Lobbyists Look Forward to Meeting New Administration

On Election Day, an eerie silence descended on the offices of Washington's top lobbying, law and public relations firms. With Bill Clinton holding a strong lead in pre-election polls, the clout merchants jetted off to Arkansas to celebrate with him.

The cast of characters partying in Little Rock that night provided a vivid tableau of what awaits the new administration in Washington. Collectively, they represented dozens of leading U.S. corporations and foreign interests.


Even the lobbying firm of Black, Manafort Stone & Kelly Public Affairs Co. -- the epitome of Republican political correctness during the Reagan-Bush years -- dispatched partner Peter Kelly to Little Rock. Mr. Kelly is one of the few Democrats at the firm, but not for long: Black, Manafort is shopping for new Democratic lobbyists.

After 12 long years of Republican rule, there are plenty of pent-up demands in Washington. Mr. Clinton's promise of an activist agenda, with more federal spending financed by higher taxes on the rich and foreign corporations, has put K Street in a state of high alert.


Mr. Clinton has vowed to curb the influence of special interests. He has promised to place tougher lobbying restrictions on top administration officials who leave the government, and he has told members of his transition team that they must wait at least six months before lobbying any agency that they helped make plans for.

But reining in the special interests won't be easy. Many lobbyists and interest groups have close ties to the president-elect and have played important roles in his campaign organization. Some of the links go back to childhood: Thomas F. (Mack) McLarty III, a boyhood friend of Clinton's who now runs Arkla Inc., an Arkansas natural gas company, and serves on Mr. Clinton's transition team. He threw an election-night party at Arkla headquarters in Little Rock.

Lobbyists played a central role in the Clinton campaign, starting at the top: His campaign chairman was Mickey Kantor, a lawyer-lobbyist in the Los Angeles-based law firm of Manatt, Phelps, Phillips & Kantor. Mr. Kantor's law partner, Charles T. Manatt, rounded up bankers' endorsements for Clinton. The teams that developed position papers for the Clinton campaign were loaded with lobbyists. And Democratic National Committee DNC) chairman Ronald H. Brown is a partner in the Washington lobbying firm of Patton, Boggs & Blow.

Political money also served as a channel between interest groups and the Clinton camp. The Clinton fund-raising operation helped the Democratic Party raise $29 million in "soft" contributions from corporations, unions and big individual donors of mid-October. ("Soft" money is contributed to the party rather than an individual candidate, skirting limits on contributions and campaign spending.) Many of these big donors had previously given little money to the Democratic Party; they didn't open their wallets to the Democrats until mid-summer, when Mr. Clinton surged ahead of President Bush in the polls.

While there will be some clear winners and losers under Mr. Clinton, the arrival of a new administration is good news for almost everyone on K Street.

"These guys' incomes will all go up because all their clients will be nervous," said Pat Choate, a consultant who has been a leading critic of Japanese influence-buying in Washington. "For most lobbyists the most profitable times are those of chaos and change." Mr. Clinton will "end the recession in Washington," Mr. Choate predicted.

Trade associations may be among the biggest beneficiaries, mounting membership drives and making special fee assessments to counter Clinton initiatives.

"This Congress and the promises that Clinton made means an almost automatic defensiveness from the corporate community on most issues it faces," Tom C. Korologos, a longtime Republican lobbyist with the Washington lobbying firm of Timmons and Co. Inc., said. "That means a lot of heavy lifting to educate the Congress and the administration."


Mr. Korologos listed health care, the environment, taxes and safety as issues that are likely to generate business for lobbyists. "Republican firms flourish" under Democratic administrations because corporate America is looking for all the help it can get, he said.

Moreover, Clinton-watchers say that his penchant for building consensus and listening to all sides of an argument will create plenty of openings for interest groups to exert pressure.

"This Clinton group is coming in with a wider set of Rolodexes," Mr. Korologos said. "They won't have the same bunker mentality that the Carter administration did. Ipso facto, there'll be more openness and receptivity in the beginning."

The question, though, is whether Mr. Clinton is prepared for the onslaught.

"The Democrats have always operated on good faith that they could control special interests," Theodore J. Lowi, a professor of government at Cornell University, said. "They've had a theory of good government that's heavily based on working out compromises among special-interest groups." But, Mr. Lowi said, the only way it will work is keeping them out of the loop entirely."

But any potential policy change draws interest groups into the loop. Take the case of energy policy. Despite his reputation as a conciliator, Mr. Clinton has already made clear that he will play favorites in the energy field. Natural gas is in; big oil is out.


Bill Burton, an Austin (Texas)-based lawyer with the Cleveland -- firm of Jones, Day, Reavis & Pogue who coordinated energy policy for the Clinton campaign, recalled that Mr. Clinton contrasted his energy policy with President Bush's this way; "George Bush's energy policy could be described in two words: cheap oil. If I'm limited to two words, it would be: natural gas."

Mr. Clinton has said that he will speed up conversion of the federal government's vehicle fleet to natural gas and that he favors more government spending on research into natural-gas-based fuels. And America Gas Association president Michael Baly III said that Mr. McLarty, who went to kindergarten with Mr. Clinton and is now one of his top policy advisers, has urged Mr. Clinton to encourage the use of domestic natural gas to reduce U.S. dependence on imported oil.

Oil companies admit that they are nervous. During the Reagan and Bush years, they could count on White House support for such controversial proposals as offshore drilling and oil exploration in the Arctic National wildlife Refuge (though Congress didn't go along.) The new administration -- especially Vice President-elect Albert Gore, Jr. -- isn't seen as a friend of the industry.

Mr. Clinton and Mr. Gore are fans of solar energy and renewable fuel sources; their proposed civilian research agency would finance development in these areas. They have also called for tax incentives to encourage renewable energy sources.

But big oil may not be frozen out entirely. For one thing, oil companies this year became big Democratic donors. Atlantic Richfield Co. (ARCO), long a major GOP financial backer, gave $267,042 in soft contributions to the Democratic National Committee as of Oct. 14. "If you've been politically active," ARCO vice president for government affairs Kenneth R. Dickerson said, "there's an increased chance that someone will consult with [you]."

Don Duncan, the Washington-based director of natural resource issues for Phillips Petroleum Co., pointed out that "it's hard to find an oil company that's not heavily into natural gas. . . . His policy of promoting natural gas has a lot of people excited. I don't think we're ready to throw in the towel and write off the administration."


Although Mr. Clinton appears intent on toughening the ethics rules for members of his administration, some Washington watchdog groups doubt that he will be able to check the influence of well-heeled special-interest groups completely.

Consider the situation that Mr. Clinton faces with tobacco interests. The tobacco industry, battered by negative publicity and sluggish sales in the United States, got help from the Bush administration in expanding into lucrative overseas markets. On the campaign trail, Mr. Clinton seemed less friendly to the industry. He said that he would consider higher taxes to curb smoking by children; he also supports expanded education programs on the health risks of smoking and has said that he may ban smoking in federal workplaces.

But the tobacco industry took no chances. Tobacco interests contributed $819,000 in soft money to the DNC during the 1992 election cycle, a twenty-fold increase over their 1988 contributions to the party. (They gave the Republicans $1.6 million for the 1992 cycle.)

And the industry is plugged into the highest echelons of Mr. Clinton's organization. The Manatt law firm, where campaign chairman Kantor works, has represented Philip Morris Management Corp., and Mr. Kantor personally represented a Beverly Hills restaurant group that helped defeat legislation to limit smoking in Los Angeles. When Mr. Kantor was passed over for the top post on Clinton's transition team, the position went to Vernon E. Jordan Jr. -- a senior Washington partner and rainmaker extraordinaire at the Dallas-based law firm of Akin, Gump, Hauer & Feld who sits on the board of RJR Nabisco Holdings Corp. Mr. Jordan is paid $50,000 a year for his service on the board.

After anti-smoking and consumer groups complained about his RJR connections, Jordan said that during the transition, he would take a leave of absence from Akin, Gump and from RJR and several other corporate boards on which he serves.

"I don't think anyone believes that [Mr. Clinton] will really shut out all the special interests," said Charles Lewis, president of the Center for Public Integrity, a Washington watchdog group. "How can a new president turn his back on dozens of his advisers from inside the Beltway who make their living trading on influence and access?"


"Clinton wants the best of both worlds," Mr. Lewis added. "He wants to be known as the candidate of change, but he's using all these old insider types because he wants to be effective. He sees these advisers as a stamp of legitimacy that he understands how Washington works."

Others warn that no president will be able to shake off the influence of monied interest groups without overhauling the campaign finance system, especially curbing the spread of soft money.

Mr. Clinton has said that he supports legislation that Congress passed last year (but that Mr. Bush vetoed) that would have provided partial public financing of congressional campaigns. He has also promised to "end the unlimited soft-money contributions" in campaigns. But it's unclear whether a campaign finance reform bill will be among his top legislative priorities.

Fred Wertheimer, president of the lobby group Common Cause, praised Mr. Clinton's early steps on political reform and ethics. But, he said: "Washington is a city in waiting. Lobbyists in this town are just waiting for a Clinton administration so they can explain to them how life works in Washington and why they should go along with it. Whether President-elect Clinton presses Congress for strong campaign finance as an early priority will tell us a lot about how interested his administration is in changing the ways that Washington works."

Peter Stone is a reporter for National Journal, where a longer version of this article appeared.