Crypto lobbying soared in Q3 amid fight over tax provisions

From: POLITICO Influence - Tuesday Oct 26,2021 10:51 pm
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By Caitlin Oprysko

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With Daniel Lippman

THE CRYPTO LOBBYING BOOM COMMENCES: Cryptocurrency firms and trade groups kicked their lobbying expenditures into overdrive during the third quarter, as the industry scrambled to fend off legislative threats and signals of regulatory headwinds from the Biden administration, your host reports.

— Crypto startups and their industry associations spent about $2.2 million from July through September, more than doubling what they spent during the same period a year earlier, according to lobbying disclosures. Many digital asset firms hired Washington lobbyists for the first time, turning to K Street amid an aggressive lobbying fight over a provision in the bipartisan infrastructure bill that would force cryptocurrency exchanges and other firms to report transaction information to the IRS.

— And industry lobbyists don’t see the heightened spending on influence efforts waning soon. Crypto is "still a very young industry, but they were able to gather force pretty quickly" in response to the tax reporting provisions, said Lisa Zarlenga, a partner at Steptoe & Johnson who represents clients like Coinbase and the Blockchain Association. "I don't necessarily see that changing," she added, noting that now, many crypto startups are starting to "formalize" their government affairs structures more.

Coinbase , the largest crypto exchange in the U.S., dished out $625,000 on lobbying last quarter, according to lobbying disclosures filed last week. Compared with some of Washington’s biggest spenders, it’s a drop in the bucket. But for Coinbase it was an increase of 681 percent from the $80,000 the company spent on lobbying in the previous quarter. Coinbase has added four new outside lobbying firms so far this year — retaining three of those in the third quarter alone — including hiring a former staffer for Senate Finance ranking member Mike Crapo (R-Idaho) and the top tax aide to former House Speaker Paul Ryan. Last quarter, the company’s in-house lobbyists also engaged in reportable lobbying activities for the first time since 2016, the disclosures show.

The Blockchain Association, one of the industry’s most prominent trade groups, increased its quarterly lobbying spending to $210,000 last quarter, up from $160,000 the previous three months. The trade group also hired the lobbying firm of former Sen. Blanche Lincoln (D-Ark.) to represent its members in Washington.

— The Chamber of Digital Commerce , whose hundreds of members include a mix of crypto and traditional financial services firms, more than doubled its second-quarter lobbying spending to $136,000 in the third quarter. The group has added four new outside lobbying firms since the summer. Its board includes three former chairs of the Commodity Futures Trading Commission and a former SEC commissioner, as well as former White House chief of staff Mick Mulvaney.

Good afternoon and welcome to PI . Send lobbying tips: coprysko@politico.com. And be sure to follow me on Twitter: @caitlinoprysko.

 

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EY’S HANSON TO LEAD CHAMBER’S TAX WORK: The U.S. Chamber of Commerce has tapped Rob Hanson as the lobbying powerhouse’s senior vice president of tax policy. Hanson was most recently senior counsel for tax policy at the National Foreign Trade Council, and before that spent two decades at Ernst & Young, most recently serving as global director of their global tax policy and controversy practice. The hire comes after Caroline Harris, a top tax lobbyist for the Chamber, left this spring to join Capitol Tax Partners. In a statement, Hanson said that he is “excited” to join the Chamber at a “pivotal time for the business community and the American economy.”

— “Our members and the broader business community will all benefit from his deep knowledge and expertise,” Neil Bradley , the Chamber’s top lobbyist, added in a statement, alluding to the various tax proposals in the Democratic reconciliation bill the Chamber is fighting to defeat. “With complicated tax policy changes that could have significant impact on economic growth and job creation under consideration here at home and globally, Rob will help the Chamber ensure that policymakers understand the impact of proposed actions and that the voice of the business community is heard.”

MANCHINOLOGY: One of the Senate’s most enigmatic swing votes opened up this morning about how best to win his vote — and also offered up a cautionary tale about how best to lose it. “Other than putting a gun to your head?” joked Joe Manchin (D-W.Va.) in an interview with The Economic Club of Washington’s David Rubenstein, in response to a question about the most effective way to lobby the senator.

— Manchin recounted one instance when he was governor of West Virginia and an associate came in to lobby him on an issue he described as “not good for my state.” When the associate pointed out that he’d held a fundraiser for Manchin, according to the senator, he told the associate to “get the hell out” and refunded the contribution.

— Manchin also outlined his key asks for lobbyists visiting his office. “Tell me what you're lobbying for and why, and give me the facts, and put your head on the other person who basically is against what you're trying to do,” he said. “That helps me an awful lot to be able to decipher and ... I can get to a decision much quicker.”

HELP WANTED:Facebook Inc. spent more on federal lobbying last year than any other company, but its influence operation in Democratic-dominated Washington is conspicuously lacking in one crucial area,” according to The Wall Street Journal’s Julie Bykowicz, Brody Mullins and Emily Glazer: Democrats.

— “As President Biden and Congress threaten tougher regulations, prominent Democrats have been rebuffing lucrative jobs at Facebook, and senior Democratic lobbyists have been leaving its Washington team. Facebook has been trying since January to hire a big-name Democrat to oversee its U.S. lobbying operations, a job that would pay more than $2.5 million a year in salary, stock and bonuses, according to people familiar with the situation,” as well as members of both parties for “more than a dozen high-level legal, lobbying and public-policy jobs.”

— The social media platform “started this year with seven Democrats and eight Republicans on its lobbying team, before [Democratic lobbyist Crystal] Patterson and two other Democrats left. Currently 22 Democrats and 39 Republicans now lobby for the company, including outside firms Facebook has on retainer.” Its “difficulty recruiting Democrats for Washington roles is the latest sign of the company’s declining political fortunes and could make it harder for the company to influence efforts by Democrats to write tough new rules for internet platforms and take antitrust action against Facebook and other technology companies.”

INSIDE FACEBOOK’S PR WAR AGAINST THE WHISTLEBLOWER: POLITICO’s Emily Birnbaum looks at Facebook’s fight to respond to the drumbeat of allegations being leveled by whistleblower Frances Haugen and the trove of internal documents she’s provided the press, lawmakers and regulators. “For Congress, the Justice Department, the FTC, the SEC, state attorneys general, the disclosures of Frances Haugen are a watershed moment,” early Facebook investor-turned-tech-critic Roger McNamee told Emily. “They have removed any excuse for further delay.”

— “Paul Argenti, a longtime corporate communications expert and a professor at Dartmouth College , said Facebook is ‘doing a terrible job’ navigating the crisis. ‘Their approach to communications has been more marketing-oriented and more image-building than trying to be a transparent and stand-up company that people can respect,’ Argenti said. ‘The best strategy when this kind of attack comes your way is, admit that you did something wrong. That would be a good start. They’re in denial mode for everything and anything, it seems.’

— “Facebook said it has no regrets about the message it’s sending. ‘When our work is being mischaracterized, we’re not going to apologize,’ spokesperson Andy Stone said Monday. ‘We’re going to defend our record.’” Unfortunately for Facebook, its narrative isn’t making much headway on the Hill. “They’ve tried to ease concerns. They’re making the rounds,” one GOP House aide told Emily. “They’re passing around blog posts that are public, trying to either discredit things or prove things wrong — that they take teens’ health on Instagram seriously, that they make sure bad content comes down.” The aide added: “It’s not working.”

AMAZON HOOVERS UP LABOR LOBBYISTS: One of Facebook’s tech peers is having a better time stocking up its policy team, Bloomberg’s Ben Penn writes. “Amazon has bolstered its lobbying ranks with a series of hires steeped in advancing corporate interests on workplace issues , positioning the e-commerce giant to weather union organizing drives and potential regulatory changes.”

— The latest hire was Suzanne Beall, previously a senior lobbyist for the International Franchise Association, who “joined the labor team within Amazon.com Inc.’s public policy division on Monday. She’s at least the fifth notable hire amid a systematic targeting of Beltway labor insiders that started at the end of 2019, when Kai Hirabayashi left Caterpillar Inc. to become Amazon’s senior manager of public policy, and has gained speed in recent months. All five lobbyists have a record of helping companies respond to union-backed policies in Washington, D.C.”

— “The company’s push to hire elite, well-connected labor professionals from industry trade associations could prove instrumental as Amazon battles worker-rights’ groups and Biden administration regulatory agencies on multiple fronts, including on union elections and organizing, occupational safety measures, and workplace equality lawsuits.”

BGR TAPS ELEVATES SEIDEN: BGR Group has named principal Maya Seiden , a former top State Department official, as the co-chair of its international and trade practice. Seiden joined the firm in 2014 after serving as chief of staff in the office of the deputy secretary of State for management and resources, overseeing budget and strategy for State as well as the U.S. Agency for International Development. She’s also a veteran of the Clinton administration, and worked in the private sector previously for BlackRock and New York University.

— “This is a further strong indication of bipartisanship for BGR,” Seiden said in an interview, pointing to fellow chair Walker Roberts , a Republican. While Seiden said one of the great things about international and trade policy is that “you can't always predict what the issues are going to be,” she argued that China policy is likely to continue to loom large over the practice, noting that “helping companies navigate and figure out how to operate in the current and evolving environment, I think, is something that we're all going to be looking at in the years ahead.”

 

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Jobs Report

Alka Patel, the former head of artificial intelligence ethics policy at the Pentagon, has joined Comcast to work on digital equity issues.

Elizabeth Rafferty and Adisa Muse have joined Hunton Andrews Kurth as directors of government affairs based out of the Richmond office. Rafferty was a director on the government relations team at Williams Mullen and Muse most recently served as Norfolk’s chief deputy city clerk and senior advisor to Norfolk Mayor Kenneth Alexander.

Allyson Baker is now a partner at Paul Hastings LLP, heading the Consumer Financial Protection Bureau practice. She most recently was a partner at Venable, and is a CFPB and DOJ alum.

Janis Bowdler is joining the Treasury Department as its first ever counselor for racial equity. She most recently was president of the JPMorgan Chase & Co. Foundation.

Jana Toner is joining American Corporate Partners as senior vice president She previously was deputy assistant to the president and chief of staff to then-second lady Karen Pence.

Marc A. Ross has launched the consulting firm MARC, which works with entrepreneurs of privately owned B2B tech companies. He is also the founder and chief strategist at political intelligence firm Caracal.

Deidrea Miller is now head of communications for Christie's Americas and will be based in New York. She most recently was a director at Brunswick Group and is also a Bill de Blasio alum

 

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Mcdermott+Consulting LLC: Preventive Medicine Research Institute
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Simon Consulting Services: Dla Piper (For Illumina, Inc)

New Lobbying Terminations

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Miller Strategies, LLC: Shangri-La Industries, LLC
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Tiahrt Enterprises, LLC: Flint Hills Resources

 

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