Lobbyists Leave Capitol Hill for the States

Money that lobbyists once spent in Washington is being redeployed to fight battles in state capitals.
June 2016
The number of lobbyists in state capitals, like Florida's, are growing. (AP)
Donald F. Kettl
By Donald F. Kettl  |  Columnist
Former dean of the School of Public Policy at the University of Maryland, and a nonresident senior fellow at the Volcker Alliance and the Brookings Institution

Shelly LeGere, a grieving mother from Elmhurst, Ill., is an unlikely symbol of the changing face of lobbying in America. Her 13-year-old daughter, Annie, died from anaphylactic shock, most likely from something she ate. When a police officer arrived, LeGere asked, “Don’t you have anything? What can we do?”

First responders rushed Annie to the hospital. But they weren’t equipped with an epinephrine injector, most commonly known as an EpiPen, and she didn’t get treatment fast enough. Annie died nine days later. To try to save other victims, LeGere launched a campaign to equip first responders with EpiPens. In doing so, she became part of a national effort spearheaded by the manufacturer of the EpiPen, Mylan Inc.

The injectors aren’t cheap. A two-dose pack costs more than $500, and that quickly adds up for cash-strapped local governments. It’s also made lobbying for the EpiPen into big business. Mylan is working around the country to require local schools to stock the injector, which can prevent life-threatening reactions in children like Annie who suffer from severe allergies. In 2010, the company had lobbyists in nine states; by 2014 they were up to 45 states.

This is just a tiny glimpse into the fundamental shift underway in lobbying, as interest groups switch their focus from Washington to the states. According to a study by the nonpartisan Center for Public Integrity, the number of organizations with lobbyists in the nation’s capital declined by 25 percent from 2010 to 2014. In state capitals, the number rose by 10 percent. Battles once fought in a single, massive Washington campaign are now being contested in dozens of states.

The reason, says Lee Drutman, author of The Business of America Is Lobbying, is simple. Thanks to gridlock, “not a lot is happening in Washington.” The more partisanship clogs the capital’s gears, the more “you start looking to the states.”

That’s especially true for the regulation of pharmaceuticals, an issue that’s still being fought vehemently in Washington as well. Take, for example, the status of biologic drugs, new formulations that come from cutting-edge biotech research. In many states, pharmacists can prescribe the cheaper biologics, just as they can substitute less expensive generic drugs for brand-name products. But to protect their immensely profitable businesses, many pharmaceutical makers have launched fierce campaigns in state capitals to make it harder to dispense the substitutes. They want to require pharmacists to obtain a doctor’s consent or to keep extra records before using the less expensive substitutes.

Lobbyists for the drugmakers claim that the manufacture of biologics is extra tricky, so substituting cheaper versions could be extra risky. New rulemaking is underway in Washington to determine just what kind of substitutions are safe. But state-based lobbyists are still working feverishly to protect their market.

Not all of the increase in drug lobbying is the direct work of corporations. There’s the effort to equip first responders with naloxone -- the quick-acting and remarkably effective treatment for heroin overdoses, which can bring patients back from death’s door in less than two minutes. Public health workers and the World Health Organization have led the campaign to make naloxone available to front-line emergency workers. That’s lobbying in the public interest, but the fact is there’s a lot of money at stake for naloxone’s manufacturers.

Meanwhile, in a much different field, Uber has mounted an intense state-level lobbying campaign to protect and expand its business. California legislators and regulators have been juggling mega-issues, like whether the company must treat its drivers as employees and give them benefits, and whether it needs to give the state data on every Uber ride. To fight off the rules, the tech startup has become one of the state’s biggest lobbyists. In California, Uber now outspends lobbyists for Wells Fargo, Bank of America and the country’s biggest company, Walmart.

This spurt of lobbying hasn’t just been at the state level. Uber invested millions in a failed effort to stop an Austin plan that would require fingerprinting its drivers.

What these campaigns have in common is the growing effort to promote policy change one state at a time. It’s become easier to fight 50 different battles than to launch a single Washington campaign -- and it’s created an enormous growth industry for state-based lobbyists. In 1997, University of Iowa political scientists couldn’t find a single lobbyist registered to do business in every state. By 2014, according to the Center for Public Integrity, at least nine interest groups and companies had set up shop in every state capital: AARP, the American Heart Association, AstraZeneca, AT&T, Express Scripts, the National Federation of Independent Business, the National Rifle Association, Pfizer and PhRMA.

Reinforcing their campaigns are the state-based efforts of conservative groups such as the American Legislative Exchange Council, whose model bills have provided a blueprint for successful beachheads that would be hard to establish in Washington. Major changes in the federal civil service laws are on the table in large part because state-by-state campaigns have led to more flexible employment rules in 28 states.

For a generation, the criticism of Washington-based lobbyists has itself been a cottage industry. Most of the 2016 presidential candidates have campaigned to shrink the power of the Washington lobby and to send decisions back to the states. If they manage to do that, they’ll discover that the lobbyists have beaten them to it.