Supercommittee Pits Lobbying Firms’ Clients Against One Another

The bipartisan congressional supercommittee charged with finding $1.5 trillion in budget savings is leaving Washington lobbying firms in a quandary, seeing their clients pitted against one another in a competition for government cash.

Major defense contractors such as Boeing Co. (BA) and Lockheed Martin Corp. (LMT) have a dozen or more lobbying firms working for them, many of whom also represent the health-care industry, another likely target of budget cuts. While firms often deal with conflicts of interest, the supercommittee represents an unusual challenge, said Clyde Wilcox, a government professor at Georgetown University in Washington.

“This actually is going to be much more like a zero sum game,” Wilcox said. “If someone wins, someone loses.”

Trying to protect clients by stalling action -- a classic lobbying tactic -- isn’t an option for most because the committee’s failure to meet a Nov. 23 deadline would trigger $1.2 trillion in across-the-board spending cuts in both defense and non-defense spending beginning in 2013.

Lobbying firms will probably try “to finesse any conflicts of interest” and go about business as usual, said Jeffrey Berry, a political science professor who specializes in lobbying at Tufts University in Medford, Massachusetts.

“What they do behind the scenes is not highly visible,” Berry said. For instance, the firms wouldn’t run major advertising campaigns that prompt a client to “say, hey, why are you lobbying for them when you should be solely concerned with our interest?’” Berry said.

Lobbyists’ Bottom Line

If all else fails, “I suspect that they’ll be rational businesspersons and make a decision based on their long-term financial interest,” Berry said. “They have a bottom line, just like their clients.”

The 12-member panel, whose work has taken on greater urgency since Standard & Poor’s downgraded the U.S. credit rating in August, will be the central focus of political and lobbying activity for the next few months.

Akin Gump Strauss Hauer & Feld LLP, which Washington’s Center for Responsive Politics ranks as the second-largest lobbying firm with 2011 revenue of $17.7 million, is among those with competing client interests. The firm’s more than 100 clients include companies in insurance, energy, finance and chemicals. The roster also includes Chicago-based Boeing and New York-based Pfizer Inc. (PFE), the world’s biggest drugmaker with stakes in the future of Medicare, the government program for the elderly.

Akin Gump

Akin Gump is also a law firm and as a result has a set conflict of interest policy, said Joel Jankowsky, a senior executive partner at the firm in Washington. Even so, some clients may first look to their industry trade groups to take their case to Congress rather than his lobbyists, he said.

“It’s largely a question of what they decide their strategy is going to be and whether or not they want us to engage on their behalf,” Jankowsky said.

Tony Podesta, whose Podesta Group ranks third among lobbying firms with 2011 revenue of $13.7 million, said he will do what he always does: advocate for all of his clients and try to persuade panel members that their programs are meritorious. Lobbyists won’t be in the position of suggesting cuts to rival programs, he said.

“It doesn’t feel to me that this is going to be the ’Sophie’s Choice’ of lobbying,” Podesta said.

‘Affordable Medicines’

Boeing and Bethesda, Maryland-based Lockheed didn’t respond to requests for comment on their lobbying of the supercommittee. Lockheed “will continue to work with our customers throughout the process to understand the potential impact to our business,” spokesman Rob Fuller said in a statement.

Pfizer wouldn’t comment on its lobbying plans or potential conflicts, though Chief Executive Officer Ian Read has said his company will fight attempts to cut Medicare payments for medicines. Spokesman Raul Damas said the company “will continue raising awareness” about how the government prescription drug benefit has provided “affordable medicines” for seniors.

The firms downplayed the potential for problems. Patton Boggs LLP, which ranks at the top of the lobbying list with $18.8 million in revenue this year and is also a law firm, has “very formal and thorough mechanisms” for resolving conflicts of interest, said Nicholas Allard, who runs the lobbying, political and election law practice.

Persuasion of the supercommittee might be comparable to the general lobbying always under way on behalf of a range of clients or an omnibus spending bill, said Stewart Verdery, partner and founder of Monument Policy Group. The firm’s clients include Boeing, defense contractor General Dynamics Corp. (GD), drugmaker Eli Lilly & Co. (LLY) and the Pharmaceutical Research and Manufacturers of America, the trade group representing drugmakers.

“It’s akin to working with congressional leadership, which we -- as most firms -- do all the time,” Verdery said. “They may have a role to play in pretty much everything of importance.”

To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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