Lawyers as Lobbyists: Regulatory Advocacy in American Finance
By Brian Libgober, Northwestern University and Daniel Carpenter, Harvard University
Regulatory agencies have increasingly taken on significant roles in policymaking. However, the mechanisms through which different entities seek influence over these agencies are not well understood. The reporting exemptions in the Lobbying Disclosure Act enable many powerful advocates to present their activities as legal representation rather than lobbying, allowing them to operate without accountability. By utilizing records related to lobbying activity generated by agencies, alongside financial reporting and personnel information specific to lawyers, as well as data from LinkedIn, we uncover a significant yet largely overlooked realm of regulatory influence-seeking. Regulatory lobbying stands apart from legislative lobbying, featuring distinct individuals and lobbying firms equipped with specialized expertise and unique networks. Our primary observations about the differences in regulatory lobbying are as follows: (1) the regulatory lobbying sector operates largely independently from the reported lobbying sector, with numerous regulatory advocates failing to register or disclose earnings that reflect their level of activity; (2) the count of unregistered regulatory advocates involved in the Dodd-Frank Wall Street Reform Act likely exceeds 150% of the registered lobbyists associated with that legislation; (3) the top regulatory lobbyists and law firms engaged in this arena experience income levels that far exceed that of leading reported lobbying firms (which are primarily law firms); and (4) preliminary calculations and advanced regression analyses suggest that total spending on lawyer-lobbying is several times higher than reported lobbying expenditures. We introduce the case of a specific lawyer-lobbyist and present a theoretical framework to contextualize these findings. Collectively, this research highlights neglected areas of political activity and illuminates significant, yet underexplored, aspects of political inequality.
