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Business Influence onGovernment and Public Policy
Professor Craig Diamond
BA 385
November 4, 2009
Chapter 12
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Outline of Topics
Corporate Political Participation Lobbying (focus on federal) Coalition Building Political Action Committees Strategies for Political Activism
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Introduction
Business is one of many groups which try to influence government.
Business must obey the law and behave ethically in its response to government’s expectations and mandates.
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Corporate Political Participation
PoliticalInvolvement
Participation in the formulation and execution of public policy at various levels of government
“Success in Washington is just as important as success
in the marketplace.”
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Corporate Political Participation
Lobbying
PACs
CoalitionBuilding
PoliticalStrategy
Influencing public officials to promoteor secure passage or defeat oflegislation; also influence elections
Instruments through which business uses financial resources to influence election results
Business and other groups joining forces to achieve common goals
To secure position of advantage regarding a given regulation or piece of legislation
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Purposes of Lobbying
Gain legislative support or institutional approval for some objective
• Influence pending legislation
• Support existing policy
• Influence a perceived coming policy shift
• Target the election or defeat of national, state, and local legislators.
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Organizational Levels of Lobbying
Umbrella Organizations
Umbrella Organizations
TradeAssociations
TradeAssociations
Company-LevelLobbying
Company-LevelLobbying
BroadBroad
MidrangeMidrange
Narrow/Specific
Narrow/Specific
Representation
• Chamber of Commerce of the US• National Association of
Manufacturers
• Chamber of Commerce of the US• National Association of
Manufacturers
• National Automobile Dealers Assn• National Association of Realtors• National Automobile Dealers Assn• National Association of Realtors
• Washington and State Capital Offices• Law firms• Public affairs specialists• PACs• Grassroots lobbying
• Washington and State Capital Offices• Law firms• Public affairs specialists• PACs• Grassroots lobbying
Examples
Figure 12-1
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Lobbyists
Lobbyists can work for trade associations, individual companies, law firms, or consulting firms.
Often they are former government officials (one year rule)
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What Business Lobbyists Do for Clients
Get access to key legislators – this is key
Monitor legislation
Establish communication channels with regulatory bodies
Draft legislation, slick ad campaigns, direct-mail campaigns
Provide issue papers on anticipated effects of legislative activity
Influence outcome of legislation
Assist companies in coalition building around issues
Help members of Congress get reelected
Organize grassroots efforts
Figure 12-3
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Grassroots Lobbying
Grassroots Lobbying
Mobilizing the “grassroots”—individual citizens who might be most directly affected by legislative activity—to political action
Cyberadvocacy
Using the Internet to amass grassroots support, and enable grassroots supporters to contact their legislators
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Lobbying Power
Business power and money often drowns out other interests that are less funded and have less focused efforts
• Example: Pharmaceutical Research and Manufacturers of America (PhMRA) and individual companies spent $29 million to defeat legislation that would have allowed the importing of lower prices drugs.
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Coalition Building
Groups of companies or associations working together to influence legislative outcomes
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Umbrella Organizations
U.S. Chamber of Commerce
• Membership: local chambers of commerce, associations, companies, individual members
National Association of Manufacturers (NAM)
• Manufacturing industries
Business Roundtable
• CEOs of largest companies – focus on high level policy issues
National Federation of Independent Businesses (NFIB)
• Small businesses, but very powerful
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Golden Rule of Politics: “He who has the gold, rules.”
Golden Rule of Politics: “He who has the gold, rules.”
Political Action Committees (PACs) are groups, including businesses, that use financial resources to influence elections.
Political Action Committees
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National Association of Realtors
National Beer Wholesalers Association
National Association of Home Builders
National Automobile Dealers Association
International Brotherhood of Electrical Workers
Operating Engineers Union
American Bankers Association
Laborers Union
American Association for Justice
Credit Union National Association
Top 10 PAC Contributors to Federal Candidates (2005-2006)
Figure 12-4
These 10 contributed total of about $30 million
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PACs expect something in return other than good
government and this can lead to differing treatment for
those who give and those who cannot,
such as the poor.
PACs are a reasonable means that business may use to organize their contributions to candidates for office.
Arguments For PACsArguments For PACs Arguments Against PACsArguments Against PACs
Political Action Committees
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Political Action Committees
Does PAC funding buy votes?
• Studies show a strong correlation between legislators receiving PAC funding and how they vote on issues supported by the PACs which funded them.
• Often favors incumbents, which impedes political change.
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Soft Money
Soft money: a contribution made to political parties instead of political candidates
The Bipartisan Campaign Reform Act of 2002 (McCain-Feingold) was a sweeping change of U.S. campaign finance• The BCRA removed the influence of soft
money on candidates running for national office.
• But, created “527” groups
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Money in Politics Watchdog Groups
The Center for Responsive Politics
Common Cause
The Center for Public Integrity
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Strategies for Political Activism
Contingency Approach:
1. Identify the important issues in a legislative district
2. Determine the information a legislator possesses concerning voter preferences
3. Determine the importance of the issues to the legislator’s constituency
4. Identify the expected position of voters on the issues
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Strategies for Political Activism
Modes of Corporate Response
Defensive (adversarial, act alone)
Form coalitions, persuade others
Active leadership role, help bring about social change