Checkpoint: Reforming Lobbying Legislation

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“Under a system in which no single question is submitted to the electorate for direct decision, an ardent minority for or against a particular measure may often count for more than an apathetic majority.”

- Patrick Devlin, The Enforcement of Morals

Lobbying remains as controversial today as in the early days of the Founding Fathers. James Madison cautioned in Federalist Papers No. 10 against the dangers of factions in American society, and the Constitution implemented his ideal of having such interests compete for scarce political resources. Regarding the factional development of the time, he stated, “Complaints are everywhere heard from our most considerate and virtuous citizens… that our governments are too unstable, that the public good is disregarded in the conflicts of rival parties, and that measures are too often decided, not according to the rules of justice and the rights of the minor party, but by the superior force of an interested and overbearing majority.” Lobbying as it exists today is a potent driving political force which, when utilized ethically, acts as a significant boon to the interests of the people; however, unethical political actors, foreign and domestic, may utilize those same processes to subvert the general will for private financial and political gain.  

The Revolving Door

The expenses of winning a Congressional electoral seat have been estimated at over $14,000 per day. Lobbyists exploit this reality by channeling resources toward politicians for campaign costs and other expenses in exchange for special policy consideration in the future. Further loyalties are incentivized with guaranteed employment at highly profitable firms following their elected terms in what is known as the “revolving door.” After his term, former Democratic Representative Jim Moran of Virginia was hired by consulting firm McDermott, Will & Emery, which posted record profits in 2020 at almost $1.4 billion. According to Statista, “Akin, Gump et al was the leading lobbying firm in the United States, with expenses of about 49.87 million U.S. dollars.” These financial resources contribute directly to political influence in exchange for policy consideration in the form of loopholes and tax breaks carved out to serve special interests.

In a segment with 60 Minutes, former lobbyist Jack Abramoff stated: 

“I would say, ‘When you’re done working on the Hill, we’d very much like you to consider coming to work for us.’ The moment I said that, we owned them. Every request from our office, everything that we want, they’re gonna do.”

Foreign Actors

International actors also engage in the advancement of their own interests. China and Russia spent the most on foreign lobbying in 2020 with a reported total of $65,201,650 and $59,544,390 respectively. Michael Flynn became infamous during the Trump presidency for a 2016 conference call regarding his firm’s $600,000 commission to “publicly disparage U.S.-based Turkish cleric, Fetullah Gulen,” accused of a coup attempt against the Turkish government. The businessman who hired Flynn felt “Trump wasn’t being supportive enough towards Turkey or doing enough to expose Gulen.” In addition, an investigation by Oregon Senator Ron Wyden found that “The National Rifle Association acted as a ‘foreign asset’ for Russia in the period leading up to the 2016 election” by knowingly facilitating thorough access for Russian agents with ties to the Kremlin. International interests contribute significantly to Washington-based lobbying efforts and thoroughly influence lawmaker’s dispositions toward international policy.

Lobbying Legislation

It is not to say that all lobbying is inherently corrupt. The right to promote one’s political interest is secured by the First Amendment right to “petition the Government for a redress of grievances.” The right is essential to promoting democracy and encourages political participation on the part of the people. Regulations are present to protect against the excesses of the system; however, the legislation currently exists as a web of conflating and conflicting language resulting in regularly exploited loopholes thus permitting these gross excesses. The Lobbying Disclosure Act of 1995 and the subsequent Honest Leadership and Open Government Act of 2007 were attempts at clarifying the field of what is now an estimated twelve thousand lobbyists living in Washington by implementing various registration and financial disclosure requirements for these lobbyists. The law, nevertheless, is vague regarding the outlined regulations. For example, lobbying “activities” are distinguished from lobbying “contacts” with complex and ambiguous language.

Lobbying activities are defined as: 

"lobbying contacts and efforts in support of such contacts, including preparation and planning activities, research and other background work that is intended, at the time it is performed, for use in contacts, and coordination with the lobbying activities of others."

Lobbying contacts, in contrast, are defined as:

"any oral or written communication (including an electronic communication) to a covered executive branch official or a covered legislative branch official or a covered legislative branch official that is made on behalf of a client with regard to..."

Where the Lobbying Disclosure Act largely targets domestic lobbying, the Foreign Agents Registration Act attempts to clarify political action and influence on the part of international interests. The rarely enforced FARA requires a more thorough disclosure of activities, meetings, contacts, all political contributions, and copies of contracts; however, a 1995 amendment allowed representatives of offshore individuals and companies to register under the significantly more vague Lobbying Disclosure Act- provided the “principal beneficiary” intended does not include foreign political interests. The definition of “principal beneficiary”, however, is unclear as well. These ambiguities have already been shown to enable unethical political influence, as Michael Flynn himself cited an “uncertain standard” regarding the registration of his Turkish contacts. Such complexities serve to accommodate unethical actors wielding overwhelming influence over the political process. When such lobbying proceeds without accountability, it diminishes the will of the people at large to advance their interests.

Competing Interests

In the wake of Joe Biden’s executive order halting construction of the Keystone XL oil pipeline, environmentalists rejoiced. Oil advocates, in contrast, lambasted the decision, citing potentially upward of one thousand jobs lost and ten thousand more positions going unfilled. Chevron was the largest contributor of lobbying funds in the oil and gas industry with a reported $8,930,000 donated. In contrast, the League of Conservation Voters was the largest environmental lobbyist in 2019-2020, donating a reported $18,053,348. Where environmental organizations lobby to represent environmental interests, Chevron and other oil lobbyists, given the benefit of the doubt, exist to represent the interests of workers in these industries. These competing interests stand as a prime example of Madison’s argument in Federalist No. 10 that competition between special interests was imperative, believing a government devoted to any single issue, as such lobbyists often are, would ultimately result in tyranny. 

Return on Investment

Corporate interests see a massive return on investment from lobbying activities. The 2004 American Jobs Creation Act lowered the tax rate on foreign profits from thirty-five percent to around five percent, allowing companies to profit enormously. A study from the Journal of Law and Politics titled Measuring Rates of Return for Lobbying Expenditures: An Empirical Case Study of Tax Breaks for Multinational Corporations compared the financial savings from said tax break against expended lobbying costs, finding that such activities yielded a nearly 22,000 percent return on investment. Susan Scholz, one of the study’s three authors, stated, “We have a situation where we, in essence, invite corporations to buy their own tax rate through lobbying... which ultimately corrupts both the companies and the politicians.” Allowing corporations to exorbitantly profit from lobbying activities directly undermines the ability of the average voter to express their political will and exert their due influence in government.

US Foreign Intervention

Long-time Republican consultant and former campaign chair to Donald Trump, Paul Manafort was found guilty during the Robert Mueller special counsel investigations on five counts of falsifying income tax returns, two counts of bank fraud, and one count of failing to report foreign accounts. Manafort’s lobbying firm aided Viktor Yanukovych, leader of Ukraine’s pro-Russia faction, in acquiring the 2010 Ukrainian presidency. Mueller’s investigation uncovered that Manafort netted “more than $60 million dollars from his Ukraine work during the period at issue”, which he laundered through luxury assets and proliferated through offshore bank accounts, and further became embroiled in the investigation of Trump’s connections with Russia. If nothing else, Manafort’s case emphasizes the political influence curried by US agents in foreign nations. Where the excesses of lobbying systems may engender unethical behavior on the part of corporations and politicians, political diplomacy greatly advances the interests of the American people abroad.

Lobbying vs. Diplomacy

Arguing against foreign influence in our political system would be hypocritical considering America’s history of intervention in governments abroad. Richard Nixon, for example, famously instructed the CIA to “make the Chilean economy scream” in order to overthrow elected socialist candidate Salvador Allende. Time has blurred the line between the lobbyist and the diplomat. Allowing foreign nationals to diplomatically promote their interests is a fundamental keystone of maintaining a strong global presence and securing vital international policy agreements which benefit the American people at large. Foreign lobbying becomes unethical, however, when that influence undermines internal national processes or prevents individuals from exerting the full bounds of their personal influence over those processes. Examples of such unethical lobbying excesses exist in Manafort’s profiting off and allegedly promoting Ukrainian interests, as well as Russia’s financial incentivization of the NRA when the gun advocacy group donated more than $50 million to Trump’s campaign in 2020.

Conclusion

Lobbying is a fundamental aspect of American diplomatic relations abroad; consulting agents operate both domestically and internationally to advance both public and private interests. However, when legislation allows corporations to achieve exorbitant profits and purchase unfair tax rates for themselves, meanwhile allowing governments to undermine the political will of the people at large, it promptly and undoubtedly constitutes a significant ethical breach. Lobbying legislation currently exists as a convoluted swath of vague language often written by lobbyists themselves and implemented by officials. We must correct this legislation to clarify financial interests influencing government and eliminate the excesses of corporate and foreign interests. As it stands now, the people are unable to fully express their due political influence as citizens under our government. We must likewise engage in ethical multinational diplomacy and lobbying abroad so that we may live up to American values on the world stage.