Meet the door to (revolving) door salesmen of the private sector, with their unique access to the so-called ‘public interest’, and a special talent for selling government a bunch of stuff its citizens don’t really need. Welcome to Lobbying 101.
By Robert Simmons
A government contract secured by a lobbyist for a private business is paid for by the public. A tax cut engineered by a lobbyist for a paying client affects the size of the public treasury [which] impacts other public policies. A change in the law won by the lobbyist on behalf of a private party governs all citizens. Lobbyists may represent the private sector, but they inevitably impact the public sector. This cannot be said of any other business or professionLobbying, Government, and Public Trust
In This Article
- What Is Lobbying?
- Lobbying 101: How do lobbyists influence government decision making?
- Lobbying 101: How does lobbying benefit the government?
- How Does lobbying negatively affect government?
- Lobbying 101: What is Revolving Door Politics?
- What is Regulatory Capture?
- What is Policy Capture?
- What is a “special interest group”?
- Lobbying 101: What are Political Action Committees?
- Lobbying 101: How are political action committees (pacs) formed?
- The Third Option Assessment of Lobbying 101.
What Is Lobbying?
Lobbying 101: Lobbying is acting to influence the decisions of others. In politics, this is done by someone other than a citizen acting on his own behalf, who either presses for a change in policy, or seeks to prevent such change. Lobbying can be done either Directly or Indirectly. Direct Lobbying implies any attempt to influence legislation through communication with an official member of a legislative body, or any ‘secondary’ official or employee who also has influence in shaping legislation. Indirect Lobbying usually refers to Grassroots Lobbying, which is an attempt to influence the opinions of the public, and trigger specified action. Grassroots lobbying is protected under our 1st amendment right to freely speak, assemble, and petition government for a redress of grievances.
The American Federal Regulation of Lobbying Act of 1946 first established rules for lobbyists, but was not specific enough, and allowed influence-peddlers of many varieties to come and go without being officially registered with the Federal Government. The Lobbying Disclosure Act of 1995 (LDA) was an attempt to secure more transparency in who had access to the legislation process. It defined a lobbyist as one who:
- makes more than one lobbying contact with a covered official
- receives compensation of USD $2500 for a contract, or USD $10,000 for a lobbying organization, within a three-month period
- spends at least 20% of work time per client or employer on lobbying activities, which includes planning, research, or other background work necessary during contacts with covered officials
There are corporate lobbyists, contract lobbyists, not-for-profit lobbyists, public relations ‘professionals’ – even governments trying to influence each other would fall under the category of lobbying.
Lobbying 101: How do lobbyists influence government decision making?
Lobbying 101: By definition, the lobbyist is an outside private sector individual or organization whose sole purpose is to influence government decision-making. They do this by communicating directly with officials who decide public policy, providing information that is often too complex for legislators to work through on their own, in the time period allowed. With so many decisions needing to be made by legislators, the ‘expert opinion’ of these lobbyists cannot help but be used, and thus color how legislation is framed, worded, and executed.
When lobby organizations fund political campaigns, there is a concern that newly elected officials may feel obligated to “return the favor” to these entities who helped get them elected (see policy capture). There is also a concern when officials leave office, only to become lobbyists within the same governmental department they just vacated (where their connections could easily create a ‘conflict of interest’). The reverse happens as well, when former lobbyists are hired to fill government positions where they once peddled their influence (see revolving door politics).
Campaign Finance Brings In Large Amounts Of Money
Another interesting phenomenon is how often an individual, who raised money for candidates, winds up getting a job within the new administration. Known as “bundlers”, these campaign fundraisers have been awarded ambassadorships and other key administrative posts for their work raising money. Eighty percent of those raising $500,000 or more end up with a job; meanwhile, they are not required to reveal their name during this process, as all disclosures are voluntary.
Lobbying 101: How does lobbying benefit the government?
Lobbyists are considered experts in their particular field – meaning they know more than legislators about a given subject – and translate data (usually scientific, informational, or political in nature) into simple-to-understand concepts that officials can digest. Lobbyists also report back to their employers what legislators are doing, which in some cases may help to hold officials accountable for the decisions they make.
Wherever there is private sector participation in government-entrusted services, lobbyists are there influencing where that money is spent. When a lobbyist’s advice serves the public interest, there would be a resulting benefit. Whether this happens at the level of Direct Lobbying is unclear.
How Does lobbying negatively affect government?
Lobbying 101: The danger inherent in the role of lobbying is that officials rely on lobbyists for the factual interpretation of information apparently too complex for legislators to fathom on their own. Even in the best of circumstances, lobbyists are selling something from their employer, hoping government will buy it.
In the financial crash of 2007-2008, the federal government decided to bail out banks, car companies, investment firms, insurance companies and real estate companies to the tune of $700 billion, on advice from lobbyists, who spent $77 million to influence government during the early period of that administration. Add to that another $42 million in campaign contributions which targeted 94 members of the Senate Committee on Banking, Housing and Urban Affairs and the House Committee on Financial Services, who were all considering various new banking regulations.
Transparency is easily avoided in many cases. Former Congress members can become “Senior Advisors”, or work in “government relations”, and not have to register as lobbyists, regardless of their agendas. Although lobbying clients may disclose working with members of Congress, there is no way of knowing whether favorable last-second amendments or “riders” tacked onto specific bills are a direct result of payments to these same Congressional members, though the money trail often suggests a direct correlation. When lobbyists are not ‘working’ the members of Congress, they are going directly after agencies within government, usually attempting to loosen unfavorable restrictions.
With tax incentives, subsidies, grants and other disbursements on the line, “who gets what” is of incredible interest to all parties involved; how the rules are shaped by various legislation will ultimately decide all of it. The conflict of interest is that lobbyists and/or lobby groups, are looking for a payday for their employer, while citizens are looking for fairness from their government. Translation: the chance for “real win / win situations are an exception”.
Lobbying 101: What is Revolving Door Politics?
Lobbying 101: The Revolving door in politics involves movement of personnel between government roles as legislators (or regulators), to employment in the very industries affected by this legislation and regulation. This can easily lead to “unhealthy relationships” between the private sector and government, around the feeling that one is ‘obligated’ when something has been given to them (like lifetime financial security, for instance). Behavioral experiments have confirmed this “reciprocity principle”.
In the U.S., 42% of United States Representatives and 50% of Senators have taken lobbying jobs on “K Street”. One study revealed that “being connected to a powerful politician is a key determinant of the demand for a lobbyist’s services…moreover, lobbyists connected to serving politicians earned significantly higher revenues, with ex-staffers working for serving senators estimated to earn 63% more than those with no such connections”. These former high-profile Congressional staffers often land in lobbying jobs, with no transparency available to know how they may have also influenced political activity via their former employers.
Concerns over this phenomenon have prompted many democracies to enforce a “cooling off” period between leaving office and taking a lobbying position (EU established a 12-month period, Canada: two years, the UK: five years), in order to prevent “conflict of interest” to occur. The U.S. has no such rule in place.
With this too-intimate connection between private and public interests, the threat of regulatory capture and policy capture are made very real.
What is Regulatory Capture?
Regulatory capture refers to a “corruption of authority”, where a policymaker or regulatory agency repeatedly serves the political or commercial interests of a specific group over the interests of the public. Groups can be defined by geographic region, industry, ideology, or profession; meanwhile, the burden of cost, through taxation, is still shared by every citizen, regardless of whether their interests are served or not.
What is Policy Capture?
When public decisions over policies are consistently directed away from the public interest and towards a “special interest”, it further exacerbates the social and economic inequality between the two, which ultimately erodes the public’s trust in government and the political process. Capture leads to financial benefits for these special interest groups, who are empowered to reinvest in the further promotion or blockage of policies, perpetuating this dysfunctional cycle.
What is a “special interest group”?
Interest groups comprise a subset of people working together through an organization and advocating on behalf of a shared agenda. Some examples include The Sierra Club (environmental protection), the Christian Coalition (Pat Robertson’s group), the National Right to Life Committee (abortion, euthanasia), and the National Rifle Association (guns). By far, the most money going to government comes from financial sector interest groups, which includes the insurance industry, banks, investment firms and real estate. Big Oil, Big Pharma, Agribusiness, and single-issue groups also help contribute large amounts to the elections of candidates, who are expected to deliver on these agendas.
Lobbying 101: What are Political Action Committees?
PACs are political committees designed to raise money, then spend it to elect and defeat candidates of their choice. PACs can represent business or labor interests, but also represent special interest groups with ideological agendas.
PACs are allowed to give up to $5,000 to candidates each election. They are also allowed to give up to $15,000 annually to national party committees, and another $5,000 annually to other PACs. Conversely, PACs can receive up to $5,000 from any one individual, PAC or party committee each year.
Lobbying 101: How are political action committees (pacs) formed?
There are several types of PACs. Separate Segregated Funds (SSFs) allow corporations, labor unions, membership organizations, or trade associations to solicit contributions from individuals associated with specific “connected” organizations. Non-connected Committees are not sponsored by or connected to any corporate, labor, or trade entities, and thus are free to solicit contributions from within the general public.
Members of Congress (or any other political candidates) are allowed to establish their own Leadership PACs, in order to support fellow candidates for various federal and nonfederal offices. Like other multi-candidate committees, these PACs are allowed to contribute as much as $5,000 to the election of another candidate.
In 2010, Super PACs were created (based on Speechnow v. FEC decision, U.S. Court of Appeals, 2010) This allows these organizations to run ads, or communicate through any other means, in order to help or hinder the election of specific candidates. To this end, Super PACs are allowed an unlimited budget.
Hybrid PACscan also bet set up to solicit and accept unlimited contributions from individuals, corporations, labor organizations, etc., which then goes to a separate bank account, for use in ads, voter drives, and other “independent expenditures”. It is a ‘hybrid’ because a different bank account can be set up to fund federal candidates, though this money is subject to the same limitations as multi-candidate PACs.
The Third Option Assessment of Lobbying 101.
It’s no secret: government has a big bag of money, and likes to sit in the park and feed the private sector. Is it any wonder that little critters would start hovering around, in ever-growing numbers, hoping for a free meal? Invariably, the bigger critters begin bullying their way to the front and eat first. None of this should be surprising.
The idea of lobbyists and the spend on lobbying makes sense as well. The optics of a horde of beggars cluttering the White House lawn would not ‘play well’ on the evening news. Sending a “sales rep” in a suit to collect the cash keeps it all on the ‘down low’, which is really the best thing for every one. Clearly, the public would prefer not to know where all their hard-earned cash is going anyway.
Disappointing, perhaps, is that Government appears to be no better with its money than the average citizen, lacking both the required knowledge and savvy necessary to protect itself from getting conned. One would like to think that Government could do its homework better, and not walk into the store, cash hanging out, and have to ask the sales person (who works on commission) for their opinion, however ‘expert’ the advice may or may not be.
The more plausible conclusion is that Government is ‘on the take’, but really, aren’t we all. Tradition is the cocktail we’ve been served since long before there was
ever any ‘happy’ hour: it’s made with one part Fear, one part Laziness, and (often more than) one part Oppression; this excuse about how “that’s the way it’s always been done” is merely the rhetoric oppressive types use to gently warn the rest of us to look the other way “if we know what’s good for us”. Unfortunately, none of this will ever go away until we change ‘the way it’s always been done’. Reactive band-aid fixes only keep the critters away for so long.
Lobbying 101: The Third Option would like to challenge the notion that “money is a necessary component of the Democratic Process”. The only necessary component of a properly functioning Democratic process is the acknowledgment that each citizen is somehow of equal importance, made manifest in allowing “one vote per (living) citizen”. Money is no doubt an excellent determinant of private interests, but is wholly ineffective in determining the ‘public interest’. If government and government officials truly want to know what interests the public, all they have to do is ask them, and then, through the exercise of good governance, present solutions that best represent the ‘public interest’.
And no, The Third Option also dismisses the idea that policies invariably have “winner and losers”; policies such as these are poorly researched, lazily developed, and politically constructed. The people need legislators to use all their available skills (which includes effort) to discover these more elusive “win-win” strategies.
Once legislators embark on this task, they will all realize that win-win strategies are indeed possible – just not using the current version of market system economics, which of course is based solely on the concept of ‘winners and losers’. It is at this point that the Great Epiphany will occur; that moment when we all suddenly realize that Democracy and Private Sector ‘winner-take-all’ economics goes together like peas and dog shit.
The Third Option has already had this great epiphany. We would plop down a National Public Bank, full of federal income tax money, and with it, build (among other things) a Communication Grid, designed to connect Communities to healthcare, education, social security, and more. Meanwhile, it would give every citizen (through an already secure personal account) the ability to exercise their government-mandated right to vote on stuff. All sorts of stuff.
Communities could implement some ‘communication infrastructure theory’ and share in the ‘civic virtue’ needed to build a more healthy Community environment. From polls and surveys, to actual votes cast for local, state, and federal candidates, the public interest could be better understood, and thus better managed. Congressional Representatives would no longer need to spend $4.4 million – and senators $15.7 million – to run their respective campaigns, and waste everybody’s time and money. Each candidate would get equal “air time” online, in order to get their points across, and let their constituents know who they are and how they stand on every possible issue.
Voting should be made mandatory. Not every one in the world gets to vote, or live in a Democracy, let alone live in a developed country, with its many (apparently taken-for-granted) perks. Election Day should be a National Holiday, and there should be celebration connected to it, mostly because it is an excellent cause for celebration.
In order to get useful responses, Government must learn how to ask the right questions. Polls should be limited to what serves the greater good, and serves it equally. Special interests are excellent uses of one’s time, and The Third Option believes every one should have a special interest, and go pursue it, either alone or with other like-minded individuals, leaving the rest of us to seek out and participate in whatever special interests incite our imaginations. This new Communication Grid would facilitate all special interests in helping people connect with like-minded citizens more easily, and if these interests become matters of community, state, national or international importance, it would fall to government to help this now-public interest reach its full expression.
There is a kind of Economics that goes with Democracy: it’s called Economic Democracy. For more on what Economic Democracy would look like, visit The Third Option.