New Internationalist

The best influence money can buy - the 10 Worst Corporate Lobbyists

Issue 439

Getting politicians to bend policy to your company’s will is a fine art – requiring a combination of charm, dogged persistence, threats and bushels of cash. But corporate lobbyists know just which buttons to press in order to get politicians to stuff human rights, public health and the dear old environment – and put business interests first.

Much as they shrink from the limelight, we feel they deserve a bit of exposure. So here’s why we think these 10 lobby groups have earned their place in the hall of shame.

Brewing denial: Big oil

Koch Industries likes to describe itself as the biggest company you’ve never heard of – but the US oil corp couldn’t escape the headlines in 2010 after revelations that it was funding the Tea Party movement that swept through America ahead of the mid-term elections in November. The media largely reported on it as a mass grassroots uprising. But behind the local meetings and cries of outrage, the freemarket thinktank Americans for Prosperity was playing the role of puppeteer – funded by the oil wealth of Koch Industries’ David Koch.

The power of the oil lobby is well documented. Big oil spent a reported $169 million lobbying in the US in 2009, and millions more on political support. BP alone made $500,000 worth of political donations, including $71,000 to Obama’s presidential campaign.1 (Its total lobbying spend was far higher – $16 million.)

But these figures only tell half the story. Undeclared and undercover, big oil is involved in funding a range of PR initiatives designed to manipulate public opinion and block action to tackle climate change. The Tea Party movement – unmasked after David Koch was filmed speaking at an Americans for Prosperity event – is an Astroturf (or fake grassroots) campaign on a scale not seen before.

Americans for Prosperity have used the Tea Party movement to tap into public concern over the state of the economy and direct it towards an anti-government, anti-regulation, anti-intervention agenda – which suits oil interests very well.

Koch also funds the Competitive Enterprise Institute, American Council for Capital Formation, Heartland and other US thinktanks with a record of sowing doubt about climate change.

European oil companies, including BP, have jumped on the bandwagon, providing funding for Tea Party candidates standing in the US mid-term election – who all deny that human behaviour has an impact on climate change.

Take it further: Sign up for updates at priceofoil.org

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Financial Fiddlers: Goldman Sachs and the International Swaps and Derivatives Association

Investment tycoon Warren Buffet described them as ‘financial weapons of mass destruction’, the Nobel Prize-winning economist Joseph Stiglitz called for a ban on their trading. But despite wreaking financial havoc, the international trade in derivatives continues virtually unregulated – and banking lobbyists are working hard to make sure it stays that way.

Derivatives are financial instruments, devised by traders to protect investments by hedging their bets. They create price volatility and played a key role in the bubble economy which led to the 2008 financial crisis.1 There is no transparency – so banks can merrily sell on bad debts without disclosing their true nature. Thus US banks sold 40 per cent of their toxic mortgage debts to banks in Europe. Big investment banks, like Goldman Sachs which trades in everything from the price of food to sub-prime loans, are key players in the derivatives trade.

When such trading came under scrutiny following the 2008 crash, the big guns and their lobby group, the International Swaps and Derivatives Association (ISDA) swung into action. They had one clear message for regulators: tighter rules are not needed – let the market regulate.2

The banking lobby has been actively pushing to get rid of regulation since the 1990s – with disastrous consequences. Between 1998 and 2008 the banking industry spent $3.4 billion on lobbying the US government. The result? Measures to prevent banks taking high risks with ordinary people’s money were swept away and proposals to regulate the burgeoning trade in derivatives effectively blocked.3

ISDA then set its sights on the EU, becoming an active member of the European Commission’s Working Party on Derivatives, an advisory group made up almost entirely of industry lobbyists, including Goldman Sachs and other big banks.4

Goldman Sachs has plenty of previous form. In the US, when it was hauled before a Congressional committee, it emerged the bank had made donations to 10 of the committee members.5 There’s also the revolving door. Former Treasury Secretary Henry Paulson was previously chief executive of Goldman Sachs. And current Treasury Secretary Timothy Geithner’s chief of staff, Mark Patterson, was Vice-President of the bank.6

Take it further: Check out the response to the World Development Movement’s campaign to stop food speculation: www.wdm.org.uk/stop-bankers-betting-food/what-problem Tax the banks: robinhoodtax.org/

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  3. www.wallstreetwatch.org/reports/executive_summary.pdf
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  6. www.ustreas.gov/organization/bios/patterson-m.html

Saving the world: Monsanto

Why lobby the government when you can be part of it? Former Monsanto vice-president Michael Taylor is now a senior adviser to the US Food and Drug Administration – going from a corporation that aggressively promotes its genetically modified crops to a body that advises on food safety.

The Obama administration is littered with former Monsanto employees who are now in positions of power. Islam Siddiqui, vice-president of Monsanto-funded lobby group CropLife is now a negotiator for the US Trade Representative on agriculture. Roger Beachy, a former director of a Monsanto-funded plant science centre has become the director of the National Institute of Food and Agriculture.1

Regardless of these insiders, biotech giant Monsanto still feels the need to be heard, investing more than $6.5 million on lobbying the US administration in 2010.2

At the UN climate talks in Copenhagen in 2009, Monsanto lobbyists promoted GM crops as a solution to climate change, earning themselves the dubious distinction of the Angry Mermaid Award.3 Monsanto argues that GM crops, such as Round-up Ready soy, minimize the loss of CO2 from the soil – conveniently ignoring the impacts on water, soil and the climate of their chemical-dependent growing methods. Chemicals which Monsanto also conveniently manufactures.

The biotech company is pushing the case for its crops being grown with ‘no till’ farming methods which don’t disturb carbon in the soil. Thus it can hope to pocket carbon credits and further its ongoing campaign to make its products an indispensable part of saving the world.4

Monsanto is also an active member of the Roundtable on Responsible Soy which is pushing its own ‘sustainability’ agenda in the EU – which includes allowing GM soy to be used for biofuels.

Take it further: www.gmwatch.eu www.responsibletechnology.org

  1. www.organicconsumers.org/monlink.cfm
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  3. www.angrymermaid.org/monsanto
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A guiding hand: The tobacco lobby

The tobacco industry knows it’s on its last wheeze but won’t give up without a fight.

Each year more than five million people die from tobacco use worldwide,1 and in Britain cigarette smoking is the greatest single cause of illness and premature death, killing 106,000 people a year.2

Desperate to escape more restrictions, British American Tobacco (BAT) joined forces with the pharmaceuticals industry in 1995 to persuade the European Union to take a novel approach to risk.

Key to their campaign was the European Policy Centre – a Brussels-based thinktank which served as an apparently ‘neutral’ front group – with whom BAT lobbyists worked to make their case.

The secret lobbyists argued that the EU was failing to assess adequately the economic impacts of new legislation – and that assessing the risk of costs to business should come over and above an assessment of health impacts.3

They executed nothing less than a paradigm shift in impact assessment for lawmaking. Defying common sense, the European Commission agreed to put the interests of business first.

The tobacco industry and the chemical industry have since been able to use economic impact assessments to delay and/or weaken EU legislation intended to protect public health.4

Take it further: Network for Accountability of Tobacco Transnationals www.stopcorporateabuse.org/natt

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  2. www.stopsmokingshop.co.uk/smoking-facts
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Bull’s-eye: The biofuel lobby

They lobbied aggressively and they won themselves a target: 10 per cent of Europe’s transport fuel will need be sourced from ‘renewable resources’ (read biofuels) by 2020. It’s all meant to sound clean and green – except that research shows that the way countries plan to go about meeting the EU target would require an area more than twice the size of Belgium to be converted to plantations.

The target signals a major expansion for the biofuel industry – and flies in the face of a growing body of evidence showing that using crops for fuel would increase the cost of food for some of the world’s poorest people, force small farmers off the land and destroy biodiversity.

And if land use changes are factored in, carbon emissions will actually increase – equivalent to putting an extra 12-26 million cars on Europe’s roads by 2020.1

Brazilian sugar cane industry interests, represented by lobby consultancies Weber Shandwick and Cabinet DN, launched a lobbying offensive to persuade EU politicians to increase the market for ethanol from Brazilian sugarcane. They were supported by Spanish energy firm Abengoa.

Not to be left behind, the palm oil industry, keen to promote the use of palm oil for biodiesel, targeted Brussels, with lobby consultancy Gplus acting on behalf of the Malaysian Palm Oil Council (MPOC).

Using misleading information, the lobbyists claimed that research showed that the EU could grow enough biofuel crops to meet demand without the need for imports. However, figures released by EU countries show that most plan to import much of the biofuel they will need.2

The outcome was a major success for the biofuel lobby, guaranteeing a growing market for biofuels for at least the next decade. With clear targets established in the EU, other countries are likely to follow suit.

Take it further: www.biofuelwatch.org.uk/alerts.php; www.rainforest-rescue.org

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Allergic to the law: The mining industry

Mining is a mucky old business for sure, but the mining lobby can also play dirty in politics. The industry loves its filth – why, it even threatened to sue Canadian MP John McKay after he introduced a private member’s bill designed to clean up Canadian mining operations overseas.1

Here’s the fun bit: the environmental and human rights standards the bill was seeking to make legal had already been endorsed by the mining industry’s main lobby vehicle, the Prospectors and Developers Association of Canada (PDAC). So why the hissy fit? Well, it seems that such standards, which must make for good PR, are fine and dandy with the PDAC as long as they are voluntary. But turn them into law? They launched a venomous lobbying campaign, condemning the bill as an attack on the nation’s mining industry.2

Mining is big business domestically, but Canadian companies including Barrick Gold, Pacific Rim Mining and Blackfire Exploration have empires around the world. They face a string of allegations over human rights abuses and environmental damage in Latin America, Asia and Africa.3

Canada’s mining industry is used to an easy ride with the government. After all, didn’t they agree to the appointment of an independent corporate social responsibility investigator in 2009? It was a post designed to investigate allegations of abuse – with the accused company’s consent.

But the threat of legislative powers sent them into overdrive – MPs with mining interests in their constituencies were particularly targeted. The bill originally had the support of three opposition parties, but was ‘killed’ by intense lobbying of Parliament.4

There were howls of outrage in Australia, too, home of mining giants BHP Billiton and Rio Tinto, at proposals for a mining tax. The Minerals Council of Australia moaned that the ‘tax grab’ would drive investment overseas.5 The tax became an election issue following a proposed deal between the then Labor candidate now Prime Minister Julia Gillard and the big players in the mining industry.6

Take it further: www.protestbarrick.net

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Stuffing its face: The food lobby

Obesity is the Western world’s ticking time bomb. Obesity-related conditions including heart disease, diabetes and stroke are already soaring.

Health experts blame poor diet, but the food industry, which makes millions from the sale of processed junk foods, is desperate not to see its hungry market disappear.

When the EU made a modest proposal to introduce ‘traffic light’ food labelling in order to signal foods high in sugars and fats, food industry lobbyists quickly persuaded politicians of the error of their ways.

The Confederation of the Food and Drink Industries (CIAA) – which in 2008 had launched its own voluntary food-labelling scheme – estimated it spent €1 ($1.3) billion successfully opposing the change,1 vastly outnumbering and outspending consumer and health campaigners.

The CIAA represents some big hitters – Cadbury, Cargill, Coca-Cola, Danone, Kraft, Nestlé, Procter and Gamble, Tate and Lyle, and Unilever are all members.2

In the United States – where statistically one in three people are obese3 – the US Food and Drug Administration announced in 2009 that it would be issuing new front-of-pack labelling guidance. But industry appears to have stepped in first, with the Grocery Manufacturers Association (GMA) and the Food Marketing Institute launching a voluntary front-of-pack labelling scheme in October 2010 to ‘fight against obesity’. Just how manufacturers like Cadbury, Coca-Cola and PepsiCo (all members of the GMA4) plan to fight obesity without ditching the products on which their brands were built is unclear. In Australia and New Zealand, it has been estimated that up to 460 lives could be saved each year with the introduction of mandatory nutrition labelling.5

The icing on the cake? British health minister Andrew Lansley’s invitation to the industry to help him develop public health policy. McDonald’s, KFC and Mars proudly take their places alongside health policy experts on the government’s new ‘responsibility deal’ networks drafting priorities for tackling obesity and alcohol- and diet-related disease.6

Take it further: The Children's Food Campaign http://www.sustainweb.org/childrensfoodcampaign

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Down and dirty: The EU and US business lobby against labour rights in China

The charade of concern for human rights in China hasn’t stopped Western transnational corporations from relocating production there at the double. Not just that, they are actively using their economic and political clout to lobby against improvements in Chinese labour laws.

So while Chinese citizens are denied freedom of speech and the right to organize, EU and US corporations are able to influence Chinese legislation. A 2010 report from the Hong Kong-based NGO Globalization Monitor revealed how lobbying tactics have been adapted to Chinese circumstances and the concept of guanxi (connections or personal ties). Developing the personal touch with government agencies is of crucial importance, building trust and offering favours, which often crosses the line into full-blown corruption.

Lobby coalitions such as the American Chamber of Commerce (ACC) and the European Union Chamber of Commerce in China (EUCCC) play a key role. The EUCCC has over 1,400 member firms, including TOTAL, Deutsche Bank and Nokia. These two coalitions sprang into action when the Chinese government reviewed its Labour Law in 2006 and was thinking of introducing the right for workers to have a written contract. In practice, the scant existing protections are rarely enforced, making the law worth little and allowing both Chinese companies and foreign transnationals to mistreat employees.

The EUCCC and ACC lobbied against any improvements in labour protection, using their usual strategy – threatening that improved standards would lead to higher costs and force companies to bail out of China. The British Chamber of Commerce echoed this scaremongering by mentioning India, Pakistan and South-East Asia as investment locations where regulations offered more ‘flexibility’. International unions blasted such irresponsible lobbying and, following media attention, the EUCCC backtracked, issuing a public statement supporting the new Labour Law. But by then the damage was done and the law had been watered down.

Source: ‘Complicity, Campaigns, Collaboration and Corruption: Strategies and Responses to European Corporations and Lobbyists in China’, Globalization Monitor, 2010. Take it further: www.globalmon.org.hk/en/

Smoking guns: The carbon trading lobby

Carbon trading has been described as the fastest growing commodities market – there have been a staggering $300 billion worth of carbon transactions since 2005, with a boom predicted that could see the market expanding to between $2 and $3 trillion.1

The carbon trading lobby have ensured that emissions’ trading is at the heart of EU and UN approaches to cutting carbon. Meanwhile big polluters, such as heavy industry and power generators, lobby for exemptions – which in the EU come in the form of free pollution permits, allowing them to profit without cutting emissions at source.

Set up under the Kyoto Protocol, carbon trading allows rich countries and corporations to buy the right to pollute – and traders (big banks and specialists) to speculate on the cost of pollution.

Industry has played a key role in setting up the carbon markets. The EU unveiled its emissions trading scheme in 2001 only after lengthy consultation with industry. In fact the idea was based on a British pilot, originally cooked up in-house by oil giant BP.2

During the first phase of the EU scheme, big emitters including BP, Shell, RWE and E.ON lobbied governments for more free permits than they would actually need.3 The result was a vast over-allocation of permits – followed by windfall profits. Germany’s top four power generators were estimated to have made a cool €8 ($10.4) billion from the scheme.4

The third phase of the scheme (due to start in 2013) proposed auctioning permits so that industry would have a stronger financial incentive to cut emissions. But the lobbyists got to it first.

Big emitters including steel giant Arcelor Mittal and cement manufacturer Lafarge, backed up by industry groups such as BusinessEurope, whined that auctioning would force heavy industry out of Europe – resulting in ‘carbon leakage’ or increased carbon emissions elsewhere. Studies show the threat is unlikely, but the EU caved in. Industry sectors considered vulnerable to carbon leakage will receive free permits in 2013.

Another get-out clause that’s in the bag is the ‘right’ to offset emissions by investing in projects abroad. The next phase of this scandalous lobby campaign aims to allow trading of credits from biofuels, monoculture forest plantations, GM crops and other offset projects that harm local communities and the environment while doing little to reduce greenhouse gas emissions.

Take it further: www.carbontradewatch.org

  1. citizensclimatelobby.org/files/Conning-the-Climate.pdf
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Deadly charm: The arms industry

When you’re in the killing, sorry, defence business it pays to grease some wheels. The arms industry spent a staggering $101,907,368 on lobbying the US government in 2010. But the true power of the arms lobby is not just in the size of its spending, it’s in how cosy it can get to governments. It loves to play on the riffs of protecting jobs and defending shores – traditionally that goes down well.

In the US, Boeing is the biggest spender, followed by Lockheed Martin, United Technologies, and a number of companies specializing in electronic systems for defence.1 Some 428 lobbyists are registered as working for the defence industry in the US – and of these, 309 have gone through the revolving door, having previously worked inside government.2

The British arms firm BAE Systems, which in 2010 became the world’s biggest arms manufacturer,3 spent just under $3.5 million on lobbying in the US in 2010. A trifle compared to the $400 million it had to shell out to US authorities in penalties for wrongdoing, following an investigation by the US Department of Justice into allegations of kickback payments in arms deals.

BAE Systems also lobbies in Europe, in its own right, and through arms industry associations and thinktanks. A particularly fruitful area is research spending, as arms firms can effectively obtain taxpayer-funded subsidies through the EU’s research programme to develop new technologies for their own profit.4

The European Union has become more interesting to the arms industry since the introduction of a joint security policy in 2003 and a joint security research programme. Described as an example of ‘Big Brother meets market fundamentalism’ and set up by the European Commission, without consultation of the Parliament or member states, the Security Research Programme drew instead on the wisdom of representatives from the industry brought together in what was called a ‘Group of Personalities’.5 This group naturally recommended increased spending on research, ostensibly to help EU arms companies compete with their counterparts in the US, but also ensuring further lining of pockets.

Take it further: Campaign Against Arms Trade www.caat.org.uk; www.controlarms.org/en

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  5. www.statewatch.org/analyses/bigbrother.pdf
Report by Helen Burley and Olivier Hoedeman of Corporate Europe Observatory. Illustrations by Donough O’Malley (www.pencilrobot.net/)

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