Accounting Board's Lobbyists Stress Independence

The rule-setting board for corporate accounting has a rocky history of bumping up against lawmakers often acting at the behest of powerful business interests. It has been criticized by some as spineless in the face of pressure from Congress.

But the Financial Accounting Standards Board has been lobbying to underline its independence as a private-sector body. The FASB's parent this spring hired K&L Gates, a big law and lobbying firm. Officials of the parent, the Financial Accounting Foundation, and the firm met last month with key lawmakers.

The foundation spent $120,000 in 2008 and $40,000 in the first quarter of this year on outside lobbyists, which also included Morrison Public Affairs Group, according to reports filed with the House clerk's office. By contrast, the accounting foundation reported no outside lobbying expenditures from 2003 through 2007.

Robert Herz, who has been FASB chairman since 2002, is addressing the National Press Club for the first time Friday. He is expected to suggest approaches to overhauling financial regulation as Congress works on revamping the rule book.

It's "great" that FASB is pushing the message of its political independence in Washington, but the impact likely will be a drop in the bucket against the banking industry, said Michael Granof, an accounting professor at the University of Texas. The Financial Services Roundtable, a group representing more than 100 big banks, brokerages and insurance companies, spent nearly $2.3 million lobbying in the first quarter.

"It's money that talks," Granof said.

FASB spokesman Neal McGarity said the lobbying comes in an "extraordinary environment ... (where) we felt it was very important to heighten the education effort towards stakeholders and policymakers."

A lobbyist from K&L Gates who has been working on FASB's behalf referred queries to McGarity.

FASB writes the standards that guide accountants in preparing companies' financial statements. Tucked away in seaside Norwalk, Conn., it seems far from the hurly-burly of Capitol Hill. But the legislative battles and political dramas unfolding in Washington impinge heavily on the accounting board.