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Wednesday, April 3, 2024

Grassroots and Grasstops

At WSJ, Brody Mullins and Luke Mullins report on the outside game of grassroots and grassroots lobbying.  Things really took off in 2011 when Google and other tech companies pushed back hard against IP legislation.
Today’s most effective corporate lobbying no longer involves wooing members of Congress with Chateau Margaux, five-star meals or tickets to professional sporting events. K Street’s elite now works in secret to influence lawmakers with the help of an unlikely ally: you.

Though appealing to the public has long been part of the lobbying playbook, it has taken a much more sophisticated form in the years since lobbyists were banned from using the traditional tools of their trade to curry favor with elected officials. They recognized that, given the new restrictions, the best way to influence members of Congress was through the people who sent them to Washington in the first place.

In 2021, the focus was on proposed tax hike.
The oil-and-gas industry killed their proposed tax increases by getting voters in Texas and Louisiana to tell their members of Congress that the tax increases would kill jobs back home. Lobbyists for tobacco companies and convenience stores worked to persuade Black Americans that a new $100 billion tax on tobacco products would drive up illegal tobacco sales and increase the likelihood of conflicts with the police, like the violent encounter that led to the death of 43-year-old Eric Garner on Staten Island in 2014. Black lawmakers responded by striking the tobacco taxes from the bill.

The private-equity industry, meanwhile, got even more creative. Months before Biden proposed a $1 billion-a-year tax increase on private-equity investors, its lobbyists quietly launched a public-relations campaign to convince a few dozen centrist Democrats that increased taxes would lower the amount of money invested in small businesses and real-estate development in their states. A key target of the effort was Sen. Kyrsten Sinema of Arizona.
To win her over, the private-equity lobby identified her top political advisers, staff and campaign donors. The industry purchased advertisements on Twitter and Facebook pages targeting this inner circle, stating that higher private-equity taxes would lower investment and jobs in her state. “Private Equity is directly supporting 138 small businesses in Arizona,” read one social-media post from the industry’s Washington trade association. The lobby also paid for advertisements in Arizona that encouraged voters to call Sinema’s office and urge her to oppose the tax increase.

Industry lobbyists contacted Arizona business leaders and got them to sign opinion pieces in local media outlets to catch the senator’s attention. Most of the pieces were written by lobbyists, according to one of the private-equity strategists involved in the campaign. “Raising taxes on individuals and small businesses who contribute funds or sweat equity to a project will diminish the incentive to take on risk,” read one piece.

Facing pressure from her constituents in Arizona, Sinema came out against the tax increase, and it was dropped from Biden’s plan before it was called up for a vote.

When The Wall Street Journal reported that industry lobbyists had persuaded Sinema to oppose the tax increases, her spokesman said it was impossible because the senator never spoke with any lobbyists for the industry. But the private-equity lobby didn’t have to speak to Sinema. They spoke to her constituents back home.