15 March 2009

GM, Chrysler Lobbying In Focus

As Originally Posted at The Wall Street Journal

Lobbyists will report next month how much they spent in Washington, D.C., in the first quarter, and recipients of government help like General Motors Corp. and Chrysler LLC are likely to come under scrutiny.

Spending on lobbyists by banks, auto makers and other companies that have participated in the Treasury Department's Troubled Asset Relief Program, or TARP, has become an increasingly sensitive issue in recent weeks.

GM, for example, spent more money last year on lobbying than any other TARP-funds recipient, according to OpenSecret.org. Chrysler ranked fifth overall, according to figures complied by the site, which tracks donor and lobbyist spending, among other things.

"It's very much become an issue," said Peter Peyser, a principal at Blank Rome, LLP, a government affairs firm. "Those are very hefty investments."

The next round of quarterly reports on spending on lobbying are due to the Senate Office of Public Records in mid-April.

Both GM and Chrysler increased their spending late in the year. Their CEOs and the head of Ford Motor Co. testified before both houses of Congress in November to make the case for a federal bailout, and then appeared again in December.

The money GM and Chrysler spent last year was on par with some of the big financial institutions like Citigroup Inc. and insurer American International Group Inc. that have also received substantial amounts of federal assistance, however.

According to OpenSecrets.org, GM spent $14 million in 2008, $4 million more than insurance giant American International Group, which spent $9.7 million, for example. Chrysler spent $5.8 million, according to the site, which tracks donor and lobbyist spending, among other things. That is around $2 million less than the $7.7 million spent by Citigroup.

Still, roughly three-quarters of the money Cerberus Capital Management – known for the former politicians in its ranks – spent on lobbying was on Chrysler. The private-equity firm's spending on lobbyists more than doubled between 2007 – when it acquired Chrysler – and 2008.

"There is significant, ongoing demand from legislators and government officials for education and information on Chrysler, its operations, products and future plans, including promoting advanced technology that responds to the nation's energy needs," a company spokeswoman said Friday.

Comment from GM wasn't immediately available.

Mr. Peyser said it is no surprise companies with so much at stake are spending so much. Moreover, the backlash to bailout spending had grown by the time auto makers arrived in Washington, D.C., to plead their case in November. They were too slow to realize they had a serious fight on their hands and are "probably ramping up on a weekly basis" right now, he said.

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