News & Politics

Hightower: Washington Overrun by 11,000 Corporate Lobbyists and $500 Million in Corrupting Donations

We need to focus on those shadowy players who're pulling the strings from behind the scenes to impose their special interest over America's public interest.

Change. That's what Americans want. We the People--a.k.a. the body politic, the majority, the great unwashed, the hoi polloi, "us"--have made it clear that we want real, substantive change in the way Washington works, and for whom it works. We're sick of a "jobless recovery," rampant banksterism, collapsing bridges, corporate-owned elections, tinkle-down economics, oil dependency, made-in-China everything, mountaintop "removal," corporate welfare, falling wages, skyrocketing tuition, the demise of the middle class, and on and on. Enough! Ya basta! Stop it--change, dammit, CHANGE!

But where's the change? It's in subcommittees, in negotiations, in limbo, in transition, in purgatory, in trouble, in Never Never Land, in the trash can.

Why? Right-wing pundits and corporate-funded tea-party groups want you to blame Washington. Well, yes, Obama seems to lack convictions, much less courage; Senate Democrats tend to be five-watt bulbs sitting in 100-watt sockets; and congressional Republicans are...well, contemptible and pathetic. But these characters are the public face of the problem, not the source. Progressives need to focus on those shadowy players who're pulling the strings from behind the scenes to kill the will of the people and impose their special interest over America's public interest.

Who are they? Let's start by running some numbers on them:

  • 11,195. That's the number of corporate lobbyists who are presently plying their nefarious trade day and night in Washington's hallways and back rooms.
  • $2.95 billion. That's the amount that corporations spent on lobbyists last year alone (a sum more than six times greater than the total spent by all consumer,environmental, worker, and other non-corporate groups combined).
  • $473 million. That's the sum of money that corporate executives and lobbyists have slipped into Washington's many political pockets--so far--for the 2010 election cycle, including donations to candidates, leadership PACS, and party committees. We are still seven months from the 2010 elections, and already corporate spending has reached the record-breaking total of $475 million shelled out for the entire 2008 cycle.

This unrelenting lobbying force is so tightly wired into every part of our political and governmental systems and so omnipresent in Washington decision making that it refers to itself as "the industry." It has become such a permanent part of America's "democratic" power structure that several universities now offer four-year degrees in lobbying! And, as a measure of how entrenched this powerhouse industry has become, note that it has its own lobbying firm: the American League of Lobbyists (ironically, its acronym is ALL). The league works to fend off legislative, regulatory, and ethical restrictions on influence peddling--a reform that nearly all Americans would support.

As if that's not enough power behind the narrow agenda of America's economic elite, consider this number: 300. That's roughly how many former members of Congress are currently in harness to corporate lobbying firms.

Ever wonder what happened to such once-powerful-and-prominent lawmakers as Dick Armey, John Ashcroft, Tom Daschle, Tom Foley, Dick Gephardt, Newt Gingrich, Phil Gramm, Dennis Hastert, Jack Kemp, Bob Livingston, Trent Lott, Bob Packwood, Richard Pombo, Rick Santorum, Bud Shuster, Billy Tauzin, Fred Thompson, and John Warner?

Instead of returning to the old homestead to dwell among the beloved constituents who sent them to Washington, they moved only a dozen blocks from the Capitol to the K-Street lobbyist corridor, where they've cashed in on their congressional experience and connections to draw six-figure or even seven-figure annual salaries for satisfying corporate desires. Indeed, Congress has become a training ground to develop lobbyists. Ex-members are prized for their insider knowledge and old-boy chumminess, which they developed at taxpayer expense but can sell to the highest bidder.

Corporations are spending $240 million a month--a month!--to maintain this occupying force of hired guns. Why spend so much? Because it pays off, big time.

Take the example of 93 major corporations (Hewlett-Packard, IBM, Pfizer, et al.) that spent $283 million on lobbyists in 2004 to shove a special tax break through Congress. Last year, the University of Kansas published a cost-benefit analysis of this lobbying expenditure. The tax break they won allowed the 93 firms to dodge $62.5 billion in taxes they otherwise owed--a 22,000% return on their investment.

That's exceptional, but it's common today for Washington lobbying shops to promise that corporate clients will get returns of 100 to 1 on every dollar they spend on professional fixers.

Inside the chamber

As reported in last month's Hightower Lowdown, a five-vote majority of justices on the Supreme Court decreed in January that corporations can henceforth dip into their bottomless treasuries and spend unlimited sums to elect or defeat candidates of their choice. This is a crushing plutocratic blow to our people's democratic authority, for it literally allows corporate lobbyists to mug elected officials--"Stand with us," the lobbyists will now say, "or we'll run a multimillion-dollar campaign to defeat you."

Worse, corporations can mug us without revealing their brand names, because they can launder their campaign funds through front groups that are not required to (and do not) disclose which corporations gave how much for which campaign. In fact, the muggers have already begun masking their attack on the people's progressive agenda by using such blue-chip front groups as the U.S. Chamber of Commerce. In March, for example, the C. of C. launched an $11 million blitz of TV ads trashing Obama's health-insurance reform package. This political barrage targeted the home districts of 40 Democratic lawmakers, demanding that these members vote against the president's bill.

In a double dodge, the anti-reform attack ads ran under the name "Employers For a Healthy Economy," a sham organization thrown together by the U.S. Chamber. The real per-petrators of the mugging were the insurance giants that put up the money for assaulting the 40 Democrats. But, fearing a backlash from their own customers and the general public (not to mention the 40 miffed Dems), the insurers cravenly hid their brands within a sham tucked inside a deceit.

The C. of C. is becoming the deceit of choice for many brand-name corporations that oppose everything from labor-law reform to a jobs bill. Interestingly, the chamber presents itself as the voice of American business, even positioning itself as the voice of Main Street. In fact, however, it speaks only for a relatively few corporate behemoths that fund its lobbying program--much of which goes against the interests of Main Street. Indeed, the organization has long claimed to be "representing more than 3 million businesses," but when Mother Jones magazine asked last October about the accuracy of that bold number, the chamber had to admit it has only 300,000 actual members.

However, it is money, not members, that give this power broker its fearsome political clout. During the past decade, the chamber's steadily expanding lobbying budget totaled $607 million--three times the amount spent on lobbying by the next-largest interest group, the American Medical Association. The chamber's budget is now immense --last year, for the first time, it spent more on its lobbying and ad campaigns ($144 million) than either the national Republican party ($97.9 million) or the national Democratic party ($71.6 million). And that was before the Supreme Court opened the floodgates to corporate treasuries, allowing this corporate spending imbalance to swell to overpowering levels.

Owning the place

Who loves Wall Street banksters? Okay, presumably their mommas do. Also the Republican leadership loves them, as do the fawning Democratic tandem of Tim Geithner and Sen. Chuck Schumer.

But that's it. The general public (from red-faced tea partiers to Green party activists) loathes these irredeemable paragons of selfishness. Wall Street greedsters crashed our economy, sopped up some $13 trillion in public bailout funds, immediately went back to their old destructive games of casino speculation, and rewarded themselves this year with billions of dollars in bonuses--while workers, Main Street businesses, homeowners, and the middle class continue to sink. What's to love?

Most Americans would cheer themselves hoarse to see those who caused this economic mayhem tarred and feathered (or at least fired), and to see Wall Street's financial fiefdoms broken up, decentralized, and tightly regulated. These bankers should be treated as pariahs in Washington, and sweeping financial reform should have been the easiest and quickest task on Congress's to-do list.

But no. Two years have passed since Wall Street's house of cards started falling, beginning with the ominous collapse of Bear Stearns in March 2008, yet only now are the feeblest of reforms plopping out of the legislative grinder. Far from pariahs, the CEOs and lobbyists for Goldman Sachs, JPMorgan Chase, Citigroup, Morgan Stanley, et al. are still being glad-handed and back-slapped by beaming officials of both parties. A diamond-level example: Jamie Dimon, honcho of JPMorgan, is a top contributor to Obama, consults regularly with him, counts Geithner as a close personal friend, is being wined and dined by GOP House leader John Boehner for campaign funds, and is likely to be named the next Treasury secretary by Obama.

Why this hugfest for such an unworthy group? Money.

No other interest group tops the finance sector in laying out cash for lobbying and campaign donations. In the last 10 years, this industry spent $4 billion on lobbyists! Consequently, in this same period, Wall Street won deregulation fights that allowed the big banks to shift from providing financial services for America to creating credit-default swaps, subprime-loan derivatives, and other gambling exotica that enriched global speculators and the bankers themselves.

After the 2008 crash and bailout, Wall Street expanded its lobbying army in 2009 in a prodigious effort to fend off regulation, restructuring, and consumer-protection proposals. Of the 11,000 corporate lobbyists presently in Washington, about 3,000 are toiling for the Street. Here's a snapshot of the 2009 lobbying presence of just three of the financial fiefdoms, as compiled by the Center for Responsive Politics (www.opensecrets.org/lobby):

GOLDMAN SACHS: Had 5 in-house lobbyists. Hired 14 K-Street firms to provide 44 other lobbyists, including former Reps. Dick Gephardt and Harold Ford. Spent $2,830,000.

JPMORGAN CHASE: Had 10 in-house lobbyists. Hired 10 K-Street firms to provide 26 other lobbyists. Spent $6,170,000.

CITIGROUP: Had 9 in-house lobbyists, including Nicholas Calio, the former head of legislative affairs for both George H.W. Bush and George W. Hired 10 K-Street firms to provide 60 other lobbyists. Spent $5,560,000.

According to official lobbying reports, the legislative reforms that these three gangs of hired guns were dispatched to kill (or severely wound) included the Anti-Predatory Lending Act, Assistance For Unemployed Workers and Struggling Families Act, Cap Executive Officer Pay Act, Compensation Fairness Act, Comprehensive Derivatives Regulations Act, Consumer Financial Protection Agency Act, Consumer Overdraft Protection Fair Practice Act, Credit Card Accountability Responsibility and Disclosure Act, Credit Card Fair Fee Act, Credit Cardholders' Bill of Rights, Derivatives Market Transparency and Accountability Act, Derivatives Trading Integrity Act, FAIR Overdraft Coverage Act, GREED Act, Helping Families Save Their Homes Act, Homeowner Protection and Wall Street Accountability Act, Mortgage Reform Act, Overdraft Protection Act, Ownership Through Counseling Act, Shareholder Bill of Rights, Shareholder Empowerment Act, Student Aid and Fiscal Responsibility Act, Student Credit Card Protection Act, TARP Reform and Accountability Act, Transparency In Rating Agencies Act, and Wall Street Reform and Consumer Protection Act.

In short, the bankers opposed anything that would keep them from doing everything they had been doing.

Last April, Sen. Dick Durbin was stunned to see his Helping Families Save Their Homes Act defeated by a stealth lobbying campaign led by Bank of America, JPMorgan Chase, and Wells Fargo. Disgusted, Durbin declared, "The banks--hard to believe in a time when we're facing a banking crisis that many of the banks created--are still the most powerful lobby on Capitol Hill. And they frankly own the place."

A year later, Durbin's assessment has been confirmed by the milquetoast Wall Street reform bill that recently limped out of the Senate Banking Committee. Written by Sen. Chris Dodd (whose top career funder, by far, just happens to be the finance sector--including hundreds of thousands of dollars each from Citigroup, Goldman Sachs, Morgan Stanley, and other Wall Street powers), the bill rearranges a number of regulatory chairs, subjects some of the riskier casino games to federal monitoring, and helps restrict (but not eliminate) the "too big to fail" syndrome that leads to massive taxpayer bailouts.

However, consumer advocates and populist reformers are frowning and bank lobbyists are smiling and winking, for the regulatory changes will be about as effective as a Jello doorstop when it comes to ending Wall Street's ability to abuse the public trust and serve its own enrichment at the expense of our country's real economy. Hoping to win support from a few Republican senators and to mitigate banker opposition, Dodd simply gave up too much. From the start, he refused even to consider proposals to restructure and decentralize America's financial system--thus wasting a once-in-a-lifetime, historic opportunity for fundamental change.

Instead, Dodd's bill, now embraced by the White House, gives us a patchwork of new regu-lations (which bank lobbyists will soon turn into Swiss cheese, riddled with loopholes). And, in a fatal concession to Wall Street lobbyists, he places most of the regulatory authority in the gentle grasp of the most banker-friendly agency of all, the Federal Reserve. Even the new Consumer Financial Protection Agency is to be in the Fed, which is akin to moving the hen house into the foxes' den.

However, nothing exemplifies the meekness of this bill more than its gesture toward restricting the obscene pay levels that the Princes of Wall Street bestow on themselves. This self-aggrandizement is especially offensive to workaday Americans, and Obama himself made a lot of noise against it. So, what does the bill actually do to stop it? A provision allows shareholders to vote on executive pay. That could be effective--except that these are to be non-binding votes! CEOs can simply ignore them, just as they routinely ignore other shareholder opinions.

A money sickness

Cancer metaphors are overused in our society, but one is appropriate here, for the sheer financial power of corporations is acting as a voracious cancer in America's body politic, devouring even the strongest expressions of the public's intent. We cannot pretend to be a repre-sentative republic (to use the new favorite phrase of ideologically correct right wingers), much less a democratic republic, if such brutish sums of special-interest money are allowed to rampage through the political system, destroying the people's will.

To achieve any of our society's progressive goals--indeed, to be a self-governing people--we have to cure this money sickness that is within us. One preventive step is to adopt the clean-elections model that such states as Arizona, New Mexico, North Carolina, and Maine have pioneered, providing public campaign funds for congressional candidates who reject private-interest money. Other suggestions? The Lowdown (and most Americans) welcome any and all ideas. The cure(s) will have to come from the grassroots.

Jim Hightower is a national radio commentator, writer, public speaker, and author of the new book, "Swim Against the Current: Even a Dead Fish Can Go With the Flow." (Wiley, March 2008) He publishes the monthly "Hightower Lowdown," co-edited by Phillip Frazer.