry.

Bank of America’s spending for lobbying fell 35 percent to $1.46 million from January through June compared with a year earlier. “We’re cutting expenses across the company in general and that includes lobbying expenses,” Shirley Norton, a bank spokeswoman, said in an interview.

Citigroup Rises

Lobbying data wasn’t available for Chrysler Financial, the lending arm of Chrysler LLC that severed its relationship April 30 when the automaker filed for bankruptcy.

Total lobbying for the six companies fell in the second quarter to $7.1 million from $10.5 million in the same quarter a year earlier. Citigroup spending rose 19 percent to $1.67 million from the year earlier, according to the reports.

“GMAC addressed a number of significant issues in 2008 that were critical to the business, including gaining approval to become a bank holding company,” GMAC spokeswoman Beth Coggins said in an e-mail. The company is evaluating ways to cut costs, including lobbying expenses, Coggins said.

Citigroup spokeswoman Molly Meiners declined to comment.

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: August 13, 2009 14:54 EDT