GOP Bill Could Funnel Cash To Corporate Lobby Groups Boosting Their Campaigns

A late rewrite by Senate Republicans could make K Street front groups for huge corporations eligible for funds meant for small businesses and their workers.

This post is written by TMI editor/reporter Andrew Perez, who recently launched the Democratic Policy Center, a progressive advocacy group that’s opposing efforts in Congress to bail out corporate lobbying groups in Washington.

As Senate Republicans this week push to slash unemployment benefits for millions of workers, they are offering a lucrative gift to Washington lobbying groups for huge corporations: access to a program meant to help small businesses and their employees survive the pandemic. The move could deliver an infusion of government cash to business groups, helping them free up more cash to boost their existing ad spending in support of Republicans’ 2020 election campaigns.

The PPP program was supposed to target forgivable loans to mom-and-pop local businesses, but it has been raided by large corporations and private equity giants, while locking out many small companies. Corporate lobbying organizations have been trying to get in on the free cash bonanza for months -- and they now seem close to achieving their goal. 

House and Senate Democrats have sponsored legislation opening up the PPP program to corporate trade associations that influence the government and bankroll election campaigns. Last month, the American Society of Association Executives, a lobbying group for lobbying groups, publicly declared that the next coronavirus relief package “may be associations’ last chance to gain access to the PPP.”

For a few hours on Monday, it looked like corporate lobbying groups might not get their way -- the original text of Senate Republicans’ new coronavirus legislation was written to block many D.C. lobbying groups from tapping the PPP. Then, the bill was switched out, and more lobbying groups were let in.

The “Continuing Small Business Recovery and Paycheck Protection Program Act,” was introduced as part of the Senate GOP’s stimulus proposal. A copy of the bill posted on Florida Sen. Marco Rubio’s website on Monday afternoon would have expanded PPP eligibility to only include smaller trade associations with less than 50 employees. Their loans would have been capped at $500,000. Local chambers of commerce with under 300 employees would have qualified.

However, the legislation’s rules on trade association eligibility were significantly altered just before the bill was formally introduced by Rubio and by Sen. Susan Collins, R-Maine. The version they introduced would expand PPP eligibility generally to include lobbying groups with up to 299 employees, and the $500,000 loan cap was removed.

The last minute switch means that if the GOP bill passes, lobbying organizations for huge companies could get a giant government subsidy for their work influencing the government. 

“The bill was being drafted and negotiated up until the moment it was introduced,” a Collins spokesperson told TMI. “The version available at congress.gov is what was submitted.”

Slipping Through The Cracks, Into A Windfall

The vast majority of trade associations -- 99.8 percent of them -- have less than 300 employees, so the GOP bill’s headcount restriction isn’t exactly meaningful.

Both the Democratic and Republican version of the legislation do include one potentially significant restriction -- only trade associations that spend less than 10 percent of their budget on lobbying would be eligible for PPP loans. But some major corporate lobbying groups could still qualify. 

D.C. trade associations exist to influence policy and advance their members’ business interests. Many of them only spend a small fraction of their budgets on federal lobbying efforts, and they seek to influence policy in other ways. 

Trade associations run television and radio advertising campaigns -- and they can secretly pay other trade groups and 501(c)(4) nonprofits to run advocacy campaigns on their behalf. They host luxury conferences where they invite congressional leaders to discuss their legislative agendas -- and where they pay retired politicians, TV pundits and journalists to speak on panels. 

D.C.’s top drug lobby, Pharmaceutical Research and Manufacturers of America (PhRMA), spent $28 million on lobbying in 2018, the fourth-highest total of any organization in Washington, according to OpenSecrets. The lobbying spending only accounted for 6 percent of its gargantuan $448 million budget. They reported having 276 employees at the time. 

The American Chemistry Council -- which represents chemical giants like Dow and DuPont, as well as oil and gas titans ExxonMobil and Chevron -- spent $9.3 million on lobbying in 2018, only 7 percent of its overall $127 million budget. The group listed 277 employees.

The Electric Edison Institute, a trade group for investor-owned electric utilities, spent $8.1 million on lobbying in 2018, or less than 9 percent of its $95 million budget. They reported having 227 employees.

Spending On Elections

The push to allow trade associations into the PPP is occurring as 2020 campaigns heat up.

While the PPP was meant to help small businesses with costs like payroll, mortgages, rent and utilities, opening up the lending program to trade groups could allow business and lobbying groups to shift more money into other activities -- including elections.

The U.S. Chamber of Commerce, the nation’s biggest business lobby, has run a series of ads boosting Collins and other Republican incumbents. The Chamber’s chief strategist recently said that preserving Republican control over the Senate is the organization’s “top priority.” The group has already spent at least $2 million on so-called issue ads lauding Republican Senate candidates, according to OpenSecrets. 

While the Chamber likely has too many employees to qualify for the PPP program under the proposal, some of its ads promoting Collins earlier this cycle say they were “supported by the Maine State Chamber of Commerce” -- a group that clearly stands to benefit from the Collins-Rubio legislation. 

State chambers of commerce have signed onto other U.S. Chamber ads designed to prop up vulnerable Republican incumbents. An ad touting Georgia Sen. David Perdue says it was "sponsored by the Georgia Chamber of Commerce.” Another promoting Arizona Sen. Martha McSally says it was "supported by the Arizona Chamber of Commerce.”

If the GOP bill passes, those groups could be eligible for PPP money, freeing up more resources for them to support Republican candidates.

Photo: Alex Proimos / Wikimedia Commons


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