Many controversies relating to the political and economic activity of U.S. corporations remain unresolved: From the issue of sheltering income in global tax havens; to company CEOs routinely being paid hundreds of times more than their workers; to the vast amounts of money firms spent on political races in the wake of 2010 Citizens United decision by the Supreme Court.
While lobbying and interest groups can be seen as a legitimate part of the pluralistic nature of democracy — the Supreme Court appeared to agree on that point, notwithstanding some dissenting opinions– there is also considerable fear by the public that powerful business interests will, in effect, “game” the system by writing the very rules that should constrain them. A 2005 study in the Journal of Politics found that during the rule-making process, businesses frequently have stronger influence than other groups.
But is lobbying truly transactional, with campaign donations resulting in political actions that benefit the donors? An alternate view of lobbying is that businesses work to influence outcomes by providing more information through hearings and other deliberative processes. To better understand this question, a 2013 study published in Legislative Studies Quarterly, “The Inside View: Using the Enron E-mail Archive to Understand Corporate Political Attention,” analyzed the company’s internal communications between 1999 and 2002. The authors, Daniel J. Hopkins of Georgetown and Lee Drutman of the University of California and the Sunlight Foundation, used automated tools to analyze more than 250,000 emails released as part of the litigation surrounding the now-bankrupt energy giant.
The paper’s findings include:
- Of 2,559 emails sent by Enron staff, only 41% were political in nature. Enron’s political activities mainly consisted of information monitoring and “formal participation in rule making.” Among emails explicitly referring to the federal government, 66% were related to monitoring, 19% to legislative contacts, 10% involved formal participation and 3% discussed opinion leadership.
- Of the emails, 56% contained publicly available information and the remainder unique intelligence, i.e., information gathered by lobbyists and other employees. As Enron’s bankruptcy approached, monitoring relied more on public information than the company’s own intelligence.
- Enron focused more on the executive branch, reaching out with 51% of their emails: The executive branch itself was the target of 10%, administrative agencies received 22% and advisory commission 19%. Only 15% of the company’s emails were directed at legislative branches of government.
- During the 1999-2000 election cycle, Enron made average donation of $1,281 to 139 House members and an average of $2,555 to 38 Senators. Only 1% of Enron’s political emails were related to elections, however, suggesting that company contributions “were more pro forma actions” than buying support from candidates.
To the researchers, the “heavy emphasis on formal participation and providing policy information” suggest that for Enron, lobbying was primarily for information exchange. “Perhaps its greater resource was its monopoly on policy-relevant information about electricity, natural gas, and communications markets, information that policymakers could not easily obtain elsewhere,” they state. “The frequency of monitoring, the large number of legislative meetings, and the special attention to members of energy-related committees in Congress suggest support for a view that treats lobbyists as allies of lawmakers and their staffs as well.”
“When we think of lobbying, we typically think of Congress,” Hopkins wrote in an article on the study’s findings in the Washington Post. “But Enron devoted substantial effort to lobbying bureaucrats as well. Judging from the content of its e-mails, it was quite concerned with making compelling arguments to regulators.”
Related research: A 2011 study from St. Louis University, “Influence of Corporate Campaign Contributions in Government Contract Award Decisions,” examined the success of corporations in securing government contracts through campaign donations. The researchers found support for the transactional theory of lobbying, if not necessarily a strict quid pro quo: for each $201,220 in campaign contributions, a firm could expect to receive an average 107 more contracts, which result in approximately $5,300,000 in additional revenues — $26 gained for every $1 spent.
Keywords: ethics, law, campaign fundraising, corruption