National News

The new business of lobbying

Marketplace - American Public Media - Wed, 2014-03-26 14:48

What does the word “lobbying” connote? Maybe a smoke-filled room somewhere, or multi-course meals, charged to an expense account. Well, “government affairs professionals,” as they like to call themselves, say the job has changed.

 “I think there is less golf and there are fewer martinis than ever before,” says Dan Bryant, chair of the public policy and government affairs practice group at Covington & Burling.

Still, I persist, arranging to meet Rich Gold, a partner with the firm Holland & Knight, at the Round Robin & Scotch Bar in the Willard Hotel.

According to lore, the term “lobbying” was coined there. Back in the 1870s, Gold’s professional forebears plied President Ulysses S. Grant with cigars and booze. So, as a waiter approaches, I wonder if Gold is going to pick vodka or gin.

“I guess in some ways I am kind of the breakthrough generation,” he says. “I have never had a martini at lunch.”

And the day we met is no exception.

Gold has been lobbying for two decades, and he says the culture has changed.

“There is no walking into a back room anymore, and saying, ‘I need this,’ tapping the table, and getting it done,” Gold explains. The economic downturn also affected lobbying.

“The recession came late to Washington, and the end of 2010, 2011, 2012 were relatively lean years,” he says. “And we’re seeing that in D.C., with some brand-name firms really struggling now.”

Gerry Sikorski is one of Gold’s colleagues. He heads the government section at Holland & Knight. For a decade, he represented Minnesotans in the House of Representatives. We meet in a cafeteria on Capitol Hill – where martinis aren’t on the menu, by the way.

"Lawmaking specialists are less valuable than they once were,” he says.

Sikorski says the federal government is still operating. It is still buying things, regulating industries, and collecting taxes.

“What’s changed is the overarching law making,” Sikorski explains. “Policymaking pieces of it aren’t happening.”

Sikorski says a lobbyist can’t fundamentally reinvent himself, but he can adjust, and many lobbyists have had to. Increasingly, what firms want in a lobbyist is expertise in a particular subject matter.  

According to W. Michael House, the director of Hogan Lovells’ legislative group, there are fewer lobbyists than there used to be.

Lawmakers are spending more time away from Washington. Last year, there were just 159 legislative days, when the House of Representatives was in session. And Congress isn’t passing many bills. In 2013, just 87 became law.  So, a lobbyist like House adjusts.

“We always say Washington goes legislation, regulation, litigation, legislation,” he tells me, noting we are in the regulation stage right now.

Federal agencies are working on financial reform rule writing and the implementation of the Affordable Care Act, and even though the legislative process is moving slowly, it is moving. There are people interested in tax reform, for example. According to House, “that’ll be a two-to-four, maybe six-year process when it’s all said and done, but the smart people get in early.”

More firms are taking what they call a “multidisciplinary approach” to lobbying. Lobbyists work hand in hand with lawyers, and some firms hire strategic communications consultants.

Back on Capitol Hill, I meet Bryant in the Hart Senate Office Building. The relatively light legislative load doesn’t seem to faze him.  

“The need to be explaining your business more, more clearly, and in a more compelling way, has never been more important both in the U.S. and elsewhere,” Bryant says, noting public policy has become “more global.”

Covington & Burling has grown its business overseas. It expanded its office in Brussels, to lobby European governments, and because many companies based in foreign countries want to lobby the U.S.

“I think as long as governments and government officials are making decisions that affect the public and that affect the business community, there will be lobbying,” he says. Although what that involves will continue to change.

Brain Changes Suggest Autism Starts In The Womb

NPR News - Wed, 2014-03-26 14:30

The organization of certain brain cells in children with autism seems already different from that of typical children by the sixth or seventh month of fetal development, a study hints.

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Is Facebook just a big venture capitalist?

Marketplace - American Public Media - Wed, 2014-03-26 14:00

Facebook is buying Oculus VR for $2 billion. A Virtual Reality company.  Really? 

Yes. Not because Facebook thinks people are thirsting to experience their status updates in a more ‘realistic way’, but because it thinks Virtual Reality is going to be the next big thing. 

 “They’re really trying to become a  holding company if you will,” explains David Rogers at Columbia’s School of Business. “They want to own a key stake in all the major platforms for social connection.”

That’s “all fine well and good,” says David Nelson, chief strategist at Belpointe Asset Management. Fine, if Facebook wants to treat its acquisitions like a venture capitalist. But Nelson – like the many investors who sold shares of Facebook on the news – wanted Facebook to give him hard numbers:  future earnings, monetization, anything with a $ sign at the end of it. 

“They’re not able to do that. They’re just saying trust us this is going to be amazing,” he says. “And we’re looking five six seven even ten years out for the return, I think that’s too far. At least for me. I sold my stock after the what’s app deal.

This not uncommon reaction may involve a difference in culture between Silicon Valley and Wall Street as far as innovation is concerned.  Victor Hwang, CEO of T2VentureCreations, a Silicon Valley Venture firm puts it this way:  “On Wall Street, the biggest fear is missing the numbers, not making earnings.  In Silicon Valley, in the startup world, the biggest fear is obsolescence.  Because obsolence is the equivalent of death.” 

He says looking only at a future earnings stream misses the fact that in an environment where industries are routinely disrupted and transformed, the foundations of earnings streams are vulnerable.  There are existential costs to not innovating – something that can happen to any company, no matter how dazzling it appears at the moment. 

“It wasn’t that long ago that Microsoft was the cool company, and now people think of it as a dinosaur,” says Hwang.  Even Google is losing its sheen, he says.  “I think Mark Zuckerberg asks himself every morning: how do we not become a dinosaur?” 

All of that said, an investment of two billion dollars is no small gamble.  Unfortunately, hindsight is the only way to see if it pays off.  As Hwang put it, Facebook’s gamble with Oculus is “either extremely visionary or extremely foolhardy, and that’s the thing about innovation – you won’t know until later.”

Facebook's VC shopping list 

by Tobin Low

With a host of high profile acquisitions in recent years, Facebook has become that friend who has to own the coolest, most expensive thing before anyone else. With multibillion dollar purchases of Instagram, WhatsApp, and now Oculus VR, the social media giant has been putting its money towards buying the newest "it" thing. That doesn't mean they purchase only sure-bets, though. Facebook has acquired a lot of companies over the years, some of which offer very similar services and use very similar technologies to the big name companies already in their shopping cart. Always a bridesmaid, sighed MySpace. 

Here are a few other companies that Facebook has purchased over the years.

Beluga - Group Messaging

Long before the purchase of WhatsApp made your jaw drop with its $19 billion price tag, Facebook acquired Beluga - another mobile messaging service - in May of 2011. Unlike previous acquisitions where they essentially bought the talent but not necessarily the technology, Facebook stated that they wanted to make use of Beluga's product in addition to adding its designers to their team. Later that year, Beluga was shut down after its design was integrated into Facebook Messenger.

Lightbox Photo Sharing App

Even after its $1 billion purchase of Instagram, Facebook purchased another mobile photo-sharing service called Lightbox. The app allowed android users to filter photographs and then share them to social media. Sound familiar? Though the Lightbox team and Facebook alike made it clear that the aquisition was more about working on engaging Facebook mobile users as opposed to maintaining Lightbox as a separate entity. The app was shut down shortly after the acquisition.

American Farm Bureau Federation FB.com

This one's a little strange. Back in February of 2011, Facebook purchased the "FB.com" domain name from the American Farm Bureau Federation so that internal emails could be anchored to Facebook.com. What wasn't made immediately clear was that the purchase price was $8.5 million dollars. That little fun fact was revealed by a not so subtle announcement at the Farm Bureau's annual meeting in Atlanta.

*CORRECTION: Victor Hwang's characterization of Microsoft was transcribed incorrectly. The text has been corrected to reflect his statements accurately. 

NLRB Sides With College Football Players Hoping To Unionize

NPR News - Wed, 2014-03-26 13:51

The National Labor Relations Board says Northwestern University football players can unionize. It's a win for student athletes, but the university says it will appeal.

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Let's give a hand to the X-ray

Marketplace - American Public Media - Wed, 2014-03-26 13:34
Wednesday, March 26, 2014 - 14:08 ANDREI PUNGOVSCHI/AFP/Getty Images

Professor Gheorghe Burnei, head of the orthopedic department at Marie Curie Children's Hospital, holds X-rays from a patient during a morning visit, in Bucharest, Romania.

From the Marketplace Datebook, here’s a look at what’s coming up Thursday:  

  • In Washington, the Labor Department releases its final fourth-quarter gross domestic product report.
  • President Obama continues his spring trip with a visit to Vatican City where he's scheduled to meet with His Holiness Pope Francis.
  • The National Association of Realtors releases its February pending home sales index.
  • And speaking of homes, Graceland, home to Elvis Presley, was declared a national historic landmark eight years ago.
  • The Senate Health, Education, Labor and Pensions Committee discusses "Strengthening the Federal Student Loan Program for Borrowers."
  • On March 27, 1998, the FDA approved Viagra.
  • Lastly, physicist and Nobel Laureate Wilhelm Conrad Röntgen was born on March 27, 1845. While working with electromagnetic radiation he took a picture of his wife's hand revealing her bones. Fortunately, they weren't broken. Voila, the first X-ray!

Marketplace for Wednesday, March 26, 2014by Michelle PhilippePodcast Title: Datebook: Let's give a hand to the X-rayStory Type: BlogSyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Exxon Valdez Oil Spill Brings 'Bad Juju' And Pain 25 Years Later

NPR News - Wed, 2014-03-26 13:31

The lives of fishermen in Alaska were forever changed after the Exxon Valdez oil spill more than two decades ago. They're still haunted by litigation, bankruptcy and herring that haven't returned.

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How Russia's Annexation Of Crimea Could Hurt Its Economy

NPR News - Wed, 2014-03-26 13:21

President Vladimir Putin's swift move to annex Crimea has been popular among many Russians. But when it comes to Russia's economy, many analysts think the country's prospects are looking weaker.

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WATCH: A Desperate Act And An Amazing Rescue In Houston Fire

NPR News - Wed, 2014-03-26 13:01

A five-alarm fire in Houston led to a dramatic scene on Tuesday, when a construction worker tried to flee flames by jumping from one balcony to another.

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Movie theaters move beyond the ticket price

Marketplace - American Public Media - Wed, 2014-03-26 12:55
Wednesday, March 26, 2014 - 13:50 Frederic J. Brown/Getty Images

AMC movie theater in Monterey Park, California on May 22, 2012.

The president of the National Association of Theater Owners, John Fithian, just announced plans to test the idea of offering discounted movie tickets one day a week. He said he is working with one state in particular -- but wouldn't name it. Box office attendance is on the decline in this country, and yet, at the same time, box office revenue hit an all-time high in 2013.

The simple explanation is that fewer people are going to the movies, but they are paying more for their tickets. Mostly we're talking about 3-D movies, which are more expensive. But higher ticket prices aren't necessarily great news for theater owners. Theaters have to share box office revenue with studios, says business professor William Greene of the Stern School of Business at NYU.

So it's not always in their best interest to raise ticket prices. And for the most part they haven't. When adjusted for inflation, seeing a movie today isn't much more expensive than it was decades ago.

"Most of the revenue theater owners make is through concessions and ancillary revenues," says *Abraham Ravid. That ancillary revenue includes money that theaters are now charging studios to show trailers for upcoming films, like Divergent.

 

Because tickets are already relatively cheap, a discount day probably would not raise attendance dramatically, but it could be a good marketing strategy. Ravid says: "Nevertheless, you would expect the decline in theater attendance will continue as more ways of delivering movies become available."

*CORRECTION: An earlier version of this story misspelled Abraham Ravid's name. The text has been corrected.

Marketplace for Wednesday, March 26, 2014by David WeinbergPodcast Title: Movie theaters move beyond the ticket priceStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Are college football players employees?

Marketplace - American Public Media - Wed, 2014-03-26 12:48
Wednesday, March 26, 2014 - 13:45 Photo by Jonathan Daniel/Getty Images

Kain Colter of the Northwestern Wildcats is grabbed by Ryan Shazier of the Ohio State Buckeyes at Ryan Field on October 5, 2013 in Evanston, Ill. Colter had previously testified that ”there's no way around” the fact that football is a “job.”

In a decision by the National Labor Relations Board in Chicago, football players at Northwestern University are now recognized as employees of the university and are able to hold union elections.

Peter Sung Ohr, the regional director of the National Labor Relations Board in Chicago explained the ruling in a statement:

 "The record makes clear that the Employer's scholarship players are identified and recruited in the first instance because of their football prowess and not because of their academic achievement in high school."

Ohr gave the rationale that the players are employees because they receive compensation in the form of scholarships. He said the players are subject to the employer's control in their performance, which directly benefits the university.

This is consistent with the history of the NCAA, which didn’t start paying players until the 1940s, according to sports economists.

"At the beginning of the NCAA, in 1905, they stipulated no scholarships at all because scholarships were a form of compensation," said Andrew Zimbalist at Smith College.

Zimbalist said that the ruling only applies to private colleges, so it doesn't apply for the majority of schools in the highest levels of college football, since most of those institutions are state universities.

Zimbalist said that if the players at Northwestern do unionize, then the NCAA will disqualify them on the grounds that college athletics are amateur. However, he said the possibility of unionization comes with other benefits.

"Say they want a cost of living adjustment or they want to have catastrophic injury insurance for those players who are injured and can't go on to play in the pros," said Zimbalist. "Then they could stay within the NCAA rules and presumably they could then trigger other universities that are private to unionize and asks for the same thing."

Northwestern has announced that it will appeal the ruling to the entire National Labor Relations Board in Washington.

Marketplace for Wednesday, March 26, 2014Full NLRB statement and releaseInterview by Kai RyssdalPodcast Title: Are college football players employees?Story Type: InterviewSyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Does Beaver Tush Flavor Your Strawberry Shortcake? We Go Myth Busting

NPR News - Wed, 2014-03-26 12:41

Heard the rumor that strawberry syrups contain flavoring from a beaver's tush? The potion was once a common food flavoring. But settle down! The time of beaver-spiked ice pops and pastries has ended.

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U.S. is running low on some basic medicines

Marketplace - American Public Media - Wed, 2014-03-26 12:31
Wednesday, March 26, 2014 - 13:25 Joe Raedle/Getty Images

Registered Nurse Tung Tran hangs an IV bag for a patient at the University of Miami Hospital's Emergency Department on April 30, 2012 in Miami, Florida.

The drip, drip of IV fluid at hospitals, the drug doctors give people having heart attacks and medicines for cancer patients are all in short supply.

“On any given day we’re tracking usually 300 drug products that are in shortage,” said Cynthia Reilly with the American Society of Health-System Pharmacists.

She says, right now, the shortage of IV fluid is at the top of everyone’s critical list.

“It’s almost, really like not having access to water,” Reilly says. 

 “When we run out of absolute basics, like we’re running out of now, that’s when things get really frustrating,” said Erin Fox, director of drug information at the University of Utah Hospitals and Clinics.

According to a report from the Government Accountability Office, the number of shortages tripled between 2007 and 2012. Sixty percent of the shortages are generic drugs, which are cheaper drugs.

“Drug manufacturing, in the U.S., is a business,” Fox says. “No company has an obligation to make any product, no matter how essential it is for patients.”

The FDA reports the number of new shortages has been falling since new rules went into place in 2012. But, says Capt. Valerie Jensen, associate director of the drug shortage program at the FDA, “some shortages are just not able to be avoided.”

Basic drug shortages are hard to fathom in a wealthy country like the U.S., but some of these drugs are produced by only one or two companies.

When a manufacturing line shuts down, or demand goes up, supplies run low.

Marketplace for Wednesday, March 26, 2014by Adriene HillPodcast Title: U.S. is running low on some basic medicinesStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No

Backlash To Facebook Buying Virtual Reality Firm Comes Swiftly

NPR News - Wed, 2014-03-26 12:30

Facebook's purchase of Oculus VR is only a day old, but the founders are already defending themselves against threats of abandonment by game developers.

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That Health Insurance Deadline Now Comes With Wiggle Room

NPR News - Wed, 2014-03-26 12:21

President Obama often said that March 31 was the hard deadline to sign up for individual health insurance. But it turns out it's not so hard. Here's the latest on that slightly squishy deadline.

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Protesters Want To Sue Secret Service: Do They Have The Right?

NPR News - Wed, 2014-03-26 12:00

The Supreme Court heard arguments Wednesday about whether the Secret Service can be sued for a 2004 incident in which agents ordered police to move demonstrators away from President George W. Bush.

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Secret Service Under High Court Scrutiny For Potential First Amendment Violations

NPR News - Wed, 2014-03-26 12:00

The Supreme Court heard arguments Wednesday in a case testing whether the Secret Service, in restraining certain demonstrators and not others, violated the protesters' First Amendment rights.

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With Elections Days Away, Suicide Bombs Sow Fear In Kabul

NPR News - Wed, 2014-03-26 12:00

Taliban attacks have rocked some of Kabul's most guarded locations just days before Afghans vote in national elections, generating fear among foreigners and many Afghans connected to the vote.

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Unanimous Jury Convicts Al-Qaida Propagandist In Manhattan

NPR News - Wed, 2014-03-26 12:00

Osama bin Laden's son-in-law, a top propagandist for al-Qaida, has been convicted. The verdict supports the Obama administration's claim that federal criminal courts are ready to hear terrorism cases.

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Washington State's 'Slide Hill' Has A History Of Landslides

NPR News - Wed, 2014-03-26 12:00

Robert Siegel speaks with Seattle Times reporter Ken Armstrong about the instability of the land in Snohomish County in Washington that was affected by the massive mudslide.

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In Brussels, Obama Seeks Broader Support For Ukraine

NPR News - Wed, 2014-03-26 12:00

President Obama is visiting the European Union and NATO headquarters in Brussels for talks that will likely be dominated by Russia and Afghanistan.

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