There are of course many Republican lobbying firms that are even more blatant in their ties with government than Democrats. In January 2011, Utah Senator Mike Lee hired an energy lobbyist to be his chief of staff, raising questions about such a direct link between politicians and lobbyists. According to the Salt Lake Tribune: “They have also both (the senator and his chief of staff Spencer Stokes) worked for Energy Solutions and Stokes is still registered to lobby for the nuclear services company, which operates a radioactive waste landfill in Utah. Stokes is currently registered to lobby for 18 organizations in the state, including the Utah League of Credit Unions; Management & Training Corp., a private prison company; and a number of energy interests, including utilities and the Utah Association of Energy Users.” Huffington Post, January 3, 2011)
Senator Lee was honest enough to acknowledge through his actions that his office belonged to corporate interests, even while he was in office, no matter what critics thought of him. Other politicians wait until they actually leave office to go to work as lobbyists. This was the case with former Senators Trent Lott (Republican) and John Breaux (Democrat). In 2008, their lobbying firm made one million dollars, which was a mere 13% of their income for the year, serving such a diverse group of clients as AT&T, Northrop Grumman, Nissan North America, Tyson Foods and Shell Oil. According to published reports, the Lott-Breaux lobbying firm actually delivered no service to these companies, and this was by no means the only lobbying firm doing nothing but receiving money from corporate clients who simply wanted these firms on their side. Despite their rather conservative leanings on foreign policy, one of their clients was Russian-owned Gazprombank, Russia’s third largest bank controlled by the Russian state-owned Gazprom energy company against which U.S. imposed sanctions in July 2014. (“Empty Disclosure” by Lindsay Renick Mayer, March 19, 2009; OpenSecrets.org)
In 2012, billionaire Republican presidential candidate Mitt Romney revealed that he was taxed at the rate of 14percent. Romney’s tax rate was considerably lower than 47% of Americans who pay higher taxes but do not have the income and assets of billionaires like Romney. This absurdity in poorer people paying tax rates than the rich is the result of lobbying. In 2010, the Sunlight Foundation conducted a study to determine how lobbying yields benefits to corporations. The result is that America’s largest companies enjoyed a tax reduction amounting to $11 billion in 2010 when compared with 2007. The study concludes that return on the lobbying investment on behalf of the companies involved was a staggering 2000%. (“Lobby More, Pay Less” by Lee Drutman. 16 April 2012 Sunlight Foundation.)
Besides the direct tax savings as a result from lobbying activities, corporations also benefit indirectly through subsidies that the government provides for some of the largest companies, including General Electric, Boeing and others of similar magnitude. Such subsidies are not only at the federal level, but also at the state and local levels amounting to billions of dollars annually, all of it in the name of neoliberalism but in essence corporate welfare.
To maintain a plant in Seattle Washington where the model Boeing 777X is made the Boeing Corporation received a staggering $8.7 billion in tax subsidy from the state as a result of lobbying. In addition to lower taxes and corporate subsidies that account for the phenomenon of corporate welfare, corporations also enjoy reduced regulation as a result of lobbying. For example, the food and beverage industry valued at more than one trillion dollars has been lobbying against regulatory measures that would reduce the rate of obesity and the ensuing costs to the health care system. With one-third of the population suffering from obesity and 17% of children, currently the US is number one among advanced nations. Because it is very profitable to make derivative food products from soy and corn used in junk foods, the food/beverage industry has spent enormous amounts on lobbying and campaign contributions to make certain there is no regulatory regime that obstructs this trend.
For large corporations in the domain of energy – coal, natural gas and oil – as well as chemical and pharmaceutical industries, lobbying is important to maximize profit by lowering costs owing to environmental regulation. The banking industry is just as active in lobbying government to permit greater freedom of its activities. (Mathew Sherman, “A Short History of Financial Deregulation in the United States”. Center for Economic Policy Research, 2009). As a result of lobbying efforts, Republicans and Democrats proceeded with banking deregulation in 1994. The result was the banking crisis of 2008 when the banks brought down not just the US economy but the world economy. All the risk rested with the taxpayers while the profits went to the bank executives and wealthy investors.
Deregulation meant massive bank profits at the cost of destabilizing the economy, but it does not stop there. Banks have been used as conduits to transfer billions in black market money emanating from narcotics to massive and chronic bribing involving FIFA international soccer games. The Justice Department’s FIFA investigation is looking into how Wall Street, including CITI and J.P. Morgan, were involved in the multi-million dollar money laundering operations of FIFA. Despite the hundreds of billions that banks have paid in fines and despite the crash of 2008, which started with Lehman Brothers in late 2007, they continue to lobby for less regulation and prevailing because of the money they spend to buy political influence.
Besides corporations deriving benefits as a result of lobbying, one of the most controversial lobbies in modern history is that representing Israel. One reason for its preeminent influence has been the combination of media, political and business support as well as voting power that make it very difficult for any politician to resist its pressures. Although the Israeli lobby acts on behalf of a foreign government, its success is that it presents its agenda as “the national interest of the US”, as though the US is an appendage of Israel and not a sovereign nation. Through its alliances with right-wing and Christian fundamentalist influence peddlers, and especially with defense industry and its lobbyists, the Israeli lobby has been able to create what many critics and supporters believe is the most powerful lobby organization in American history. One reason is the reluctance of most people to criticize because of fear they may be labeled anti-Semites. The question is whether this has helped to further the broader interests of the US or harmed them by helping to drag the country into regional Middle East conflicts and costing American taxpayers trillions of dollars from the 1940s to the present.
In September 2004, a number of media outlets dealt with the Israeli lobby and its links to Douglas Feith, Undersecretary of Defense for Policy. Fellow neo-conservatives well-connected with the Jewish lobby, Richard Perle and Paul Wolfowitz made sure Feith secured the Pentagon job, though it is not known the degree to which they were involved with the Israeli lobby and handing over official confidential documents to Israelis. Feith and his office were involved in an intelligence breach compromising US foreign and defense policy, but a pro-Israel administration refused to move forward with the case.
Neo-cons, some of whom are Jewish, were well connected to vice president Dick Cheney's office and to ultra-right wing Christian fundamentalists, all defenders of the Israeli lobby. Although the Justice Department investigated Feith and his office staff, it never found him guilty of anything. However, the issue is much larger than the specific perimeters of this case involving Feith who went on to work for pro-Israel causes including lobbying against the US-Iran nuclear deal. At the core of the controversial Israeli lobby is not the lobbyists working on behalf of the government in Tel Aviv under the cover of American conservatism, but U.S. foreign policy.
Politicians, the media, and pundits analyzing/propagating in the media have no problem with the Israeli lobby, focusing instead on China and its rising influence through lobbying efforts. There are many books and articles on the controversial Israeli lobby that many regard as sacrosanct and others decry as a situation where a tiny country largely determines US foreign policy from Truman to the present. The Israeli lobby is not the only one influencing US policy, and it must not be used as a pretext for the structural problems of lobbying. There are many other foreign lobbies pushing for everything from improved trade to arms deals and economic aid. One reason that the governments of Taiwan and Kuwait funded most of the Memorial Day activities in Washington in 2015 is because they want continued preferential treatment from US in trade, investment, foreign and defense policy.
The foreign lobbying process involving millions of dollars exchanging hands means that policy is not made based on the merits of the case, but on who pays and who does not. As the case of Senators Trent Lott and John Breaux illustrate, these people are hired guns for just about anyone that the US government would permit as “legitimate”. The issue of money is at heart of the Israeli lobby as well as less influential ones that know the way to buy policy is to pay for it and use other lobbies, especially the defense industry
In 2007 the Justice Department reported there were approximately 1,700 lobbyists representing more than 100 countries before Congress, the White House and the federal government all required to register under the Foreign Agents Registration Act (FARA). The Department of Justice has never enforced FARA evenly, and only used it when targeting countries it does not favor. Such selective enforcement of FARA is a reflection of the overall policy toward lobbying. The bottom line here is that the absence of political will results in the absence of enforcement of the law because the goal is to perpetuate a lobbying system that perpetuates the political regime serving the existing political economy and social structure.
All efforts at reform have come after the failure of some well-known lobbyists were involved in scandals or failing to register as such, or disclosing their firm represents foreign governments and they did not register as foreign agents. In 2006, Jack Abramoff, one of the most powerful lobbyists pleaded guilty to charges of fraud, corruption and conspiracy. This was a very big case that revealed the depth of corruption in the business. U.S. Government Accountability Office research of lobbying acknowledges that regardless of laws and enforcement, the system is flawed. During the Clinton administration, for example, of the 13,500 people lobbying Congress, 10,000 were not even registered as such! This does not include individuals working for corporations that lobby politicians individually.
Although this is hardly intended as an excuse, lobbying is not something that takes place only in the US. The European Union has its own set of problems with various forms of lobbying ranging from cronyism to money directly from companies and wealthy individuals to politicians in all countries from France to Greece. In some respects, the EU is as bad if not worse than the US, which simply confirms that lobbying is a universal phenomenon under capitalism and hardly a unique political or cultural trait in America. According to Transparency International only 7 out 19 EU countries even have laws and regulations on lobbying, and most of that is not working.
This explains everything from tax breaks for the rich to massive capital transfers and illegal activities involving money changing hands from businesses to politicians and public officials. This is not a problem confined to the periphery southern and Eastern European countries, but actually found at the northwest core countries where capitalism thrives and where most of the corruption takes place because of the headquarters for some of the world’s largest banks and multinational corporations with a history of corruption. When we trace the money trail that finds its way to politicians, government ministers and public officials, we realize that legislation and regulatory measures pass because “greased wheels” are behind it.
Nevertheless, EU politicians like their US counterparts try their very best to argue that everything they do, including tax reductions and tax loopholes for the wealthy “is best for society” and there is no other way. There are an estimated 30,000 lobbyists in EU headquarters Brussels, Belgium spending more than one billion euros to buy political influence. Their influence over policy impacting everything from trade and monetary policy to energy and shipping is estimated at 75%. (UK The Guardian, May 8, 2014) The interesting thing about all of this is that the EU taxpayers are actually subsidizing the lobbyists who secure subsidies for their clients.
The issues before critics of lobbying include transparency, consumer protection, degradation of the environment, health and safety, equal access to politicians, and a regulatory regime that is intended to result in enforceable and ethical conduct on the part of both lobbyists and those in government. This is the reformist camp of critics that has its ideological roots in the late 19th century when the Industrial Revolution and finance capitalism needed to enjoy greater control of public policy so they could realize greater profits. Reformers believe in rationalizing capitalism so it can work best in a pluralistic society where the middle class needs protection, especially in the 21st century when communications means are so readily available and it is difficult to conceal the role of lobbies.
Businesses and foreign governments create coffers and slush funds to elect or reelect politicians, or at least influence their voting on specific issues or to prevent measures from passing because they would cut into their profits. Through political action committees and through loopholes and favors from politicians, lobbyists provide the financing and media influence politicians need to win or stay in office. Most of this is legal, some of it is not and we do not know to what degree, but the lobbying system as a whole is a reflection of how the political economy operates. Lobbying is built into the capitalist system to further strengthen and concentrate capital and maintain the social order. Efforts of reformers to rationalize the economy and balance interests of various sectors of production along with the interests of social classes in order to maintain a pluralistic society that politicians can still call “democracy” are a distraction for the benefit of the public that needs to believe we live in a democracy.