Lee Drutman, a senior fellow in the political reform program at New America, is the author of “The Business of America Is Lobbying: How Corporations Became Politicized and Politics Became More Corporate.”
When the Supreme Court ruled in Citizens United that corporations could spend unlimited amounts on elections, Democrats and a few Republicans warned that the 2010 decision was going to open the floodgates for corporate money in politics. A million dollars here, a million there, and businesses could get rid of their stubborn opponents in Congress — and maybe cow a few others by threatening to go after them, too.
Then-Sen. Russ Feingold (D-Wis.) f retted that “the Court has given corporate money a breathtaking new role in federal campaigns.” Sen. John McCain (R-Ariz.) called it the Supreme Court’s “worst decision ever.” President Obama said the justices had “given a green light to a new stampede of special interest money in our politics.”
But in the five years since the ruling, large corporations have mostly declined the generous offer. If you scour the names of super PAC contributors, with only a few minor exceptions, you don’t see the big blue-chip corporations that dominate Washington lobbying. Rather, the rise of super PACs empowered a new category of campaign kingpins: large individual donors such as Sheldon Adelson and Tom Steyer.
There is a simple reason for this: For big corporations, multimillion-dollar electoral spending just doesn’t deliver the same return on investment that traditional inside-the-Beltway lobbying does. Worse, it could earn companies some enemies, too.
Large companies wield impressive influence by flooding the Capitol, the White House and federal agencies with dozens of lobbyists, sometimes upward of 100 , almost always from both sides of the political aisle. Many lobbyists enjoy access because they are well-liked and well-connected, often because they worked in government previously. Some have access because they are deeply knowledgeable about a particular subject and their expertise is valuable. Some are all of the above.
Most lobbyists do have their clients’ political action committees contribute to campaigns, and many contribute themselves. But that doesn’t mean they like to. One lobbyist I interviewed for my new book said that “the biggest headache is dealing with the volume of calls and e-mails requesting money. If you have a PAC . . . everybody asks. At the end of the day, we have screens on who we’ll give to and how much we can give, and I apply those screens. But on any given day I’ll get 25 faxed invitations to Washington-based fundraisers.” Still, lobbyists know that their clients’ $5,000 campaign contributions are the small gifts that keep them in good standing, like bringing a bottle of wine to a party.
But corporate managers are not in the business of paying more than they have to — for anything. In interviewing 60 corporate lobbyists, one of the things that originally surprised me was how frequently their bosses at company headquarters questioned the costs of political engagement. As one lobbyist told me: “We’re overhead, right? We’re not selling things. We’re a cost center. [Management is] always eager to get a sense of the return on investment.”
From 1998 onward, as far back as there is good data, corporations have consistently spent about 13 times more on lobbying than they have on campaign contributions. That’s not to say they don’t spend on campaigns. In the 2013-14 cycle, corporations, trade associations and business associations spent a combined $381 million through their political action committees. But that’s small potatoes compared with the giant $5.2 billion pot roast of reported corporate lobbying expenses over this period. And about half of lobbying doesn’t even get reported.
Lobbying offers a much better return than election spending because real power lies in influencing how policymakers think about the world, not in getting them elected. Lawmakers’ staffers, who are the key policymakers in most offices, are smart but young. They are often inexperienced and stretched far too thin, trying to understand many complicated subjects with limited time. Large corporations that hire many lobbyists can overwhelm offices by “helping” them make sense of the issues.
Staffers may know that the information is biased, but they just don’t have the time do additional homework. And besides, if there were another view out there, wouldn’t those advocates send in their lobbyists, too? On many issues, though, there is no other side — or at least no other side with anywhere near the same resources as big corporations. By my count, corporations and their associations spend $34 on lobbying for every $1 that labor unions and groups representing diffuse interests, such as citizens and consumers, spend combined. That ratio is up from 22 to 1 in 1998.
In many cases, corporate lobbyists also serve as external support staff to help congressional staffers do their jobs, providing what Richard Hall and Alan Deardorff have called a “legislative subsidy.” Lobbyists give aides new policy ideas they can take to their bosses. And they are only too happy to draft legislation for them. Drafting legislation, after all, is hard work and requires a level of legal knowledge and precision that takes years to acquire.
Consider the great Cromnibus of 2014, which included a provision that weakened some of the Dodd-Frank financial regulations. As was widely reported at the time, Citigroup lobbyists wrote most of the legislative language in that provision. But since only members of Congress can introduce legislation, Rep. Kevin Yoder (R-Kan.) put his name on the original standalone bill that got folded into the Cromnibus.
More recently, a bill to update federal regulation of toxic substances was outed as the creation of chemical-industry lobbyists. Reporters found that the bill was drafted on a version of Microsoft Word that belonged to the American Chemistry Council.
Moreover, as corporations have steadily increased their investments in lobbying, they’ve siphoned more and more of the best and most experienced policy minds out of the public sector and into the private sector. As one lobbyist I interviewed put it, “One of the big things that’s wrong with the system is that somebody finally learns their job and then they have to move on, so you have a bunch of young folks who turn to lobbyists to figure out their jobs.”
All in all, it’s a pretty good situation for the biggest corporations. Why upset that with a risky strategy that carries uncertain rewards?
Pouring millions into a campaign or a super PAC is risky for two reasons. First, it could create unnecessary enemies. If the candidate you opposed wins despite your efforts, you’ve just made somebody mad at you. Likewise, if you give big to a Republican or Democratic super PAC, you’ve just angered an entire party. Effective corporate lobbying operations always have more friends than they need, on both sides of the political aisle. Ineffective ones make enemies.
Second, hefty election spending runs the risk of upsetting consumers outside the Beltway. If some of your customers are Democrats and some are Republicans, a really big check could be more trouble than it’s worth. Target learned this when it gave $150,000 to a group supporting conservative Tom Emmer in the 2010 Minnesota gubernatorial race, alienating its many customers who opposed Emmer’s anti-gay-marriage stance.
This reluctance may not last forever. As party leaders attempt to raise ever more campaign cash, they will be putting more pressure on corporations to write bigger checks. And as “dark money” 501(c)(4) groups begin to eclipse more-transparent super PACs (which have to disclose their donors), it will become easier for big corporations to give more without worrying about publicity. Arguably, this is already starting to happen.
Still, the fact that corporations have been slow to dive into campaign funding tells us that they don’t see politics as their primary source of influence. They get much more bang for their billions through day-to-day lobbying.
Corportations tend to spend much more on lobbying than on campaign contributions. For instance, in 2012 they spent $1,842,209,663 on lobbying vs. $168,521,379 on campaigns, a ratio of nearly $11 of lobbying money for every $1 of PAC contributions.
|ratio of lobbying to pac spending|
Source: Center for Responsive Politics