Businesses seek to tap public anger

Some business groups that often find they have to fend off consumer discontent are now rushing to turn collective anger over rising fuel and food prices to their advantage on Capitol Hill.

The Petroleum Marketers Association of America (PMAA), which represents gas retailers, is urging its members to post placards on pumps urging customers to support the group’s cause on Capitol Hill: curbing “speculation” in oil futures markets.  

{mosads}Airlines, which have joined PMAA in a “Stop Oil Speculation Now” coalition, are using frequent flyer e-mail lists to urge flyers to e-mail their representatives in Washington to support anti-speculation bills.

“Our country is facing a possible sharp economic downturn because of skyrocketing oil and fuel prices, but by pulling together, we can all do something to help now,” the letter states.

As of last weekend, the effort had generated more than 1 million e-mails to Capitol Hill.

“This gives the constituents of elected officials the opportunity to express their views,” said David Castelveter, a spokesman for the Air Transport Association.

The Grocery Manufacturers Association (GMA), which represents food makers like Kellogg’s, meanwhile, has launched a grassroots campaign to stoke public opposition to congressional mandates for more corn-based ethanol production, which GMA says is partly responsible for rising food costs.  

Grassroots lobbying of this sort has been around for decades, following the same upward trajectory that the advocacy industry in general has been on since the 1980s.

According to Ed Walker, a University of Vermont sociology professor, grassroots lobbying has become a $500 million-a-year industry, greatly expanding in the 1990s as fax machines, e-mail and improvements in computer software made it easier for businesses to generate “communications” to Congress.

Over half of the grassroots activity comes from corporations and their trade associations that are seeking to add a “real people” legitimacy to corporate campaigns, Walker said.

Unions, political parties and nonprofit special-interest groups account for the rest of the grassroots business.

Sherri Cabrera, director of government relations at PMAA, said the group has done a lot of grassroots activity in the past. But the latest effort is different because the group is trying to expand its pool of support beyond its member base.

“When people pull up to [a gas station] and are upset about gas prices, we want them to see this information and contact their congressmen,” Cabrera said.

So far, gas stations in 10 states have put placards on pumps and brochures in stores directing consumers to the Stop Oil Speculation website and giving them information on how to reach their representatives in the nation’s capital. Cabrera said the association intends to run the campaign in all 50 states.

{mosimage}Ultimately, the effort seeks to dislodge whatever anger may initially be placed at the doorsteps of airlines and gas retailers and place it squarely at someone else’s: in this case, the investor community’s.

“It’s a classic lobbying strategy: trying to throw someone else under the bus,” said one lobbyist who represents the investor industry.

Deep-pocketed institutional investors may be at a disadvantage in one sense. They don’t have the grassroots network that the airlines, for example, have access to.

{mosads}But they aren’t without resources. There are several associations in town lobbying against bills like the one introduced last week by Sens. Joe Lieberman (I-Conn.) and Susan Collins (R-Maine) that would limit the number of oil futures contracts a particular investor can hold by directing the Commodity Futures Trading Commission (CFTC) to place “position limits” on investors.

Groups like the Managed Funds Association, Securities Industry and Financial Markets Association, Financial Services Roundtable and the International Swaps and Derivatives Association instead favor a measure introduced by Senate Majority Whip Dick Durbin (D-Ill.) that would increase funding to the CFTC.

The groups have increased their activity on Capitol Hill, hiring additional outside lobbying teams and paying for advertisements in newspapers like The Hill. They have also stressed that many of the investors who own oil futures contracts are pension funds, which do have a grassroots feel.

The basic message: Tightening oil supply is the real cause of rising oil costs. Limiting investor participation in the markets may do more harm than good by limiting liquidity and thereby reducing the opportunity of commodity consumers to hedge against further price increases.  

The airlines “are rallying public support for a flawed argument,” said one financial services lobbyist.

So far, there isn’t a clear winner, although Senate Democrats said Monday they would have an anti-speculation bill ready for release on Wednesday.

An energy package House Democrats may bring up to the floor this week seeks to push oil and gas companies to develop leases they hold to boost supply, rather than opening off-limit areas as Republicans want.

The package would also make price-gouging a federal crime and provide more support for mass transit.

But lobbyists did not expect it to include a measure to limit investor participation in futures markets, and lobbyists representing investors are encouraged that the speculation piece is moving through regular order. The House Agriculture Committee, which has jurisdiction over the CFTC, held three hearings last week.

Grassroots activity relating to energy policy hasn’t been limited to airlines and gas stations. And not everybody is targeting investors.

The National Association of Wholesalers-Distributors (NAW) has joined large manufacturing and other energy-intensive industries and oil and gas producers in pushing Congress to open up new areas to oil and gas drilling.

The NAW recently sent out a survey asking its members to describe how high fuel prices are affecting their businesses. Ninety-seven percent of respondents said rising fuel costs have had a significant or very significant impact on their business.

Environmental groups, meanwhile, are activating their base in hopes of fending off the increasing pressure to rescind the moratorium that blocks drilling in most of the Outer Continental Shelf.

 The Week in Congress

 APPROPRIATIONS
• The Senate Appropriations Labor, Health and Human Services and Education subcommittee has scheduled a hearing to discuss the fiscal 2009 budget for the National Institutes of Health on Wednesday at 9:45 a.m. in 138 Dirksen.
• The House Appropriations State and Foreign Operations subcommittee has scheduled a markup of its spending bill on Wednesday at 3 p.m. in H-140 of the Capitol.
DEFENSE
• The House Armed Services Strategic Forces  subcommittee is holding a hearing on the modernization of the nuclear complex on Thursday at 10 a.m. in Room 2212 of the Rayburn House building.

FINANCE
• The Senate Banking Committee will hear testimony from Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson and Securities and Exchange Commission Chairman Christopher Cox at 10 a.m. Tuesday in 325 Russell.

HEALTHCARE
• The House Ways and Means Committee’s Health Subcommittee will hold a hearing on state-based health reform initiatives on Tuesday at 10 a.m. in 1100 Longworth.
• The Senate Health, Education, Labor and Pensions Committee’s Children and Families subcommittee will hold a hearing on childhood obesity on Wednesday at 2:30 p.m. in 430 Dirksen.