Oil Companies are Biggest Spenders in Huge Year for Corporate Lobbyists in California

With year still not over, 2023 sees $358 million flooding Sacramento from all lobbyists.

PUBLISHED NOV 9, 2023 7:13 A.M.
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Lobbyists have been big spenders in 2023, with oil companies alone spreading around more than $15 million.

Lobbyists have been big spenders in 2023, with oil companies alone spreading around more than $15 million.   Santosh7700 / Wikimedia Commons   C.C. Share Alike 4.0 License

BY JEREMIA KIMELMAN, CalMatters

The leaves might be turning red and brown across swaths of California, but there has been a lot of green spent on swaying the opinions of policymakers since the year began.

Chevron Corp. and the Western States Petroleum Association, a trade organization for the oil industry, spent the most on lobbying activities so far this year at nearly $10 million and $5.3 million, respectively. 

Between the start of January and the end of September more than $358 million was spent by nearly 4,000 companies, organizations, and local governments to lobby California’s government, according to reports filed with the Secretary of State.

That is a nominal increase from this point in 2022, when lobbying activity totaled $333 million. For all of 2022, the total was more than $437 million. Data for October through December of this year won’t be reported until early next year. In the last 10 years, about 24 percent of the money was reported in the final three months of a year.

Chevron Corp. and the Western States Petroleum Association, a trade organization for the oil industry, spent the most on lobbying activities so far this year at nearly $10 million and $5.3 million, respectively. That’s not unusual: For the past four legislative sessions, they both were among the top three highest spending lobbying organizations in the state. Together, they’ve spent more than $188 million lobbying the state government since 2005, making them the third and first largest spenders on hired advocates since then.

The third highest spender on lobbying activity this year was the Hawaiian Gardens Casino cardroom. The casino spent more than $5.1 million since January, or roughly 71 percent of all its California lobbying dollars since 2005.

Oil companies have had plenty of challenges in California, a state with ambitious climate goals including a ban on the sale of new gas-powered cars by 2035. This year began with Gov. Gavin Newsom blasting oil companies for price gouging and proposing a “windfall profit” tax aimed at regulating the profit margin for refining gasoline. The tax bill was the top priority for oil company lobbyists and it was scuttled in March when lawmakers raised doubts about the idea. Newsom later signed a watered-down version of the bill that could lead to a cap on earnings for oil companies.

The oil industry also opposed two other bills this year: one that Newsom signed into law about increasing the penalties for violations of oil and gas regulations, and another divesting the state’s large pension funds from the 200 largest fossil fuel companies, which did not get through the Legislature. 

The third highest spender on lobbying activity this year was the Hawaiian Gardens Casino, a cardroom located in Los Angeles County. Between 2013 and 2022, it spent about $120,000 per year, but the casino spent more than $5.1 million since January, or roughly 71 percent of all its California lobbying dollars since 2005.

On reporting forms filed with the Secretary of State, the Hawaiian Gardens Casino reported that it lobbied the governor’s office on budget issues and licensing fees, and it lobbied the legislature on three bills: in support of AB 341 and against SB 549, both related to regulations on casinos, and in favor of AB 1175, which extended certain outdoor advertisements for three years. Both bills the casino supported were signed into law by the governor and SB 549 did not get through the Legislature.

The statewide affiliate of the Service Employees International Union—the California State Council—spent $3.3 million to persuade government officials since the start of the year. 

McDonald’s, the fourth highest spender on lobbying activity this year, also reported a sharp increase from previous years. It spent nearly $5 million so far with a focus on AB 1228, a bill that was amended in a deal with labor unions to raise the minimum wage for fast food workers to $20 an hour next April and create a council to set labor standards. Of the roughly $5 million the fast food company spent on lobbying the state this year, more than $4.5 millionwas given to a group called “No on AB 1228”, which spent heavily on digital advertising.

In other spending, the Energy Foundation, a collection of philanthropies focused on climate issues, spent more than $4 million to lobby the California Air Resources Board about regulations aimed at transitioning the state’s truck and bus fleets to zero-emission vehicles. This year’s spending was a little more than 40 percent of the $9.2 million the San Francisco-based nonprofit has spent on advocacy since it started reporting to the state in early 2021.

The statewide affiliate of the Service Employees International Union—the California State Council—spent $3.3 million to persuade government officials since the start of the year. The council has spent more than $78 million lobbying Sacramento on behalf of public employees since 2005, making it the second largest “lobbyist employer” in the state behind the Western States Petroleum Association and ahead of Chevron.

As of the end of September, nearly $25 million had been spent on advocacy efforts that don’t include a lobbyist directly, such as digital advertising. The state calls that spending “payments to influence” and requires disclosure reports.

In addition to the amount of money spent on “general lobbying” of the Legislature, executive branch or agencies, the Fair Political Practices Commission requires a separate disclosure for the amount of money spent lobbying the California Public Utilities Commission. That powerful commission regulates privately owned infrastructure, including energy, telecommunications, water and transportation companies.

Since January, 33 companies have spent more than $2 million to lobby the commission that's been in the news recently for allowing—and then not allowing—“robotaxis” to operate in San Francisco and for deciding a rate hike for electricity customers.

General lobbying expenses have to be reported to the Secretary of State, but the filing requirements don’t reveal how much money was used to lobby officials on each bill. Instead, the organizations that hire lobbyists, which the state describes as “lobbyist employers,” are required to submit a list of legislative bills or administrative actions on which they “actively” lobbied during the reporting period.

Lobbying firms, which hire lobbyists, reported receiving just under $219 million so far this year from their clients, or about 57 percent of all the money spent on advocacy at the state level. An organization can also spend advocacy dollars on in-house lobbyists or on payments to influence, such as the digital ads produced on behalf of McDonald’s. 

As of the end of September, nearly $25 million had been spent on advocacy efforts that don’t include a lobbyist directly, such as digital advertising. The state calls that spending “payments to influence” and requires disclosure reports when the organization spends at least $5,000.

These so-called “$5,000 payments” skyrocketed during the first three quarters of this year, up from $9.5 million during the same period last year. In the last decade, the most money spent on these lobbyist-free activities in a two-year legislative session was nearly $30.5 million during the session that ended in 2022.

Adam Zelizer, of the Harris School of Public Policy at the University of Chicago, has studied lobbying and pointed out that even though hundreds of millions of dollars were spent on lobbying this year, it’s effectively a “rounding error” when compared to what’s at stake. 

The lobbying total is roughly 1 percent of the state budget that California passed earlier this year, which allocated more than $310 billion in spending. He also said the economic value of everything regulated by California’s government is much greater than that.

The article titled "Oil companies top big year in lobbyist spending" appeared first at CalMatters here: https://calmatters.org/politics/capitol/2023/11/lobbying-california-2023/

CalMatters is a nonprofit, nonpartisan media venture explaining California policies and politics.

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