In DC, Capitol Hill Townhomes Aren’t for Living In—They’re for Lobbying

From a story by Hailey Fuchs and Emily Birnbaum headlined “These days, Capitol Hill townhomes aren’t for living in. They’re for lobbying.”:

Just a few blocks from the U.S. Capitol, is a five-bedroom townhouse with an unobtrusive presence on New Jersey Ave S.E. It looks like any other home in this quaint, historic neighborhood in Washington D.C. But this one has a small placard and doormat distinguishing it from the row of other residences.

The house is the property of the Allied Pilots Association….And inside, it’s an airplane fanatic’s dream. Several model planes and a mini-model engine are on display, and the walls are dotted with photos and artistic depictions of various aircrafts….

The Allied Pilots Association bought the townhouse for about $1.8 million in February 2020, just before Covid-19 shut down Washington and the world. With the city now emerging from its long pandemic-induced hibernation, the group is hoping its new real estate will cement it as a permanent force on Capitol Hill.

“Just me personally, I’ve probably had 20 members of Congress say, ‘Hey, can we do an event over there?’” said Brian Bell, a pilot-advocate for the association. “Now, we want to make sure everybody knows we have a permanent presence on the Hill, being the largest airline in the world, and what this will allow us to do as far as an advocacy perspective from the Allied Pilots Association, now we can entertain members of Congress, both sides of the aisle.”

The popular conception of a lobbying shop usually involves an office on K Street, an expense account at some popular steakhouse and a small army of operatives that hit the fundraising circuit in downtown D.C. on a nightly basis. But influence peddlers have long explored other, subtler venues to twist the arms of members of Congress. And the Capitol Hill townhouse is chief among them.

The townhouse owned by the Allied Pilots Association is one of more than 20 properties identified by POLITICO that are located around the Capitol Hill area and owned by business groups and others lobbying Congress. The groups use these homes, often registered with the city as residential property, as a workplace for D.C.-based employees, a respite for K Streeters taking a break from meetings on the Hill, and, most notably, a cheap fundraising venue for members of Congress. But above all, these luxurious townhouses provide companies, trade associations, religious groups and lobbying shops with a chance to rub shoulders with lawmakers outside the bounds of government property….

The townhouses, a pillar of the D.C. lobbying circuit for decades, have long provided a unique set of benefits to the lobbyists that own them and the lawmakers who attend events at them. The first, and most important, is proximity. Busy members of Congress and their overworked staff are able to duck out of the office for a brief period of time, attend an event and rush right back in time for a set of evening votes.

“I think it’s really about convenience — to be able to host members without having them travel far from the Hill,” said Izzy Klein, a co-founder and principal at the Klein/Johnson Group, which counts Oracle, CVS, Clearview AI and Cisco as clients. “I think they can offer up something that can fit into a members’ schedule mid-day, to do a lunch or something, whereas it would be harder to get a member downtown for that same purpose.”…

For members of Congress, who are constantly seeking to raise money for their next reelection campaign, there’s also a major financial perk. Compared to the lavish hotels and restaurants that lawmakers tend to flock to for fundraising events, the price to rent one of these townhouse rooms is a veritable steal. Costs range from roughly $140 to $300 per hour — a cut rate that corporate owners can often write off as an in-kind donation to the fundraising candidate from their PACs.

Campaign finance guidelines require property owners to rent out space for fundraisers at “fair market value” — meaning they can’t give special rates to lawmakers with whom they’re hoping to mingle. But that’s a loosely-defined term. Locations on Capitol Hill are in a constant process of comparing their rates to one another, according to a lobbyist whose company owns one of the townhouses, in order to ensure they’re not violating any Federal Election Commission guidelines. A few hundred dollars for a room is cheap, considering many of the townhouses are in prime condition, though unlike restaurant rentals, the price doesn’t include catering….

Regardless, there’s little enforcement in this area of the law. “The FEC just doesn’t have the time to sit around and monitor whether or not a townhouse is being rented out at a fair market value for a campaign fundraising event,” said Craig Holman, a campaign finance lobbyist with advocacy group Public Citizen. “It’s left to the discretion of the lobbyists and campaigns to determine what they want to charge. I suspect very frequently it’s way under fair market value.”

The in-person fundraising circuit in D.C. almost entirely shut down during the pandemic. But after nearly two years of crickets, the townhouse lobbyist fundraising scene is now showing signs of life. With the D.C. mayor’s recent announcement rolling back parts of the city’s indoor mask mandate, the coming months will likely bring the advocacy community back to their regular haunts….

A House Republican aide described the culture at many of the townhouses as casual and convivial, with staffers buying six-packs of beer to drink on the plush couches in the townhouse living rooms near the House and Senate office buildings….

In pre-Covid times, the steady flow of lobbyists to and from the Capitol and the townhouse scene was a fixture of life on the Hill. And they were certainly among the least humble parts of the K Street lifestyle. A 2022 assessment of the Associated General Contractors of America townhouse estimated its value at $2.7 million and the Oracle townhouse at $2.8 million. The Credit Union House is estimated at $2.6 million, and the UPS townhouse is estimated at $2.3 million. The National Indian Gaming Association townhouse is estimated at $3 million. The political arm of the American Osteopathic Association in August bought a townhouse assessed at $4 million from nuclear components company BWX Technologies….

Some groups are outspokenly proud of their prime Capitol Hill real estate — the house owned by Alticor has an Amway sign out front, along with the ones owned by the Associated General Contractors of America and the Allied Pilots Association.

“This will boost us because when people hear Allied Pilots Association, now they’re gonna realize, ‘hey you know they have a great venue,’” said Bell, the pilot who is based in Texas. “It’s all about the building the relationships that we strive so hard to do because everyone knows in Washington D.C., it’s the relationships that matter.”

The facades of some corporate townhouses around the neighborhood show no easily identifiable information about the property’s true owner. The townhouse owned by UPS is registered with the D.C. government under an LLC called “BT-OH LLC.”…

A number of organizations declined to offer POLITICO a tour of their property. Those include the American Dental Association, the Credit Union House, the Association of Credit and Collection Professionals, and the technology company InterDigital. Highlighting the protectiveness some owners feel about their houses, the Oracle townhouse called security on a POLITICO reporter lingering outside, citing heightened security across the Capitol area following the events of Jan. 6….

The townhouses don’t often make money for their owners, but they pay dividends in access and influence. Companies with corporate offices on the other side of town often struggle to attract members of Congress to their events, several lobbyists said.

“If you’re a trade association or corporation and you want to play at the highest level, having something right near the Hill is very valuable,” said Stewart Verdery, CEO and founder of Monument Advocacy, a firm that counts Google’s parent company Alphabet, Amazon and Netflix as clients. “It gives you the mechanism to engage with members that others aren’t going to be able to do.”

Verdery said it sends the message that the corporate owners are “an access player, so it’s probably not for everybody.”

The Republican aide said the influence is often subtle — less quid pro quo and more about the social relationships that form between lobbyists and lawmakers during the flurry of activities. “I don’t know that any staff are particularly smitten by, ‘Oh, I go to their townhouse so I gotta be nice to them when it comes to legislation,’” the aide said. “But I do think a lot of members hold fundraisers there, so you have to wonder if you’re raising a lot of money using their house, if that’s going to make you think twice before you vote against them.”

Speak Your Mind