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LOBBYING — Panel: Standards For Contingency Fees, Bonuses Subject

Mark Wegner
© National Journal Group, Inc.

For a lobbyist, how much is too much? And does that include a bonus?

Those were the questions for a gathering of about 50 lobbyists, who turned up Thursday for a forum on how much lobbyists should charge for their work and how they should be paid.

Much of the discussion focused on whether it is appropriate for lobbyists to collect contingency fees or bonuses that are awarded when they achieve a client's goals.

The discussion at times drifted into the practices of GOP lobbyist Jack Abramoff, who is under investigation for collecting millions of dollars in lobbying fees from six American Indian tribes.

House Democrats this week referred to Abramoff's ties to House Majority Leader DeLay to try to force a debate on the ethical standards of GOP leaders.

Lobbyists said media reports about Abramoff's fees immediately raised red flags among lobbyists, but they noted that it is not always clear cut on how much to charge clients.

Wright Andrews, an attorney and lobbyist who served on the panel, said some of Washington's lobbyists have great influence and can set up a meeting or sway a vote just by making a phone call.

"It's perfectly appropriate to charge more if you can deliver," Andrews said. "There are a lot of people in town we know that don't have 'silver bullet' capabilities. There are people who have ... more political clout. They are worth more."

Andrews said some clients are willing to pay more to a lobbyist for a short amount of time, especially if that lobbyist's access can influence an impending, crucial vote.

Some lobbyists in attendance suggested the market often sets lobbying rates.

Andrews said corporate clients with Washington experience know what reasonable fees are, but he asked whether it is fair to charge a naive client or foreign government $100,000 a month.

"I know I couldn't ever get a corporate client to pay nearly that much," he said.

Andrews said there are many ways lobbyists charge for lobbying work, and arrangements depend on whether the lobbying is simply monitoring an issue, actively working a member, tapping personal connections or using political capital.

Ted Goldman, who helped start Legal Times' lobbying newsletter, Influence, said lobbyists must communicate clearly about "what the client wants and what he's going to get" for lobbying work.

Attorney and lobbyist Tom Susman, who chairs the American League of Lobbyists ethics committee, said at the federal level there are relatively few limits on lobbyists accepting contingency fees or a "success bonus." He said federal law prohibits foreign agents from paying such fees, while the so-called Byrd Amendment prevents a client from paying a fee out of the government contract a lobbyist helped secure.

Andrews said he uses a "facts and circumstances test" on a case-by-case basis to determine whether a contingency fee might create a conflict of interest with other clients or force a lobbyist to use questionable methods to meet a clients' objective.

"I don't see anything wrong in contingency fees," he said. "If it's over the top, I think that's a different issue."

Some lobbyists said many of their clients are small and cannot afford to spend much money in Washington's lobbying game. In these cases, lobbyist might charge clients a relatively small flat fee but reap a higher commission if their lobbying is successful.

Center for Ethics in Government Director Peggy Kerns, who tracks state lobbying, said about 30 states prohibit contingency fees in part because it might disadvantage interests that cannot afford to spend as much on lobbying as rivals.

She said changes in state lobbying laws are often driven by typically negative news reports about Washington lobbying. She said state definitions of lobbying have grown more expansive.

"Suddenly now the whole world becomes a lobbyist," she said. "Why is that? I think that too often the media frames what you all do."

Or as Susman framed it for lobbyists, "How would you like to read about it in the newspaper? And more importantly, how would you like your mother to read about it in the newspapers?"

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