Client's rewards keep D.C. lobbyists thriving

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A few years ago, a coalition of 60 corporations -- including Pfizer, Hewlett-Packard and Altria -- made an expensive wager. They spent $1.6 million in lobbying fees -- a hefty amount even by recent K Street standards -- to persuade Congress to create a special low tax rate that they could apply to earnings from their foreign operations for one year.

The effort faltered at first, but eventually the bet paid off big. In late 2004, President Bush signed into law a bill that reduced the rate to 5 percent, 30 percentage points below the existing levy. More than $300 billion in foreign earnings have since poured into the United States, saving the companies roughly $100 billion in taxes.

Although not every political battle yields $100 billion, the return on investment in lobbying is often so substantial that experts and insiders agree that Washington's influence industry will continue to thrive no matter how lawmakers decide to rein it in. Congress is crafting restrictions on lobbyists this year after the Jack Abramoff political corruption scandal. The initial revisions from both Republicans and Democrats would reduce the amount of travel and dining that lobbyists could cover for lawmakers and require more disclosure of their activities.

Other proposals would decrease the number of narrowly targeted appropriations, called earmarks. But the new House majority leader, John A. Boehner (R-Ohio), has said he preferred more disclosure without the travel and meal restrictions. And the legislation under discussion would not eliminate earmarks entirely. No one on Capitol Hill is suggesting a ban on lobbying, a change that would run counter to the First Amendment to the Constitution.

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