May 26, 2016

Despite Initial Hesitance, Americans for Prosperity Ups Lobbying Presence on Capitol Hill

By Walker Davis

Americans for Prosperity (AFP), a Koch network-connected section 501(c)(4) nonprofit group, is well-known for its grassroots organizing and campaign-style political activity. In 2014, however, AFP tepidly made plans to try out a more traditional, insider influence tool: lobbying Congress.

AFP registered to lobby the federal government in February 2014, but did not register any individual lobbyists at that time. The group claimed it did not expect any staff member to devote more than 20 percent of his or her time to legislative contact, which is the registration threshold under the Lobbying Disclosure Act. A spokesperson told The Hill that the organization only registered at all out of an “abundance of caution,” and that it would most likely soon terminate its registration. That didn’t happen. Instead, AFP registered a pair of lobbyists two months later and has since then continued to ratchet up its federal lobbying efforts.

AFP’s unusually detailed lobbying reports disclose not only the issues the group lobbies on, but also details about who the organization lobbies. The group disclosed lobbying activity in 13 policy areas in 2014. Most of these involved low-cost activities like joining a coalition letter, but the group itemized meetings with congressional members and staff, too: AFP reported contacting the offices of 13 House members and seven Senators in 2014. Overall, AFP reported just $30,000 in lobbying expenses in 2014.

In 2015, AFP upped its lobbying activity. The group registered three new lobbyists and more than tripled the number of congressional members and staff with whom they met, focusing more heavily on Senate offices for facetime. In 2015, AFP reported contacting the offices of 25 members of the House and 24 Senators, disclosing $55,000 in lobbying expenses.

It’s not clear how much of AFP’s lobbying activity the group is itemizing on its disclosures, particularly since the group is not actually required to disclose much information about what it does. A July 2015 Los Angeles Times report that AFP met with 150 legislative offices about the Export-Import Bank since the Koch network “seized” on the issue in late 2013 suggests more lobbying meetings may have taken place than AFP disclosed. It’s possible the group only itemizes lobbying meetings that cross a certain threshold of formality or importance.

One of the legislative goals that AFP most frequently advanced in its meetings with members of Congress and their staff was advocating for the expiration of the Export-Import Bank, a policy position that the Koch network is credited with popularizing. From its registration in 2014 to the end of 2015, AFP reported lobbying twenty congressional offices about the agency.

When the bank expired in July, AFP President Tim Phillips seemed to acknowledge the impact of his organization’s efforts: “We’ve taken an issue that I bet you the majority of members of Congress were not familiar with…and we’ve made it an important example of why government cronyism is a bad thing.”

That was an understatement. Not only did AFP and other network groups raise awareness about the issue, the organization challenged the position of powerful pro-business groups like the Chamber of Commerce and National Association of Manufacturers with whom Republicans in Congress normally align, causing the bank’s charter to lapse for the first time in its 81 years. The Koch network’s success, however, was short-lived, as AFP was ultimately unsuccessful in preventing reauthorization. In December 2015, the bank was reauthorized until September 2019.

The fight against the Export-Import Bank is a good example of how AFP’s lobbying fits into the greater strategy of Koch-tied political groups. AFP’s lobbying efforts complemented other network groups’ activity: both Freedom Partners and Generation Opportunity ran ads against the bank’s reauthorization.

In addition to AFP’s prominent place in the Kochs’ network of nonprofit organizations, the group shares current and former leadership with Koch Industries, the multinational corporation owned by the Koch brothers, which is a major corporate donor to the political right. Campaign finance disclosures filed with the Federal Election Commission show that in 2014 and 2015, Koch Industries’ political action committee, KochPAC, gave more than $600,000 to the campaigns and leadership PACs of the members of Congress whose offices AFP lobbied. Koch Industries also publicly opposed the bank.

When the Export-Import Bank went from an “obscure government agency” to a “litmus test” of conservative “ideological purity,” several members of Congress changed their position on its reauthorization. Sen. Richard Shelby (R-AL), for example, who serves as chairman of the Senate Committee on Banking, Housing, and Urban Affairs, voted to reauthorize the bank in 2012 and suggested in early 2015 that he would do so again. The Hill reported in June 2015 that Sen. Shelby was “expected to support the bank’s reauthorization provided there are reforms to its structure.” A week later he took the floor of the Senate and refuted that expectation: “I believe that Ex-Im has outlived its usefulness and should be allowed to expire.”

The Koch network stoked that view behind the scenes. Sen. Shelby’s statement came during the same quarter of 2015 that AFP contacted Sen. Shelby’s office to talk about reauthorizing the bank and six weeks after Koch Industries made a $2,500 contribution to Sen. Shelby’s campaign. Freedom Partners, the network’s financial hub, sang his praises in a press release on the day that he expressed support for the bank’s expiration.

Not surprisingly, AFP’s own political spending has coincided with its lobbying agenda. According to OpenSecrets, AFP paid for independent expenditures in 13 races in 2014. Ten of the candidates that benefitted from AFP’s ad spending won. The next year, AFP disclosed lobbying the offices of four of the members of Congress it helped elect. In at least one case, AFP’s election support and lobbying activity might well have overlapped. In 2014, AFP ran ads praising Rep. Mike Pompeo (R-KS) as he faced a primary challenger. The ads ran through early August, and AFP reported lobbying Rep. Pompeo’s office at some point between July and October.

AFP’s lobbying expenditures are drops in the ocean when it comes to federal lobbying and relative to the funding the group takes in. The organization’s venture into lobbying is noteworthy, however, because it gives the Koch network an additional tool of political influence—one the network is using more and more. The fact that AFP represents some of the biggest campaign donors in the nation gives the group an additional element of persuasion in advocating its agenda.

AFP set course for its busiest year of lobbying yet in the first quarter of 2016. On its lobbying disclosure form, the group reported meetings with 16 congressional offices, including the Speaker of the House and the Senate Majority Leader. If recent reports that the Koch network plans to deemphasize electoral spending while boosting its focus on advocacy and education are true, then AFP’s lobbyists may soon become increasingly familiar faces on Capitol Hill. 

Infamous for Keeping Clients Secret, Berman Admits to Advising Monsanto on GMOs

In June 2014, Richard Berman, the infamous president of corporate public relations firm Berman and Company, pitched a room full of energy company executives on his team’s work in fighting an anti-fracking initiative in Colorado. Noting that critics often want to know the names of the donors behind his campaigns, Berman said he runs all his work “through nonprofit organizations that are insulated from having to disclose donors,” allowing “total anonymity” for his clients. Read More ›

Groups Tied to Nonprofit Leading SCOTUS Blockade Regularly Target AG Candidates

The Judicial Crisis Network (JCN) is making news these days as the main conservative group seeking to block President Obama’s ability to seat a replacement on the Supreme Court for late Justice Antonin Scalia. The nonprofit group, which does not disclose its donors, is spending millions on ads attacking nominee Merrick Garland and pressuring Republican senators to hold the line against even holding a hearing on his nomination. Read More ›

The Supreme Court Needs to Be Consistent on Corruption Law

On Monday, the Supreme Court handed down a decision upholding a Baltimore police officer’s conviction for extortion under a key federal corruption statute called the Hobbs Act. In the majority opinion, Justice Alito wrote that the officer’s agreement with an auto body shop’s owner to accept kickbacks in exchange for directing car accident repair work to the shop constituted extortion under the law. And despite the dispute among the Justices about whether the payer in the extortion scheme may or may not be part of the conspiracy, all Justices agreed that the existence of an agreement between the parties is what defined a conspiracy and differentiated it from other lawful relationships. Read More ›

Justice Breyer’s Concern Should Not Free McDonnell

In 2010, the Governor of Virginia, Robert McDonnell, accepted more than $100,000 in cash and luxury goods from a Virginia businessman, Johnnie Williams. That money bought Williams access to the Governor and the Governor’s help in encouraging the State to fund studies to benefit William’s business. And the Governor followed through on that offer of help, making subordinates available for Williams to lobby and prodding those subordinates for updates on progress on Williams’s requests. Read More ›

Ski Trip Fundraiser Doesn’t Raise a Lot of Money for Members of Congress

In early March, a quartet of congressional Republicans linked arms and formed a joint fundraising committee (JFC) that could nominally benefit each of their respective re-election campaigns. The new committee, called Team Telluride, ultimately allowed the members of Congress to hit the slopes in Colorado under the guise of fundraising for their political operations. Read More ›

Rubio: Just kidding, I’m not actually running for president

Last week, we wrote about how Sen. Marco Rubio (R-FL)—who is not running for president—responded to a letter from the FEC questioning his acceptance of excessive donations by transferring the money to his general election account. Read More ›

© 2015 Citizens for Responsibility and Ethics in Washington, all rights reserved.
• 455 Massachusetts Avenue NW • Sixth Floor • Washington, DC 20001 • 202-408-5565 •

Citizens for Responsibility and Ethics in Washington®, and the
“CREW | Citizens for Responsibility and Ethics in Washington” wordmark are registered trademarks.