City Council and the soda tax, a ‘lobbyist employment program’

The $1.4 million spent on lobbying in the first quarter by the American Beverage Association is nearly three times as much as the overall amount spent by everyone else.

The caucus before Thursday morning City Council sessions is like a cocktail hour. Well-dressed men and women make small talk and hand out business cards. Nobody arrives on time, and everyone is there: Council members, staffers, hangers-on who have no reason for being in the room except for wanting to be in the room.

Amid the crowd every week, there are at least a handful of lobbyists. This caucus is one of their most important times of the week. Access is unfiltered. Anybody can walk up to a Councilperson or staffer and say anything they’d like. Lobbyists can come back week after week to cultivate relationships and remind the lawmakers over and over whatever message a client wants to share.

In Philadelphia right now, the dominant message has been the soda tax. The American Beverage Association spent $1.4 million on lobbying from the beginning of the year through March. But lobbyists are here all the time. The profession is bigger in Washington and Harrisburg, but not limited to there. Philadelphia has full-timers who work for a variety of clients, others who are in-house lobbyists for some of the city’s biggest companies and nonprofits and plenty of attorneys and others who dabble — some of whom might not properly register as lobbyists.   

As one lobbyist put it, “The City of Philadelphia is a $5 billion enterprise. There’s a fight going on over that money.”

Around a dozen lobbyists generally show up for the caucus sessions and City Council hearings. At a recent Thursday caucus session, some of the lobbyists present include those representing Wawa, Penn, AT&T and, of course, both sides of the soda tax.

The thought of lobbying might bring up images of handshakes in City Hall’s dark corridors and power lunches at The Capital Grille, but the job involves more digging through the weeds than glamour. They sit through the “boring shit” so their clients don’t have to. They make the connections their clients can’t make through donations — sometimes as much as several thousand dollars to individual council members — and through building face-to-face relationships. Elected officials probably won’t grant favors (say, sitting out votes) because of donations, but they might if they know and trust a certain person.

City Hall features a small pool of stakeholders, and lobbyists have broken into the inner circle from years spent lobbying or from past jobs. Lauren Vidas, president of Hazzouri & Associates, worked as a City Council staffer and then for the Nutter administration. Her father, Edward Hazzouri, has worked in public strategy for decades.   

“This city is difficult to navigate politically and from a business perspective,” Vidas said. “Ninety-eight percent of the time I’m not trying to fight something. I’m trying to make the outcome better for everybody. I think about my role more as a mediator and voice of communication between legislators and folks that are going to be impacted by the bill.”

The other 2 percent of the time, there’s something like the soda tax (or in previous years, the smoking ban and the proposed sale of PGW to UIL). Hazzouri & Associates has been lobbying for the American Beverage Association, which opposes the soda tax.

Judging by how money flew around from January through March, the soda tax issue has consumed City Hall. The $1.4 million spent in the first quarter by the American Beverage Association is nearly three times as much as the overall amount spent on lobbying by every other entity that paid for lobbying in Philadelphia.

One City Council staffer noted people didn’t realize a soda tax was back in play earlier this year because lobbyists have been showing up almost every year to talk about the soda tax since former Mayor Michael Nutter first proposed one. In 2014, when a soda tax wasn’t an issue, the ABA still spent about $12,000 on lobbying. An inside joke among some City Hall employees is that the soda tax is a lobbyist employment program.

The great majority of the ABA’s money has gone toward indirect lobbying, things like ads or phone calls used to sway legislators by influencing the general public. Councilman Curtis Jones Jr. said during a period in early April his office was receiving 30 letters and 10 to 15 phone calls daily regarding opposition to the soda tax, and he attributed it to the indirect lobbying.

Direct lobbying is when lobbyists speak to public officials about specific issues. Most Council people and their staffers meet with lobbyists. Mustafa Rashed, president and CEO of Bellevue Strategies, said brief interactions rather than full-on meetings are often the most effective way to communicate, given Council members are generally stretched for time.

As the budget nears and the soda tax’s debate continues, these interactions will pick up, as will the possibility for bending or breaking Philadelphia’s lobbying regulations. It wasn’t until 2011 that Philadelphia enacted any rules regarding lobbying. Since then, companies, organizations or nonprofits spending more than $2,500 in a quarter on lobbying must register. So must individual lobbyists who receive $2,500 or more in a quarter to speak to a public official about a specific issue. Individuals are barred from lobbying a political entity they previously worked for until a year after their employment ended.

Politicians don’t need to disclose communications with lobbyists. They only need to keep track of gifts they receive from them, and gifts are rarely given.

The registered lobbyists who spoke for this story — some on background and some on the record — agree there’s a possibility lobbying regulations are violated by people who don’t register. Some thought the problem was more acute, especially at times when major legislation like the soda tax is being discussed. They believe some attorneys who work at firms that also lobby don’t register when they should. The other example could be community members representing small nonprofits or associations who aren’t well-versed in Philadelphia lobbying regulations and don’t know any better.

Either way, the city is not well equipped to catch any wrongdoing. The onus is on the lobbyists to report themselves, and there’s no mechanism to find those who don’t. Even the politicians aren’t always sure who they might be talking to.

“I don’t know who’s a lobbyist or who’s an interested businessperson,” Councilwoman Jannie Blackwell said. “I don’t know who’s who — who’s a consultant, who’s somebody, who’s somebody else. I don’t know who they are.”

Jones Jr. said, “I do. Because I ask. I say, ‘who do you represent?’”

Blackwell said “you have people all over the place” during budget season. Anybody who attends City Council hearings the next few weeks will be able to see that.

The lobbying that’s going on will be more discreet. As the soda tax likely gets decided, we won’t be able to see exactly what kind of money influenced its fate or where the money came from. The next quarterly reports for lobbying aren’t due until the end of July.

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