Am I now or have I ever been a lobbyist? Well, that depends what “lobbyist” is. Sometimes I tell people, “I peddle influence for money.” More descriptive.

What do I do? I have organized or advised or developed or participated in efforts to affect the course of legislation: securing the production of a U.S. gold coin; repealing the Federal Telecom Excise Tax; expanding the investors’ options as to what can go into their IRAs; cutting capital gains taxes; and a significant number of other diverse matters. I’ve even contributed to campaigns.

Recently, there has been a lot of talk about the influence of money on politics. The Congress passed and the President signed the Shays-Meehan bill, which had previously passed the Senate. It would ban so-called “soft money,” or money given to political parties. It would also ban issue advertising by you or me or our neighborhood association which might beat-up or praise an incumbent or his opponent. These methods of injecting money in the political veins was devised because another route had been choked off. Way back in 1974, individual contributions to candidates were limited to $1000 per candidate per election. If the new reform bill is enacted, and survives Supreme Court challenges, it will suffer the fate of most previous “reforms.” It will mean that money will be routed elsewhere. Think of it as stepping on a puddle of mercury.

I don’t want to appear more cynical than I am. But, because Shays-Meehan or McCain-Feingold was enacted, does this mean that instead of “soft money” going to campaigns, more money will go to K Street lawyers and lobbyists? If so, perhaps there is a secret moral hazard here: lobbyists actually stand to gain from shutting off some of the campaign money. It’s a thought.

Generally campaign finance laws administered by the Federal Elections Commission bureaucracy restrict how money goes into campaigns and define campaign spending. One thing this alleged reform would do will make it an illegal campaign expenditure to disseminate information on issues at certain times and mentioning candidate’s names. It would limit that small sector of policy influencing. Instead of influencing (informing?) voters, the money might otherwise be used to hire more lobbyist to influence policy makers. If less money for TV ads and voter guides means more money for lobbyists and their efforts, then some of my brethren may not object so strongly to the bill. If citizen Smith can’t influence policy in an election, he’ll do it after the election.

But in its efforts to limit money in campaigns, the Shays-Meehan advocates assume that campaign expenditures are isolated from other policy influencing. Campaigning is only one gear in a very large mechanism.

One is lobbying. Lobbying, per se, is influencing legislators. The most recent (1995) law tightened up on some things like how much you can spend for lunch for a Congressman or staffer. And, it further defined what a lobbying expenditure is. But affecting public policy far more than lobbying. It is, however, instructive to see the scope of this corner of the effort is.

The fact is that Congress controls over $2.2 trillion a year - way over $4 trillion every election cycle. Affecting how that money goes is too good an opportunity for many to pass up. For some it is a necessity. Political campaigns are but one part of influencing government. Lobbying Congress is another key part.

Today there are 38 registered lobbyist for every member of Congress. Divide that into the Congressional Budget Offices (CBO) estimate of federal revenues in this fiscal year of $2.2 trillion (CBO) and you get $4 billion per member. And, let’s recognize too, that there are really just 50 or so real shakers in Congress. Then the per-shaker authority of, about, $40 billion. The GDP of most mid-sized nations.

Right now, all the hub-bub is about campaigns. Sometimes the klieg light is on lobbying legislators. The Capitol Hill watchers forget that a hundred words of regulation are written for every word of legislation. For those who want to or who must influence policy, it may be simpler to influence the regulations. We hear horror stories about Food and Drug Administration sitting on good drugs. What we don’t hear is how the FDA is “lobbied.” There is an industry of drug-approval “consultants” out there who not only work to get drugs approved. They also work to get competitors’ drugs not approved, or un-approved. Legally, these people may not be “lobbyists” though their work is crucial to their businesses as is any high-priced schmoozer of Congressmen.

This is the political/policy marketplace, democratic principles aside. As long as the police power of the state is used to affect the lives of people in our society, members of society will have to be influencing the state. The market responds. And, frankly it is necessary. Just as a trial needs witnesses, so government cannot make wise decisions without private sources of information about the issues from those affected by the laws. Any honest Congressman will tell you that he needs lobbyists to give him good information. If I ever gave a Congressman bad information or bad advice, his door would be closed in the future.

Policy influencing also can allow the big to nail the small. When the Occupational Health and Safety Act was being considered, in the early ’70s, I was working for a member of Congress from Minnesota. A good Republican, he decried this proposed massive federal intervention into American business. I visited one day with the head lobbyist with the Minnesota Mining and Manufacturing ƓM today). I asked him what could be done about this terrible legislation and he said with a sly grin, “well, Howard, we’re big enough so we can conform with it. But, our competition can’t.” A rude awakening for this naive staffer. Regulation stomps on pesky competitors. In other words, his job was not necessarily to thwart bad legislation, but to mold it to hurt his competitors. Even in the non-profit sector, big charities tend to like regulations that small charities can’t afford.

Shays-Meehan/McCain-Feingold restricts one form of influencing Congress and elections. It will only shift the needed expenditures and efforts to other pipelines.

If I paint a program to solve a government-caused problem for a client, I would consider a pallet with a dozen colors of activities. During the Bush I administration, I was asked to develop a plan for a firm that trained air traffic controllers for the Federal Aviation Administration. There would be a $15-$25 million contract awarded by the FAA to train air traffic controllers. My client’s goal was to simply keep politics out of the process and not give it to a particular Senator’s constituent. My client would ride on his merits.

The plan I put together had some lobbying of Congress, but as much or more effort was to be devoted to visiting the FAA, learning their procedures, determining their contract proposal writing procedures, developing contacts in higher levels of the FAA. There were campaign contributions to key members of Congress, and I suggested retaining the attorney who headed up the relevant committee chairman’s PAC. Much effort went to help friendly Congressmen do their oversight job - writing letters about the process, and expressing enough interest from both Democrats and Republicans. The goal of the political attention - the heat - was to give the FAA very good excuse to not slip the contract to some (other) politician’s friend. Potential scandal is a great deterrent.

The cost of the effort was very small compared to the potential profits involved. It was a wise business decision.

In fact the money spent on influencing Washington is a very good investment.

Marc Andreessen is cited in Sara Miles’ new book on the effort of Silicon Valley zillionaires to co-opt the Democrats (they couldn’t). The genius programmer behind Netscape wrote a $250,000 check to the Democratic National Committee and he was taken aback by the great reaction he got. Later on he said, that if he were investing in a company and only put in a quarter mil, no one would have taken him seriously.

Of course, the bottom line is that influence-peddling is usually a very good investment. When he ran Chrysler, Lee Iacocca spent a measly $12 million lobbying for a $700 million federal loan guarantee (”bailout”). Chrysler’s stockholders got their money’s worth.

And, let us remember that the stakes in this game are not just the $2.2 trillion spent this year. As Milton Friedman said, the federal budget only represents that portion of the Federal burden on the economy that flows through the Treasury. What about OSHA and other regulatory burdens? Let’s just add a conservative cost to the economy of regulation of $1 trillion. (EPA alone estimates that it’s regulations cost in excess of $300 billion per year.)

I would argue that the cost of influencing the election of people who control $4.5 trillion every two-year Congress is insignificant compared to the power in question.

Policy influencing includes political campaigns. It also includes lobbying. But it includes every effort made to provide information to legislators and regulators, and influence the public’s attitude toward issues. If people spent just 1% per year of the cost of the federal government to influence how their money goes, it would add up to $22 billion!

Put it another way. It cost Chrysler 1.7% of the total of their bailout to get that bill passed.

But forget about the major corporations acting here. We’re all members of a couple dozen groups, from our jobs, our hobbies, our communities (every governor and every big city mayor has an office here), even our religions. I don’t care what your view of tobacco is, but faced with nasty legislation, reported tobacco industry lobbying spending moved to $67.4 million in ‘98 from $38.2 in ‘97. Brown and Williams spent $4 million in ‘97, and spent $25 million in ‘98. The widows who invested in those stocks were well represented: Their agents succeeded in scuttling the anti-smoking bill sponsored by who? John McCain.

The Shays-Meehan show is the Wizard of Oz saying, “Don’t look at that man behind the curtain.” It’s Vegas’s Siegfried and Roy with great fanfare, making a white tiger disappear, when it isn’t going anywhere at all.

*Mr. Segermark wishes it noted that he only engages in influence peddling on behalf of honest and moral admirers of Western Civilization and its precepts. He is President of the Howard Segermark Assoicates of Washington, DC.