The Wolves of K Street: How Corporate Lobbyists Infiltrated Washington

BIANNA GOLODRYGA, INTERNATIONAL HOST: Well, we return here to the U.S., where there’s going to be one big winner this November, and our next guest argues that it’s not going to be Republicans or Democrats, but lobby groups. Pulitzer Prize-winning investigative reporter Brody Mullins joining Hari Sreenivasan to discuss his new book, which chronicles how lobbyists have brought in a new era of public policy to the benefit of corporate America.

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HARI SREENIVASAN, INTERNATIONAL CORRESPONDENT: Brody Mullins, thanks so much for joining us. You are a co-author with your brother on a new book called “The Wolves of K Street: The Secret History of How Big Money Took Over Big Government.” Thanks for being with us. And I wonder why this book? Why now?

BRODY MULLINS, CO-AUTHOR, “THE WOLVES OF K STREET” AND PULITZER PRIZE- WINNING REPORTER: Yes, that’s a great question. You know, when we travel outside in Washington, our reporting, if you talk to Republicans and say, what’s wrong with Washington, they blame Democrats. And if you talk to Democrats, they blame Republicans. And what we’re really identifying is that, you know, Corporate America is a lot of the problem in Washington. Corporate America is bipartisan. They win whether Republicans are in charge or Democrats are in charge. And we sort of wanted to expose, you know, sort of how they use their power, influence, and money to change public policy, to help big companies and executives and not the rest of us.

GOLODRYGA: So, give me an idea, like what kinds of laws or legislation have lobbyists been very successful and either creating or tweaking or stopping

MULLINS: Well, one, you know, how much time do we have here? We go on forever. But to take your recent example, I mean, think about the last presidential election where Joe Biden, Elizabeth Warren, every single Democrat running for Congress or for the presidency, what was saying they’re going to roll back the Trump corporate tax cut, the $1.3 trillion tax cut that Trump enacted in 2017. So, Democrats were elected to get rid of that tax cut. And corporate America and their lobbies had so much influence. There was never even a vote on that. It’s not like they brought that up and Democrats were not able to get the votes, they couldn’t even bring a vote to it. That’s how much the corporate lobby has.

SREENIVASAN: So, you know, what you point out — I mean, and you go really kind of fascinatingly into the history of this that lobbying, in one way or another, has been around. In fact, the framers of the constitution even knew that that was going to happen, you know, hundreds of years before the state we’re in today.

MULLINS: Yes, that’s — you know, one of the fascinating things we learned in our reporting that we did not know about is exactly what you just said, that in “The Federalist Papers,” the framers of the government said — you know, they foresaw there would be lobbying, there would be corporate lobbying. They didn’t call it lobbying, they call them factions. But they foresaw there’d be an industry faction, you know, business owners, would have a group — an interest group, essentially, and then that workers would have an interest group, or what they call a faction, which basically became labor unions. But what they thought is that those two factions would be sort of equal size and strength, and they would battle each other to make sort of compromise legislation, and that basically worked for most of the next 200 years. The problem now is that corporations have so much money and so much influence that they basically destroy the other factions or interest groups. You know, as we know, labor unions don’t have the influence they used to have. The Ralph Naders and consumer groups don’t have the influence they used to have. And it’s really just big companies who are putting their thumb on the scale, really their whole hand on the scale for policy to help companies and not everyone else.

SREENIVASAN: So, what happened if this idea that the founding fathers had, OK, there’s going to be this marketplace of ideas, there’s going to be these competing factions, this tension will balance itself out. If that lasted well-ish for 200 years, what happened when we get to the 1970s?

MULLINS: Yes, a whole bunch of things happened in the 1970s. That’s sort of the key moment. So, before the ’70s companies had relatively little influence in Washington. In fact, Ralph Nader was the most influential person on public policy matters. From the new deal to the great society, the government really grew very quickly, lots of new rules and regulations and administration agencies, and companies for the most part did not oppose those — the growth of the government because they were making money and things were fine. They were sponsoring the little league team and supported their employees. What changed in the 1970s, the economy tanked company profits evaporated, and companies looked around for who to blame, for how to get back making money. And they realized that all these new rules and regulations were really hindering their ability to compete in the marketplace and to make money and cost them so much money to comply with. So, in like any good business people, they invested in their problem. And their problem was the government. So, as a result of that they started pouring money into lobbying, into campaign donations and to really, for the first time, taking action in Washington and gaining the power that they have now.

SREENIVASAN: You’ve got a statistic in there that I just want to cite here. It says, by 2012 for every dollar spent by consumer groups where environmental activists to influence federal policy, corporations and their allies were spending $86. Explain that to us.

MULLINS: Yes, and that was more than a decade ago. And also, that’s only the money that we know that’s being spent. I mean, so much of lobbying is now being spent outside of Washington to get constituents and business groups and other organizations to support pro-business policies. And that money is not included in that total. The idea here is that, you know, there are hundreds and thousands of big U.S. companies, and they’re all spending millions of dollars to impact legislation, and it is overwhelming the opposition, the opposition here being labor unions or consumer groups.

SREENIVASAN: Can you give me an idea of the scale of what kind of money we’re talking about? Who are the biggest players? How much are they spending?

MULLINS: Right now, the big tech companies dominate the lobbying game, but so does the U.S. Chamber of Commerce, which spends $100 million lobbying, and pharmaceutical companies. But you know, more of the point here, we write out one company, Genentech, and one of their lobbyists, their lobbying — their internal lobbying figures that I got show that about five years ago they were spending about $50 million lobbying Washington, but only $5 million of that was in the disclosed category. So, if you take that across everyone else, you know, one out of every $10 being disclosed and nine out of 10 is not disclosed. And that’s really, you know, the issue.

SREENIVASAN: So, some of lobbying, as you point out, you know, you and I can go to opensecrets.gov and you can start to see who got a campaign contribution from a company, for how much money, right? You can — we can even go into different databases and search for which lobbyists might have registered a visit to a member of Congress or the white house. But you’re saying that that — even though those are staggering sums of money, that’s actually not the whole picture.

MULLINS: Exactly. I wanted to write about our book is how lobbying it has moved from sort of smoke-filled room where lobbyists get special favors and get access to members of Congress, you know, using old school tactics like, you know, steak dinners and rounds of golf and cozy relationships and campaign check. So, much of lobbying now takes place outside of Washington. And lobbying outside of Washington is not disclosed. When I say lobbying, you know, what we’ve realized is that members of Congress will do whatever it takes to get re-elected. And to get re-elected, obviously, you need 51 percent of your constituents to support you. And lobbyists know that. So, lobbyists now go to constituents and to companies and to employees and to industry groups and to other civic organizations and trying to get their support, you know, for a trade policy or an R&D tax credit or for, you know, some immigration regulation. And if you can get the support of someone’s constituent, the member of commerce will follow because the member of commerce wants to get re- elected. All of that lobbying that’s taking place now is not disclosed at all. So, to give you a statistic, in 2007, the last time there was a major lobbying reform bill in D.C., there were roughly 12,000 registered lobbies in D.C. Today, 15 years later, with corporations having so much influence in Washington, spending billions of dollars to influence Washington, there are still only 12,000 registered lobbyists in Washington, you know, and that means that statistic is not accurate. I mean, there’s way more lobbyists than the 12,000 people who are required to disclose under the law.

SREENIVASAN: Microsoft is one of the biggest tech companies and one of the biggest tech lobbyists now, but that wasn’t always the case. You point out that Bill Gates didn’t really care much for lobbying in the beginning.

MULLINS: Yes. When Microsoft got started, Bill Gates smartly, you know, focused just on his company and making the best — being the best software company in the world, which he succeeded at. But the problem he made is that he ignored Washington. He didn’t hire lobbyists. He didn’t have lawyers in D.C. He didn’t have — wasn’t making big PAC contributions. And his idea was that he was sort of the smartest person in the room. He knew the best way to run his company. He didn’t want Washington, you know, meddling in his business. The mistake came when the Justice Department, over time, decided to sue Microsoft for being an antitrust monopoly. Because Bill Gates sort of didn’t have lobbyists, he didn’t have eyes and ears, he didn’t have friendships and relationships in D.C., they were sort of caught by surprise and weren’t able to do anything to head that off or nip it in the bud early on. As a result, Microsoft and Bill Gates spent 10 years fighting the Justice Department’s antitrust lawsuit. That’s 10 years where they weren’t focused on innovation, weren’t focusing on development, weren’t focusing on their company, or were distracted by Washington. And that was a big mistake that he made. So, when Google came to D.C. 10 years later, in the early 2000s, they realize, you know, in order to be the biggest, most dominant company in the country, you really need to invest in Washington. And they have. And by contrast, you know, in the 15 years that Google has been an enormous company — an enormous U.S. company and enormous force in Washington, nothing bad has ever happened. That they’ve defeated every single attempt at antitrust investigation or any legislation on Capitol Hill that could harm them.

SREENIVASAN: So, if you are kind of a Forbes 500 company, corporate lobbying is just part of the cost of doing business like human resources is or marketing is?

MULLINS: Absolutely. You know, one of the things that surprised me about writing this book is that I thought that so much of lobbying was, you know, the government is making some new rule or regulation that affects the industry. So, an industry hires lobbies to try to, you know, bend that regulation or block that legislate — that regulation or change it in some subtle way. In fact, lobbying is much more on the offensive, where companies hire lobbyist to come to D.C. to create rules and regulations to block competitors or to create barriers to entry so that they are the only companies that can expand in that industry.

SREENIVASAN: Give us an example of that.

MULLINS: We’ll look at Dodd-Frank after the housing crisis. You know, we created the big banks, Canada, D.C., the big mortgage banks, and created these new capital requirements where you have to have billions and billions and billions of dollars in reserve in order to enter these marketplaces. Well, guess what? Only five companies can afford to do that. And guess what? Those are the companies that lobbied to create the law.

SREENIVASAN: Is there a difference, a partisan difference? I’m assuming that lobbyists work for whoever pays the check, but when you look back across your research, across different administrations of who’s in power or which Congress is kind of in control, is that — is there a difference between Republicans and Democrats when it comes to lobbying?

MULLINS: You know, it’s fascinating. That’s — the answer is no. And that’s one of the fascinating things, you know, as we said in the beginning, you know, companies and corporate lobbyists win whether Democrats are in control or whether Republicans are in control. And, you know one of the statistics we found is that you would think that Corporate America would want Republicans to win and would support Republicans, you know, with their campaign donation. In fact, corporations just want to be with the winner. So, we looked at campaign finance data and the campaign finance data shows that when Republicans are in charge, when they control the White House and control Congress, that corporations and their PACs do give about 60 percent of their money to Republicans, but they still give 40 percent of their money to Democrats, even when Republicans are in charge. More fascinating is that when Democrats are in charge, when the Democratic president and when Democrats control the House and the Senate, corporations give 60 percent of their money to Democrats and 40 percent to Republicans. So, they really just want to be with the winner. They don’t care who the winner is.

SREENIVASAN: You know, when you look at the politics of the previous couple of administrations, one of the things that animated the Trump campaign early on, the first time around, was to drain the swamp, to, you know, get the influence of money out of Washington. And what you describe in the book is that it wasn’t as successful and it maybe would have changed, it changed the scope and where the power rested in Washington from Congress back into the White House. Explain that.

MULLINS: Yes. So, the way our government has changed over the last century is that — or really since Watergate, actually since the 1970s, is that power has become more diffuse in Washington, before Watergate and before Nixon or through the Nixon administration (INAUDIBLE) most government power was held by the president in the White House, and Congress had, you know, a role in creating rules and regulations and laws, but really the White House dominated. After Watergate, Washington was reformed and power was taken from the White House, given to Congress, and taken from congressional leaders, and given to committees and subcommittee chairs and regular members. So, Congress, in a way, or Washington power sort of democratized. Trump is a reversal from that. Trump took power back to the White House. I mean, he realized correctly that commerce is dysfunctional and would not pass the things that he was proposing, in part, because the House and Senate so narrowly divided between Republicans and Democrats. But either way, Trump realized in order to get things done, and as we know, he’s an impatient guy, in order to get things done quickly he had to do things himself. So, we started basically governing through executive order. The executive order is just something he could sign that would last through his administration So, he passed more executive orders than anyone else or any modern president. And as a result of that, if companies wanted something, it didn’t matter what Congress did or didn’t do, what they needed to do is get to Trump. And the thing about Trump is it because he was an outsider when he was elected, most of the Republican party supported other candidates and did not want Trump to win the election. So, not many people knew him when he came to D.C., but a few people who did know him became lobbyists and became fabulously wealthy because of their access to him.

SREENIVASAN: One of the things that you point out is that if Former President Trump becomes president again, Paul Manafort stands to become one of the most influential humans on the planet. Why is that?

MULLINS: Yes, you know, it’s exactly what we just said, you know, there’s only a few people who are close to Trump. Trump values loyalty above anything else. And, you know, there’s one person in America who has gone to jail for Donald Trump, and that is Paul Manafort. And Paul Manafort worked for Donald Trump’s first campaign. His plan back then was to start a lobbying firm, had Trump won. Instead, he got wrapped up in the Mueller investigation, he was sent to jail. You know, was later pardoned by Trump. I mean, most people, I think, consider Paul Manafort a big loser right now. He’s been chewed up and spit out by Washington politics. But if Trump wins, you know, Paul Manafort will be back. And I think he will be paid for his loyalty with tons of lobbying contracts from U.S. companies and foreign countries. I think he’ll be the most successful lobbyist we’ve ever seen.

SREENIVASAN: You know, these relationships now seem to matter kind of more than ever. And it seems like a sad reflection that at the same time so many people feel disconnected from the political process, they don’t feel like their voice counts, they don’t feel like their vote counts, they don’t feel like their impact would ever be anything meaningful about legislation or policy. And yet, you were pointing out that there are these individuals who still have figured out how to peddle power.

MULLINS: Yes. You know, that’s kind of one of the main points of our book is that, you know, there’s an establishment in Washington that sort of corporate elite establishment that benefits whether Republicans or Democrats win. And no matter who wins the next election, you know, corporations will be the winner because, you know, they’ve got their hooks into both political parties, both presidential candidates, and, you know, these lobbies and companies, you know, they employ Republican lobbies and Democratic lobbies. So, if Trump wins, he’ll just promote their Republican lobbies and those relationships. And if Biden wins, or wherever else becomes the nominate, you know, they’ll promote their Democratic lobbies. And — but either way, the companies that they employ, or that employ them will be the big winners. I feel like that is disconnecting many people from Washington. And I do think we see an increasing number of populist Republicans these days, sort of antiestablishment Republicans, like Josh Hawley in Missouri and J. D. Vance from Ohio who are saying, hey, this system is rigged. And they’re fighting out against some of these big companies, and the Chamber of Commerce actually, you know, because they’re saying the system is rigged, these big companies, you know, can afford to hire these lobbyists to make these campaign donations and to come to Washington change the rules and regulations to help big companies at the expense of everyone else.

SREENIVASAN: The book is called “The Wolves of K Street: The Secret History of How Big Money Took Over Big Government.” Brody Mullins, thanks so much.

MULLINS: Thanks for having me. It’s great.