Issue #11, Winter 2009

Original Intent

How the Founding Fathers would clean up K Street.

Lobbying is a $3 billion-a-year industry devoted to changing the policy choices of Congress. Despite reforms, the lobbying industry keeps growing by 7 to 8 percent per year, easily outstripping the economy. In the past decade alone, the amount spent on direct federal lobbying has more than doubled. Nor are there signs that growth is slowing.

Lobbying distorts American democracy by introducing a pay-to-play scale to the public’s ability to petition the government. It turns our government from a fundamentally public-facing entity to a private-facing one. If we do not radically change the role of the lobbying industry in decision-making, laws will increasingly tend towards complex mechanisms that redistribute power away from the people and toward the clients of the most effective lobbyists.

Citizens, candidates, and the press recognize that lobbying is a problem. Lobbyists and the culture of corruption were a central theme of the presidential race. Barack Obama wouldn’t take money from lobbyists and his ads in several states revolved around how John McCain’s closest advisers came from the industry; McCain, for his part, made lobbyist-procured earmarks the centerpiece of his campaign.

But proposals for lobbying reform often feel like the definition of an anti-climax. If Washington really is dominated by lobbyists, is it enough simply to require greater reporting and place restrictions on meals? If our environmental, intellectual property, and agriculture policies are captured by special interests, is it enough to require a few years’ breathing time before government officials can move into lucrative lobbying gigs? In short, most reforms on the table, though laudable, are out of scope.

Like the credit markets circa August 2008, widespread lobbying has thrown the political system profoundly out of whack. But unlike the credit markets, there won’t be a noteworthy crash and rescue. Nor will there be a natural recovery. The system must be dramatically reformed. As we think about how, it is worth going back to our founding principles, plumbing our Constitution for insight into the problem of power and information in Washington–and pointers toward possible new frameworks.

Lobbying 2008

So-called “super-lobbyist” Jack Abramoff may often be considered the poster child for corruption, but he’s an exception to the Beltway norm. The real problem with lobbying is not what’s criminal, but what perfectly legal practitioners do on a daily basis. It is hard to measure influence precisely, but numbers can tell us something profound about the reach of lobbying. At the current pace, at least $2.9 billion will be spent on lobbying the federal government in 2008; that comes to $5.4 million per member of Congress per year–or $14,800 each for every day of the year. If you include 527 campaigns and other money spent to persuade decision-makers, the number mushrooms. The health care industry spent some $330 million on lobbying in 2006, and the Public Action Campaign Fund estimates that coal and oil interests spent half a billion dollars in the first half of 2008 alone.

Does it work? Take the financial sector, which spent billions over the last decade pushing for looser regulations on the sort of complex derivatives and questionable lending practices that precipitated last fall’s meltdown. Indeed, the list of industry spending on lobbyists reads like a who’s who of bank and insurance failures: AIG spent over $10 million in 2007, Freddie Mac spent $8 million, Lehman Brothers spent $720,000, Washington Mutual spent $980,000, Bear Stearns spent $900,000, and Merrill Lynch spent $4.4 million. And when the failures started, lobbyists for the remaining financial firms were the first on the scene in Washington, providing complete, coherent stories about how the bailout package should be structured to give them maximum leeway in using the funds. An autopsy of the bailout will show that millions were spent in that one week alone on lobbying, and that the tweaked provisions in the 400-page Senate plan were largely drafted by financial services lobbyists.

While, as Hillary Clinton famously said, “A lot of these lobbyists, whether you like it or not, represent real Americans,” the overwhelming trend is towards more money spent by companies and trade associations and less by civic organizations, unions, and citizen groups. Of the top 20 spenders from 1998 to 2008, only one, the AARP, represents a citizen-membership organization. The more one drills down into particular issue areas, the more apparent the disjuncture between the amount spent by corporate interests (which are required to maximize the bottom line) and the amount spent by civic groups and non-profits. In the sector coded by the influence-monitoring group Open Secrets as “finance, insurance, and real estate,” financial-service firms dwarf the small amount of lobbying done by credit unions: Before its implosion, AIG alone spent twice what all credit unions combined spent on lobbying in 2007.

Moreover, a large portion of lobbying is done not for Americans, but foreign governments. A review of the Foreign Agents Registration Act report to Congress for the six months ending in December 2007 shows 405 active registrations, representing 563 foreign principals, filed by foreign-agent lobbying registrations. The Ministry of Foreign Affairs of Azerbaijan spent nearly $400,000 through October 2007, and the President of the Republic of Congo spent $2.5 million. Equatorial Guinea, one of the world’s most corrupt and politically repressive countries, spent more than $1.1 million to, among other things, make sure Congress had a positive impression of its “progress” on human rights. Foreign governments can afford the best of the white-shoe lobbying firms: Cassidy & Associates represented Pakistan in a $1.2 million-a-year contract, while DLA Piper provides lobbying and governmental relations services to Turkey–including, but not limited to, “preventing the introduction, debate, and passage of legislation that harms Turkey’s interest or image”–for $1.2 million-a-year. This amounts to privatized, pay-to-play diplomacy, bypassing and dangerously distorting the traditional avenues of international relations.

Paid lobbying does not represent the interests of most people, or the most needy people, or society as a whole. Rather, it serves the interests of people and companies who can afford to pay for it. Lobbying provides information, to be sure, but it also provides special access for those who can afford it, the creation and framing of issues, and careful psychological manipulation. Indeed, the touted “informational” role lobbyists play is itself a frightening development: Congress has become dependent on federal lobbyists to provide information about the impact of proposed legislation, even as that information is carefully selected to favor certain kinds of decisions. The problem with lobbying, therefore, isn’t lying or unlawfulness. Rather, when it dominates Congressional processes as it does, it systematically distorts decision making in the most undemocratic of ways, to the most undemocratic of ends.

What Would the Founders Think?

Lobbying today is at the heart of what the Founding Fathers would call “corruption.” This is not corruption in the legal sense of “bribery,” but the deeper sense, in which public officials and citizens use public channels to serve private ends.

Lobbying as it currently exists was not part of the nation imagined by the Founding Fathers. However, as the debate notes from the Constitutional Convention show, they were electrified by the fear of money influencing politics, and they went to great lengths to structure the Constitution to protect against financial interests’ takeover of the democratic structures. During the months they spent in Philadelphia, corruption was a constant topic of conversation, talked about one out of every four days–almost half the days in which there were issues of substance debated. As Alexander Hamilton explained in the Federalist Papers, for those at the Convention “[n]othing was more to be desired than that every practicable obstacle should be opposed to cabal, intrigue, and corruption.” When they spoke about corruption, it was clear they were not merely talking about crimes, but abuses of power, brought on by temptation. The specter of a corrupt Europe, and to some degree corrupted Greece and Rome, hung over dozens of conversations. The bogeyman was Britain; above all, the Framers and their contemporaries feared creating a structure that invited the sort of plunder of democracy by economic interests that they saw in the British empire. Thomas Paine considered Britain “teeming with corruption.” Patrick Henry wrote, “Look at Britain–see there the bolts and bars of power–see bribery and corruption defiling the fairest fabric that ever nature reared.” In place of this culture of plunder, where the king and parliament acted for private gain instead of the public good, the American Framers wanted a system that limited the temptations placed in front of public servants.

Two issues in particular concerned the Framers: the way foreign nations might use their financial clout to influence domestic politics and the way members of Congress might create powerful offices they then could fill themselves. In both cases, the Framers not only created structures that leveraged people’s self-interest in the public interest, but they also attempted to shape what would be considered self-interest in the first place. They not only tried to leverage selfishness, but cultivate virtue.

The fear of foreigners was explicitly tied to the fear of Congress being bought. George Mason, for example, urged that the three-year-residency requirement for Congress be switched to seven years, because “it might also happen that a rich foreign Nation, for example Great Britain, might send over her tools who might bribe their way into the Legislature for insidious purposes.” Hamilton worried that “foreign powers also will not be idle spectators. They will interpose, the confusion will increase, and a dissolution of the Union ensue.” Elbridge Gerry recommended that only natives be allowed to run for office, because “foreign powers will intermeddle in our affairs, and spare no expence to influence them…Every one knows the vast sums laid out in Europe for secret services.”

Moreover, the two-thirds requirement for a treaty was included in part because, as James Madison said, “The power of foreign nations to obstruct our retaliating measures on them by a corrupt influence would also be less if a majority sh[ould] be made competent than if 2/3 of each House sh[ould] be required to Legislative acts in this case.” There was a history of foreign involvement in other countries affairs–as there is now–and the particular fear related to the idea that actors unconstrained by patriotism and love of country, love of the American public good, would be more likely to try to manipulate the system for self-serving ends.

The most passionate and intense discussions about corruption involved the scope of the emoluments clause and the ineligibility clause, the two parts of Article 1, Section 6. These clauses prevent members of Congress from holding civil office while serving as a legislator, or from being appointed to offices that had been created–or in which the compensation was increased–during their tenure. While these clauses now gets relatively little attention, Mason considered them the “cornerstone” of the republic. In England at the time, ambitious citizens would seek out public office in order to create lucrative positions, which they would then later fill themselves. Since government work was stable and could be very easy, elected officials would basically launder their popularity and votes into a reliable, comfortable, post-elected life civil service job with few demands. Mason argued that the primary source of corruption in the British politics is “the sole power of appointing the increased officers of government.”

The Constitution’s drafters did not want to create a system in which the pressure on members of Congress from their associates would be too great–they wanted to limit temptation for themselves, and pressure from others. If a close friend or associate–or someone who was important in getting a Congressman elected–constantly asked a member to make a small civil office post open in the local district, it might not seduce or persuade all members of Congress, but it could certainly sway those who were slightly indifferent or weak, let alone venal. For these reasons they placed the primary power of filling public offices in the executive branch. In an extensive discussion of these defensive provisions, Mason explained that without these protections, members of Congress would “make or multiply offices, in order to fill them.”

The fear of self-dealing and foreign influence-buying came together in the Constitutional provision limiting the power of foreign governments to give gifts to American officials. Louis XVI had famously given both Arthur Lee and Benjamin Franklin small gifts (a snuff box and a portrait) when they were diplomatic representatives of the United States to Paris. The gifts were probably meant simply as expressions of politeness–but, people wondered, did the French monarch have more insidious hopes? Would these gifts corrupt Lee’s and Franklin’s judgment in European affairs? To protect against any such questions, the Framers inserted one of the most strongly worded sections into the United States Constitution: Article I, Section 9, Clause 8, forbidding federal officials–without a special dispensation from Congress–from receiving gifts “of any kind whatever” from any foreign party. “It was thought proper, in order to exclude corruption and foreign influence, to prohibit any one in office from receiving or holding any emoluments from foreign states,” explained Edmund Randolph. “If at that moment, when we were in harmony with the King of France, we had supposed that he was corrupting our ambassador, it might have disturbed that confidence, and diminished that mutual friendship, which contributed to carry us through the war.”

What is most important about all these provisions, and the discussions surrounding them at the time, is how focused the Founding Fathers were on creating structural limitations to the power of outside money in governmental decision-making. These were nontrivial measures, with real costs associated. The practice of diplomatic gift-giving had a long heritage, and taking away the power to accept gifts could easily put a strain on diplomatic relationships. Residency requirements limited the number of qualified people who could run for federal office. And separating the power of appointments and the power of the purse, according to several delegates, made it far less likely that qualified people (who might want the power of appointments for themselves) would run for office. But the Framers found such costs acceptable, given the importance they attached to minimizing the risk of corruption.

Issue #11, Winter 2009
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As a former attorney with the Congressional Research Service,I am familiar with the problems of Congress in developing neutral information. Everyone has some sort of ax to grind. Over the course of my tenure with CRS, much of my time was spent countering or explaining away lobbyist's positions. Their information is always, always tainted. Lobbyists are paid to taint and taint they do. The problem is that Congress has tunnel vision when it comes to lobbying and lobbyists. Lobbyists, in some way or another, get campaign money to members of Congress. This is mother's milk in our political system.

The only solution that I could come up with (or with which I could come up) is to limit lobbyist's communication with Congress to written material. I would go one step further and have the lobbyists attest to the material being either a neutral statement of facts or a brief in support of a position. Probably this is not a viable approach to the problem but something is needed. In our present system we all know that lobbying is institutionalized bribery, no more no less.

Dec 15, 2008, 12:27 PM

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