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Issue #1485      19 January 2011

Culture & Life

In the halls of shame

“Is this a joke?” asked one reader, commenting on an online article.

“I’ve checked the date. It isn’t April 1,” responded another.

It was no prank. Britain’s new Con-Dem coalition government really was getting McDonald’s and PepsiCo to help write the national health policy.

Just a few months earlier, while still in opposition, David Cameron had warned against the deleterious effects of corporate lobbying.

The next big scandal waiting to happen, he said, was one that had “tainted our politics for too long, an issue that exposes the far too cosy relationship between politics, government, business and money.”

What a difference an election makes.

A world of lobbying

Lobbying isn’t new. The term’s origins can be traced back to US President Ulysses S Grant who in the early 1800s used to hang out in the lobby of the Willard Hotel in Washington DC. In Britain it is said to refer to the vaulted hallways or lobbies of Parliament where individuals or special interest groups might enter discussions with MPs to try to influence their vote.

In theory, lobbying is just a part of the democratic process. Any groups with a special interest can lobby – be they trade unions, charities, environmental or business groups. Even representatives of foreign governments can do so.

But lobbying on behalf of business corporations has come to dominate – in terms of activity, money spent, and clout.

A sub-sector of Public Relations, lobbying (also known as Public Affairs) has become a multi-billion dollar industry in its own right. You only have to look at attempts to regulate the finance industry in the US to see how corporate-driven lobbying has become. Nearly 1,000 lobbyists have been trying to influence Washington lawmakers. But lobbyists acting for the finance industry and against reform have outnumbered those from citizens’ groups by eleven to one.

The sheer scale of lobbying activity today is mind-numbing, if not alarming.

Corporate lobbyists are at the heart of writing and determining policy. They operate outside democratic control, generally hidden from public view

British members of parliament may be contacted by lobbyists 100 times a week. The number of lobbyists in Washington is said to have doubled since 2000. In Australia lobbying spend is growing at three times the rate of inflation and is well over $1 billion per year.

In India, the capital is bristling with a new generation of corporate lobbyists, many of which have international links with, for example, Washington PR giants Burson-Marsteller. According to journalist Praful Bidwai: “Corporate lobbying has become the highest embodiment of crony capitalism in India. It has developed into a formidable industry, with at least 30 major firms based in New Delhi alone.”

In some cases, business interests have ganged together to form a massive lobby group – such as the 150-company strong Canadian Council of Chief Executives (CCCE) or the gargantuan BusinessEurope which represents 20 million companies from 34 countries.

Unsurprisingly, corporations are prepared to pay big money to win influence, especially if legislation that might affect their profits is in the pipeline.

Top of the big spenders in the US was the pharmaceutical and health industry which in 2009 invested almost $200 million in derailing Obama’s flagship health reforms. The insurance sector, with similar purpose, channelled more than $122 million into defending its interests against American public health.

It was a success which PR guru Wendell Potter now confesses was achieved by peddling mass deception. Answering criticism from fellow lobbyists who have condemned him for spilling the beans, he says: “After 30 years in the PR industry, I most certainly do have a right to call out the deceptive campaigns PR firms have orchestrated to obscure the truth and deceive the American public in the debate over healthcare reform and beyond. I detail these campaigns at length… based on my own participation in just these practices.”

Hidden hand at the Tea Party


Making donations to political parties is a traditional way of trying to influence policy-makers. Rules on disclosure and limits on funding vary from country to country.

In Australia, pharmaceutical companies Pfizer and Medicines Australia donated $572,560 and $392,386 respectively to the major parties. Similarly, a company can set up a front group. Tobacco giant Philip Morris, for example, created the Alliance of Australian Retailers to fight a law due to come into force in 2012 ruling that cigarettes be sold in plain non-branded packets.

But perhaps the most successful arms-length strategy has been employed by the oil-billionaire Koch brothers, heirs to America’s second largest privately owned company. The Tea Party presents itself as a spontaneous, gutsy, grassroots organisation that is against conventional politics and corporate spin. Republican ex-governor of Alaska Sarah Palin is its poster girl.

It took a while for investigative journalists to detect the close links between the Tea Party and its wealthiest corporate backer via a myriad of other organisations. David Koch co-founded Americans for Prosperity Foundation which trains and “educates” Tea Party activists, “channels” their political energy and provides lists of elected officials to target. Public tax records show that in 2008 the three main Koch family foundations gave money to 34 political and policy organisations, three of which they founded and several of which they direct.

Like a cab for hire …

The difference between a politician and a corporate lobbyist is becoming less and less clear these days. Politicians can move with ease between positions in government or opposition and high-level lobbying positions in corporations – and back again, through the so called “revolving door”.

Sometimes politicians will try to operate on both sides of the revolving door at once. In March 2010 the British public were treated to a priceless glimpse into the grubby world of lobbying by former Labour Party transport secretary, Stephen Byers.

“I’m a bit like a sort of cab for hire,” was Byers’ admission to a fake PR professional who he took to be genuine. “I still get a lot of confidential information because I’m still linked to No 10.”

His fee was “usually between £3,000 and £5,000 a day” ($4,700 –$7,900).

Others fell for the “cash-for-influence” sting, mounted by The Sunday Times and Channel 4’s Dispatches program. Former health minister Patricia Hewitt was reported to have said that, for a fee of £3,000 a day, she could help “a client who needs a particular regulation removed” – a claim she later denied making. Former defence secretary Geoff Hoon said he was “looking forward to … something that, frankly, makes money” and agreed that he would sit on an advisory board for £3,000 a day too. In December Byers and Hoon were barred from the House of Commons for two and five years respectively.

Byers was offering his services as a lobbyist while occupying a seat in parliament and at a daily rate higher than most people in his North Tyneside constituency could dream of earning in a month.

Strange as it may seem, the British system allows current members of parliament to be paid consultants to business interests and they are free to act as advocates for their employers, often doubling or tripling their income. Behaviour that would be classed as corruption in Africa or Asia or Latin America somehow passes as legal lobbying when it happens in the West.

The greed of British politicians must seem like chicken feed from the other side of the Atlantic. In spite of the recession, congressional members’ personal wealth collectively increased by more than 16 percent between 2008 and 2009. Nearly half of US lawmakers are millionaires, a slight increase from the previous year.

New Internationalist   

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