Lobbying

An April 2009 academic paper titled “Measuring Rates of Return for Lobbying Expenditures: An Empirical Analysis Under the American Jobs Creation Act” has been floating around the web for a couple of years and is occasionally cited for a shocking statistic: it found that firms which lobbied for the American Jobs Creation Act of 2004 (a tax holiday which led to the repatriation of around $300 billion in profits that U.S. corporations were keeping overseas in order to save money on taxes) saw a 22,000 percent return on their lobbying investments.

Yes that is three zeroes you see there. Who says a dollar doesn’t go far anymore?

Today I read an interesting article in the Washington Post about the debt ceiling debate and the role played, or rather not played, by the business community.

‘Embarrassed’ CEOs Silent on Debt Debate Driven by Republicans

With the U.S. government on the verge of a historic default, the country’s largest business lobbying group took to the halls of Congress last week to press lawmakers to support the Panama Free-Trade Agreement.

The U.S. Chamber of Commerce sponsored a “door knock,” with 80 members handing out Panama hats to tout a trade deal with a country that has a smaller economy than Akron, Ohio. To critics, the Chamber event illustrates what has been a deafening silence from U.S. executive suites on the gridlock in Washington over raising the country’s $14.3 trillion debt ceiling…

At a closed- door meeting with Chamber lobbyist Bruce Josten last month, Democratic Senators Mark Begich of Alaska and Mark Warner of Virginia upbraided the group and its member companies for not twisting arms hard enough to get a compromise package worked out, according to two people familiar with the discussion who spoke on condition of anonymity* because the meeting was private…

This is interesting because, if I recall correctly, Begich and Warner were among those Senators backing the DISCLOSE Act and expressing opposition to the Citizens United decision last year, falling in line with the general hysteria over the idea of corporate political speech.

Earlier this week I noted that self-styled campaign finance and government ‘reform’ group Common Cause had filed a complaint with the IRS demanding that the American Legislative Exchange Council (ALEC) be stripped of its tax-exempt status as a 501(c)3 organization. The complaint is unlikely to get far as it’s based on a frivolous interpretation of laws defining lobbying activity, and is simply the latest effort by Common Cause and their ‘reform’ allies to harass ideological opponents.

What I didn’t mention was that it was becoming evident that the Common Cause complaint was part of a well-coordinated campaign against ALEC by the ‘reform’ community and others who simply oppose ALEC’s ideological agenda, which favors limited government, free markets, and conservative ideas. A few days before the Common Cause complaint, the liberal group Center for Media and Democracy launched a campaign against ALEC called ALEC Exposed.

Among other things, the project apparently involved obtaining and putting online copies of ALEC’s model legislation. As the web site of ALEC Exposed states:

On July 13, 2011, the Center for Media and Democracy unveiled this trove of over 800 “model” bills and resolutions secretly voted on by corporations and politicians through the American Legislative Exchange Council (ALEC). These bills reveal the corporate collaboration reshaping our democracy, state by state…

The Center obtained copies of the bills after one of the thousands of people with access shared them, and a whistleblower provided a copy to the Center…

Please join us in helping to expose ALEC, its corporations and politicians, and how money has corrupted the democratic process.

The term “whistleblower” is kind of interesting, given that it’s usually used to describe someone who reveals illegal activity, and as yet it’s not illegal to discuss and advocate for conservative ideas, or any other political ideas for that matter. Our system of government is in fact based on the idea that we are free to communicate with our elected officials, even if we’re advocating ideas that Common Cause doesn’t much agree with.

The most recent element of the attack on ALEC seems to be a report by another member of the ‘reform’ community, the National Institute on Money in State Politics (NIMSP). One of the more obscure groups in the vast constellation of ‘reform’ groups, NIMSP compiles and makes accessible to the public campaign finance disclosure data from all 50 states.

And so on Wednesday it was NIMSP’s turn to take a whack at ALEC:

Self-anointed ‘good government’ and ‘reform’ group Common Cause has launched yet another witch hunt against those who dare to hold different views than them, this time demanding that the IRS investigate and punish the American Legislative Exchange Council (ALEC). Like their failed crusade against Supreme Court Justices Antonin Scalia and Clarence Thomas for allegedly being involved in a plot with wealthy libertarian brothers Charles and David Koch in the Citizens United case (which, among other things, would have required both Justices to have access to Hermione Granger’s nifty Time Turner in order to conquer the Gregorian calendar), there’s little reason for Common Cause to be taken any more seriously on this than reports of Crumple-Horned Snorkacks.

There is an awful lot of hysteria, hyperbole, conspiracy theory, and of course a Koch brothers connection in the complaint by Common Cause, but the basis of their demand for an IRS investigation of ALEC is explained in a Los Angeles Times story this morning:

Common Cause accuses conservative group of lobbying, seeks IRS probe

The government watchdog group Common Cause has asked the Internal Revenue Service to investigate the tax status of the nonprofit American Legislative Exchange Council, or ALEC, an association of conservative state legislators and private sector officials that churns out hundreds of bills and resolutions annually to pare back regulation and promote business…

In a letter to the IRS, Common Cause argued that a review would help determine if ALEC’s tax-exempt, 501(c)(3) status should be revoked due to “excess lobbying or, alternatively, because ALEC appears to operate primarily to further private business interests and not to advance a charitable purpose.”

The letter from Common Cause to the IRS goes into further detail, but the horcrux of their complaint is that developing model legislation is lobbying, ALEC claims it does no lobbying, as a 501(c)3 organization ALEC is not permitted to have lobbying as a substantial portion of their activities, therefore ALEC is violating its tax status and filing false returns with the IRS.

Apparently Common Cause was hit with a Confundus Charm, because their argument simply doesn’t make sense.

The hearing at the U.S. Court of Appeals for the Second Circuit in New York featured a wide range of questions from the panel of three judges questioning counsel in Green Party of Connecticut et al v. Garfield.

The case involves two key questions: extremely broad and onerous restrictions on campaign contributions and activity by lobbyists and a public financing scheme which a lower federal court held unconstitutionally discriminated against minor parties and gave an unacceptable windfall to major party candidates.

Washington Examiner Lobbying Editor Tim Carney spoke at the Cato Institute today. Carney discussed his new book, Obamanomics: How Barack Obama is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses, with Dr. Uwe Reinhardt of Princeton University and New York Times Columnist Ross Douthat.

Carney absolutely shreds the idea pushed by pro-regulation groups that Obama’s war on lobbyists have reduced the influence of interest groups and lobbyists in Washington.

The nexus of Carney’s argument is that whenever the government gets involved with economic matters, it opens doors for special interests who ultimately get their way. Both Republicans and Democrats cut deals with their respective corporate allies and special interests to advance legislation and expand government.  Accordingly, these special interests are more than willing to pony up the cash necessary to win increased regulation or additional government spending, much to the detriment of their competitors not at the legislative table. Every time the government gets bigger, the person with the best lobbyist ultimately wins and makes a killing doing it.

Brad’s latest post on National Journal‘s Under the Influence Experts’ blog, responding to the question, “What Will Be The Most Lobbied Issues In 2010?”:

I can’t say what will be the most lobbied issue, but I can say this — we will see more lobbying than ever before. Why? Because big government and big lobbying go hand in hand. The current administration and congressional majority are both eager to expand the size and scope of government. As these efforts move forward, many of the same organizations that generally favor this expansion of government — Common Cause, Public Citizen, U.S. PIRG, etc. — will release breathless reports about the need to further restrict lobbying and political speech through the use of … more government.

Read the whole thing here.

National Journal recently started a new blog forum called Under the Influence Experts, which they pitch as “An Inside View of the Lobbying and Advocacy Industry.” Each week, National Journal’s Bara Vaida posts a question about lobbying, campaign finance, etc. and National Journal’s community of lobbyists, activists and other pundits respond.

This week’s question is “Should Lobbyists Be Banned From Campaign Contributions?”

CCP Chairman Brad Smith responds

The American Civil Liberties Union of Illinois is challenging a state registration fee for non-profit lobbyists in federal court, BNA: Money & Politics Report ($) reported today.

The Illinois Lobbyist Registration Act, amended in August, violates the First and Fourteenth Amendments by nearly tripling the lobbying fees for non-profits like the ACLU.

Read the ACLU’s filing here.