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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. 

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