Is the American lobbying industry out of control?

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‘Things can be slipped into a bill at the last minute… It is very easy to change things here and there if you are persistent. If you make the arguments again and again, there is a tendency to work out a compromise.’
– Lee Drutman, senior fellow at New America thinktank

‘The shackles, even while they are on, are more spaghetti than steel.’
– The Center for Responsive Politics, on lobbying restrictions in Washington

These two quotes illustrate the concerns around the lack of control on lobbying in the United States. Is the industry broken and if it is, can it be fixed? The article below, written in February 2017, tackles this question.

Lobbying: The Scourge of Good Government
by Philip Kotler

Lobbying describes the effort of lobbyists to influence decisions made by government officials such as legislators, regulators, or judges. The term came from the fact that ‘influence peddlers’ would appear in the lobby of legislative buildings to buttonhole legislators and influence their voting on behalf of the legislators’ clients. Most of the lobbyists are lawyers and many are ex-Congresspersons.

Lobbying takes place at every level of government, including federal, state, county, municipal, and even local governments. In Washington, DC alone, over 12,000 lobbyists are busy targeting legislators and regulators.

Views about Lobbying

We tend to view lobbying activity as bad in leading elected officials away from voting in the interests of the people in their district and toward voting in favor of the lobbyists’ clients. We tend to see the influence of lobbyists as pernicious and favoring the interests of corporations and wealthy families over the common citizens.

Nevertheless, we must recognize instances of ‘good lobbying’ by groups trying to counter the misstatements and misinformation of other lobbyists, and also to represent advocacy groups such as environmental, educational, and health care groups. For example, the American Medical Association lobbied Congress to pass laws against tobacco advertising or sales to minors, and most people would consider this to be good.

In the ‘bad’ category are seen the lobbyists for major industries, particularly the oil industry, agriculture industry, pharmaceutical industry, and the defense industry. Lobbyists for the oil industry have managed to get government to provide strong subsidies and privileges for that industry. Lobbyists for the agriculture industry basically serve the corporate owners of vast agricultural land rather than the small farmers. Lobbyists for the pharmaceutical industry have helped achieve high drug prices in the U.S. by keeping out foreign drugs and delaying generic drugs. And lobbyists for the defense industry keep legislators actively voting for more military goods than even the military generals feel that it needs.

Campaign finance is the real source of corruption of our democratic ideal. Each legislator faces a mounting cost to get elected or re-elected way beyond his/her personal income and the income of friends and acquaintances. Each legislator needs campaign donations beyond what the political party can supply. Lobbyists are able to make campaign donations coming from their client corporations. Lobbyists cannot ask for the legislator’s vote in return for the campaign donation. But clearly legislators will know the size of the donation and will thank the lobbyists for the campaign support. Legislators also know that voting favorably for the interests of certain companies will increase chances to become a lobbyist after the legislator’s career is over. A Congress person who becomes a lobbyist can make several times his former annual salary of $187,000 as a lobbyist.

All said, raising enough campaign finance money is a cancer that gets legislators to focus more on the interests of big corporations and wealthy families than on what best serves the interests of the voters in their district.

We must recognize lobbying as essentially a marketing activity. The client hires a lobbyist with an issue in mind and together identifies the key legislators, their voting tendencies, and their susceptibilities; all in order to develop the right information, communication, and persuasion strategy. Successful lobbying requires deft persuasion skill, and has much in common with such activities as management consulting and public relations. Lobbyists hope to develop a close and trusting relation with various legislators and supply them with helpful information. Lobbyists must not commit the error of feeding dishonest facts to the legislator and thereby embarrassing the legislator, who will never again deal with that lobbyist. Although the facts are usually correct, the lobbyist puts them into a context that favors voting a certain way.

Lobbyists often say that they don’t approach a legislator and offer a political contribution. Most often the legislator phones them and asks for a political contribution, even stating the amount. The total cost of federal campaigns has skyrocketed in recent years, and elected officials must spend countless hours on the phone raising money for their campaigns. The real story here was not one of lobbyists corrupting some otherwise honest policymakers, but one of elected officials hitting up lobbyists through a form of legalized extortion.

Lobbyists are paid a salary and are given a budget to cover expenses and also contributions to legislator campaigns. One of the most damaging indictments of lobbying is found in Lawrence Lessig’s book Republic, Lost: How Money Corrupts Congress–and a Plan to Stop It. The Supreme Court decision in Citizens United v. Federal Election Commission ended up declaring that businesses were persons with a right to influence other citizens. The result is that more Americans see special interests funnel huge amounts of business money into influencing Congress and that business interests control the legislatures. Although there is little evidence of overt bribery, a lobbyist statement such as ‘If you aren’t able to vote for X, I’ll have to contribute $1,000,000 to your opponent’ is likely to have a strong effect.

Does the lobbying activity really pay off? Some studies have tried to show that legislators were not influenced by campaign contributions. But Lessig shows that influence can occur in other ways such as delaying certain bills, modifying certain bills. He shows how members adjust their views in advance before asking for contributions, so there is no explicit evidence of a change in a member’s view as a result of asking for contributions and that often contributions are given to avoid a bill being passed or to preserve the status quo.

Other studies say that lobbying has a great impact on Congressional bills and policy making. A 2011 meta-analysis of research findings found a positive correlation between corporate political activity and firm performance. A 2009 study found that lobbying brought a substantial return on investment, as much as 22,000% in some cases.

Proposed Solutions to the Lobbying Problem

Clearly governments must pass laws regulating the influence of lobbyists. Lobbyists’ activities must be reported and transparent and must be free of overt bribery. Lobbying is subject to extensive rules which, if not followed, can lead to penalties including jail. Yet the activity of lobbying is legal and is interpreted by court rulings as free speech and protected by the U.S. Constitution.

Among the solutions proposed are the following:

  • A cooling off period that makes congressional staff and others wishing to enter the lobbying field wait a year or more before they can lobby, and limits campaign contributions
  • Requiring lobbyists to register; requiring them to report contacts and expenditures
  • Reporting which businesses and organizations lobby, how, at whom, and for how much
  • Establishing a ban on personal gifts
  • Requiring political candidates to voluntarily agree to take only small ($100 maximum) contributions
  • Allowing a federal tax payer campaign fund checkoff [on U.S. income tax return forms] for specific Congressional candidates

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