Corporate Lobbying

Peer Pressure to Join the Bailout Club

Once upon a time, there was a stigma attached to businesses that had to be bailed out by government. Only ones that desperately needed help—the likes of Lockheed, Chrysler and Continental Illinois—would resort to such a step.

In the upside down world of the current U.S. economic situation, the tainted firms may be those that are not being rescued. That seems to be the growing sentiment among the country’s banks, which are feeling increased pressure to participate in the partial nationalization plan being pursued by Treasury Secretary Henry Paulson. As the Wall Street Journal put it today: “Now institutions across the U.S. worry that if they don’t try for the money, the market will judge them as too unhealthy to qualify, or lacking the savvy to deploy cheap government capital on acquisitions and investments.”

It thus appears, according to the Journal, that thousands of banks will be applying for capital infusions from the federal government, whether they need them or not. For example, US Bancorp, known for its stability and conservative practices, announced today that it will be getting $6.6 billion from the feds. Depository institutions that for decades have proudly displayed their “Member FDIC” sign now feel obliged to advertise that they are also members of Paulson’s bailout club.

One banker already in that club told the Journal: “There’s a perception in the market that the government is actively picking winners and losers…we wanted it well-known in the market that we’re on the list of survivors.”

Those survivors are making sure their status as wards of the state does not cause them to lose much of their autonomy. High-powered banking lobbyists are working hard to thwart any new strings that might come with the federal investment, while financial industry trade groups such as the American Bankers Association are signaling that they would like to remove the modest restrictions on executive compensation that Treasury has already imposed.

Given the mood of the public, the pay rules are not about to be lifted, but neither is Paulson likely to go along with any additional rules. Banks may be largely responsible for the mess we are in today, and they want to use their federal money for acquisitions, bonuses and dividends rather than new loans, yet Paulson continues to treat them with kid gloves. His successor should be a lot less accommodating.

The Democratic Convention: Brought to You By Your Friends in Corporate America

Barack Obama and Hillary Clinton may be bashing big business (up to a point), but a number of major corporations are positioning themselves to win favors from a possible Democratic administration next year by signing up as sponsors of the party’s convention. Last week, Kevin Vaughan of the Rocky Mountain News reported that the August gathering in Denver has already lined up 56 corporate supporters.

Vaughan notes that these companies appear to be motivated by something other than civic responsibility: “Almost all of them have the same thing in common: They either have business with the federal government or they lobby on pending issues.”

Massie Ritsch of the Center for Responsive Politics told Vaughan: “Corporations aren’t allowed to contribute directly to political parties or candidates’ campaigns, but they can subsidize the gatherings that show off a party’s candidate to American voters and get the candidate officially nominated…Money from these corporate donors helps the party, it helps the candidate, and to call it anything other than a campaign contribution is to make a distinction without a difference.” Also on the list of sponsors is the Service Employees International Union.

The Center’s Capital Eye blog later reported that companies on the sponsorship list are also associated with actual campaign contributions—through their political action committees and individual giving by employees and their families. In this way, the Center says, 38 of the sponsoring companies have provided about $971,000 to Sen. Clinton and 48 have provided about $1.3 million to Sen. Obama.

Vaughan does a good job of cataloging the issues on which the corporate sponsors would likely seek help from the Democrats if they control the White House as well as Congress. For example, AT&T’s concern about liability in connection with its involvement in national security wiretapping; Merck’s opposition to low-cost drug importation; and Visa’s worries about new restrictions on credit card companies.

Other sponsors include leading weapons producer Lockheed Martin, the giant for-profit medical insurer UnitedHealth Group, and utility firm Southern Co., one of the largest producers of greenhouse gas emissions. Another of the sponsors, Molson Coors, may be a significant liability for the Democrats even during the convention. Jonathan Coors, nephew of company vice chairman Pete Coors, is leading an effort to put an anti-union right-to-work initiative on the ballot in Colorado.

Isn’t it wonderful that the Democrats display such diversity among those helping to make its historic convention possible.

Rebuffed by Supreme Court, NAM Complies with Disclosure Law—for Now

It’s rare these days for powerful business interests to be rebuffed by the U.S. Supreme Court, but that’s what happened when Chief Justice John Roberts denied an emergency request from the National Association of Manufacturers (NAM) last week having to do with disclosure. NAM has been waging a court battle against a new law (Section 207 of P.L. 110-81) that requires trade associations to list member companies that are extensively involved in developing the organization’s lobbying strategies or that contribute at least $5,000 toward those efforts. NAM believes its members should be able to lobby confidentially.

NAM was seeking a stay on enforcement of a portion of the Honest Leadership and Open Government Act that took effect on April 21. The DC Court of Appeals turned down the request, so NAM went to the Supreme Court, which also said no.

This week, NAM submitted an amended lobbying disclosure filing to the Clerk of the House and the Secretary of the Senate. Beginning on page 54 of the 71-page document, NAM responded to a question about additional affiliated organizations by including a link to a page on its website.

That page contains the names of 63 large corporations and two trade associations (American Petroleum Institute and the Edison Electric Institute) whose lobbying involvement, NAM decided, now has to be made public. Not surprisingly, the companies include giant industrials in sectors such as energy, pharmaceuticals, chemicals, heavy equipment, food processing and aerospace. In other words, companies that have a lot of interests that need to be fostered in Washington.

Here’s the complete list: Albemarle Corporation, American Electric Power, American Petroleum Institute, AREVA Group, AT&T, Bayer Corporation, BD, Boston Scientific Corporation, BP Corporation North America, Bristol-Myers Squibb Company, Campbell Soup Company, Caterpillar Inc., Chevron Corporation, CN, CONSOL Energy, Corning Incorporated, Deloitte & Touche LLP, Delphi Corporation, Dominion Resources Services, Dow Corning Corporation, Eastman Chemical Company, Edison Electric Institute, Entergy Corporation, Exxon Mobil Corporation, FirstEnergy Corp., FMC Technologies, General Electric, Goodrich Corporation, Illinois Tool Works, Ingersoll-Rand, JELD-WEN, Inc., Johnson Controls, Koch Industries, Loews Corporation, Marathon Oil, Mead Westvaco, Merck & Company, Northrop Grumman, Occidental Petroleum, Owens-Illinois, PPG Industries, PPL Corporation, Rockwell Automation, Rohm and Haas, SABIC Americas, Inc., Sanofi-Aventis, Shell Oil, Smurfit-Stone Container, Sony Electronics, Temple-Inland, Terra Industries, Textron, The Clorox Company, The Hershey Company, The Timken Company, Unilever United States, Union Pacific, United States Steel, USEC, Verizon, Volvo Group North America, W L Gore & Associates, W. R. Grace & Co., Weyerhaeuser Company, and Xerox Corporation.

It is no great surprise that companies such as these are deeply involved in trying to shape federal policies, but what’s important here is the principle: lobbying is not a process that companies can engage in surreptitiously by funneling their spending through business associations. NAM President John Engler (former Republican Governor of Michigan) warned that the new disclosure requirement might prompt companies “to curtail their memberships or restrict their involvement in trade associations.” That might sound like a problem to Engler, but less corporate involvement in manipulating public policy is music to my ears.

Exposing Corporate Front Groups

The Center for Media and Democracy recently joined with Consumer Reports WebWatch to create a new site called Full Frontal Scrutiny, which “seeks to shine a light on front groups—organizations that state a particular agenda, while hiding or obscuring their identity, membership or sponsorship, or all three.”

Full Frontal Scrutiny is an extension of the work that the Center has long been doing to expose corporate manipulation of public opinion. That work has been widely disseminated through the PR Watch journal and website as well as the Sourcewatch wiki.

Consumer Reports WebWatch, which calls itself “the internet integrity division” of the venerable watchdog group Consumers Union, says its mission is to “provide unbiased and practical research on Web site publishing and business practices; help devise guidelines for credibility; expose practices that are a cause for consumer concern; and recognize good practices.”

In its initial posts, Full Frontal Scrutiny has dealt with perennial opinion manipulators such as Big Pharma, the tobacco industry and “clean” coal producers.