President Barack Obama went out of his way to reassure Detroit autoworkers that their jobs were safe. The lobbyists for General Motors and Chrysler had no concerns about their jobs. As the two automakers have become wards of the government, they have also become utterly dependent on lobbyists.
GM spent about $8 million to $8.5 million on federal lobbying each year from 2003 to 2006, lobbying records show. Then, as things turned dramatically southward for the company, lobbying spending exploded, jumping 64 percent in 2007 to $14.6 million. Last year saw another big jump. Chrysler ramped up its lobbying at a steadier pace. From $3.1 million in 2001, it progressively rose to $7.1 million in 2007. Private equity firm Cerberus Capital bought Chrysler in 2007 and spent $7.9 million on lobbying in 2008.
The details of these lobbying surges are telling.
Ten days after Barack Obama was elected president, GM added lobbying giant Covington & Burling to its lobbying platoon. Specifically, GM hired the firm’s heavy hitter, Stuart Eizenstat.
Eizenstat has worked in every Democratic administration since Lyndon Johnson and nearly every presidential campaign since then. He was a top adviser in Jimmy Carter’s 1976 campaign and served four years in the Carter White House as chief adviser on domestic policy.
When Democrats returned to the White House in 1993, so did Eizenstat. Under Bill Clinton, Eizenstat was ambassador to the European Union, and an undersecretary at the departments of Commerce and State (in this latter role, he led the U.S. delegation in meetings on the Kyoto Protocol on Climate Change). In 1999, he moved to deputy secretary of treasury, where he worked alongside Timothy F. Geithner — then the undersecretary for international affairs and now the treasury secretary. Last fall, when Democrats took back the White House after eight years, Eizenstat didn’t join the administration, but instead remained in his perch as a top lobbyist.
This record made him a natural pick for GM in the age of bailouts and the age of Obama — especially once Eizenstat’s old colleague Geithner was tapped to run Treasury.
Since the election, according to lobbying filings, Eizenstat has provided GM “assistance with preparation of financial restructuring plan presented to Congress and for congressional hearings and follow-up.” Presumably, Eizenstat is not an expert in fixing car companies, but he has few equals when it comes to getting Democratic government officials on the phone.
Chrysler’s big Democratic lobbying hire came last May, when the company retained the firm Venable LLP. Chrysler’s lobbyists there include Thomas Quinn, whose online bio reads:
“Mr. Quinn has been an active participant in political affairs. He served in the presidential campaigns of the late Hubert H. Humphrey and Edward M. Kennedy, and has been continuously active in efforts supporting the Democratic National Committee, Democratic Senatorial Campaign Committee and Democratic Congressional Campaign Committee.”
By contrast, Ford Motors, the strongest of the Big Three and the only one not to seek a federal bailout, toned down its lobbying at the same time GM and Chrysler were building up theirs. From $9.6 million and $9.1 million in lobbying in 2005 and 2006, Ford dialed down to $7.1 million and $7.6 million in 2007 and 2008.
Interestingly, Ford’s lobbying downturn came after the carmaker hired its new chief executive officer, Alan Mulally, away from Boeing, which is known for its lobbying prowess. This column suggested that the hiring of Mulally in early 2007 was a sign that “Ford might soon become another beggar at the federal trough of handouts.” The opposite has happened: Ford has emerged, relatively speaking, as the free-market poster boy of Detroit, eschewing bailouts and quieting its lobbying.
The tale of Detroit’s lobbying is another blow to Obama’s promise to end the influence of corporate lobbyists. A company’s or an industry’s lobbying effort is proportional to the government’s involvement in that industry.
Now that Obama is getting closer to micromanaging GM and Chrysler, the companies will need to lobby for subsidies and approval for nearly every decision it makes. Want to start a new model? Hire a lobbyist. Want to expand your corporate headquarters? Dispatch a lobbyist to ask permission. Want to pay a bonus or negotiate a new union contract? Call in Stu Eizenstat.
It’s a brave new world of business-government relations — and lobbyists are increasingly the beneficiaries.
