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In the spirit of the approaching holidays, we’d like to offer a heartwarming tale that carries an important moral. Or, at least, a story about earmarking that has to do with Christmas trees. Stay with us. Last year, Rep. Patrick McHenry (R-N.C.) earmarked $129,000 for a commercial development in a part of his district hard-hit by the dwindling textile industry. The development? The Home of the Perfect Christmas Tree, a Christmas crafts store named for a children’s book whose author donated the rights. Mitchell County officials hoped the money would go to fund small-business jobs for woodworkers and craftsmen. But McHenry carries the reputation of being something of a congressional Grinch, one who’s harshly criticized his colleagues’ use of earmarks in the past. That meant fellow members saw a chance to steal presents from underneath his tree. In an unusual move, the House voted publicly to kill the earmark while McHenry’s political critics reveled in the schadenfreude. Maybe you heard the jingle about him penned by the Democratic Congressional Campaign Committee to the tune of “O Christmas Tree”? (Sample lyric: “You pitch a fit on the House floor, but Christmas trees you do adore.”) Of course, in the vast river of congressional spending, McHenry’s earmark was a tiny rivulet. But the rush to stick coal in his stocking exposed some new realities when it comes to appropriations lobbying and earmarks. Although even earmark opponents will still back projects that bring pork to their districts, new transparency rules passed earlier this year mean that legislators can no longer hide their names when funding a Bridge to Nowhere, even if the earmark — like McHenry’s — is for a tiny amount. That has a ripple effect on K Street and puts appropriations lobbying on uncertain ground. Lobbyists and lawmakers are still gauging the full impact of the new disclosure rules. And while K Street’s biggest players aren’t rushing to shutter their appropriations practices, some are taking a second look — especially given the growing number of hoops to jump through and the flood of lobbyists who have begun doing approps work. Gregg Hartley, vice chairman and chief operating officer of Cassidy & Associates, says the value of simple appropriations lobbying contracts has dropped by 30 percent to 40 percent over the past 10 years. “We’ve seen a lot more competition there, and we’ve seen the average size of a project decline,” says Hartley. The firm’s business is now roughly 50 percent appropriations, compared to 60 percent to 70 percent 10 years ago. ENDING GOOFY EARMARKS? For critics of earmarking, the new rules are a welcomed change. “There have been some positive developments,” says David Williams of Citizens Against Government Waste. “It’s not perfect, but you do see members’ names next to projects. Now, does that mean earmarking is going to go away? No. They are still politicians, and they still want their pork.” Williams says he’s waiting for the major spending bills for next fiscal year to come out of conference before judging whether the enhanced disclosures will keep pork penned. The biggest casualty of earmark reform so far, says Steve Ellis, vice president of Taxpayers for Common Sense, has been “the goofy earmark. The ones that sound funny — they try very hard to make them seem less funny.” In other words, no more Perfect Christmas Trees — too high a chance of winding up on YouTube. But in response to reforms, companies and lobbyists have gotten savvier, Ellis says. For instance, companies make sure their footprints span multiple congressional districts and “shop” for space in the districts of powerful lawmakers. One example, first reported by The Washington Post last week: Concurrent Technologies, based in the Pennsylvania district of powerful Democratic Rep. John Murtha, with offices in the districts of House Appropriations Committee members. “The F-22 for the Air Force is being built in more than 40 states,” Ellis says, adding that companies have grown more sophisticated when it comes to hiring “gatekeeper” lobbying firms with relationships with specific lawmakers. ON THE DEFENSE Large lobbying firms in particular say appropriations work isn’t a point of emphasis these days. Often, they say, they just work on approps issues for big clients who use the firm on other matters. “It’s a tool in the toolbox for the client,” says John Simmons, a senior adviser at Akin Gump Strauss Hauer & Feld who specializes in appropriations and worked on appropriations issues as a House staffer. Signing up clients who just want earmarks makes less sense as the earmarks get tougher and more time-consuming to obtain, Simmons says. Lawmakers and staff members “need to be well up to speed, and if they’re going to have a smaller allocation, it had better be a great project that’s going to have a lot of economic impact. It’s not an easy sell any more,” Simmons says. Simmons and other lobbyists say it’s easier to win support for projects involving public clients, such as cities, towns and universities, than for private companies. Defense appropriations, too, is still a hot area for lobbyists, with large appropriations bills still awaiting action from Congress. Simmons, among others, reps defense contractor Boeing, which stands to benefit big-time from contracts tied to those bills. Boeing and other defense companies still get most of their work through federal contracts, and some firms, including the PMA Group, which was No. 15 on Legal Times‘ Influence 50 last year with $19.6 million gross revenue, specialize in defense appropriations. In response to questions about the percentage of the PMA Group’s work involving defense appropriations, Carmen Jacobs, a spokesman for the firm, e-mailed, “Business development (non-lobbying) has always been a significant portion of PMA’s Defense portfolio and that expertise is even more important now.” The key, most of the lobbyists say, is not letting appropriations work push out potential policy and regulatory clients. Tony Podesta, head of the Podesta Group, says his firm has never been, and doesn’t want to be, an appropriations firm. “We’ve tried to do some of it but not get overwhelmed by it,” says Podesta. “That’s proven in retrospect to be a good strategy; I think there’s less and less of it.” Still, the firm hired former House Appropriations Committee Communications Director John Scofield, a Republican, late last year. Podesta says the firm will take on appropriations clients but is picky about whom it represents. One example: The District’s Children’s National Medical Center, which lacks an obvious congressional champion, paid the Podesta Group $180,000 over the first half of the year. Another example is defense giant Lockheed Martin, which paid the Podesta Group $100,000 over the first half of the year. Cassidy’s Hartley and Stuart Van Scoyoc of Van Scoyoc Associates say they expect their firms to stay in the appropriations business, even if it becomes a smaller part of the overall portfolio. Van Scoyoc says he’s seen little push-back on rates, despite competition in the market, possibly because “we tend to be one of the more reasonably priced firms out there anyway. I don’t think we’ve seen a big change.” Van Scoyoc’s firm also represents Lockheed Martin, and it reported $40,000 in revenue from the company for the first half of the year. Van Scoyoc says the new rules and rigorous scrutiny tied to the appropriations process could actually help firms, such as his, that have a deep bench of lobbyists with appropriations expertise. “I think we’ll continue to do well,” he says. Less experienced lobbyists “are going to drop out pretty quickly.”
Carrie Levine can be contacted at [email protected].

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