Government Motors will still lobby government
By: Timothy P. Carney
06/02/09 8:14 PM EDT
UPDATE: Wednesday morning, 14 hours after this piece was posted online, a General Motors spokesman informed the Examiner that GM was canceling all of its contracts with outside lobbying firms. The company will maintain its in-house lobbying shop however. I will add further updates here throughout the day.
General Motors will continue its multimillion-dollar lobbying operation in Washington, even after the federal government takes ownership of it. The automaker may even maintain its high-dollar lobbying contracts with some of the wealthiest and most influential K Street firms.
"We believe we have an obligation to remain engaged at the federal and state levels," General Motors stated in an e-mail after President Barack Obama announced his plan for the federal takeover of the carmaker, "and to have our voice heard in the policymaking process."
As a result, some of the jobs that the White House will save with this unprecedented nationalization could be on K Street in downtown D.C., rather than in Detroit.
GM spent $13.1 million on lobbying in 2008. In the first quarter of this year, while surviving on federal bailout money, the company's lobbying tab was $2.8 million.
Washington's most powerful lobbying firms are among the 14 firms the company employed as of the last filings. None of the firms would comment on whether it would continue to work for GM. An assistant to leading Republican strategist and lobbyist Charlie Black of BKSH & Associates said "Charlie doesn't know" what effect GM's bankruptcy will have on the firm's contract with the automaker.
Assuming GM continues its current lobbying effort, many of K Street's most storied lobbyists, such as Black, would in effect be working for taxpayer money. One such government contractor would be Stuart Eizenstat at the top-tier firm Covington & Burling, who served in the administrations and on the campaigns of every Democratic president from Lyndon B. Johnson to Bill Clinton. GM hired him and his firm 10 days after Obama's election.
Ken Duberstein, Ronald Reagan's former White House chief of staff, is also on GM retainer, as is former Sen. Don Nickles, R-Okla., who served as the majority whip in the upper chamber.
In addition to hiring these outside firms, General Motors operates its own in-house lobbying shop in a pricey office at 101 Constitution Ave. NW, across the street from the Capitol grounds. Under Obama's plan, taxpayers would in effect cover 60.8 percent of the cost of this operation. The lobbying office referred inquiries to GM's press office, which replied with two e-mails.
One e-mail outlined its "obligation to remain engaged" and to participate in the policymaking process, citing health care, cap-and-trade, and foreign trade.
When asked specifically whether GM would continue to retain outside lobbyists, a GM spokesman wrote back, "As with all aspects of our business, GM sometimes will use consultants with strong expertise on certain issues. The list of these consultants is public. The use of these consultants is constantly under review."
By press time, the White House did not respond to two phone messages and an e-mail inquiring whether the president intended to restrict GM lobbying or spending on lobbying while the government owned the company.
The awkwardness of GM, in effect, lobbying its owner, is one of the many conundrums created by the business-government partnerships initiated by President George W. Bush last fall.
If Obama were to place lobbying restrictions on GM limiting GM employees' and consultants' contacts with government officials that would amount to restricting communication between the company's management and its shareholders. A related question: Will all discussions between administration officials and GM management continue to count as "lobbying contacts" covered under federal law? Elliot Berke, a government ethics lawyer in Washington, told me, "Nobody really knows what any of this means."
Insurance giant AIG suspended its entire lobbying practice once the government bought a majority stake in it, terminating all contracts by Oct. 1.
In the first three months of this year, GM lobbied on issues including its own bailout, the stimulus, climate change, transportation funding, air bag laws, fuel-efficiency requirements, prescription drugs, health care reform, cellulosic ethanol, hydrogen-powered cars, fuel cells and Mexican trucks, among others.
GM is a member of the U.S. Climate Action Partnership, a coalition that lobbies Washington for cap-and-trade restrictions on greenhouse gas emissions, as is Chrysler, a USCAP spokesman confirmed Tuesday afternoon. AIG, on the other hand, withdrew from the coalition upon its bailout.
Trying to be a business and a de facto government agency simultaneously won't be easy, and the problem of lobbying shows why.
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