Capture is the power to direct the agenda and the allocation of resources of government. In the case of corporate capture, it is corporations directing the agenda. We all know there is too much corporate involvement in Washington. Too many lobbyists and too many subsidies and tax breaks for big corporations, too much money. But what does that mean and how does it impact our country?
It means, first and foremost, that the playing field is not level. If, as we learned from the Citizens United decision, that money is speech then the corporations are a whole lot louder than the rest of us. Deep corporate coffers mean that they can speak more loudly, more often and reach more influential people than most of us ever will. Is it legal? On paper it is. Is it what we want from democratic capitalism? I don't think so.
Corporate capture of our government means that, effectively, corporations are creating or changing the rules that are meant to govern how they do business. These are the rules that are designed to keep them functioning in the way that best serves shareholders and society. Instead, they work very hard to eliminate or change regulations that safeguard workers, consumers, the environment and our social welfare. For example, let's take Dodd-Frank, the post-financial crisis law that is supposed to protect us against "Too Big to Fail" and another crash. According to the Center for Responsive Politics, there were ten lobbyists for every congressional committee member writing Dodd-Frank. That's one heck of a megaphone to broadcast corporate "speech." But that's not all:
• In 3rd quarter of 2010, after Dodd-Frank was signed into law, 723 clients hired 2,879 lobbyists, most focused on getting rid of parts of the bill undesirable to business.
• The year Dodd-Frank was passed saw lobbying expenditures rise to an all-time high of $3.5 billion. 2
This is after years of lobbying for fewer regulations and creating "relationships" with lawmakers designed to "educate" them on the benefits of deregulation.
• Between 1999 and 2008, the financial sector spent $2.7 billion in lobbying to "create a close working relationship between bankers and their regulators." Including "education" programs, retreats and conferences. (See Richard Heinberg, End of Growth: Adapting to Our New Economic Reality, New Society Publishers, 2011.)
• Half the senators and 42 percent of the House members who left Congress between 1998 and 2004 became lobbyists, according to Robert G. Kaiser's So Much Damn Money, New York.
Corporate representatives in Washington work very hard to cultivate relationships with lawmakers that go far beyond simply meeting with them. There are dinners, social events, golf and private clubs. Then there are the donations to lawmaker's charities and nonprofits. These aren't technically lobbying expenditures and time spent at a fundraiser may not count as lobbying time. Nevertheless, these are moves calculated to grow influence.
• A 2010 New York Times report found that at least two dozen charities started by lawmakers and/or family members received regular corporate donations.
• In fall of 2009, during a six-week period, Altria gave at least $45,000 to four different charities, including one by John Boehner (Republication House Leader) and one by James Clyburn (Democratic Whip). At the same time, Altria was seeking legislation to curb the Internet sale of cigarettes.
• In 2009, Sunlight Foundation found that special-interest lobby groups contributed to $50.2 million to lawmakers' charities or nonprofits.
All this is to illustrate just how intertwined our government is with corporate interests -- how captured. What this means is: Corporations have the voice and the access to make sure their interests are heard and heeded. This is dire information and maybe not new information to you -- the news is full of stories of corporate power. Still, there are avenues for change. Some very industrious people are working toward undermining or overturning Citizens United, and that's a start. Others have been working for years to make sure we know who are lawmakers are meeting with, who they support with legislation and who funds them. For me, because I have spent my professional life trying to make corporations accountable, I think there is a path through shareholder activism.
Shareholders -- and by this I mean the managers and trustees of the large funds (pension, mutual, IRA, 401(k), etc.), large university endowments and large charitable funds have a right and a duty to act as stewards of the corporations they are invested in. They not only should act as responsible owners, they have to. If our government is well and truly captured -- and I believe it is, this is our last line of defense to call corporations to any kind of accountability.
You can help. By virtue of the fact that so many of us have a retirement or pension plan, a 401(k) or IRA, or we went to a university that has an endowment fund, a huge portion of the American population is invested in the very corporations who are using their voice to drown out our voices. You are a shareholder and you can contact your college endowment officer or the manager who oversees your retirement investment and tell them you want them to be active owners who hold corporations to account on where, when and how they spend money on campaigns and in lobbying.
Maybe with this type of effort, along with other efforts to curb the impact of corporate power and the effects of Citizens United, we can restore the appropriate balance of power between corporations, government and citizens.