Lobby Watch

Published — May 20, 2005 Updated — May 19, 2014 at 12:19 pm ET

Foreign companies pay to influence U.S. policy

More than $620 million spent lobbying federal government

Introduction

For example, from 1998 to mid-2004, London-based BP plc spent close to $25 million* lobbying the U.S. government—the third-highest amount among foreign entities. Surprisingly, this international energy giant lobbied nearly as much on matters related to the environment and Superfund as it did on oil and gas issues. One likely explanation: BP and its U.S. affiliates are listed as the potentially responsible parties for 162 Superfund pollution sites that, collectively, have cost the Environmental Protection Agency $1.1 billion in analysis and clean-up costs. All told, records reveal, 22 foreign companies listed as potentially responsible parties for 275 Superfund sites in 40 U.S. states reported lobbying on the same issue or directly to the EPA.

During these same six-plus years, the Center analysis shows, companies with headquarters in more than 100 foreign nations* spent more than $520 million* lobbying the federal government. Over that time, those companies employed 550 lobbying firms and teams of 3,800 lobbyists, more than 100 of whom were former members of Congress. Companies based in the United Kingdom alone spent more than their counterparts in 38* U.S. states during that time period.

BP, which ranked 52nd among lobbying groups overall—just ahead of insurance giant American International Group Inc., the American Bankers Association and Merrill Lynch & Co. Inc.—was one of several oil companies involved with Arctic Power, a lobbying consortium that has led the years-long efforts to open the Arctic National Wildlife Refuge to oil exploration and drilling.

In late 2002, in the face of the debate over the potential profitability of developing the region, BP—like a number of large U.S. oil companies—withdrew from the lobbying group, citing the action as a cost-cutting move and deferring its decision on whether to expand Alaskan operations into ANWR until Congress had finished its deliberations.

Registration Requirements

Foreign governments are not required to register their lobbyists with the Senate Office of Public Records (which tracks all other individuals and organizations that lobby the U.S. federal government) even if they conduct activities that meet the U.S. government’s definition of lobbying. Instead, foreign governments, political parties and politicians complete a more intensive disclosure of activities under the Foreign Agents Registration Act at the Department of Justice.

Therefore, international spending reported under the Lobbying Disclosure Act—and included in the Center’s LobbyWatch database—is not a complete illustration of foreign entities attempting to influence the U.S. government. It is rather a more limited reflection of foreign-business spending.

There’s not much ambiguity, however, about why these foreign companies seek to keep their voices heard in Washington: they typically have a direct stake in this nation’s ever-shifting canon of business law and tax policy.

For example, each of the three top-spending foreign companies—DaimlerChrysler Corp. of Germany, pharmaceutical giant GlaxoSmithKline of the United Kingdom and BP plc—all have extensive business operations within the United States.

Those companies that don’t actually operate within the United States almost universally depend on advantageous trade policy, either with U.S. markets or under the parameters of international trade agreements in which the United States is a definitive power. Not surprisingly, international trade was by far the most common issue foreign companies reported lobbying on, followed by defense and taxation and the Internal Revenue Code.

But lobbying by foreign companies doesn’t stop at business and trade policy or the outsourcing-friendly contract system: many foreign groups lobby on U.S. domestic policy, even as it’s being negotiated in Congress.

For example, U.K.-based GlaxoSmithKline, the second-highest-spending foreign company, consistently reported lobbying on Medicare and Medicaid reform issues during the nearly seven years studied. The pharmaceutical giant, one of more than 90 foreign companies that reported lobbying on health issues or the Department of Health and Human Services, is also a member of lobbying machine PhRMA, whose more than $65 million* spent during the period in question earned the industry huge victories with Congress and the FDA.

And as they seek to influence U.S. policy, foreign companies primarily seek the same top lobbying firms that their domestic counterparts tend to rely on.

The five lobbying firms that led the industry in the entire 1998 to 2004 period— Interpublic Group of Companies Inc., Piper Rudnick, WPP Group plc, Patton Boggs and Akin Gump Strauss Hauer & Feld LLP—also received the most money from foreign companies.

Not surprisingly, those familiar lobbyists tread the same well-worn corridors of power. Just as in the lobbying industry at large, the U.S. Senate and U.S. House of Representatives were by far the most lobbied by foreign companies, followed by the Departments of State, Commerce, Treasury and Defense, and the Office of the U.S. Trade Representative.

Nor should the result of that access be surprising. Sixteen foreign companies that paid Washington-based representatives to lobby the Department of Defense between 1998 and mid-2004 received more than $16.4 billion in Pentagon contracts during that time, $5.6 billion of which was awarded without competition.

Read more in Federal Politics

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