Purpose: To emphasize the central importance of corporate lobbying, think tanks, and the revolving door in corporate public-policy making. This class gives a contextual background on various ways corporations influence public-policy making.  It also outlines some of the popular solutions to ensure that public policy is made for the common good and not for the corporate good.

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Materials

Readings: Justice Rising, Winter, 2013, $ In Democracy Part 2, Who—or What—Occupies the Government Control Room?; Spring 2013, $ in Democracy Part 3, Policymakers—Committed to Public Values or Corporate Agendas?

Handouts: Questions & Talking Points, Article Rankings

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Paradigms: Citizens have a right to address their grievances to the government, and public employees should have a commitment to promote the common good. This class brings participants face-to-face with two realities:

(1) Multi-national corporations have claimed our right to address our government and used that right to beleaguer elected officials and public servants with their special-interest lobbying; and

(2) Corporate-friendly public administrators often create a corporation-to-government revolving door that puts corporate interests in the public policy driver’s seat.

This corporate-funded revolving door uses Congress and public service as a training ground for future lobbyists, offering huge compensation when public servants leave government service.

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Context: Public-policy making is the central operation of our political system, and it is important for citizens in an age of corporate power to understand how money power and corporate interests manipulate our political system.

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Wealthy Americans came out on top after the American Revolution. John Hancock was the wealthiest man in America when he signed the Declaration of Independence, and George Washington was the wealthiest man in America when he became the first president of the United States.  All hopes that the American Revolution was for the common man who fought in the trenches were smashed by state laws that allowed only white male property owners to vote and by the defeat of Shays Rebellion in 1787.

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The roots of Shay’s Rebellion grew out of the first actions of the American Revolution in the early 1770s. In those years, farmers in Western Massachusetts got rid of the oppressive taxing and judicial system of the British Empire by surrounding British courthouses in their towns and making the British judge, hat in hand, walk the gauntlet of irate farmers and accept banishment from town.  By the time of Lexington and Concord, all British authority had been vacated from Western Massachusetts and pushed into Boston.

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Ten years later, with the United States and independent country, the farmers in Western Massachusetts were appalled when they discovered that now American legislators and judges were creating laws in their towns favoring the American upper class, leaving farmers once again burdened by unfair taxes.

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In response, farmers again came together, bravely took over the courthouses, made the judges depart, and established their own local authority. Outraged, Boston merchants financed an army to defeat the farmers, bringing Shay’s rebellion to an end.  But that was not the end of the story.

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The new American aristocracy throughout the United States felt frightened by the rebellion of the farmers and anxious about the inability of the federal government to raise an army to fight them. These concerns led a small group of prosperous, slave-owning, white men to secretly write the Constitution of the United States under the guise of rewriting the Articles of Confederation. The Constitution they proposed created a strong central government that could raise an army and protect the interests of the wealthy.

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Jumping ahead to the 1960s, popular rebellions again shook the United States.

• A massive uprising to free blacks from the oppression they had long endured succeeded in removing many of the barriers that had kept them from voting.

• Women re-energized the movement for female liberation and began getting some legal control over their bodies.

• A massive anti-war movement forced the American Empire to retreat from its imperial war against the Vietnamese people and questioned the efficacy of the American military.

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Culturally and politically, the corporate–financed political class was losing power. In 1973, Lewis Powell, a corporate, tobacco-lawyer from Virginia and president of the American Bar Association, started an aggressive corporate counterattack on the popular causes coming out of the 1960s. Powell sent the now-famous Powell Memo to the US Chamber of Commerce encouraging corporate America to dominate public-policy making by taking over the electoral system, the courts, the universities, the media etc.

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After reviewing his plea, corporate America took action.

• Joseph Coors provided $250,000 to start the Heritage Foundation.

• William E. Simon, Nixon and Ford’s Treasury Secretary, became the head of the John M. Olin Foundation and formed a relationship with the Bradley, Scaife, and Smith Richardson Foundations to establish a stable of conservative think tanks and legal firms across the country to promote the public policies of the corporate right.

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The various Scaife Foundations received their funding from investments of the Mellon family, including BNY Mellon Bank, Alcoa Aluminum, and Chevron. Richard Scaife, head of the Scaife Foundation, was vice president of the Heritage Foundation and granted it more than $20 million. Like their fellow corporate-funded foundations, Scaife gave money to create an institution that met corporate needs.

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The Lynde and Harry Bradley Foundation joined the Scaife Foundations in the early days of funding corporate-right think tanks. Their funding came from the military contractor Rockwell Inc. Their grantees include the American Enterprise Institute, The Hoover Institute, and the Federalist Society.

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The corporate-right influence in Washington has also drawn traditionally liberal think tanks into their sphere. The Brookings Institute is the granddaddy of liberal think tanks. Now, “much of Brookings’ top brass has come from Republican administrations,” according to Fairness and Accuracy in Reporting, which then provides, “A brief sampling of some 138 corporate supporters: Bell Atlantic, Citibank, J.P. Morgan, Goldman Sachs, NationsBank, Exxon, Chevron, Microsoft, HP, Toyota, Pfizer, Johnson & Johnson, DuPont, Mobil and Lockheed Martin, and the foundations of companies like American Express, Travelers, AT&T, GM, ADM and McDonnell Douglas. A few media conglomerates, like Time Warner and the Washington Post Co., are among the donors.” 

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Of course, there are also liberal think tanks that receive corporate money, but they do not usually spend it on promoting pro-corporate public policies. They may, however, still be part of the Washington consensus that promotes corporate empire. We will discuss the difference between the Republican and Democratic approaches to corporate empire in Part 4 on globalization.

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Examining one of the biggest roles of think tanks takes us back to the revolving door. Think tanks act as placeholders for political pundits who are waiting to have their corporate allies back in power again so they can revolve into a federal job. This is true of think tanks such as the Heritage Foundation and the American Enterprise Institute as well as established think tanks like the Council on Foreign Relations (CFR), which was founded by and always connected with the big New York banks.  CFR has revolved almost all of the top State Department managers into their jobs for the past century.

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Corporate-friendly think tanks manifested the agenda of the corporate right using democracy-friendly terms: Greed was replaced by “entrepreneurialism,” and the control of politics and the economy by monopolistic corporations was renamed the “free market.” They debilitated the regulatory system by promoting voluntary compliance and market-based solutions for regulatory policies. They also provided the media with free, corporate-friendly research articles and supplied government officials with corporate–friendly public policies ready to be enacted.

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The American Legislative Exchange Council (ALEC), which brought corporate CEOs, politicians and policy makers together to promote corporate-right legislation in states across the country, also rose out of this bubbling cauldron of corporate initiatives.

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A few months after Lewis Powell wrote his memo to the Chamber of Commerce outlining how corporations could take over public policy making, he joined the US Supreme Court and strongly participated in the judicial decisions that made money equal to speech and gave corporations free speech rights enabling corporations to vastly expand their political campaign contributions.

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All this set the groundwork for our current situation, with corporate-friendly regimes controlling both houses of Congress and a majority in the Supreme Court while a corporate CEO sits in the White House with a cabinet mainly made up of other corporate CEOs.

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Activities: Telling the stories of Shay’s Rebellion and the Powell memo is a good introduction to elite control of our public-policy making. We do have videos on our video list that will help tell the story, but you may have to fill in some of the holes.

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Lobbying: It would be great to start off the discussion of lobbying by showing the 14-minute section of Sixty Minutes of convicted lobbyist Jack Abramoff after he got out of jail. It is one of the most straightforward descriptions of life in DC I have ever seen. You can find it here: https://www.youtube.com/watch?v=CHiicN0Kg10

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You can amplify the discussion on lobbying with three charts we have developed. The first compares spending on lobbying and campaign finance and shows the increasing amount of money being spent on lobbying — almost seven times what is being spent on campaign finance. This chart also shows how dominant the money industry — sometimes called FIRE for finance, insurance and real estate — is in the lobbying world. My friends in Washington tell me that the most innocuous wording in a bill that might impact the money industry is descended upon by an army of lobbyists to wipe those words out of the law.

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In these days of concern about climate change, the second chart shows the expanding lobbying expenditures of the energy industry as talk of climate change and carbon taxation grew in Washington. There is an article by Bill McKibben on this topic in the Justice Rising reading for this class.

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The final chart shows the amount of money spent on lobbying along with the number of registered lobbyists in the past 18 years. It is significant that the number of lobbyists has dropped considerably, not because the number of people acting as lobbyists has declined, but that the number of people registering as lobbyists has declined. Here is a link to a revealing article about John Boehner after he quit Congress. He went to work for one of the largest lobbying firms in DC, Patton Boggs, headed by the son of ex-Congressman Hale Boggs. As you can tell from the story, he was hired as a lobbyist but is not registering as one. It is another odd mix of lobbying and the revolving door. The Center for Responsive Politics is the source of all of these charts and articles. You can find them at Opensecrets.org.

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Revolving Door: We run into the revolving door between corporate wealth and public policy makers constantly in this course. It permeates the entire federal government. Here is a chart that shows how widespread the revolving door phenomenon is across industries and how many revolvers there are from each of the industries.

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Even more revealing are Venn Diagrams that show the connections between the individual revolvers, the company or industry they are involved with, and the position they held or maybe still hold in the federal government. Here is a link to one about the oil industry and one about Monsanto.

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You can also show this segment about the revolving door from the Bill Moyers Show, which always has good information. http://billmoyers.com/segment/bill-moyers-essay-washingtons-revolving-door/

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Think Tanks: Massive corporate foundation funding of a host of conservative think tanks with specific, pro-corporate agendas developed quickly out of the Powell Memo. Here are some charts from a Drexel University Study on the funding of climate-change–denying think tanks. The first one shows the funding foundations. The largest funder on that chart, Donors Trust/Capital Trust, is an entity established in 1999 for people and foundations that want to remain totally anonymous. In this age of increasing political-money obscurity, the biggest donors to climate denial are secret. They make up 14% of the total donations, twice as much as the Scaife Foundations, the next largest donor.

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The Kochs are the fourth biggest donors to the climate deniers. They have become infamous in recent years for contributing a lot of money to pro-corporate causes like Americans for Prosperity. Among their many pro-corporate grantees is the American Legislative Exchange Council (ALEC) that brings corporate CEOs and allied state politicians together to create pro-corporate public policy.

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The next chart shows the climate denying think tanks that received corporate-funded foundation largesse.  As you can see, the largest recipients are the same think tanks that developed and grew after Powell wrote his memo in the early 1970s. The American Enterprise Institute, the Heritage Foundation, the Hoover Institution, Manhattan Institute and Cato Institute received half the money paid out to climate denying think tanks. All these think tanks know what the corporate-funded foundations want and how to provide it.

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By now it should be time to take a break. Follow that up with a discussion of the questions for the readings. Here are some notes to the answers. Make sure that you also share the list of books for this class and pass out the questions and article rankings for the next class on courts and corporations. It would also be good to distribute a printed version of Jan Edwards’ and Molly Morgan’s article Abolish Corporate Personhood that you can access here.

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The day after the class, email the questions and rankings for the next class to everyone and include a current article on elite influence over the courts.

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The day before the next class, send a reminder email that the class is coming up and again attach the questions and ranking and maybe a piece on corporate power and our courts.