Multinational Monitor
25 Years of Monitoring the Multinationals
January/February 2005 - VOLUME 26 - NUMBERS 1 & 2
Don't Mourn, Organize
Big Business Follows Joe Hill's Entreaty
to U.S. Political Dominance
by Robert Weissman
For more than two decades, a corporate political juggernaut has
rolled over citizen interests the world over. It was not always so.
In the 1960s and 1970s, it was Big Business that was on the
defensive. In the United States, a low-unemployment economy increased
workers' bargaining and, indirectly, political power. The modern
environmental movement formed and quickly began transforming popular
consciousness and scoring important political victories. Following
Ralph Nader's breakthrough with Unsafe At Any Speed, the consumer
movement began uncovering case after case of corporate abuse and
successfully pushing for reform. The anti-war, civil rights and
women's movements all mounted broad social challenges intended to
democratize the economy.
Internationally, the newly decolonized Third World asserted itself
politically, pressing calls at the United Nations for a New
International Economic Order. Revolutionary movements around the
globe posed serious threats to established order, in many cases
gaining political power and in some instances rejecting multinational
corporate dominance of developing country economies.
In leading business circles, these developments were viewed with
alarm. In 1971, Lewis Powell, a prominent corporate lawyer who would
soon be appointed to the U.S. Supreme Court, prepared a memorandum,
"Attack on American Free Enterprise System," for the U.S. Chamber of
Commerce. This widely circulated memo asserted that "no thoughtful
person can question that the American economic system is under broad
attack." It warned: "Business and the enterprise system are in deep
trouble, and the hour is late."
The central message of Powell's memo was that corporations needed to
organize to confront organized citizens. "Strength lies," Powell
wrote, "in organization, in careful long-range planning and
implementation, in consistency of action over an indefinite period of
years, in the scale of financing available only through joint
efforts, and in the political power available only through united
action and national organizations."
Although Powell's memorandum focused on what the Chamber of Commerce
could do, it was really a clarion call to the executive class. To
respond to the memo, the Chamber organized a task force of leading
executives to develop an action plan. Following on Powell's
suggestions, the task force emphasized the need for corporations to:
* Work to promote pro-business attitudes among young people and
intellectuals, including by hiring sympathetic intellectuals as
consultants and sponsoring their research;
* Sponsor more research and aggressively communicate business points
of view to the media;
* Utilize paid advertisements to support the business system;
* Dramatically ratchet up corporations' political activity, including
by forming political action committees and increasing campaign
contributions; and
* Strive to influence judicial decisions and the judicial system.
Business took these recommendations to heart. Through the Chamber of
Commerce and by many other means, corporations pursued all of the
proposals put forward by the task force. More importantly,
multinational corporations committed themselves to following Powell's
entreaty to organize politically.
Throwing money at the problem
The multinationals threw themselves into the task of domestic
political organizing with reckless abandon. They revitalized the
Chamber of Commerce and National Association of Manufacturers. They
created new entities, such as the Business Roundtable, an
organization consisting only of the CEOs of the nation's largest
companies. They transformed countless trade associations from sleepy
groupings at which companies traded information on industry matters
to potent political lobbies.
Through these beefed up organizations and their own Washington, D.C.
offices, business started channeling vastly greater sums into
national politics, with campaign finance laws playing little role in
limiting their monetary contributions.
To take one measure alone, the Center for Responsive Politics
reported that corporations in 1996 contributed more than $170 million
in "soft money" - money donated to the two major parties for
educational purposes, but which was used for thinly veiled candidate
advertising. That $170 million figure is more than 17 times the labor
union soft-money contribution total for the same year.
In 2004, business contributions to federal candidates, from
individual donors and through political action committees,
outdistanced labor contributions by a 15-to-1 ratio. (Soft money was
banned by the very modest campaign finance reform legislation of
2001.)
While the Republican Party is, for the most part, the Big Business
party of choice, multinationals pour huge sums into both Republican
and Democratic coffers. In the 2004 election cycle, for example,
Goldman Sachs made $5.6 million in political donations, 58 percent to
Democrats; Microsoft made over $3 million in contributions, 60
percent of which went to Dems; SBC contributed more than $2.6
million, nearly two thirds of which went to Republicans; Pfizer
donated nearly $1.6 million, almost 70 percent of which went to the
GOP; Lockheed Martin spent $1.73 million in contributions, directing
59 percent to Republicans; and ExxonMobil donated $800,000, 89
percent of which went to Republicans.
At the very least, corporations' millions in campaign contributions
gets them "access" to Members of Congress, congressional staff and
high-level executive branch officials - access which may even enable
them to draft or edit proposed legislation or regulations. Often,
campaign contributions appear to prompt specific, targeted government
action. After Carl Lindner, CEO of Chiquita, donated more than
$250,000 to the Democratic Party, for example, the Clinton
administration brought a World Trade Organization challenge against a
European banana-buying program which gives preferences to former
European colonies in the Eastern Caribbean. The United States does
not grow bananas, but Lindner wanted Chiquita exports from Latin
America to get a bigger share of the European market. The World Trade
Organization ordered Europe to ends its preferential program for the
Eastern Caribbean, with harsh impacts on small banana-dependent
countries like the Windward Islands. (Lindner also made huge
donations to the Republicans, and leading Republican lights including
then-Senator Bob Dole, then-Senate Majority Leader Trent Lott and
then-Speaker of the House Newt Gingrich all pressured the trade
representative's office to work on behalf of Chiquita's interests.)
But the most far-reaching effect of corporate campaign cash is the
way in which it shifts the entire political debate. Since most
politicians know they will need ever-greater amounts of corporate
money in all of its various forms to win reelection, they are
inclined not to challenge Big Business on issues of general concern
or on issues of concern to entire industries - environmental
regulation, say, or healthcare reform.
The lobby-PR-political complex
Corporations do not just rely on money to do their talking for them,
however. There has been an explosion of lobbyists in Washington, D.C.
in the last two decades. Political analyst Kevin Phillips estimates
there are at least 80,000 to 90,000 lobbyists and people associated
with lobbying in Washington, D.C., the overwhelming number of them in
corporate lobby shops (including especially trade associations).
These lobbyists swarm the halls and backrooms on Capitol Hill and in
agency headquarters, seeking to nudge policymakers in directions
favorable to their clients.
Traditional lobbying - meeting with lawmakers and others and trying
to persuade them of one point of view or another - is only one part
of what lobby shops now do. Because corporations and their lobbyists
understand the importance of organizing and the perception of broad
public support for favored measures, lobbying is now intermixed with
public relations and corporate-style organizing.
The 1980s saw a proliferation of "front groups" - business outfits
which have names that make them sound like citizen membership
organizations but which are in fact business political associations.
These front groups have names like Citizens for a Sound Economy,
Consumer Alert and the Coalition for Vehicle Choice. They have
"members" like General Motors, Coors and DuPont. But when, say,
Citizens for a Sound Economy issues a news release decrying efforts
to address global warming and describing itself as a "consumer group"
and a "free market-oriented grassroots advocacy group," reporters are
frequently fooled. So too do these organizations mislead
Congressional staff and agency bureaucrats.
In the 1990s, corporate flacks developed an even more deceptive
device known as "astroturf" lobbying - astroturf as in fake
grassroots. Corporate lobbyists contact citizens and urge them, often
in misleading ways, to communicate corporate views to policymakers
through pre-printed or sometimes even individually tailored
postcards, faxes and letters. The idea is to convince policymakers
that a groundswell of citizen outrage is growing to demand a specific
reform. That the effort is orchestrated by a corporation is to be
hidden from view. In 1995, in a particularly egregious example of
astroturf lobbying, working for AT&T, MCI and Sprint, lobbyist Robert
Beckel generated 500,000 telegrams to members of Congress opposing a
measure which would permit the Baby Bells to offer long-distance
phone service. Up to half of the telegrams were faked, with many
signed by people who had never heard of the bill or "sent" by people
who were dead.
Campaign money and lobbying are complemented by a host of other
tricks of the corporate influence trade: corporate-funded think tanks
which churn out material supporting business proposals; the revolving
door through which government officials spin - from corporate law
firms and lobby shops to government service and back again; sponsored
scientific research; issue advertising, a growing phenomenon
following the success of the "Harry and Louise" ads which contributed
to the defeat of the Clinton healthcare plan; and many more.
Innovation knows no bounds for the corporate lobby shops. One novel
technique orchestrated by the U.S. Chamber of Commerce has been to
operate a propagandistic newspaper that presents itself as a
legitimate independent voice.
In Madison County, Illinois, the Chamber started the Madison
Reporter, which bills itself as independent legal weekly. The paper
churns out a steady stream of attacks on the civil justice system and
people's right to sue corporate wrongdoers. Nowhere in the paper is
the Chamber's sponsorship - more than $200,000 invested in the rag,
according to the Washington Post's Jeffrey Birnbaum - disclosed.
The Chamber set up the paper in Madison County because the county is
perceived as a friendly jurisdiction for victims of corporate wrongs.
The apparent goal of publication is to shift the attitudes of
potential jurors in the area, making them more sympathetic to
corporate defendants; and more generally to advance the cause of
"tort reform" - the business campaign to undermine the civil justice
system, and make it harder for injured and defrauded persons to bring
suit against the corporate perpetrators.
Ideas matter
Industry also began taking the world of ideas much more seriously.
Recognizing that academics and think tank analysts could function not
just as hired guns who would testify in Congress on behalf of a
particular piece of legislation or in a lawsuit over a particular
disputed issue, large corporations and corporate foundations began
funding intellectuals who could contribute to broad shifts in the
terms of political debate, regulatory approaches and legal
jurisprudence.
These intellectuals organized concerted attacks on the idea of
government regulation, both for economic and for health, safety and
environmental purposes. They developed elaborate schemes of
"cost-benefit analysis" and "risk analysis" in which the costs of
regulatory measures were wildly inflated and the risks of not acting
routinely underestimated. The result was to create the intellectual
rationale to put the brakes on government regulatory initiatives and
then to advocate for deregulatory efforts.
In the area of antitrust, the infusion of conservative economic ideas
(known as the "Chicago School") helped neuter a critical tool to
promote competition and combat corporate accumulations of economic
and political power through mergers. Fanciful new doctrines presumed
to show that corporations would never undersell in a market to drive
out competitors (an illegal practice known as predatory pricing), for
example, and that competition could be preserved with many fewer
companies than previously thought and sometimes with just the
prospect of future competition (making merger approval much more
likely). These views permeated the executive branch, rendering
antitrust enforcement practically null during the Reagan and Bush
administrations, and still quite weak in the Clinton era. These
notions were spoon-fed to the federal judiciary - with most federal
judges attending Chicago School antitrust seminars - so that it is
now extremely difficult for plaintiffs to win antitrust cases in U.S.
courts.
To take another example, corporate-backed scholars also began,
especially in the late 1980s and 1990s, to push vigorous property
rights theories. Much government regulation, they contended, exacts
value from property holders, who should be compensated for the costs.
This "takings" analysis - based on the Fifth Amendment to the U.S.
Constitution which states that the government may take property for
public purpose with just compensation - has begun to permeate the
courts and is the basis for proposed legislation that would, again,
sharply inhibit government regulatory authority, especially land-use
regulation.
Making the loony seem possible
As Multinational Monitor celebrates 25 years of publication, the
evolution of corporate campaigning is reaching its apex with the
debate over Social Security privatization, a boondoggle potentially
worth hundreds of billions of dollars to Wall Street interests.
The whole notion of Social Security privatization began as a loony
idea of extremist free marketeers. Over more than a decade, the
concept was nourished at corporate-backed, right-wing think tanks,
led by the Cato Institute.
As the idea began to be taken seriously in Washington policy circles,
financial firms started investing in propagating the concept,
including through the National Commission on Retirement Policy, a
project of the Center for Strategic and International Studies.
With George W. Bush's election to a second term, Social Security
privatization - a topic almost completely absent from the electoral
campaign - suddenly moved atop the policy agenda. Years of spade work
by Cato and the financial service industry had paid off.
Joining the privatization crusade is a prominent seniors corporate
front group, the United Seniors Association (USA Next). Co-chaired by
Art Linkletter, USA Next has positioned itself as a right-wing
alternative to the mainstream AARP (formerly American Association of
Retired Persons). USA Next plans to air millions in TV ads, following
the example of the deceptive "Swiftboat" advertisements against
defeated presidential candidate John Kerry.
The strategic work on the battle for Social Security privatization
will be carried out by the leading corporate trade associations and
business-backed advocacy groups. The Business Roundtable and National
Association of Manufacturers have arranged two umbrella groups to
carry forward the work, according to the Washington Post. The
Alliance for Workplace Security is tasked with insider lobbying.
Coalition for the Modernization and Protection of America's Social
Security (CoMPASS) is charged with paying for a fake grassroots
campaign - $15 million to $20 million worth.
Overall, the comprehensive business campaign for privatization is
expected to cost at least $100 million.
Capital mobility and political power
While business was tightening its grip on Washington in recent
decades, the leading source of independent countervailing power -
organized labor - was simultaneously losing influence in the capital,
as its membership base shrank dramatically. That shrinkage was in
part due to a failure to invest sufficient resources in organizing
new workers, low levels of labor militancy and suppression of union
democracy. But falling levels of union membership also reflected a
new level of aggressive anti-unionism commencing in the 1980s, the
migration of unionized heavy manufacturing jobs to the Third World
and corporate threats to shift additional jobs abroad if workers
elected to join unions.
Facilitated by new technologies, job shifting and the threat of job
shifting became not only a means to weaken organized labor, but
multinational corporations' ultimate trump card over U.S. democracy.
Time and time again, U.S. citizens working to clean up the
environment, improve working conditions or hold corporations
accountable through the civil justice system banged into the same
argument: cleaner and safer production standards will hurt U.S.
business competitiveness and cost jobs. While the threat of job loss
was often transparently exaggerated, the underlying plausibility of
corporate flight - reiterated daily by newly shuttered plants and
gleaming new U.S.-owned factories in Mexico and throughout the Third
World - enormously increased corporations' leverage over policymaking.
Against such raw power, public interest groups issuing critical
reports and relying on sympathetic media coverage can barely make a
policy dent, whichever party controls the White House. Long quieted
are the civil disruptions that, along with public interest groups'
rising influence, so scared Lewis Powell in 1971. While the social
movements achieved important victories and lasting change, few if any
deeply rooted organizations were left in their wake.
For now, it is Big Business that is the organized and dominant force
in U.S. politics.
REGULATORY OVERRIDE
Corporate political dominance is frequently even more extreme at the
regulatory level than in the legislature. The technical details of
regulatory matters provides endless opportunity for manipulation by
corporate lawyers, scientists and other specialists.
A scathing 1997 book issued by the Center for Public Integrity, Toxic
Deception: How the Chemical Industry Manipulates Science, Bends the
Law and Endangers Your Health, provides a case study in how one
industry is able to use potent political tools to forestall health,
safety and environmental regulations. Examining four dangerous
chemicals, alachlor, atrazine, formaldehyde and perchloroethylene,
that have remained on the market, the book shows how the chemical
industry has slanted science and kept regulators at bay:
* The chemical companies that made the four chemicals gave 214 free
trips to members of Congress from 1990 to 1995.
* Of 344 lobbyists and lawyers identified as working for chemical
companies and trade associations, more than a third came from federal
agencies or congressional offices.
* Of the 43 published industry studies on the chemicals, only six
returned unfavorable results. By contrast, of 118 studies by
non-industry researchers, 71 were unfavorable. More independent
research is not done in part because the industry employs key
scientists - nearly 90 percent of the 1,700 weed scientists in the
United States are in industry employ, according to the Center for
Public Integrity.
* The chemical companies are required to disclose to the government
any scientific findings that show a chemical may endanger public
health or the environment. But it appears the law is routinely
disregarded. In 1991 and 1992, the Environmental Protection Agency
offered an amnesty from big fines to any manufacturer that turned
over studies that should have been provided earlier. The
manufacturers suddenly turned over more than 10,000 such studies.
- R.W.
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