New Internationalist

In the halls of shame

Issue 439

Our governments are riddled with hidden persuaders pushing the big business agenda. Vanessa Baird on a cosy nexus that needs constant exposure.

Jeff Christensen / Reuters
McDonalds promote a ‘new healthy diet and exercise campaign’. There’s big bucks in obesity for PR firms lobbying to water down regulations on junk food advertising to children. Jeff Christensen / Reuters

Is this a joke?’ asked one reader, commenting on the online article.

I’ve checked the date. It isn’t 1 April,’ 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.1

The similes came flooding in.

Like Hitler helping to write a policy on religious tolerance.’ Or ‘getting [child murderer] Myra Hindley to write Nursery School 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.’2

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.3

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.4 The number of lobbyists in Washington is said to have doubled since 2000.5 In Australia lobbying spend is growing at three times the rate of inflation and is well over $1 billion per year.6 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.’7 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.8

Corporate lobbyists are not just seeking to influence – increasingly they are at the heart of writing and determining policy at both national and international levels. They operate outside democratic control, generally hidden from public view.

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.5

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.’9

Reuters
Plus ça change… Peter Mandelson – the British politician and ex-EU trade commissioner parodied above – has just launched his own PR agency to lobby for foreign corporate interests. Reuters

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 (see Facts page 18).

In Australia, pharmaceutical companies Pfizer and Medicines Australia donated $572,560 and $392,386 respectively to the major parties. But there are other methods available to Big Pharma. When Wyeth Australia wanted arthritis drug Enbrel listed on the pharmaceutical benefits scheme (PBS) it hired political lobbyists Parker and Partners to wheel out sick kids in its meeting with politicians. Result: the drug was rushed onto the PBS at a cost of $100 million a year.10

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.11

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 organization 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 organizations. 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 organizations, three of which they founded and several of which they direct.12

I'm like a cab for hire…

Mohamed Azakir / Reuters
Mohamed Azakir / Reuters

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 programme. 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.13,14

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 per cent between 2008 and 2009. Nearly half of US lawmakers are millionaires, a slight increase from the previous year.5

What to do?

Billionaires and corporations are capturing the political process everywhere; anyone with an interest in democracy should be thinking about how to resist them. Nothing is real anymore. Nothing is as it seems,’ writes George Monbiot.15

But what are we to do? How can we resist them?

WikiLeaks has given a new meaning to ‘surveillance society’. The tables are turned: this is surveillance by society of the workings of power and privilege.

Well we can’t do much unless we know what’s going on. We know something about the extent of lobbying in the US because it, at least, has minimal disclosure laws via a register of lobbyists. In Britain, such small attempts at transparency were rejected in 2009 in favour of ‘self regulation’ by the lobbying industry. ‘At the moment, we’ve no right to know who is lobbying whom and for what. We think the public should know who is influencing government decisions,’ says the Alliance for Lobbying Transparency.

It is calling for a mandatory register which shows who is lobbying and how much they are spending on it; a public record of all meetings between elected officials and lobbyists; and enforceable ethics rules and curbs on benefits in kind and gifts. It’s also campaigning against corporations gaining privileged access to MPs and government officials, and calling for an end to the ‘revolving door’ syndrome.

The best PR is never noticed,’ the saying goes, and corporations, lobbying firms and many politicians are keen to keep it that way. But thanks to individuals and groups who are prepared to blow the whistle, to dig the dirt and to expose the murky world of lobbying, people are beginning to sit up and take note. Across the world citizens’ groups and transparency activists are revealing that we are living in an era of largely uncontrolled corporate lobbying.

The corporate takeover of democracy is not just a paranoid nightmare of conspiracy theorists.

It affects all of us at every level of our lives. The food we eat, the medicine we use, the air we breathe, the wars fought in our name, how our natural resources are used, the temperature of our planet, how we spend our money, and how our money is spent for us by those who control the public purse.

At the same time governments and corporations know more about us and our habits than ever before and can use that information to their benefit.

The storm over WikiLeaks has shown, however, that even the most powerful cannot stop embarrassing information about their activities from flowing into the public domain. Equally significant is the massive public support that has sprung up for WikiLeaks, which has helped spread information and combat corporate and government attempts to silence and disable the website.

WikiLeaks has given a new meaning to ‘surveillance society’. The tables are turned: this is surveillance by society of the workings of power and privilege.

Maybe David Cameron knew what he was talking about when he warned that the ‘next scandal’ would be the ‘too cosy relationship between politics, government, business and money’.

The work of exposing the scandalous reality of corporate lobbying is more than an exercise in impotent rage. It’s a vital and positive strategy to rescue what’s left of our democracy.

So, now (after a few Facts), over to our awards ceremony for the ‘10 Worst Corporate Lobbyists’. Hold your noses.

Action

Keep tabs on what the corporates get up to on the quiet by checking out these fact-finding groups.

INTERNATIONAL

Sourcewatch
www.sourcewatch.org
WikiLeaks 213.251.145.96/ (address may change)

AUSTRALIA

Democracy For Sale
www.democracy4sale.org
Hosted by the Green Party
Public Interest Advocacy Centre nin.tl/fUXcVp Tobacco Control Supersite nin.tl/fY3C9T

BRITAIN

Spinwatch
www.spinwatch.org.uk
Corporate Watch
www.corporatewatch.org.uk
Alliance for Lobbying Transparency
www.lobbyingtransparency.org

CANADA

The Council of Canadians
www.canadians.org

EU

Corporate Europe Observatory www.corporateeurope.org
The Alliance for Lobbying Transparency and Ethics Regulations (ALTER-EU)
www.alter-eu.org
Transnational Institute
www.tni.org

US

Center for Responsive Politics
www.opensecrets.org
PR Watch
www.prwatch.org
Corp Watch
www.corpwatch.org

The coalitions Move to Amend.org and FreeSpeechPeople.org are calling for constitutional amendments to restrict corporate participation in electoral politics.

  1. The Guardian nin.tl/gWTvN1
  2. The Telegraph nin.tl/gOxiv0
  3. Huffington Post nin.tl/dZdFAY
  4. Wikipedia nin.tl/f8crgr
  5. Center for Responsive Politics www.opensecrets.org
  6. Sourcewatch nin.tl/hJkDvL
  7. Transnational Institute nin.tl/ePn93S
  8. Council of Canadians, ‘CETA and Corporate Lobbying’ , www.canadians.org
  9. PR Watch www.prwatch.org
  10. Sydney Morning Herald & The Age nin.tl/gNl19u
  11. PR Watch nin.tl/f9Hz0f
  12. New Yorker nin.tl/erxaH0
  13. The Guardian nin.tl/evwM24
  14. The Guardian nin.tl/eE3ZW8
  15. The Guardian nin.tl/e2Pz5f

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