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Known unknowns: Trying to divine the real numbers in the lobbying compensation reports

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Registered governmental affairs firms, representing virtually every industry in Florida, reported earning more than $31.75 million from October 1 to December 31 of 2016 to lobby the Florida Legislature.

FloridaPolitics.com previously reported which firms made what, with Ballard Partners leading all firms in Q4 compensation.

The 2016 Q4 numbers were down slightly from the 2015 Q4 numbers ($31.75 mil to $32.375 mil), likely because the 2016 Legislative Session began in January. The month before Session commences, in this case, December of 2015, typically sees the highest levels of reported compensation. An apples-to-apples comparison of the state of the industry might have to wait until later this year when 2017 Q1 numbers can be compared with 2015 Q4 numbers.

Still — and this should be a genuine warning sign for the industry — the 2016 Q4 numbers are significantly down from the high-water mark of $34.525 mil during 2014 Q1.

Of course, these mid-30 mil figures could be dramatically off from what firms are actually earning.

Lobbying firms report their quarterly compensation totals in ranges. Pursuant to Florida statute Sec. 11.045, the total compensation provided or owed to lobbying firms must be “reported in one of the following categories: $0; $1 to $9,999; $10,000 to $19,999; $20,000 to $29,999; $30,000 to $39,999; $40,000 to $49,999; or $50,000 or more. As explained by LobbyTools, if the category “$50,000 or more” is selected, the specific dollar amount of compensation must be reported, rounded up or down to the nearest $1,000.

Under this reporting system, governmental affairs firms could have cumulatively earned anywhere from $20 million to just north of $50 million. This is a dramatic discrepancy, especially since it’s probably the larger figure that is a more accurate reflection of the state of the governmental affairs industry.

This “range issue” can also be found in the numbers being reported by the individual firms.

The top-earning firm, Ballard Partners, earned $2,273,000 if you go by the median number of the figures it reported, but it could have earned as little as $1,270,072 or as much as $3,027,849. And if you’ve seen the beautiful building Brian Ballard is constructing on Park Avenue, you’d probably be right to assume that the larger figure offers a better picture of the firm’s revenue stream.

The ranking of which firms earn the most for lobbying the Legislature does not change if you use the high-low system, but the overall figures would certainly change. Instead of reporting it earned $1,605,000, Southern Strategy Group‘s top number shows $2,469,827. Ron Book‘s is $1,949,923, Capital City Consulting’s is $1,949,923, Greenberg Traurig’s is $1,529,921, and Gray Robinson’s is $1,489,889.

But here’s where the numbers really get eye-popping.

Add in the high-water marks of what the firms earn to lobby the executive branch. Southern Strategy Group is the top firm here with $2,574,826 in compensation and Ballard Partners at $2,483,855.

Combine these top-range figures with the top-range figures from the legislative branch column and now both Ballard Partners ($5,551,704) and SSG ($5,044,653) are $20 million a year lobbying firms. And those numbers don’t include any revenue earned from lobbying at federal or local level or non-lobbying revenue (I like to say that SSG is a real estate holding company with a nice lobbying business on the side).

As it is, most news outlets covering the Legislature will do a skim of these numbers, see the median figures, and write stories every quarter about how these firms are earning something over a $1 million to lobby the Legislature. As we have learned from a more detailed breakdown of these figures, the top two firms in the state likely earn at least a combined $40 million to advocate for their clients before state government.

Another interesting result of going by the likely-more-accurate top-range figures is that they do shuffle up the rankings of the top six firms (and isn’t it interesting that in less than a year we have moved from talking about the Big 4 — Ballard, SSG, CCC, Book — to the Big 6 — the four previously mentioned plus Gray and Greenberg).

As prosperous as they are, Capital City Consulting and Ron Book, P.A., are more invested in legislative lobbying than executive lobbying. If you count the top-range numbers from both the legislative and executive branches, CCC is still a strong third ($2,889,822), but GrayRobinson is right there ($2,819,774) at number four and Greenberg rounding out the top six. ($2,589,846). But let’s not cry for Mr. Book and his #5 ranking ($2,589,862); Book earns that impressive figure with a fraction of the staff that the other firms do. As they say, keep it small, keep it all,

We’ll have more insights from the 2016 Q4 reports in a future post.

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Peter Schorsch is the President of Extensive Enterprises and is the publisher of some of Florida’s most influential new media websites, including SaintPetersBlog.com, FloridaPolitics.com, ContextFlorida.com, and Sunburn, the morning read of what’s hot in Florida politics. SaintPetersBlog has for three years running been ranked by the Washington Post as the best state-based blog in Florida. In addition to his publishing efforts, Peter is a political consultant to several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella.

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