The Wolves of K Street (book review)

We met on a hot summer night to discuss The Wolves of K Street, an insider’s look at the history, trends and players in the lobbying and influence industry.  These forces influence government at all levels, but this book focused on the worst of the players inside the Beltway. 

The writing was choppy, time-lines and themes disorganized, but the authors’ underlying research and insider details were impressive.  What the book lacked in style, it made up for in content.  And stories.

The book's leader, Bill, was unable to attend, but sent us a list of discussion questions, so was he with us in spirit.  The first queried how many of us had an exposure to lobbying at any level.  Pete had been chairman of his retail store PAC, representing over 100,000 stores, so he described his own insider’s view (including fun nights out on the town with John Boehner and other notables).  His work focused on advocacy through  education, always sprinkling money on both sides of the aisle, with marginally more to incumbents, in deference to their power.  

Doug had been involved early in his career in the public utility sector, again focused more on education as advocacy than the cocktail parties and overt political power games described in the text.  My own tangential experience included a roundtable discussion on the National Flood Insurance Program, where I sat next to two Liz Warren assistants.  My focus was on risk assessment and program sustainability, theirs more interested in pricing relief to subsidize consumers.  Perhaps a coastal real estate lobbyist was lurking around the corner!  Finally, Chuck recalled that Black, Manafort and Stone were the big dogs in DC when he was in law school there, and not much older than he was.  The book had explained how they all started breaking molds and  scheming subterfuge when they were young, clever, adaptable firebrands, at the top of the game.

While many lobbyists perform important functions bringing insight and perspective to the political arena, the book focused on the wolves.  Bill asked us to name our most despicable characters: 'Whom would you choose first to strangle with their thousand dollar silk neckties?'  In no particular order we focused on these players:

I chose Tony Podesta, whose brother John was Bill Clinton’s Chief of Staff and close advisor to Barack Obama.  After his divorce from business partner and wife Heather, and subsequent collapse of his firm, he withheld personal financial support such as placing his art collection as collateral for a critical line of credit for the firm.  His treatment of the firm as a piggybank and its employees as tools was beyond disgraceful. This treatment paled in comparison to his treatment of clients and others, tip of the iceberg.

Roger Stone’s disinformation campaign in a grade-school election reflected his early mastery of ‘rat-fucking’, techniques to weaken opponents based on actual or fabricated impropriety.  Ironically, the gossip around Mr. and Mrs. Stones’ DC swinger parties that Jerry Falwell’s ascendant Moral Majority used to run Stone out of town, was true.  

Evan Morris was an early character, mentored by the legendary Tommy Boggs.  His work extending Genentech’s FDA approval for its ineffective cancer treatment earned the company a billion dollars, enough such that a $500,000 donation to the Clinton Foundation took only a phone call.  His suicide at his swanky Robert Trent Jones golf club as his world came careening down elicited little sympathy from our group.

Paul Manafort cashed in on his discovery that foreign influence earned a premium for the reputational harm to lobbying firms.  We learned about FARA filings (Foreign Agents Registration Act). Two examples jumped out: his relief that the early morning banging at his door was the the FBI, not a Russian oligarch’s goons; and Trump’s call to Paul that his silence that put him in prison showed that he "was a true man". His silence also got him a pardon.

Lee Atwater was the Babe Ruth of negative politics back in his day.  Brilliant, insightful, ruthless, and effective (winning is everything), he died trying to find repentance through God.  

Tommy Boggs, the son of powerful Louisiana Congressman Hale Boggs, was an early wolf for whom you have to give at least a grudging respect.  His close ties with the trial lawyers association (ATLA) was instrumental in killing the Clintons' health care bill because proposed medical malpractice limits might have derailed the 'med mal' gravy train.  His firm Patton Boggs developed the famous ‘Harry and Louise’ ads that killed this generally popular health care initiative..  Chuck commented that he’d love to have gone duck hunting with Tommy on the Eastern Shore. Hard to disagree:  Alcohol, Tobacco, and Firearms. Who's bringing the chips and salsa?

The theme on the demise of all these characters was mostly pure Schadenfreude.

Drifting from the book itself, we turned to the question of aggregation vs. dispersion of political power and its effect on the social fabric more broadly.  The book chronicled the supersession of federal over state power from the mid ‘60’s to the mid 70’s, driven in part by the accumulation of decades of business "externalities" - costs that companies off-load from their income statements to others, often to society broadly - like air and water pollution, when business had been less constrained by government.  The Clean Water Act, Endangered Species Act and the creation of the Environmental Protection Agency (EPA) began to quantify and charge back environmental externalities. The Truth in Lending Act and Poison Prevention Packaging Act asserted federal oversight in other industries as well.  From this newly discovered influence by grassroots environmental and consumer advocacy groups emerged a realization - by politicians - and grudging recognition - by business - of the federal government's breadth and depth of economic power.  Profits from the S&P 500 businesses - big business - declined some 30% over this transition with the new socially focused legislation as many former externalities were priced in.   Concurrent high oil prices compounded the losses and stagflation came to America.  Business took notice, and began to buy influence, through the professionals on K Street. With so much at stake, influence had become a necessary, if not good, investment.

But not all businesses understood the extent of this emergent power. The tech industry had been allowed to evolve without conventional regulatory oversight for years when Bill Gates got summoned before Congress in 1998.  His failure to pay sufficient deference to congressional inquisitors cost Microsoft dearly over the next two decades.  Google made the same mistake a decade later, but also learned its lesson, becoming one of K Street’s most generous and effective forces.

With the impact of federal power on business and the economy today, Rick wondered aloud how politicians can even afford to live in DC on a congressional salary, particularly with so much money at stake with every new regulation, two or more sides angling for regulatory protection or regulatory relief.  We agreed that big business can afford to pivot to compliance, while smaller businesses - with its smaller voice - often struggle under new regulatory burdens.  Politicians meanwhile are always laser focused on the next election.  And that means money. 

On this topic we drifted into the fantasy land of term limits, but what politician would ever allow an institutional collar on their own compounding power?

For a historical perspective, Doug cited James Madison’s admonition from the Federalist Papers that one danger of democracy was ‘factions’.  Individual states had their own interests. Representatives would need to cultivate competing interests to become elected.  Today, lobbyists can supercharge any faction …with enough money.

Our discussion moved onto the balance between capitalism and government oversight, the spectrum of business ownership - where innovation and property rights are dominant, vs. stakeholder culture, where employees, customers, and society's broader interests prevail. Far above the street level of conflict lies a harmony of oppositions that eventually balances our world. The balance point is impacted by paid influence.

Foreign influence has emerged more recently as a major source of K Street funding.  Qatar is the biggest player today, and not only in politics but through its generous donations to our top educational institutions, media hubs, and most influential cultural centers.  For a more detailed view of Qatari influence and its role in undermining western institutions, read the article in The Free Press:  https://www.thefp.com/p/how-qatar-bought-america-9df or listen to Bari Weiss’s 'Honestly' podcast here.  https://www.thefp.com/p/how-qatar-bought-america-f28,

A final thought: Remember this book was about the wolves of K Street, not the many qualified and dedicated representatives of their industries, visiting the center of power to educate congressional aides and their elected bosses how things in the real world work.  Lobbying is a necessary act in a complex world ruled by elected politicians. Don’t paint them all as wolves.  But nor should we ignore the influence of those wolves on our culture, our freedom, and our collective direction.