How Did Corporate Lobbying Become So Powerful in Washington DC?

What is the True Story Behind the Rise and Fall of K Street Lobbyists?

Discover the history of corporate influence in Washington DC with this review of The Wolves of K Street. Explore the rise and fall of power brokers like Tommy Boggs, Paul Manafort, and Tony Podesta, and learn how lobbying tactics evolved from the 1960s to the modern era.

Want to understand the full scope of how big money continues to shape government policy? Read the full article to dive deeper into the tactics, scandals, and modern shifts in the lobbying industry.

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Behold the lobbyist: that silver-tongued figure clandestinely pulling the levers of power. In this detail-rich study of half a century of influence-peddling, journalists Brody and Luke Mullins paint a portrait of K Street denizens that is even more craven than the stereotype. They describe the colorful careers of such master influencers as Tommy Boggs, Lee Atwater, Paul Manafort, and Tony Podesta. While each was associated with a particular political ideology, their true motivations seemed to be money and power. This depressing but important tale will engage readers of all political stripes.

Take-Aways

• The modern age of corporate lobbying began in the 1960s.
• Tommy Boggs helped defeat a proposed Federal Trade Commission regulation.
• During the Reagan years, the firm Black Manafort became a Republican power broker.
• In the late 1990s and early 2000s, lobbying firms saw their revenues soar.
• The left had its own power brokers, most notably, Tony Podesta.
• Paul Manafort’s high-flying empire crashed in dramatic fashion.
• Podesta’s firm spiraled out of control, too.
• Donald Trump ushered in a new era for lobbyists and big business.

Summary

The modern age of corporate lobbying began in the 1960s.

Tommy Boggs — a Washington influencer so smooth that he became known as the “King of K Street” — played an outsized role in creating the modern-day lobbying industry. Boggs gained entry into the halls of power through his family: His father, Hale Boggs, had been a high-ranking Congressman before he died in a plane crash in Alaska in 1972. The elder Boggs was a big-government Democrat who helped create a variety of new regulatory agencies, including the Environmental Protection Agency (EPA) and the Occupational Safety and Health Administration (OSHA). The younger Boggs, on the other hand, worked on behalf of free markets and looser regulation. Tommy Boggs operated in a world of duck-hunting junkets and political action committee contributions. “I love the game,” Boggs once said in an interview.

“Tommy acquired the influential friends, interpersonal gravitas, and political wisdom needed to broker complex legislative compromises.”

Tommy Boggs entered lobbying in the 1960s, when this brand of influence-peddling was in its infancy. In 1961, just 130 US companies used lobbyists, and those firms tended to operate in defense contracting, broadcasting, or telecommunications — all tightly regulated sectors. Generally, US companies weren’t all that interested in what happened in Washington, DC. Landmark legislation such as the 1964 Civil Rights Act and the bill creating the EPA swept into law with little corporate input. But the hands-off attitude changed dramatically in the latter half of the 1960s, partly because of activist Ralph Nader’s criticism of the auto industry. Nader was such a threat to the status quo that he found himself under constant surveillance by operatives hired by General Motors, which hoped to kill the National Traffic and Motor Vehicle Safety Act. That 1966 law kicked off a more-than-decade-long period of more robust regulation, spurring corporate America to invest in lobbying.

Tommy Boggs helped defeat a proposed Federal Trade Commission regulation.

This rule, proposed in 1977, would have cracked down on the growing practice of advertising high-sugar foods to children. Boggs represented Mars Inc., the candy company. He built a coalition of rival companies opposed to the rule, raising $30 million to fight the FTC regulations. The influence campaign paid off when The Washington Post published an editorial deriding the FTC for seeking to become America’s “National Nanny.” Building on this momentum, Boggs successfully lobbied the congressional committees that controlled the FTC’s funding to cut off the money the agency needed to enforce its proposed rule. The take-away for US regulators was clear: Antagonize corporate interests at your peril.

“After 15 years on the defensive, corporate power was on the march.”

By the late 1970s, a new breed of fire-breathing young conservatives had descended on Washington. Their goal was to reverse what they viewed as the leftward tilt of American politics since the 1930s New Deal. This cadre included Lee Atwater, Charlie Black, Roger Stone, and Paul Manafort. Atwater rose quickly — in 1988, he helped George H.W. Bush win the presidency by painting his opponent, Michael Dukakis, as a soft-on-crime liberal. Atwater spearheaded an ad campaign that told voters about Willie Horton, a Black man and a convicted murderer who had raped a woman while on furlough from a prison in Massachusetts; Dukakis was governor at the time. The hardball tactic propelled Bush to a come-from-behind victory. Atwater died young, succumbing to brain cancer in 1990. Just before his death, he apologized to several individuals for his scorched-earth tactics.

During the Reagan years, the firm Black Manafort became a Republican power broker.

While Black, Manafort, Stone, and Atwater were equal partners in their K Street operation, people in Washington referred to the firm as Black Manafort. The upstart influencers did a little of everything — lobbying, campaign consulting, and public relations. The firm soon represented a who’s who of clients: media mogul Rupert Murdoch, tycoons Lee Iacocca and Donald Trump, financiers Ron Perelman and Carl Icahn. The young stars of the firm built a hard-charging, hard-partying culture, and they often ran afoul of the usual rules about ethics. Black Manafort helped build the foundation for Fox News and Trump’s first foray into politics.

“What emerged was the signature political influence firm of 1980s Washington — an amalgam of traditional lobbying, modern electioneering, and old-fashioned hustle.”

Black Manafort undeniably got results. The firm helped Perelman and Icahn fight off regulatory scrutiny of major deals. Black Manafort could save military defense contracts the Pentagon wanted to kill, and the company was instrumental in deregulating the natural gas industry. Black Manafort did well financially: In the 1980s, the fee for a single meeting between an overseas oil company and the firm was $40,000. Black, Stone, and Manafort drove fancy cars, sported expensive clothes, and belonged to exclusive clubs.

In the late 1990s and early 2000s, lobbying firms saw their revenues soar.

By the late 1990s, Tommy Boggs’s firm, Patton Boggs, had a client roster that included United Airlines, Time Warner, and Bristol-Myers Squibb. The firm employed 140 workers, and its revenues jumped from $15 million in 1998 to $30 million in 2003. Lobbyists drank openly on the job — a female employee even delivered drinks to workers’ desks during the day. The boozy culture attracted ambitious people willing to bend the rules.

“Firms like Patton Boggs became indispensable sources of campaign cash for lawmakers, giving its lobbyists greater clout in making federal policy.”

The rivers of cash flowing through the political system soon grew unseemly. During the 2000 presidential election, big donors such as Microsoft and AT&T made $1 million in “soft money” contributions, exploiting a loophole in campaign finance law: After the Watergate scandal, Congress limited the degree to which corporations could fund individual political candidates, but it allowed companies to donate unlimited sums to political parties. In 2002, the McCain-Feingold Act turned off that spigot of cash. However, the reform only served to empower lobbyists. Members of Congress now needed to do their own fundraising. Firms such as Patton Boggs quickly ascertained that lobbyists could win lawmakers’ loyalties by bundling dozens or hundreds of $500 contributions.

The left had its own power brokers, most notably, Tony Podesta.

Podesta was the brother of John Podesta, former chief of staff to President Bill Clinton. Tony was particularly adept at rallying public support to influence legislation. In 1994, for example, Podesta represented California poultry farmers in a fight against Tyson Foods, which had persuaded regulators to allow them to label a chicken as “fresh” even if it had been previously frozen. In one publicity stunt, Podesta invited Wolfgang Puck to Capitol Hill, where the celebrity chef knocked over bowling pins with a bird labeled “fresh.” Over the course of his lobbying career, he represented tech and biotech companies and built a firm with nearly $50 million in annual revenue. Podesta raised money for Hillary Clinton, Nancy Pelosi, and Chuck Schumer, and he became a critical link between 21st-century Democrats and the deep-pocketed giants of Wall Street and Silicon Valley.

“Although Tommy remained the quintessential inside operator, Podesta preferred the advanced outside tactics of the modern influence peddler.”

Podesta became a prominent art collector, a passion that started when he was volunteering for Ted Kennedy’s presidential campaign in 1980. The campaign persuaded artists like Andy Warhol and Robert Rauschenberg to donate limited-edition prints. The campaign could claim the works were worth only a few hundred dollars each but sell them for thousands. As Kennedy’s campaign ran out of cash, Podesta found himself paid in works by famous artists. Podesta transformed into a serious collector, amassing enough art that he often lent his pieces to prestigious museums.

Paul Manafort’s high-flying empire crashed in dramatic fashion.

Manafort was pushed out of Black Manafort in 1995 for misusing company funds. Newly independent, he began to court overseas despots, including Viktor Yanukovych, the pro-Moscow leader of Ukraine. Manafort and Yanukovych enjoyed a close relationship. The American lobbyist played tennis with the Ukrainian president, lounged at his 350-acre estate, and collected fees from Ukraine’s oligarchs. In exchange for $3 million for nine months of consulting work, Manafort hired pollsters and consultants and spruced up Yanukovych with a new haircut and wardrobe. Manafort also urged the candidate to lean into specious rumors about Ukrainian officials mistreating Russian-speaking citizens. Yanukovych was elected in 2006. Manafort’s reward during Yanukovych’s reign amounted to $60 million over a decade.

“By 2015, Manafort’s cash-flow bonanza in Eastern Europe had completely evaporated, touching off an acute financial crunch.”

Despite significant revenues, Manafort struggled to keep pace with his expenses. Yanukovych’s ouster turned off a crucial revenue stream. But Manafort had high-end tastes, with expenditures that included half a dozen luxury properties, three Land Rovers, a $21,000 watch, and a mistress. Meanwhile, Manafort had partnered with Podesta, to whom he owed hundreds of thousands of dollars. In 2016, Manafort joined the Trump team as an unpaid consultant. While the lobbyist claimed he just wanted to see Trump win, Manafort’s ulterior motive was to parlay a Trump victory into a financial windfall.

Manafort’s entry into Trump’s orbit quickly backfired: The New York Times reported on Manafort’s work with the unsavory Yanukovych, and Trump fired Manafort a few months before the 2016 election. In the influence-peddling power vacuum, Florida lobbyist Brian Ballard swooped in, making $100 million in four years by representing such clients as Amazon, Qatar, and GEO Group, the private prison operator. In 2017, Manafort was indicted for money laundering and other federal offenses.

Podesta’s firm spiraled out of control, too.

The high-profile marriage of Heather and Tony Podesta began to fray in the 2010s. The couple bickered over their art collection and luxury homes. Tony donated pieces to museums without Heather’s knowledge. During divorce proceedings, Heather subpoenaed Tony’s employees, which he viewed as an insult. He accused her of having an affair — and, perhaps most devastatingly, of being nobody before he made her a star. “Ms. Podesta’s career has risen meteorically since the parties’ marriage,” Tony’s attorney argued.

“In order to retain control of his lobbying firm and the art collection, he had to relinquish much of everything else.”

The couple concluded their divorce in 2014 and issued public statements praising one another. But the split clearly exacted a toll on Tony, who gained weight and became brutally short-tempered with his employees. As part of the divorce, Tony kept the firm and the art collection but handed over his homes and retirement savings, plus a quarterly cash payment of $200,000 to Heather. To generate cash, Tony took out a loan against his art. Amid the belt-tightening, Tony began to take on clients he previously would have rejected on moral grounds. After the divorce, the Podesta Group started doing business with Azerbaijan and South Sudan regimes. But Podesta’s lavish lifestyle outstripped his earnings, especially after the Manafort scandal tarnished Podesta’s image. In 2017, Podesta’s $50 million lobbying firm closed its doors.

Donald Trump ushered in a new era for lobbyists and big business.

When Trump took office in 2017, he vowed to sweep out the insiders and elites who, according to the new president, had supported the outsourcing of American jobs and otherwise undermined working-class prosperity. At the same time that Trump vowed to “drain the swamp” of influence-peddling, Democrats espoused the breakup of the tech giants and Wall Street banks that bankrolled blue candidates.

“Trump’s arrival in the White House would signal the unraveling of the pro-business consensus that had guided Washington policymakers for most of the prior four decades.”

The Trump era saw the downfall of Manafort and Podesta. It also drastically changed the tenor of the Republican Party’s relationship with large corporations. The pre-Trump GOP welcomed big business; the post-Trump party viewed large employers as enemies of the working class. In Florida, Republican governor Ron DeSantis battled with Walt Disney Inc. over the company’s position on gender identity and sexual orientation.

“As business interests grow alarmed by the groundswell of anticorporate populism in Washington, influence peddlers are confronting the most hostile political environment in a generation.”

Some Republican legislators even sided with Democrats over issues such as blocking corporate mergers or allowing the federal government to demand the heads of failed banks pay back compensation received in the lead-up to an institution’s demise. Marco Rubio and J.D. Vance, two conservatives in the US Senate, supported pro-union measures. The new ideological tone matched changes in the flow of campaign contributions. Republican members of Congress began receiving less of their funds from big donors and more from individual contributors — often everyday voters — expressing support for a candidate’s position.

About the Authors

Brody Mullins is an investigative reporter in the Washington, DC, bureau of The Wall Street Journal, where he led the team that won the 2023 Pulitzer Prize for investigative reporting. Luke Mullins is a contributing writer at Politico magazine.