Lobbyist Financial Trends and Acts for Infrastructure, Semiconductors, & TikTok

In the complexities of political policy proposals, corporate lobbying plays a significant role in shaping the legislative agenda. For as long as politics has existed, vested interests have sought to influence decision-makers. But it was not until the Lobbying Disclosure Act of 1995 that the activities of lobbyists became subject to public scrutiny, providing further insight into the American legislative system.

In this article, we explore corporate-lobbyist expenditures and potential implications for the democratic process. As a FactSet partner, LobbyingData.com offers lobbying-contracts data for investment research (alpha), trends/growth signals, competitor intelligence, due diligence, and business intelligence.

A Brief History of Lobbying

There is a continual debate about where the term “lobbying” originates. The most widely accepted origin story attributes it to the 18th President of the United States, Ulysses S. Grant, and his purported private dealings with special interest groups in the lobby of the Willard Hotel in Washington, D.C.

With the passing of time and the increasing complexity of policy issues, lobbying has transformed into a sophisticated industry. The Lobbying Disclosure Act of 1995 was a watershed moment, making it mandatory for lobbyists to disclose their activities and expenditures. Transparency was the driving force behind this legislation, with lawmakers seeking to curb potential corruption and ensure public accountability.

The Scale of Lobbying in Washington

Since the passage of the Lobbying Disclosure Act, the lobbying industry has continued to grow at an astonishing pace. In 2022, lobbying expenditures exceeded $4.88 billion, with nearly 13,000 registered lobbyists working to influence the U.S. government on behalf of various clients and industries. Compared to 1999—our earliest readily available view into the world of lobbying—when lobbying expenditures totaled $1.67 billion, this explosive growth underscores the value companies and interest groups attribute to lobbying in realizing their strategic goals.

U.S. Federal Lobbying Expenditure Snapshot, from 1999-2022 (Updated March 2023)

Source: Lobbyingdata.com

Why Firms Lobby

Corporations, organizations, and special interest groups typically lobby to gain a competitive edge, safeguard their interests, or champion policies that align with their organizational objectives. Specifically, lobbying can shape the drafting of congressional bills (S. and H.R. bills), secure government contracts, or assist companies in obtaining favorable tax treatment.

By influencing lawmakers, firms can create a more favorable operating environment, which ultimately could translate to higher profitability and a stronger market position. In 2022 alone, publicly-traded companies' lobbying expenditures exceeded $1.6 billion, while non-public entities (including private firms, NGOs, special interest groups, and state and local governments) contributed an additional $3.28 billion.

Research into lobbying disclosures becomes most insightful when we delve into the “specific lobbying issues” that lobbyists submit in their quarterly lobbying reports. For example, consider the following lobbying report filed by Google, Inc., in 2022:

Google reported spending $70,000 on this lobbying engagement, employing a reputable lobbying team to advocate to Congress, the USDA, the Department of Transportation, Federal Aviation Administration, and Federal Maritime Commission. Based on this information, one could deduce that Google had a keen interest in legislation addressing anti-competitiveness and sought government contracts through the National Defense Authorization Act.

Lobbying on the Infrastructure Act, CHIPS Act, and No TikTok on Government Devices Act

To understand the impact of corporate lobbying on politics, let's examine a few recent bills that received significant attention from lobbyists: the Infrastructure Investment and Jobs Act, the CHIPS Act, the No TikTok on Government Devices Act, and the recent RESTRICT Act.

Infrastructure Investment and Jobs Act

The Infrastructure Act, signed into law in 2021, is an investment in American infrastructure, focusing on transportation, broadband, and clean energy. With billions of dollars at stake, industries such as construction, telecommunications, and renewable energy actively lobbied for favorable provisions. Lobbying efforts by these sectors were aimed at securing funding and shaping regulations that would benefit their businesses.

Our analysis uncovered that lobbying expenditure for the bill, based on over 5,600 lobbying contracts referencing the legislation, exceeded $1.06 billion. The National Association of Realtors, the Chamber of Commerce of the USA, and Amazon led the charge. Companies such as Oracle lobbied on niche issues relevant to their operational practices, including cloud and emerging technologies in the space domain, cybersecurity, and matters related to the Internet of things, among others.

CHIPS and Science Act

The Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act aims to invest in domestic semiconductor manufacturing and research to maintain U.S. technological leadership in the semiconductor industry. Semiconductor companies and their trade associations lobbied vigorously to secure financial incentives and research grants, arguing that a strong domestic semiconductor industry is vital for national security and economic competitiveness.

Consequently, the CHIPS Act earmarks billions of dollars to bolster the conception and production of semiconductor technologies within the United States. Our analysis of over 1,600 lobbying reports referencing the CHIPS Act revealed that lobbying expenditure on these contracts surpassed $518 million, spearheaded by Verizon, Qualcomm, and the National Association of Manufacturers. The semiconductor industry's lobbying undertakings were instrumental in securing this funding, underscoring the significance of lobbying in molding public policy.

No TikTok on Government Devices Act and the RESTRICT Act

In 2020, the No TikTok on Government Devices Act was introduced and later included as Division R in the Consolidated Appropriations Act of 2023. This legislation forbids the use of TikTok on any federal government device. While only Bytedance, TikTok's parent company, specifically lobbied on the TikTok bill in their filing (spending $4.9 million), nearly 2,000 lobbying reports mentioned the Consolidated Appropriations Act of 2023. Lobbying spending on contracts referencing the bill reached an impressive $338 million, led by the likes of Bytedance, Meta Platforms, Lockheed Martin, and Altria.

More recently, the RESTRICT Act emerged in the Senate, which could authorize the Department of Commerce to ban apps or services posing a national security threat. The act has attracted significant public scrutiny, most notably for its potential to ban TikTok, so much so that it has informally become known as the TikTok ban. Monitoring lobbying reports after the bill's introduction, we discovered that since March 1, 2023, at least 15 companies sought lobbying firm representation concerning issues linked to the Restrict Act.

Curiously, most firms did not mention the Restrict Act by name in their lobbying filings but instead used language addressing issues connected to the act. For example, an electric vehicle company with a Chinese parent company lobbied with phrases such as "restrictions that could impact [company's] operations in the United States; issues associated with the use of those vehicles, including safety and data privacy." As the debate over potential risks posed by TikTok carries on, the undeniable influence of lobbying in molding the legislative response to these apprehensions remains evident.

Lobbying Expenditure on Lobbying Reports Mentioning 3 Bills (Updated March 2023)

Source: Lobbyingdata.com

Political Capital as an Intangible Asset

A critical question in the lobbying discussion is whether the financial resources devoted to lobbying efforts have a direct bearing on a bill's likelihood of passage. To explore this, we examine a statistical analysis performed on lobbying expenditures and bill passage rates since 1999.

The research team at lobbyingdata.com compared lobbying spending between bills that passed and those that did not. The results revealed a highly significant relationship between lobbying spending and the odds of a bill clearing Congress. Although many variables may contribute to a bill's passage, the outcome implies that a firm's financial investment significantly impacts the process. Put simply, higher lobbying expenditures correlate with increased chances of legislative triumph.

While acknowledging lobbying's role in a democratic system is essential, it also invites questions about the potential sway of money on the legislative process and what that means for democracy. In the realm of investing, some argue that political capital—quantifiable through data such as lobbying information—constitutes an often-neglected, intangible asset that could yield above-average returns.

Corporate lobbying is a multifaceted and powerful force within the U.S. political arena, carrying significant economic ramifications. Lobbying can influence public policy, defend industry interests, and spur innovation. However, it is imperative to ensure transparency and accountability throughout the process.

LobbyingData.com collects and analyzes complex government lobbying filings under the Lobbying Disclosure Act. This simplifies the process of deriving insights from the intersection of money and politics—whether it’s another variable in your research, a new input for your models, or another layer in your due diligence.

To learn more about our data and gain access to LobbyingData.com's exclusive compilation of historical lobbying data as well as the research within this article, please email contact@lobbyingdata.com or connect with us on LinkedIn.

This blog post has been written by a third-party contributor and does not necessarily reflect the opinion of FactSet. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.