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‘Choosing winners and losers’: Behind the battle to be deemed essential

By Theodoric Meyer and Anna Gronewold

In New York, the real estate lobby tried to convince Gov. Andrew Cuomo that people could be left homeless if the industry is forced to shut down.

Retailers in Illinois pressed to get businesses that service swimming pools and hot tubs added to the list of businesses considered too essential to be closed.

And the Golf Course Superintendents Association of America provided talking points to its members to push states and localities to let the greens stay open. The game of golf has “tremendous benefits to offer during times of crisis,” the trade group argued on its website.

As states and cities have forced what they consider “nonessential businesses” to close to slow the spread of coronavirus, lobbyists for industries from retail to reefer have been hustling to make the case that they’re too important to be shut down — a designation that could mean millions for companies and the employees who keep them running.

Business interests have argued that the constantly changing rules in different states, counties and cities have created a patchwork of restrictions that are inconsistently enforced and are costly to adhere to, as the Retail Industry Leaders Association and the National Retail Federation wrote in letters to governors last week.

“In a lot of ways, states and local governments are choosing winners and losers,” said Douglas Friednash, a Denver lawyer who has lobbied on the restrictions in recent weeks.

Companies and trade groups seeking to shape the rules are lobbying governors, most of whom have issued executive orders detailing which businesses can remain open and which must close. They’ve also appealed to the Trump administration, which has put out recommendations outlining which industries it considers essential — although states and cities aren’t bound by the recommendations.

The National Shooting Sports Federation, for example, successfully convinced the Trump administration to add gun stores and shooting ranges to its list of essential businesses. The move convinced New Jersey to change its own rules — but it didn’t sway Los Angeles, which has shut down its gun stores. A federal judge sided with the city on Monday in a lawsuit brought by the National Rifle Association and other gun-rights groups.

Some companies have turned to lobbyists with ties to the administration to help them make the case that they should be added to the list.

Laundrylux, which makes commercial washers and dryers, and the title insurance company Fidelity National Financial last month both hired Brian Ballard, a lobbyist who’s a top fundraiser for Trump’s campaign. Laundrylux wanted laundromats included on the list. Fidelity sought to have county recorders of deeds — who are crucial to its business — designated essential.

Ballard’s firm lobbied the Department of Homeland Security, which later included “laundromats, laundry services and dry cleaners” and government workers “who perform title search, notary and recording services in support of mortgage and real estate services and transactions” on an updated list of essential industries.

And Energizer Holdings hired Scott Mason, who worked on Trump’s 2016 campaign, to convince the administration the company's battery manufacturing operations should be considered essential. Mason lobbied the White House and the Department of Homeland Security on the matter, according to a disclosure filing.

In an interview, Mason said Energizer’s operations in states such as Wisconsin, North Carolina and Ohio should be designated essential because the company supplies batteries that hospitals battling coronavirus rely on.

“They’re a direct supplier of dozens of health care and hospital systems across the country, millions of patients across the country,” he said.

Energizer paid Mason’s firm $20,000 to lobby on the essential business designation and other matters for less than two weeks last month, according to disclosures.

Christopher Krebs, the director the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency, wouldn’t specify which industries have lobbied his agency but said in a statement that the list “includes the feedback and suggestions received from” the private sector.

Other battles over what’s an essential business have been fought in the states.

When a New York state agency said that real estate wasn’t considered critical, the state’s powerful real estate industry warned that deeming it nonessential could have devastating consequences.

“Right now, there are buyers and sellers in the final stages of their transactions and absent the ability to conduct legally required walk-throughs, they simply will not be able complete their purchase or sale,” Jennifer Stevenson, the president of the New York State Association of Realtors, wrote in a letter to Cuomo obtained by POLITICO. “Should real estate services not be able to proceed, New Yorkers will be faced with the prospects of losing down payments, being in contractual breach, or worse yet, homeless if the sale of their current residence just recently settled.”

New York reversed course last week, indicating that real estate agents could resume showing houses, apartments and offices. But the move spurred an immediate backlash in a state that has reported more than 7,000 people have died of the novel coronavirus.

The state clarified the next day that only virtual showings would be allowed, though back-office work, walk-throughs and appraisals still appear to be allowed.

The Golf Course Superintendents Association of America, meanwhile, organized golf executives to lobby every governor in the country. “The ask was, ‘Keep golf open for play where possible,’” Chava McKeel, the trade group’s top lobbyist, said in a webinar last month.

In states that have forced golf courses to shut, the trade group has asked that courses at least be allowed to keep up with maintenance. It also has pressed the Department of Homeland Security to designate golf course maintenance as essential.

In Illinois, retailers successfully convinced Gov. J.B. Pritzker’s administration to add bicycle repairs shops to the list of essential businesses. With many Chicagoans avoiding mass transit, “bikes become a whole lot more popular, and bike repair businesses a whole lot more essential,” said Rob Karr, the president and chief executive of the Illinois Retail Merchants Association.

But the trade group failed to persuade Pritzker to add tree nurseries and businesses that service pools, spas and hot tubs to the list. “That was not included,” Karr said.

The retail industry has also chafed against rules in Vermont and cities in other states forbidding stores from selling goods not considered essential, even if they’re allowed to remain open to sell groceries, hardware and other supplies.

Lindsay Kurrle, Vermont’s commerce secretary, directed big-box retailers such as Walmart and Target last week to “reduce the number of shoppers by requiring online ordering, delivery and curbside pickup whenever possible, and by stopping the sale of non-essential items.”

Jason Brewer, an executive vice president at the Retail Industry Leaders Association, said such rules were unfair because they forced employees to try to police the items that customers were buying.

“For a lot of retailers, there are aisles that contain essential and nonessential goods,” he said. “Simply roping off an aisle doesn’t really work.”

Some of the battles are being fought in cities and counties rather than state capitals.

Like several other states, California has designated recreational cannabis an essential industry — a much-needed win for the state’s dispensaries, which are already struggling to compete against an underground market that can’t be shut down by executive order. But Long Beach, the state’s seventh most populous city, and Santa Clara County, announced last week that they’d only let dispensaries sell to those with medical marijuana cards (although Santa Clara Country still allows home delivery of recreational cannabis).

That’s a problem because many Californians who use cannabis medicinally no longer have cards now that recreational weed is legal, said Adam Spiker, a co-founder of the Southern California Coalition, a cannabis industry trade group. His group has mounted “a full-court press” against the restrictions, which he said came at a particularly bad time.

Medical marijuana users need the drug more than ever now, he said, “because everyone’s panicked about what’s going on in the world.”

Tim Starks contributed reporting.