The weekly meeting was led by Koch’s top lobbyist, Philip Ellender. He didn’t share the habits of a typical lobbyist. He lived in Atlanta, working out of Koch’s offices there, and commuted to DC by airplane. While most lobbyists arrived for work around nine thirty or ten in the morning after spending late nights at dinner parties, Ellender operated on Wichita time. He arrived early and spoke frequently on the phone with colleagues in Kansas. He was also a true believer in Charles Koch’s philosophy. “We’re a bit philosophically more pure,” Ellender explained, “in that we recognize that we are unabashedly free traders, that we believe in profiting by the economic, not political, means. We’re against cronyism. We’re against subsidies. We’re against mandates.” He peppered his speech with the vocabulary of Market-Based Management.
As Koch Industries became more politically influential, it became increasingly insistent that its lobbyists were pursuing a purely ideological mission. Koch’s lobbyists and public relations teams said their goal wasn’t to boost Koch Industries’ profits, but to champion the ideas of freedom and prosperity. Ellender and others were quick to highlight the times when Koch lobbied against subsidies or tax breaks that might benefit the company. Still, Ellender and his team focused overwhelmingly on the issues that did matter to Koch’s business, such as arcane rules about chemical safety, rate billing, and taxes on oil companies. Koch Industries also accepted the subsidies and tax breaks that were in place for it—Ellender said that refusing to do so would put Koch at an unacceptable disadvantage to its competitors.
For all the talk about ideological purity, Ellender’s operation reflected a more complicated reality. The lobbying business didn’t operate along clean partisan lines. There was a cartoonish image of a Washington lobbyist that most Americans held in their mind—the image of a well-dressed influence peddler who took politicians out to expensive dinners and cocktail cruises on the Potomac River. With enough steak dinners, enough cruises, and enough campaign contributions, the thinking went, any politician eventually succumbed to the lobbyist’s wishes. If this view of lobbying was ever accurate, it was certainly irrelevant by 2009. The reason for this was structural: the number of corporate lobbyists had exploded over the previous thirty years. Thousands of lobbyists were trying to push their message, but the messages could only be received by a very narrow audience. There were only 435 members of the House of Representatives and 100 members of the Senate, a total of 535 channels into which all of America’s special interests were forced to funnel their message.
The competition for those channels was more intense with each election cycle. In 1983, groups seeking to influence Washington policy spent about $200 million. By 2002, these groups—including corporations, labor unions, and advocacy groups representing retirees or environmental activists—spent $1.82 billion on lobbying, a sevenfold increase. By 2010, spending on lobbying had nearly doubled again to $3.55 billion. And this figure captured only a share of all lobbying expenditures—the share that was reported under public disclosure laws, which didn’t account for campaign contributions or issue-related advertising.
The rise in lobbying spending was not spread evenly across interest groups. Corporations and business groups far outspent other interests, like labor unions and consumer advocates. By 2012, corporations, trade associations, and businesswide associations were responsible for 78 percent of all lobbying expenditures, according to an analysis by the political scientist Lee Drutman. Business interests outspent other interest groups by a ratio of 22 to 1 in 1998, and 35 to 1 in 2008, Drutman found.
Even within these ranks of big corporate spenders, Koch Industries stood apart. The biggest corporations far outspent everyone else. About 90 percent of all US corporations did not even have one full-time lobbyist, and were only represented through trade associations. The biggest companies, like Koch, had a significant advantage.
In this environment, the primary job of Koch’s lobbyists was to gather and analyze information. Inside information was perhaps even more important in the market for influence than it was in the market for crude oil. Congress was an impossibly opaque system, a complex pipeline network of policy ideas that flowed between 535 offices in the House and Senate. Minute-by-minute updates on the inner workings of Congress were extraordinarily valuable, and out of reach for most companies. Koch’s lobbyists, like most other corporate lobbyists, spent their time gathering detailed intelligence. They determined which bills were originating from which offices, which bills had momentum and which didn’t, which politician needed help with a campaign and where that politician stood on issues that were important to Koch. This need for inside information explains why so many lobbyists are former congressional staffers. The former staffers have personal relationships with lawmakers and their staffers. They know which bills will be debated and moved forward through the system. A lobbyist’s value comes just as much from knowing about this process as it does from being able to influence it.
Ellender’s team was small, considering the size of their job. Koch Companies Public Sector had only five full-time registered lobbyists in 2009. The defense contractor Lockheed Martin, by contrast, had an in-house team of thirty lobbyists that year.
Ellender’s permanent team of lobbyists knew a great deal about Republicans in the House and Senate. Koch Industries had given generously to Republican candidates and conservative causes over the years—in the 2008 election cycle, Koch Industries gave $1 million to Republicans and just $186,500 to Democrats.
When Ellender and his team met in 2009, they needed to figure out a way to learn more about the newly empowered Democrats. This might seem like an impossible task for Koch’s small cadre of lobbyists—the entire Koch team could fit around the conference table, with chairs to spare. But their lobbying power was bigger than their numbers might suggest. Each Koch lobbyist was like the regional manager of a franchise. They built expertise on certain policy issues, like climate change legislation or derivatives trading, and they had the ability to hire contractors from outside firms if they needed to beef up staff. This allowed Koch to build up or reduce its expertise on different topics as they arose in Congress. Sometimes, the outside contractors joined Koch’s team for its Monday meetings.
One of the lobbyists at Ellender’s meeting table was a woman named Kelly Bingel, a contractor with Mehlman Vogel Castagnetti, a bipartisan lobbying shop. Firms like Mehlman Vogel were a shock absorber that protected corporations from populist passion. When conservatives took over Congress, Mehlman Vogel hired out its Republican lobbyists to help negotiate the new environment. When liberals took over, Mehlman Vogel hired out its Democrats.
Koch Industries first retained Mehlman Vogel in 2007, when Democrats gained control of Congress, paying the firm $10,000 a month through 2008. By the end of 2009, Koch was paying the firm $20,000 a month and retaining thirteen of its lobbyists, including Bingel. She was a former staffer for Senator Blanche Lincoln, the Arkansas Democrat, and was on a first-name basis with many Democratic senators and staffers.
Bingel was part of a hidden political movement in 2009 that could be called “Democrats for Koch Industries.” She spent time hanging around the cheap congressional cafeterias, like the one in the basement near Jonathan Phillips’s office. When Bingel saw a staffer she knew, she sat down and traded gossip. She spent time on the phone, collecting tips. When her staffer friends wanted to get out of the office, Bingel took them out to lunch. Bingel became a liaison between Koch Industries and the liberal politicians whom the company had spurned for so many years. “My job was to introduce them to Democrats,” she said.