Lobbying in the United States

1. Lobbying in the United States GR Congress Moscow, Russia November 17, 2011 Wright Andrews Partner, Andrews & Andrews, PLLC Principal, CapCity Advocates Andrews & Andrews ,PLLC

2. Agenda • Wright Andrews’ Background • American League of Lobbyists • Lobbying in the United States • Lobbying Regulation • American League of Lobbyist Code of Ethics • Case Study • Questions & Answers

3. Wright Andrews’ Personal Background • Lawyer and lobbyist • Worked for U.S. Senate • Began lobbying in 1975 • Former President of American League of Lobbyists (ALL) • Co-Author of ALL’s Code of Ethics for Professional Lobbyists

4. The American League of Lobbyists • Primary U.S. organization for professional U.S. lobbyists • Defends profession from unjust attacks • Supports legal reforms to enhance transparency and prevent abuse • Networking events with congressional members and other industry professionals • Code of ethics • Education and training program for lobbyists

5. Lobbying in the United States • Seeks to influence public policymakers • Integral role in democratic process • Provide policymakers with information • Explain and advocate clients’ positions • Clients’ vital economic and other interests heavily impacted by government actions • Constitutional right to petition government to protect interests

6. Lobbying Activities

7. Lobbying is Big Business • $3.5 billion spent last year in Washington • Over 12,000 registered Federal Lobbyists and many more not registered • All types of interests represented • Independent lobbyists and in house lobbyists • Frequently have teams of lobbyists including media experts and grassroots firms • Foreign governments and companies often have Washington lobbyists

8. Attacks on Lobbyists

9. Lobbying Regulation • Laws, regulations, rules, and code of ethical conduct essential for “civilized lobbying” • Provide guidance to lobbyists and public officials • Prevent and punish corruption • Critical to help ensure public trust • Transparency very important

10. Regulation at the Federal Level

11. The State of U.S. Lobbying • Not perfect, but better than most nations • Lobbying disclosure act • Campaign finance law • Inadequate enforcement • ALL is developing proposed reforms advocating the highest of standards

12. Summary of ALL’s Code of Ethics • Article I – Honesty & Integrity • Conduct lobbyist activities with honesty and integrity • Truthful and factually correct, correct inaccuracies, and advise of material changes • Article II – Compliance with Applicable Laws, Regulations, & Rules • Comply fully with all laws, regulations, and rules applicable to the lobbyist • Become familiar with applicable laws, regulations, and rules • Not cause public official to violate

13. Summary of ALL’s Code of Ethics • Article III – Professionalism • Conduct activities in a fair and professional manner • Understand legislative and government processes • Continue education and training programs • Article IV – Conflicts of Interest • Do not continue or undertake representations that may create conflicts of interest without the informed consent of the client or potential client involved

14. Summary of ALL’s Code of Ethics • Article V – Due Diligence & Best Efforts • Vigorously and diligently advance and advocate the client’s or employer’s interests • Devote adequate time, attention, and resources • Keep client informed and be loyal to client’s interests • Article VI – Compensation & Engagement Terms • Written agreement with the client regarding the terms of the lobbyist’s services, including the amount of and basis for compensation • Charge reasonable fees

15. Summary of ALL’s Code of Ethics • Article VII – Confidentiality • Maintain appropriate confidentiality of client or employer information • Article VIII – Public Education • Seek to ensure better public understanding and appreciation of the nature, legitimacy, and necessity of lobbying in our democratic governmental process • Article IX – Duty to Governmental Institutions • Exhibit proper respect for the governmental intuitions' before which the lobbyist represents and advocates clients’ interests • Should not act in any manner that will undermine the public’s confidence or trust or that will disrespect governmental institutions

16. Case Study Federal vs. State Regulation of Insurance

17. Hypothetical Situation • In the U.S., insurance products are generally regulated by laws in each of the states, not the federal government • Investment securities are regulated by state laws & at federal level by Securities Exchange Commission (SEC) • SEC proposed a new regulation that changed the way federal law had been interpreted for decades & tried to treat certain insurance products as a security which it could regulate instead of leaving it as a state regulated insurance product • If the SEC prevailed, it would have imposed a totally different regulatory regime, forcing many insurance sales agents to stop selling the product, costing many millions & putting many agents & companies out of business, & raising costs for many consumers • Insurance sales agents & companies decided to fight this power grab by the SEC • Filed lawsuits to delay the rule • Began lobbying campaign • Hired independent lobbyists, used association lobbyists, in-house company lobbyists

18. What Might Lobbyists do to Stop SEC? • Study and develop policy arguments – carefully analyze the issue, political environment, and develop policy arguments to justify the position • States adequately regulate so federal regulation not needed • New regulation would have very negative economic impacts on tens of thousands of small businesses (the insurance sales agents), costing many jobs, & raising costs to consumers • SEC already overburdened regulating other areas & not doing good job on them • Certain additional consumer protections the industry can tolerate

19. What Might Lobbyists do to Stop SEC? • Strategy and tactical plan • Coalition - organize a coalition of all the involved lobbyists to coordinate activities & share information • Ideally, have a single coalition manager to direct overall effort • Keep “below the radar” – seek relief by adding amendment to very large bill with hundreds of other issues & by avoiding high-profile media stories • Effective Written Materials – draft clear, concise & convincing advocacy papers • Target Key Legislators –focus on key Senate and House members who will decide the issue & those who can become clients’ main supporters • Members from States with large numbers of insurance companies/agents • Members on Congressional Committees with jurisdiction over the issue • Senate/House Leadership • Bi-Partisan, Republicans & Democrats

20. What Might Lobbyists do to Stop SEC? • Strategy and tactical plan • Gain support from other interest groups • State insurance regulators • State governors • Consumer advocacy groups • Seek to neutralize competitors (e.g., parties selling securities instead of insurance) • Favorable industry media articles – Secure favorable articles in certain industry publications (not public newspapers) to gain more industry support & involvement • Grassroots support - develop strong grassroots campaign with thousands of insurance agents contacting key legislators demanding support & saying their families’ income is at stake • Utilize website to tell Agents what to say & who to contact & to send communications easily from website & how to report back what legislators said

21. Execution of Lobbying Plan • Drafting advocacy materials, including articles to put in certain publications and proposed amendment language • Lobbyists’ coalition meetings for coordinating various lobbyists’ and clients’ contacts with key parties to share political intelligence • Extensive personal contacts with policymakers by lobbyists, clients, and via insurance companies’ grassroots network of thousands of insurance agents • Meetings in Washington & in home legislators’ home States • Letters, emails, and telephone calls to policymakers • Explain issues, seek support & secure bi-partisan sponsors for clients’ position • Many follow-up meetings and communications • Existing personal relationships help get access, attention & support • Active political contribution efforts • Hiring of additional lobbyists with special political contacts

22. Execution of Lobbying Plan • Meetings with State Insurance Regulators to gain their support & help guide the on Which Federal officials to contact • State insurance regulators supportive because they do not want to lose power and the fees charged by the state to the companies they regulate • State insurance regulators then follow-up by contacting key federal policymakers • Similar meetings with key State Governors to gain support & to have contact Federal policymakers • Extensive lobbying of key decision makers by other Senate & House supporters (i.e., “Member to Member” lobbying) • Meetings & discussions with Consumer Advocacy Groups to gain support or reduce opposition

23. Execution of Lobbying Plan • Very high-level meeting and negotiations with Congressional leadership and committee chairman • Prepare workable “compromise” proposal for supporters to offer – • Add new statutory language saying only insurance products that met certain additional requirements can remain exempt from SEC regulation

24. Results

25. Questions & Answers Wright Andrews Partner, Andrews & Andrews, PLLC Principal, CapCity Advocates 1155 F St., NW – Suite 1050 Washington, DC 2004 +1 (202) – 559-8840 wamdrews@amdrewsdclaw.com