Oh, sure, the Republicans did alright for themselves in last week’s midterm elections – taking control of the Senate (while increasing their hold over the House), and winning 24 of 36 gubernatorial contests.
But have you seen the latest numbers out of K Street?
Many of the country’s top lobbyist firms experienced their best period yet in this year’s third quarter, as the businesses hiring lobbyists bulked up their pre-election spending in anticipation of what many expect will be an invigorated legislative agenda beginning next January.1
A few signs of the times:
- Brownstein Hyatt Farber Schreck said its third-quarter revenue grew to $6.35 million in the latest quarter. So far this year, the firm has cleared a profit of $17.7 million.
- The Republican BGR Group, which counts former Mississippi Governor Haley Barbour among its lobbying talent, had more than $4million in revenue this past quarter, the best quarter the firm has experienced since 2011.
- K&L Gates said it also expects to have its best overall yearly since 2011, after reporting revenue of $4.4 million in the third quarter.
- Capitol Counsel is reporting a 20% boost in its quarterly revenues, and is expected to take in $13.3 million this year.
As Politico pointed out, two industry sectors – defense and technology – have been especially generous in hiring lobbyists, at least in the latest full quarter before the election.2
Lockheed Martin, for instance, spent $3.5 million in the third quarter – an increase of $30,000 from last year. General Dynamics boosted its lobbying by $252,000 to $2.5 million. And shipbuilder Huntington Ingalls saw an increase of $7,000 to $1.3 million – money that was used to press members of Congress on a range of issues, including the refueling and overhaul of the USS George Washington aircraft carrier.
In tech, Google, Facebook, Twitter, Yahoo and Amazon all spent more in the third quarter this year than they did in the same quarter last year. (Google, which doled out $3.94 million in the last quarter, even lobbied on a brand new issue this time around: drones).
Spending by telecoms was generally down across the board, save for T-Mobile, which said it spent more than $4.7 million so far in 2014 – much of it likely aimed at trying to garner support for a merger with Sprint that ultimately fizzled when regulators signaled they wouldn’t approve it.
Not that lower spending always meant insignificant totals: Comcast, for example, spent $4.23 million this quarter, and AT&T spent $3.47 million.
Investors have been rewarding the stocks of companies that tend to spend significantly with respect to their asset base, regardless of industry. The Kings of K Street motif has gained 11.1% in the past month.
During that same period, the S&P 500 has increased 7.1%.
So far this year, the motif has risen 27.2%; the S&P 500 is up 12.2%.
What’s next for DC lobbyists –perhaps a post-election breather? On the contrary, several lobbyists told Politico they expect a bump in business in the first half of 2015 when companies look to recalibrate their outside rosters to engage more heavily with Senate Republicans.3
“There will be a burst of excitement and activity as a result of that change,” said former Senate Majority Leader Trent Lott, who now heads Squire Patton Boggs’ lobbying operation. “There is a lot of pent-up demand in the tax area, infrastructure, immigration, the budget, and tax policy.”
Lott said he thinks it will be a shot in the arm to K Street with a much busier legislative agenda.
And, possibly, to the market caps of companies writing checks to those lobbyists.
1Tess VandenDolder, “K Street Made a Killing in Q3 Thanks to Election Day Concerns,” inthecapital, Oct. 21, 2014, http://inthecapital.streetwise.co/2014/10/21/k-street-made-a-killing-in-q3-thanks-to-election-day-concerns/, (accessed Nov. 10, 2014).
2Byron Tau, “K Street defying expectations,” politico.com, Oct. 21, 2014, http://www.politico.com/politicoinfluence/1014/politicoinfluence15768.html, (accessed Nov. 10, 2014).
3Anna Palmer, “K Street’s Republicans hope for uptick in business,” politico.com, Oct. 29, 2014, http://www.politico.com/story/2014/10/2014-elections-lobbying-republicans-112283.html#ixzz3IEpswRLN, (accessed Nov. 10, 2014).