Lobbyists representing defense contractors and other companies sometimes invest in the same industries they represent, a questionable practice with little oversight, according to a report.
Since 2006, almost 150 lobbyists or other professionals who seek to influence government policy “had investments that overlapped with their lobbying duties,” according to a Dec. 26 article in The Wall Street Journal by reporters Brody Mullins, James Grimaldi and Rebecca Ballhaus, who analyzed financial disclosure forms filed by lobbyists’ spouses working for Congress.
The practice — which is different from insider trading — isn’t illegal, but is ethically questionable, some say.
The article highlights the case of Martin Paone, an employee of WPP Plc, the London-based advertising and public relations company, who in November 2012 acquired shares of Lockheed Martin Corp., the world’s largest defense contractor, while his firm was representing rival General Dynamics Corp. — days before Lockheed won a final agreement on a $3.8 billion contract for more F-35 fighter jets.
Paone, whose purchase of as much as $15,000 of Lockheed stock were disclosed by his wife, a congressional aide, didn’t provide comment but a company spokesman said “the trades were made by a financial adviser without his knowledge” and complied with all necessary regulations and policies, according to the report.
The practice is probably more common than even the article suggests, considering there were more than 12,400 lobbyists registered with the government in 2012, according to the Center for Responsive Politics, a nonprofit organization in Washington, D.C., which tracks such activity.
The defense sector “has a formidable federal lobbying presence,” according to the group.
The industry spent $136 million lobbying the government last year, down about 11 percent from a peak of $152 million in 2008, according to the center, which analyzed expenditures filed with the Senate Office of Public Records.