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Mapping the Influence of Lobbyists in Congressional Hearings in the Insurance Industry

Mapping the Influence of Lobbyists in Congressional Hearings in the Insurance Industry

Feb 19, 2014

By Kristin Oakley

This is where the magic happens.
This is where the magic happens.

 

We all know lobbyists have power in Congress. We hear about the fundraisers, expensive dinners, and vacations; but what happens within the walls of the Capitol to affect legislation? Do lobbyists have influence there? If so, how far does it reach? Monetary connections don’t automatically yield influence on policy decisions, but money has a way of talking, even when not everyone is listening.

Listening may be a tricky skill to cultivate in D.C., but hearings are a good place to start. A February 4th hearing held by the Housing and Insurance subcommittee of the Committee on Financial Services (FSC) begins to shed some light on how far the reach of lobbying is in this industry. Data trackers and online tools such as the Influence Explorer, Poligraft, and OpenSecrets.org provide the data that highlight financial and political connections between lobbyists and members of Congress; it just takes a little digging to see who’s who and where their money flows.

Insurance sector funds for Congressman Spencer Bachus (R-AL), for example, totaled over $1 million dollars. When seeking to map networks of influence in the context of this recent report, then, it behooves us to be especially attentive to tracking how subsequent legislation impacts the largest insurers in his district.

The hearing in question was held to review a report on insurance modernization released in December by the Federal Insurance Office (FIO), which is housed under the Department of Treasury. The report was commissioned by the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 to make suggestions on how to modernize the entire insurance industry, with the exception of health insurance, which is not monitored by FIO.

This report produced a hubbub for a couple of reasons: it was two years past deadline when it was released and no one knew what it was going to say. Though FIO doesn’t have any regulatory authority, the recommendations in the report could have a large impact on the insurance industry.

But what does this uncertainty have to do with lobbying? To understand that, it’s necessary to look at who was at the meeting, and where those people spend and receive their money.

There are 23 members of the FSC on the Housing and Insurance subcommittee, and they called 10 people in to serve as witnesses on two different panels. The first panel was comprised of only two people – both government employees – one of whom directed the report’s creation and the other who works for the Connecticut Insurance Department. The second panel consisted of eight industry experts.

Of these eight panelists in the second group, three are recognized lobbyists according to Sunlight’s Influence Explorer. Anthony Cimino of the Financial Services Roundtable, Gary Hughes of the American Council of Life Insurers, and Scott Sinder of The Council of Insurance Agents & Brokers have all worked as lobbyists for the insurance sector in recent years. The Financial Services Roundtable donated upwards of $25,000 each to the campaigns of several committee members.

Looking at who was in the room lets us know that three of the key witnesses potentially present a conflict of interest because of their work experience, but what about the money floating around? “Follow the money” is a saying for a reason.

Let’s start broadly, using data from OpenSecrets.org. The finance sector, which includes insurance and real estate, is the largest source of campaign contributions to federal elections.[1] For the 2012 election cycle, this sector contributed about $666 million – 68% of which was donated to Republicans. For the current 2014 election cycle, there have already been over $100 million in contributions from this sector (62% to Republicans).[2]

$100 million buys a lot of influence, but tracking that influence depends on finding out where that money goes. Plenty of the money goes to organizations that work towards broader bipartisan goals, but a good amount also goes straight to the campaigns of congressional members and candidates. The chart below shows how much of each subcommittee’s campaign money comes from the insurance industry.

 

Contributions from the insurance sector play a large role in campaigns.
Contributions from the insurance sector play a large role in campaigns.

 

Of the 60 members on the FSC, 55 received contributions from the insurance industry for their campaigns. The Center for Responsive Politics maintains a list of the top 20 members of the House who receive the most money from the insurance industry each year. Of these 60 FSC members, 11 were in this top 20 list on 2013 – this is an 83.33% increase from 2012, when only 6 committee members made the list.

 

Top 20 Members of the House who received the largest contributions from finance/insurance sector in 2013. Committee Members are highlighted in red.
Top 20 Members of the House who received the largest contributions from finance/insurance sector in 2013. Committee Members are highlighted in red.

 

Having documented who receives the money, now we must find out who’s giving it. We know it’s coming from the finance/insurance sector, but can we identify direct links between the witnesses and the committee members? It turns out, we can.

Each of the testifying witnesses represented an organization, and many of these organizations have deep pockets when it comes to congressional campaign contributions.  Excluding the witnesses that are government employees, eight organizations concerned with insurance regulation were represented. Again, of the 60 committee members, 44 received a campaign contribution from at least one of the witnesses’ organizations. Specifically, of the 23 subcommittee members, 18 received money from one of these organizations.

 

Many of the subcommittee members have received campaign contributions from multiple organizations with which the witnesses are affiliated.
Many of the subcommittee members have received campaign contributions from multiple organizations with which the witnesses are affiliated.

 

Using this hearing on FIO’s insurance modernization report as a starting point, we can begin to see how lobbyists exert their influence in Congress. It’s probable – and likely necessary – that legislation will come from the recommendations in this report, and we want Congress to have objective, unbiased sources when planning and proposing laws. Knowing how much money and presence industry lobbyists have in just this single hearing, can we as citizens trust that Congress is acting in our best interest and not that of insurance companies? We won’t know until legislation on this topic begins, but in the meantime, the available data suggests we should be watching carefully.

 


[1] Center for Responsive Politics, OpenSecrets.org, http://www.opensecrets.org/industries/indus.php?Ind=F.

[2] Center for Responsive Politics, OpenSecrets.org, http://www.opensecrets.org/industries/recips.php?ind=F&cycle=2014&recipdetail=H&mem=Y&sortorder=U.

All non-cited data comes from use of the suite of tools provided by the Sunlight Foundation including Influence Explorer, Poligraft, and Lobbying Registration Tracker.

Follow-up plans for expansion:

In addition, I would explore the impact of these monetary and lobbying connections on legislation as Congress proceeds in response to FIO’s report. I’m sure the FSC and specifically the Housing and Insurance subcommittee will propose some sort of legislation as a response to the report – or at least they are supposed to – which would give light to the impact of this report.

There is also more context to explore. I’d like to research the influence of insurance industry, in terms of lobbying practices, as compared to other industries as well as the historical role and practices of the insurance industry.
Finally, I would also like to see more summarization on the Lobbying Registration Tracker for comparing data, so that information like in which month/time period are the most registrations filed is available.

Feedback on Sunlight Foundation tools:

I mostly used the Influence Explorer and Poligraft to collect my data, and the only difficulty I had was with the specificity of search results. I think Influence Explorer would benefit from a more robust search function that doesn’t require such specific search inputs, so that people are easily able to find and highlight relevant information even if the name they have isn’t quite the same as the one Sunlight has used.

Also, I delved a bit into the House Staff directory and I think it’s missing some data. I was unable to view the staffers in Mark Sanford’s office. Perhaps I wasn’t searching correctly, in which case there might be a usability problem.