Washington on $10 Million A Day: How Lobbyists Plunder the Nation - Hardcover

Silverstein, Ken

Hardcover

ISBN 10: 1567511376 ISBN 13: 9781567511376

Publisher: Common Courage Press, 2002

Synopsis

From the creator of CounterPunch--the "essential" (Noam Chomsky) newsletter--comes a lively expose of who really runs Washington. This gut-wrenching chronicle of the hostile takeover of democracy names the names and lays the blame. Silverstein fingers the corporate villains--from Boeing to UPS--who pay the hired guns to bag the big concessions of corporate welfare Extensive radio promos. National media publicity. Author speaking tour. .

About this title

Excerpt. © Reprinted by permission. All rights reserved.

Pimps to Power: Lobbyists and the Destruction of Democracy

When Fortune published its 1997 list of the nation's top 500 corporations, the magazine could barely restrain its exuberance. The previous year had been "extraordinary" with regard to profitability, Fortune said, as companies "restructured, reengineered, refinanced, downsized, laid off, split up, and merged their way to prosperity." All this had been furthered by "an almost magically favorable economic climate," highlighted by low interest rates and "benign labor costs."

For business and the wealthy, these past few years truly have been the best of times. Profits at Fortune 500 firms rose by 23.3 percent in 1997, after climbing by 13.4 percent the previous year. Salaries for top managers are also soaring. Business Week, a publication not normally known for its radical politics, says executive pay is "Out of Control." The magazine reports that the average salary and bonus for CEOs at the nation's biggest firms rose by 39 percent in 1996, to $2.3 million. Total compensation, which includes retirement benefits, incentive plans and stock option packages, was up 54 percent, to $5.7 million. Corporate America's hired help didn't do nearly as well. Workers' salaries rose about 3 percent in 1996, leaving average compensation for CEOs at 209 times higher than that of factory workers.

Meanwhile, the wealthy are paying less and less to the treasury in the form of taxes. Some 2,400 Americans with annual income of $200,000 or more paid no taxes in 1993, compared to just 85 wealthy individuals who escaped paying taxes in 1977. Since Congress in 1997 reduced inheritance taxes and the tax on capital gains, the number of rich Americans who pay little or no taxes is expected to grow in coming years.

Corporations are also avoiding tax payments. Two loopholes Congress provided to companies with operations overseas-the foreign tax credit and tax deferral on foreign income-cost the treasury about $24 billion per year. The bland term "accelerated depreciation" obscures a rule that allows companies to write off the cost of equipment faster than it actually wears out, a gift worth $28.3 billion annually. Overall, federal corporate income taxes have declined from 30.1 percent of total tax revenues during the 1940s to 12.2 percent in 1996.

Huge corporate profits and low taxes for the wealthy do indeed result from a "favorable economic climate," but there's nothing magical about it, as Fortune would have you believe. The policies behind the favorable climate are designed by politicians who are dependent on cash from Corporate America to finance their political careers. The deluge of business dollars-in 1996, the parties and their candidates raised $2.1 billion, an average of $5.75 million every day-means that elected leaders are sure to implement policies designed to fatten their sponsors' bottom lines.

The link between campaign donations and political policy was brought into sharp focus by the campaign finance scandals that erupted during the 1996 campaign. Even jaded observers were startled by the Clinton administration's selling of the Lincoln bedroom to the highest bidder, and its organizing of White House coffee klatsches to reward donors and encourage them to make additional contributions.

But political contributions are only one way that big business wins favors in Washington. The media's focus on who made what phone calls from where, and who gave what funds in exchange for which favors misses a broader picture. Understanding how the capital works, and how business prospers here, requires a trip through the world of beltway lobbying and a review of the vast army of hired guns working at the behest of Corporate America.

Dollar for dollar, lobbying is a better investment than campaign contributions, one reason business spends far more on the former than on the latter. In 1996, Philip Morris coughed up $19.6 million for lobbying programs versus $4.2 million for campaign donations (making it the leader in both categories). The same pattern holds true with other firms. For 1996, Georgia Pacific spent $8.9 million for lobbying and handed out $527,000 in political money. Corresponding figures for AT&T are $8.4 million versus $1.8 million; for Pfizer, $8.3 million versus $775,000; for Boeing, $5.2 million versus $770,000; for ARCO, $4.3 million versus $1.4 million; for Lockheed, $3.5 million versus $1.26 million; for Fedex, $3.1 million versus $1.9 million; for Dow Chemical $1.5 million versus $578,000.

In addition to in-house efforts, most big corporations spend lavishly for outside lobbying firms. Lockheed, for example, retains at least two dozen beltway lobby shops to supplement its own efforts, while Fedex has an additional 10 firms on retainer. In 1996, Boeing hired seven outside lobby shops for the sole purpose of pushing renewed Most Favored Nation trade status for China, paying them a combined total of at least $160,000 for their efforts.

While corporate lobbying has long been a major force in American politics, it has also been greatly transformed during the past few decades. Today, many efforts involve stealth lobbying-the chief tactic here is mobilizing fake "grassroots" campaigns-or with indirect methods, such as buying research from friendly think tanks in order to influence Congress and public opinion. All of this makes calculating corporate lobbying expenditures nearly impossible, though it's safe to say that lobbying has now become a multi-billion dollar-per-year industry. No one can say whether the figure of $10 million dollars a day in this book's title is accurate. But the trend would suggest it will soon be a very significant understatement-even if weekends and holidays are included.

When you consider the enormous benefits bestowed on Corporate America by the White House and Congress, the big sums companies spend to win favors are revealed as chump change. Lockheed's combined expenditures on lobbying and campaign contributions were about $5 million in 1996. That same year, Lockheed's lobbyists, with help from other arms makers, won approval for the creation of a new $15 billion government fund that will underwrite foreign weapon sales. In 1996, Microsoft spent less than $2 million for its combined lobbying and campaign contribution expenditures (the former accounted for more than two-thirds of that amount). The following year Congress awarded the company tax credits worth hundreds of millions of dollars for the sale of licenses to manufacture its software programs overseas.

Corporate lobbyists don't win every battle (though when they lose it's often because a competing corporate faction bought up even more lobbying firepower). It is indisputable, though, that corporate citizens who retain lobbyists have an enormous advantage in Washington over the regular ones who merely vote. Tommy Boggs, perhaps Washington's best known influence peddler, charges $550 per hour for his services. That's a drop in the bucket to Philip Morris, but Boggs' rate would eat up the average salary earner's entire annual income after a mere 43 hours of lobbying activity.

That lobbying has corrupted the political system is no secret. During his 1992 presidential campaign, Bill Clinton promised to "break the stranglehold the special interests have on our elections and the lobbyists have on our government." Such promises (like many others the president made) were forgotten as soon as the election votes were counted. Clinton picked Vernon Jordan, a top lobbyist and one of Washington's consummate political insiders, to head his presidential transition team. Among those selected for top administration jobs were Ron Brown, a former colleague of Tommy Boggs at the firm of Patton Boggs; Mickey Kantor of the powerhouse firm Manatt, Phelps, & Phillips; and Howard Paster, a former lobbyist for oil companies, banks and weapons makers.

A more recent display of the administration's open door policy to lobbyists came with the White House coffee klatsches. Examine the list of the roughly 1,500 people who attended the affairs and one finds that lobbyists were among the most heavily represented.

Republicans criticize Clinton for his coziness with special interests, but they maintain the same intimate relationships with corporate lobbyists. After winning control of Congress in 1994, the GOP House leadership met weekly with "The Thursday Group," a pack of lobbyists and activists who helped plot legislative and media strategy on the Contract With America. Included in this elite troupe were hired guns representing the U.S. Chamber of Commerce, the National Federation of Independent Business, and Americans for Tax Reform.

Washington on Ten Million Dollars A Day tells how monied interests use lobbyists to achieve their goals in Washington, and why no one in the capital seems to want to do anything to change the system. It's also about the woeful ethical standards of Washington lobbyists, most whom will represent any client, from a corporate criminal to a foreign despot, as long as the bills get paid on time.

Fundamentally, though, Washington on Ten Million Dollars A Day is about corporate power and the destruction of American democracy. . .

Edition details

• Publisher: Common Courage Press
• Publication date: 2002
• Language: English
• ISBN 10: 1567511376
• ISBN 13: 9781567511376
• Binding: Hardcover
• Number of pages: 251