The Secrets To Washington's Power Game.

Lobbying for Washington policymakers is no longer just an inside game.

A favorite metaphor for the official happenings in Washington, D.C., is "inside the Beltway." This is usually a term of opprobrium. A lot of Americans think that nothing can go well or smoothly or fairly when it occurs "inside the Beltway." And they aren't entirely wrong. The U.S. system of government and politics is a Byzantine, insiders' game played, for the most part, in the District of Columbia and its suburbs, which are circumscribed by a highway numbered 495 and called The Beltway.

How does the Beltway game work? That's not an easy question. No one person can describe or conquer it, that's for sure. Washington is a city filled with control freaks, which, by design, nobody can control. The federal government's internal checks and balances, in which one branch of government can block the others, insure frustration at every turn. On top of that, the post-World War II Washington is so large and unwieldy that just keeping track of the place, let along trying to harness it, is nearly impossible. Foreign countries and non-U.S.-based corporations feel especially outside the loop.

Fortune magazine, my employer, has been trying to make sense of the mess for the last four years. We have conducted a poll of D.C. power players--members of Congress, White House staffers, professional lobbyists and the like--to find out what groups have the most clout in the capital and why. The results have been eye opening. Taken together, the results serve as a kind of primer on how--and how NOT--to deal with Washington. What follows is a synopsis of our ongoing study.

The most important conclusion is that the whole notion of "inside the Beltway" is misleading. The part of the country with the real juice is outside, not inside, the Beltway. Government action (or inaction) reflects more what actual voters want than is the common perception. Indeed, the best way to manipulate legislation is by mobilizing blocs of voters, not by, buying access to politicians with campaign contributions. This is truer now than ever thanks to low voter turnout. Smaller voter blocs make a bigger difference to elected officials because so few people go to the polls (barely half of those eligible in 2000).

When Fortune asked Washington's insiders what compelled lawmakers to vote for or against legislation, the answer was this: the views that voters communicated to their elected representatives. Campaign donations had their influence, of course. But the opinions of voters mattered more. And voters who said they were willing to vote their convictions on certain issues were the people who carried the most weight. In other words, Washington still operates much like it was designed, from the bottom up rather than the top down.

This isn't a Pollyanna-ish point. D.C.-based lobbyists spend much of their day figuring out ways to get voters to do their bidding. A favorite method is to set up phone banks and call into key congressional districts and states to create a flood of phone calls and letters from voters to their congressmen. In the parlance of the craft, this is grassroots lobbying. In fact, it's Astroturf lobbying because of its obviously artificial nature. But it works. Creating and activating networks of lobbyists-for-a-day is what the modern lobbying industry is all about. (In the alternative, interest groups set up websites and send out e-mails to accomplish the same task.)

These days, pressure groups are valued more for the votes they can deliver than the dollars they can raise. Most of the Fortune survey's top interest organizations, known as the Power 25, have large numbers of geographically dispersed and politically active members who focus their energies on a narrow range of issues. In other words, they know their convictions and vote them. That kind of commitment can mean the difference between victory and defeat in close elections, which translates into heft on the legislative front. In 1997, for instance, fully half of the top ten groups in the Fortune poll got there on the strength of their long-established Astroturf networks. These kings of the town hall meeting were the American Association of Retired Persons; the National Federation of Independent Business, better known as the small-business lobby; the National Rifle Association (which is the current No. 1 on the list); the Christian Coalition (since fallen from the list); and the National Right to Life Committee, the anti-abortion group. Which isn't to say that money doesn't talk at all anymore. The AFL-CIO, for example, garnered great grades for both its grassroots and its campaign fundraising. And three of the top ten groups owed their high rankings to their substantial campaign contributions: the Association of Trial Lawyers of America, the American Israel Public Affairs Committee, and the American Medical Association. The poll results every year has provided similar proportions.

Lobbying was once a secretive art. But with the new emphasis on persuading voters and not just lawmakers, that has changed substantially. The capital's mightiest lobbyists aren't shadowy creatures who shun the spotlight anymore. Many are among the nation's best-known public servants who until recently were Sunday talk-show regulars, and in some cases still are. The top ten of Fortune's list of lobbying companies is peppered with recently departed leaders of Congress and the political parties.

These include the new No. 1 firm, Barbour Griffith & Rogers, which is headed by Haley Barbour, who chaired the Republican National Committee at the moment of the party's greatest glory, November 1994, when the GOP won control of the U.S. House of Representatives. Another perfect example is a former No. 1 firm, Verner Liipfert Bernhard McPherson & Hand, which acquired such marquee partners as ex-Senate Majority Leaders Bob Dole (who also was the 1996 Republican presidential nominee) and George Mitchell. Principals in the other top-ranked firms include ex-Senate Majority Leader and new ambassador to Japan Howard Baker of Baker Donelson Bearman & Caldwell, ex-White House Chief of Staff Ken Duberstein of the Duberstein Group, and Tom Boggs--son of an ex-House Majority Leader--of Patton Boggs.

As these names suggest, a lobbyist nowadays is as much a general as an infantryman. Sure, the ability to get a phone call returned is vital in the throes of battle. But many former insiders are valued as much for their strategic advice as for their door-opening skills. In effect, they manage entire persuasion campaigns, which include access lobbyists in Washington, Astroturf lobbyists at home, publicists for free media, advertisers for paid commercials, and scholars to shape the arguments.

But that's not all. The cutting edge of lobbying cleverness can be glimpsed in West Palm Beach, Fla. There, Richard Pinsky, a former GOP campaign operative, worked as a political detective. His job: to locate and bring into the lobbying fold people who know lawmakers personally. On assignment from lobbying firms based in Washington, Pinsky is paid to find key individuals close to lawmakers who are undecided on the legislation of the moment. He then ferrets out which of these confidants are willing to make the case to Sen. X or Congressman Y. In the argot of the multi-billion-dollar influence industry, Pinsky is doing grasstops--as opposed to grassroots--lobbying, since he avoids hoi polloi and zeroes in on those few people whom lawmakers know and whose opinions they trust. The beauty of this tactic is that the lawmakers rarely know they've been lobbied. That's why it works so well.

But the most impressive--and most instructive--lobbying in years came in 1998 from a little-known organization that represents America's twelve thousand credit unions. The Credit Union National Association ranked a mediocre No. 70 in the Power 25 in 1997. But it leaped to No. 8 the next year after it persuaded Congress to overturn a Supreme Court decision that would have sharply curtailed credit unions' growth. In the process it trounced its richer and larger archrival, the American Bankers Association.

To accomplish this legislative feat, the credit unions' trade association had to awaken a sleeping giant--its members' customer base. For many years credit unions flew below congressional radar. But when the Supreme Court threatened to prohibit them from expanding to cover larger groups of employees, it flew into action. It decided to unleash its most effective lobbying tool: the seventy-four million people who bank at credit unions. It took some money (about $7 million a year) and careful preparation (a dozen regional coordinators and lots of members' meetings). But the result was the biggest avalanche of phone calls and letters that many veteran lawmakers could ever recall. When the Senate Banking Committee chairman wanted a couple hundred credit union members to visit the Capitol to help him push the credit union's bill, six thousand people showed up from all fifty states. "The credit unions showed they can generate a massive level of grassroots support" said Ed Yingling, chief lobbyist for the American Bankers Association. "There was nothing you could do." That's how things REALLY work inside the Beltway.

Jeffrey H. Birnbaum is Fortune magazine's Washington Bureau Chief and a Political Analyst for Fox News Channel. His latest book is The Money Men: The Real Story of Fund-raising's Influence on Political Power in America (Crown Publishing Group, Inc., June 2000).