Lobbyists Targeting State Attorneys General

He runs a business helping corporate clients influence government policy, but former Nebraska Attorney General Donald Stenberg (R) isn’t listed in the state’s database of registered lobbyists – nor does the law require him to register.

That’s because Stenberg, who served as Nebraska ‘s attorney general from 1991 to 2003, doesn’t direct his advocacy at lawmakers so much as law enforcers.

Stenberg is among a growing number of advocates who turn a profit by lobbying state attorneys general – seeking to influence the investigations they pursue and the outside help they hire, according to current and former state attorneys general.

It’s an area of lobbying that has received little attention and even less oversight at the state level, experts say. Nebraska , for example, only requires lobbyists to register if they are involved with the legislative branch, according to state officials.

The lobbying of state attorneys general mainly comes from corporations trying to dissuade the law enforcers from filing lawsuits that could cost the firms millions of dollars in legal fees, fines or out-of-court settlements – as well as plenty of bad publicity, according to past and present officials who have held what is considered the second most powerful position in state government. Other lobbying efforts are aimed at helping private law firms profit from state-led cases by winning lucrative government contracts to assist in litigation.

At a panel discussion last month in Washington , D.C. , Colorado Attorney General John Suthers (R) said lobbying of state law enforcers has become increasingly common since 45 attorneys general in 1998 forced tobacco firms into a record $246 billion settlement over smokers’ health claims.

“A cottage industry has sprung up. There are now hundreds of people making a very good living lobbying attorneys general,” Suthers said at the forum, where he was joined by Stenberg and the Republican attorneys general of Wisconsin and Virginia . “When the 50 state attorneys general get together to discuss issues, there are often 100 or more lobbyists in the back of the room looking for an opportunity to further their cause.”

Stenberg’s firm specializes in “resolving legal issues with state attorneys general,” according to his company’s website. In an interview with Stateline.org , Stenberg said his work primarily is divided into two categories: meeting with corporate clients and meeting with state attorneys general or their staff “to make sure they have the facts and a full understanding of the matter.”

“Businesses at least want to have their side heard by state attorneys general before the attorney general makes a decision as to whether legal action should be commenced or not,” Stenberg said.

That approach makes lobbying aimed at attorneys general far different from the lobbying directed at legislators, said James Tierney, the former attorney general of Maine and now the director of Columbia University ‘s National State Attorneys General Program.

Direct requests for attorneys general to take a desired action “would be very offensive,” Tierney said. Instead, lobbyists primarily explain the positions of the companies that pay them, he said, and do not typically make the kind of requests that are more common in the legislative branch.

Suthers, for his part, said he finds the lobbying “pretty disconcerting – but I’ve also come to understand it.”

Lobbying of state top cops has increased as attorneys general continue to launch lawsuits that can become national in scope and cost businesses millions, if not billions, of dollars, Suthers and others say. The 1998 tobacco settlement – the result of a lawsuit initiated by Mississippi ‘s then-attorney general – remains the largest civil settlement in U.S. history.

State attorneys general this year have led consumer-protection investigations resulting in multimillion-dollar settlements with corporate giants ranging from AOL in the communications industry to Bayer Corp. in pharmaceuticals. Attracting the most attention has been an investigation by New York Attorney General Andrew Cuomo (D) into the college-loan industry; Cuomo’s inquiry has exposed conflicts of interest at schools and lenders across the country and prompted demands for reform from Congress.

Corporations have a major stake in fending off such investigations even before they begin and they hire lobbyists to do so, said Michael Greve, a scholar at the American Enterprise Institute in Washington , D.C. Negative attention resulting from investigations by one or more state attorneys general can be financially disastrous for publicly traded companies, Greve said.

“Once the stuff hits the newspapers, you’re dead,” he said.

The same investigations that can spell trouble for corporations can be lucrative for private law firms, Greve noted. Attorneys general frequently must hire outside help to assist in major cases and lobbyists – who are usually lawyers – jockey for the contracts that are awarded, he said. In addition, investigations such as Cuomo’s targeting the college-loan industry eventually can result in private, class-action lawsuits that can be extremely lucrative for law firms – another reason lobbyists try to influence attorney general investigations, according to Greve.

Tierney said it is not surprising – or, for that matter, a bad thing – that more firms are lobbying attorneys general, given the number of high-profile investigations that take place and the huge sums of money that can be involved.

“When attorneys general swing at the big guys, the big guys are going to swing back. It is natural that the decisions of attorneys general are going to be closely scrutinized,” Tierney said. He added: “I see nothing wrong with that. The more information they have, the better.”