The Secret History of How Big Money Took Over Washington - Brody Mullins

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1:28The annual dollar amount that lobbyists spend lobbying the Congress and the U.S. President on an annual basis is it's only about the dirty little secret in Washington is that you would think that companies would want to support Republicans because Republicans are generally pro-business. But the fact is that businesses just want to be with the winner, whether the winner is a Republican or Democrat. And this gets right to the point of Donald Trump, that companies make relationships with Republicans and Democrats. They give money to Republicans and Democrats. They would prefer if the Republican won, but if Biden won, you know, they have a Biden playbook.

1:59They've got an Obama playbook. They've got a George Bush playbook. What they didn't have was a Donald Trump playbook. They would be much more comfortable having Kamala Harris or Democrat being president because, yeah, they're not going to like everything. Republicans and Democrats play within the 40-yard line. Trump is like not even playing within the end zone. Let's talk about tariffs and trade. For the last 50 years, the Republican Party and the Democratic Party have been pro-trade, pro-immigration, anti-terrorist. So companies like that. They like the certainty. The problem with Trump is that he is uncertain.

2:25He's changing the regular rules of the game in order to help his blue-collar workers or exactly the people who are opposing these big companies. So Trump is very much a threat to big companies, and that's really why they just want certainty. They would prefer to have someone who just goes down the middle every time and keeps things simple. Welcome to Open Book. I am your host, Anthony Scaramucci. Joining us today is Brody Mullins. He's a Pulitzer Prize-winning journalist and best-selling author. His recent book, which I read and loved, is The Wolves of K Street, The Secret History of How Big Money Took Over Big Government.

3:00Now, listen, this was released last year, and I understand you're now working on a book called The Battle Over Bigness. So we're going to talk about both if you don't mind. But when I picked up this book, this is one of the reasons why I go to bookstores, Brody. I had not heard of your book. I walked into a Barz and Noble, and I was leafing through the current events section. I said, wow, this is an interesting title. And then I read the first chapter, and I immediately went and bought the book. So, I mean, you are a brilliant writer, but you're touching on something here about Washington and lobbyists.

3:35Now, I have a lot of international listeners that tune in. So what do people need to know about Washington and lobbyists that perhaps they don't know? Yeah, I mean, so for my entire life, I've been a reporter covering Washington and sort of writing about the behind-the-scenes players, you know, like the, uh, you know, the wizard behind the curtain who's making things happen. So if you watch most of the news and read the New York times and most paper, you know, you're going to hear about, you know, Trump's doing this or the president's doing that, or there's an executive order or Congress is voting on this bill or not voting on that bill.

4:08And when I look for sort of like behind the scenes, why are those things happening? And time and time again, it's corporate lobbyists, big companies are pulling the strains with, you know, campaign donations or with relationships they have through lobbyists. So for my career at the Wall Street Journal, I was writing about the lobbying and influence industry behind the scenes. Big companies, also unions, billionaires from time to time. But really, the book is about, for the last 50 years, how these companies went from having very little influence in Washington to having a ton of influence. And if you really want to know how Washington works, that's what the book, The Wolves of K Street, is about.

4:47Okay. The annual number. the dollar amount that lobbyists spend lobbying the Congress and the U.S. president on an annual basis is? It's only about a trillion dollars or a billion dollars, I should say, just a billion dollars in what is disclosed. And this is sort of the key. You're asking, like, how much do they spend? We really don't know. What we know is how much they're required to disclose they spend. And a lot of the books sort of about that, too, is sort of how the rules and regulations haven't really kept up with evolution lobbying. So let me explain. Under the lobbying law, you are a lobbyist if you spend 20 % or more of your time actively talking to members of Congress or staff on behalf of a company or a client.

5:36And that 20 % is really the key here. Very few actual lobbyists spend 20%. That's a full day each week where you're doing nothing but talking to a member of Congress. So Congress has passed a lot of ethics reforms that are aimed at reducing the influence of lobbyists, at cutting the ties between lobbyists and lawmakers. And therefore, what a lot of lobbyists have done is to say, hey, you know what? I'm actually not a lobbyist. I'm a consultant or I'm an advisor. And therefore, they don't register as lobbyists. So when the most recent lobbying reform took place or was enacted in 2007, there were 15 ,000 registered lobbyists in D.C.

6:14Today, there's 13 ,000. And that just shows what a scam this is, that people are simply not lobbying, not registering as lobbyists. To put another way, there's five or six million people who live and work in Washington, D.C., and everyone in D.C. is involved in creating policy or advocating for rules or regulations or laws, unless you're a school bus driver or a waitress or something like that, maybe working at a university. Everyone here is involved in pushing for legislation, five, six million people, but only 13 ,000 people are saying that they're lobbyists. So that really shows that the lobbying industry is much bigger than that$1 billion figure that's being disclosed.

6:57So, I mean, I'm going to put it very simply, but I want you to react to my simple like pea brain, Brody. Okay, you ready? There are 535 members of the Congress, 435 in the House, 100 in the Senate. There's one president. There's 536 people that are controlling 27 % of the country's GDP. That's the federal budget. And to put it differently, it's 7 % of the global GDP is controlled by 536 people and, of course, their staff. So is there any wonder that this amount of pressure is being put on these people? No, it makes total sense. I mean, I'm not saying that it is a problem with lobbying. In fact, lobbying is constitutionally protected under the First Amendment.

7:46The First Amendment that gives me the right as a journalist to talk about whatever I want is the same First Amendment that protects the right of a lobbyist or an individual or a company owner or a union official to talk to their members of Congress about legislation that they support or oppose. So it's all legal and above board. The problem is simply that the only rule we have for lobbying is that if you're a lobbyist, you have to disclose. And very few people are doing that. But you're absolutely right. I mean, Mitch McConnell talks all the time about how the United States of America spends way more money on potato chips than we spend on lobbying.

8:21So as a share of what the benefit is, it's very, very small. In fact, a couple of companies that we wrote about, the lobbyists who work for these companies every year wrote an ROI report back to headquarters, return on investment, that said, hey, you gave us$2 million to advocate in D.C. We got you$100 million in contracts or in block regulations or whatnot. So it's a very good investment for companies. Now, since the 1970s, you make this case in the book, we have shifted power to the lobbyists away from elected officials. I mean, sometimes I can literally see lobbyists-like language in actual legislature.

9:05They just hand the legislator the lobby language. They put it in the rules book. So tell me what happened. Yeah, it's sort of a difficult question to answer because it involves understanding sort of how Washington's changed over the years and how the government is run. You know, the government is really run by certainly staff by younger people in their 20s who aren't making that much money, who oftentimes aren't married, don't have mortgages. I mean, it's sort of a young person's game because you don't make much money working for the government. So you have people who are in their 20s and early 30s who are doing the best they can, who want to help out, but just don't have, they haven't worked in business.

9:43They don't have the level of expertise they should have. And they're dealing with incredibly complex business issues every single day. You know, one meeting, one minute you have a meeting with an electric utility to talk about rates and how they can be changed. And then you're talking to someone about air pollution. And then you're talking to someone about construction or mining or, you know, the list goes on and on. So it's incredibly labor intensive and no one can know the policy experts in every issue, especially not a 25 year old. And therefore, staffers rely on lobbyists. You call a lobbyist who used to work on Capitol Hill or used to work for the Environmental Protection Agency or is an expert in that policy and you learn from them.

10:21And that gives the lobbyist tremendous influence or sway the thinking and the mindset of folks on Capitol Hill. So a solution to this would be to pay congressional staffers and members of Congress a million dollars a year. I think you get a lot more talented people on the Hill. But that's obviously any lawmaker who proposes a big pay raise for himself is getting booted from office pretty quickly. Going online without ExpressVPN is like scuba diving in a suit made of meat. It's a great idea if you're trying to meet a lot of sharks. Every time you connect to an unencrypted network in cafes, hotels, airports, etc., your online data is not secure.

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11:40That's expressvpn.com to find out how you can get up to four extra months free. ExpressVPN.com. When I read the book, I was literally laughing out loud because you had these anonymous figures in the book. And I've met every one of these figures, Brody, okay? You had the, you know, the dirty trickster. You had the art collecting fixer. You had the cigar chomping insider. I mean, some great descriptions. I'm like, oh, shit, I know every one of these people. So, I mean, this is sort of big money though, right? I mean, there's big money in this for these people, right? People don't understand how much money.

12:23I mean, these guys make huge amounts of money from campaigns. They take huge amounts of money from these political action committees. Lobbyists get tons of money from these corporations. What say you about all these characters? Yeah, so what was lucky for us is that Washington is a town where people can come and reinvent themselves. The difference between D.C. and New York, for example, is that you can be a huge success in Washington and really never accomplish anything or get anything done. If you work in New York, if you're a trader, you know, your boss knows, other people know, did you win or did you lose that day?

13:02Did you win or did you lose that hour? Did you win or did you lose that year? In Washington, everything is sort of fluffy. You never quite know. A bill passes or doesn't pass. Is that because of the lobbyists or did it just happen? And there's so many people who come to D.C. and sort of reinvent who they are and sort of they know there's a difference between power and the perception of power. In D.C., the perception of power can be just as important. So people can sort of fake their ways to the top and take credit for things that happened that they didn't do. In fact, you know, there's a great example.

13:32There was a lobbyist in the first Trump administration. I forget his name, but he started marking himself as a super close to Trump, you know, hire me and I'll get everything done in the Trump world that you want. And it turned out that he'd never met Trump. He didn't know Trump at all, but he made millions of dollars just because people thought that he did because he told them that. You know, so the point that you can sort of fake and lie your way through D.C., which for a writer, you know, for a storyteller makes for great characters and great stories.

14:01Abramoff. let's look at who he was and what happened to him and what he exposed yeah so uh jack abramoff was a republican lobbyist uh in 2000 2001 2002 or so became probably the most influential lobbyist of that era he claimed to be close or was close with uh tom delay who is the republican house leader from texas uh he ended up getting in a huge uh lobbying and corruption scandal um because He was basically bribing members of Congress, bribing staffers to help his clients. And then he was actually lying to his clients also. He had them sending him money for fake advocacy organizations that he set up.

14:45So he actually led to that lobbying reform that I mentioned that passed in 2007. He was the reason that we had that lobbying law because he was essentially giving money to members of Congress, giving money to staffers. I think like 19 people went to jail. It's a huge scandal about 20 years ago. Um, and that led Congress to reform the lobbying system, uh, putting in place what was called the gift ban, which means that under the current law, as I was sort of alluding to before, if you're a lobbyist, you can't buy a sports ticket for a member of Congress. You can't bring him up for a round of golf.

15:17You can't buy him a beer, but go to a steak dinner. And as a result of that, so many lobbyists had said, well, I'm not a lobbyist. I'm a consultant. I can keep doing those things. So Abramoff was really the scandal that created the modern, uh, lobbying laws back in 2007. So I'm going to throw a theory out to you that someone has said to me and get you to react to it. So if you like moderation and status quo, you should support the lobbyists. Hear me out for a second. Number one, they've got a lot of knowledge. They impart that knowledge to the Congress and their staff. But number two, right now, there's a lot of guys in Washington that do not like Donald Trump's tariffs.

15:58They're CEOs. They're afraid of Donald Trump's wrath, so they say, no problem with the tariffs, la-di-da. But then they call their lobbyists. They get on the phone and say, hey, lobbyist, hey, Brody, here's some big bucks. Go influence the Congress. Go influence the congressional aides. Go influence the guys in Washington, like you say, in the White House that are not making big bucks, but someday want to make big bucks, and tell them to knock off XYZ or get my company an exemption from these tariffs or an exemption from policies that I don't like. Any truth to that, or is that just a made-up theory?

16:34I think that's pretty close. I mean, the dirty little secret in Washington is that you would think that companies, as businesses, would want to support Republicans because Republicans are generally pro-business. But the fact is that businesses just want to be with the winner, whether the winner is a Republican or a Democrat. And this gets right to the point of Donald Trump, that companies make relationships with the Republicans and Democrats. They give money to Republicans and Democrats. They would prefer if the Republican won. But if Biden won, they have a Biden playbook. They've got an Obama playbook.

17:04They've got a George Bush playbook. What they didn't have was a Donald Trump playbook. They would be much more comfortable having Kamala Harris or Democrat being president because, yeah, they're not going to like everything, but they're going to—Republicans and Democrats play within the 40-yard lines. Trump is not even playing within the end zones. I mean, And let's talk about tariffs and trade. For the last 50 years, the Republican Party and the Democratic Party have been pro-trade, pro-immigration, anti-terrorist. So companies like that. They like the certainty. The problem with Trump is that he is uncertain.

17:39He's changing the regular rules of the game in order to help his blue-collar workers or executive people who are opposing these big companies. So, you know, Trump is very much a threat to big companies, and that's really why, you know, they just want certainty. They would prefer to have someone who just, you know, goes down the middle every time and keeps things simple. Do they help us get down the middle, get us back on the fairway? Yeah, no, I think that lobbyists want to keep things down the middle. They don't want things to be extreme. Lobbyists also, like their companies, you know, want certainty.

18:13They don't want disruption. They want the lobbyists and the companies and the politicians and the media. We're all part of the establishment here. We want things to stay the same. We're all winning. What we don't want is disruption. What Donald Trump is doing is taking everything in Washington and turning it upside down, which could be great for everyone outside of Washington. But for the people inside Washington, the establishment, Republican, Democrat, company, lobbyist, that's a problem. Let me ask the question differently. Let me say it one more time. That's also why the media goes so crazy, because things are supposed to work a certain way, and Donald Trump does things a different way.

18:47And so every time Trump does something, the media says, well, that's not how we do things. That's crazy. I want to ask a different question. I want you to make the case for me for the lobbying. I want you to say, okay, Anthony, lobbying is great for the country. These wolves of K Street are great for the country because, go ahead. Yeah. So Washington is a very complicated place. Policy is incredibly complicated. It's nuanced. It's detailed. It's written by lawyers. The federal code has gone from being a few pages to stack it up because you're here to the moon or something like that. If you're a business owner, your job is to run your business, not to worry about what's going on in Washington.

19:30So when you do have a problem, you need to figure out, well, who can help fix my problem? Who do I need to talk to who I can explain, hey, you created a regulation XYZ and it's really hurting my business. It's causing me to spend more money on materials or more money on healthcare. And therefore, I can't hire that third or fourth employee or therefore, I have to lay off someone, which is bad for the country, but your job is to run your business. So lobbyists are sort of Washington, D.C. translators. They're experts in this arcane policy process. So you hire the lobbyist. The lobbyist knows who to talk to, knows who to bring it to, knows which doors to open so that you can tell your story to the right people.

20:08That's really the benefit of a lobbyist. Okay. Make the case against a lobbyist. Make the case why we should ban lobbying. Lobby should not be banned, although it is interesting in doing the research for this book. Washington, D.C. is the only state, the only capital, and America is the only country in the world that has a lobbying system like that, which is pretty bizarre that Japan, Germany, every other country doesn't have a system like this. So, you know, maybe that's a question for another show. But the problem is that only one side has the money for the lobbyist. So literally, the founders of the country in the Federalist Papers knew there would be lobbyists.

20:48They didn't call them lobbyists. They called them factions. They said there'd be a faction of pro-worker folks and a faction of business owners. And those two factions, which were basically lobbyists, almost the Chamber of Commerce and the labor unions, they would sort of fight and lobby over pieces of legislation, and they would produce compromised legislation. The problem we have right now is that in the last 50 years, because consumer groups and labor unions don't nearly have the influence or money that they used to, and companies have a ton of money, that only one side is able to hire the lobbyists.

21:19So when the lobbyists go up and fight on Capitol Hill, there's no one fighting against them. I'll give you two quick data points. We interviewed 50 lobbyists and asked them, hey, when you go out and fight on Capitol Hill for your issues, who are you fighting against? Who is your opponent? Not one of them said they're fighting against a labor union, which just shows that the labor, the other side is not there to fight back. And the other part of that is that most lobbying fights now are not company against regulation or company against labor union. It's company against company. What's perverted the system is that you have company A goes to Washington.

22:04So when I first started covering lobbying, I thought that companies sit around and work on their business issues trying to make money. and once in a while the government creates a regulation that hurts the company. So they hire lobbyists to go back to try to roll back that regulation or change it in a way that's not as harmful. And that's how lobbying used to work. The way it works now is that companies proactively hire lobbyists to go to D.C. to change the rules of the game to help themselves or to screw a competitor. So people are using Washington lobbyists in the system to make changes in the marketplace and that's a total perversion of what even Republicans and conservatives is would not, you know, don't want that to happen, which is why I think we've given the rise to some of the populace, uh, in, in, and, and even Donald Trump, it's saying these big companies are artificially using their access, using their resources to change the rules of the game in the marketplace to benefit the big guys or the little guys.

22:57So let's go to your other book. You're writing a new book right now. It's called the battle over bigness. Tell us more about it and how does it connect to the wolves of case? Yeah. So it's a perfect linear connection, which is that a year ago, my brother and I came out with this book called The Bulls of K Street. And it's about how companies the last 50 years have used their campaign donations and lobbyists and access connections to become this incredibly powerful force in D.C. And then when the book came out and I looked around and said, oh, man, companies don't seem to have the influence that they had five years ago.

23:33And that was right by the time that Trump came on the scene for the second time. And what I've seen is that this era that companies have dominated politics is starting to come to an end. We see it with both Republicans and Democrats, with Donald Trump and J.D. Vance and Josh Hawley. An increasing number of Republican populists are turning against, not businesses, but the biggest companies. We see it with tech. We see it with health care. We see it with the poultry industry, maybe even big banks and Wall Street. Increasingly, we see Republicans thinking that these big companies are too big and too influential.

24:09In fact, for our research, I interviewed J.D. Vance back when he was just a no-name Republican senator from Ohio, not the important vice president he is now. And that's one thing that he said is that Republicans for history have felt that their job is to protect the individual liberty of Americans. and for 100 years, protecting the liberty of Americans meant keeping the government off our backs. And now so many companies, led by the tech companies, have gotten so big and so powerful that the part of a job of a Republican is to protect the individual liberty from these big companies. That's something that J.D.