July 22, 2008
Corporate Lobbyists
July 22, 2008
Hello everyone. Ross Perot tried to tell the American people over 15 years ago that the reason government doesn’t work for The People is because it is corrupted by money. The big money comes from multinational corporations - American and foreign. These corporations are represented in American government by registered lobbyists who wine and dine and meet with our elected officials to gain influence into the legislative process and to win government contracts - sometimes (often times?) even when it conflicts with the national interest. Many of these corporate lobbyists are former elected government representatives or high-ranking government officials who know how to effectively access and work the government system to the benefit of their clients.
Well, here it is in 2008 and not much has changed since Ross Perot pitched his “clean out the barn” message to voters. Actually, things have gotten much worse: Jack Abramoff, millions of American jobs have been carted off overseas for more corporate profits, the trade deficit has exploded to unsustainable levels, the rich have gotten richer at the expense of the middle class and poor, the value of the dollar is falling through the floor, health care and prescription drug costs are exploding, and on and on. Consider these recent examples of corporate lobbyists that influenced government to legislate against the interests of America and the majority of its workers:
o From the June 22, 2005 Washington Post story on corporate lobbyists “The Road to Riches Is Called K Street“:
Take the example of Hewlett-Packard Co. The California computer maker nearly doubled its budget for contract lobbyists to $734,000 last year and added the elite lobbying firm of Quinn Gillespie & Associates LLC. Its goal was to pass Republican-backed legislation that would allow the company to bring back to the United States at a dramatically lowered tax rate as much as $14.5 billion in profit from foreign subsidiaries.
The extra lobbying paid off. The legislation was approved and Hewlett-Packard will save millions of dollars in taxes. “We’re trying to take advantage of the fact that Republicans control the House, the Senate and the White House,” said John D. Hassell, director of government affairs at Hewlett-Packard. “There is an opportunity here for the business community to make its case and be successful.”
o And today in USA Today, “Does tax code send U.S. jobs offshore?“:
“The U.S. tax system does provide an incentive to locate production offshore,” says Martin Sullivan, a contributing editor to Tax Notes, a non-profit publication that tracks tax issues.
At issue is the U.S. tax code’s treatment of profits earned by foreign subsidiaries of American corporations. Profits earned in the United States are subject to the 35% corporate tax. But multinational corporations can defer paying U.S. taxes on their overseas profits until they return them to the USA — transfers that often don’t happen for years. General Electric, for example, has $62 billion in “undistributed earnings” parked offshore, according to recent Securities and Exchange Commission filings. Drug giant Pfizer boasts $60 billion. ExxonMobil has $56 billion.
“If you had two companies in Pittsburgh that both were going to expand capacity and create 100 jobs, our tax code puts the company who chooses to put the plant in Pittsburgh at a competitive disadvantage over the company that chooses to move to a tax haven,” says former White House economist Gene Sperling, a Clinton adviser.
o And from the July 29, 2007 CBS News 60 Minutes article “Under The Influence - 60 Minutes’ Steve Kroft Reports On Drug Lobbyists’ Role in Passing Bill That Keeps Drug Prices High":
Former senators Dennis Deconcini, D-Ariz., and Steve Symms, R-Idaho, and former congressmen like Tom Downey, D-N.Y.; Vic Fazio, D-Calif.; Bill Paxon, R-N.Y., and former House Minority Leader Robert Michel, R-Ill., all registered as lobbyists for the drug industry and worked on the prescription drug bill.
“I can tell you that when the bill passed, there were better than 1,000 pharmaceutical lobbyists working on this,” says Rep. John Dingell, D-Mich.
Dingell has been in Congress for 52 years and is the chairman of the House Energy and Commerce Committee, which shares jurisdiction over Medicare. He says the bill would not have passed without the efforts of the drug lobby.
“There is probably a lotta truth in it that the bill was stacked in their benefit. And it’s probably also true that it was written by their lobbyists,” he says.
Why was the drug lobby was so interested in this bill and what did it have to gain? Ron Pollack, the executive director of Families USA, a nonpartisan health care watchdog group, says it all boiled down to a key provision in the legislation.
It prohibited Medicare and the federal government from using its vast purchasing power to negotiate lower prices directly from the drug companies.
“The key goal was to make sure there’d be no interference in the drug companies’ abilities to charge high prices and to continue to increase those prices,” says Pollack.Before the vote, Congress was told the program would cost a whopping $395 billion over the first 10 years. In fact, Medicare officials already knew it was going to cost a lot more.
Burton said he and others were misled. “Within two weeks after the bill was passed, everybody knew it was gonna cost well over $500 billion,” he says. “And many members of the Congress [who] had voted for it said, ‘I would never have voted for it had I known that.’ ”
Medicare Chief Actuary Richard Foster later told Congress that he revised the cost estimate to $534 billion before the vote, but was told to withhold the new numbers if he wanted to keep his job.
During a Congressional hearing, Foster stated: “It struck me there was a political basis for making that decision. I considered that inappropriate and, in fact, unethical.”
Foster said the person who told him to withhold Congress from getting the revised estimates was Medicare boss Tom Scully.
Scully was the administration’s lead negotiator on the prescription drug bill, and at the time was also negotiating a job for himself with a high-powered Washington law firm, where he became a lobbyist with the pharmaceutical industry.
“He was negotiating for his job at the same time that the Medicare legislation was being considered. He wound up taking this job 10 days after the president signed this legislation,” says Pollack.
o And, finally, from the 2006 article from PBS’ Moyers on America regarding Jack Abramoff, Tom Delay, and the Northern Mariana Islands:
Aside from Puerto Rico, the Northern Mariana Islands are the only other insular commonwealth of the United States. The arrangement, which began in 1978, grants all indigenous inhabitants of the islands American citizenship and allows them to elect a local island government but excludes the right to vote in U.S. presidential elections. The government of the Northern Marianas benefits from substantial U.S. federal funds-in the form of subsidies and development assistance-administered by the Department of the Interior. The United States benefits by having a strategic military site in the Pacific.
Under the terms of their commonwealth agreement, the Northern Marianas also maintained the right to label “Made in the U.S.A.” all products manufactured on the islands — despite the fact that they had been given exemption from some federal labor laws, customs laws, immigration laws, quotas and tariffs laws By the late 1980s, this state of affairs had become a boon both for the island’s garment industry and for a slew of American apparel giants who could count on abundant cheap labor without sacrificing the sacred “U.S.A.” label.
During those years, the Northern Mariana’s garment and textile businesses exploded, with companies importing tens of thousands of foreign workers from China, the Philippines, Thailand, Cambodia, Sri Lanka and Bangladesh to stitch in their factories for roughly half the American minimum wage. These immigrants often paid thousands of dollars to loan sharks to bring them to Saipan with the promise of work and spent months, if not years, paying off their debts, if they found work at all. Workers were often housed in barracks behind barbed-wire fences, often in unsafe, overcrowded and unhygienic conditions, and were charged exorbitant amounts for their room and board.
Abramoff pocketed nearly $8 million from his contracts with Saipan between 1995 and 2001, according to the Northern Marianas’ public auditor. And with the help of Tom DeLay (R-Texas) and others he accomplished his goal of keeping congressional hands off the commonwealth’s sweatshops, despite a growing public outcry over the continuing abuse of immigrant workers.
These problems will never be effectively dealt with until corporate lobbyist influence in government is significantly reduced. Until voters support elected officials who speak out against excessive corporate lobbying and are for significantly reducing their influence, government will never effectively represent its citizens. If you’re ready to tilt government back towards the interests of citizens, then find out where your candidate stands on the issue of corporate lobbying and get the corrupting influence of corporate lobbyists out of government.
All the best.
…Michael
ps: Last year, the Yearly Kos convention held a debate among the Democratic
presidential candidates that included the issue of corporate lobbyists. It was a
lively debate, particularly among Hillary Clinton, Barack Obama, and John
Edwards. I invite you to watch the short video clip from youtube (below) from
this debate: