Monday, February 8, 2016

Money in Politics Isn't Just About Campaigns. It's Also About Governing

When we talk about the role of money in politics, the focus is usually on campaigns. That leads to an emphasis on superpacs that are the result of the Supreme Court's decision in the Citizens United case. But what that discussion leaves out is perhaps the more direct way that special interests have an impact on governing via their lobbying efforts once the campaigns are over.

Ryan Lizza gave us a fascinating example of that in his story about the career of Elizabeth Warren. Prior to getting elected to the Senate, she worked to ensure that the Consumer Financial Protection Bureau was included in the Dodd-Frank Wall Street reform bill. In order to accomplish that goal, she worked with Camden Fine, the head of the Independent Community Bankers of America (ICBA), who Lizza referred to as "one of the most powerful lobbyists in Washington." The deal that emerged was that in exchange for ICBA staying neutral on the CFPB, they were excluded from oversight by the bureau.

It is interesting to look at how ICBA has developed as such a powerhouse on Capitol Hill. According to Open Secrets, in 2014 they spent about $1.8 million on political contributions, but over $4.6 million on lobbying. What is probably at least as important is what Barney Frank told Lizza - "they're in everybody's district."

There has recently been a perfect example of how that works in my home state of Minnesota. Our Democratic Senators - Amy Klobuchar and Al Franken - led the fight to delay the implementation of the medical device tax as a funding mechanism for Obamacare. Here's how the state's largest newspaper described what happened.
It took tens of millions of dollars in lobbying and campaign contributions, but in the end, Minnesota's medical device companies got what they wanted out of Congress: the gutting of a sales tax they claimed was crippling them...

Because tax repeals are incredibly difficult to pull off, particularly after the money has been collected, the medical device industry sank millions into behind-the-scenes lobbying on Capitol Hill and hefty campaign contributions to Minnesota's politicians on both sides of the aisle.
Were Klobuchar and Franken bought off by the medical device industry? It's actually a bit more complicated than that. Minnesota is second only to California in the number of people who work in that industry - 35,000 in more than 700 companies. One of the reasons the state has such a low unemployment rate (3.5%) is that it has put a lot of emphasis on growing companies like this as part of the plan for economic development. Here is what Klobuchar said about her motivation:
"I advocated for the repeal because of the jobs in our state and the people who work in the industry. This is a tax that was assessed inordinately on one state," Klobuchar said in a statement.
Would she have fought this hard against the tax if it weren't for the campaign contributions and lobbying efforts by the industry? It's possible. But ultimately we'll never know.

There are complex reasons why Democrats from Connecticut support the insurance industry, those from Louisiana often side with the oil industry and those from Washington state protect the interests of Boeing. It isn't just the donations that are made to their campaigns. These industries also spend a lot of time and money lobbying their representatives. In doing so, they make a case for how legislation will affect not just their bottom line, but their employees and the local economies that depend on them. The line that divides a politician who has been bought off by these lobbying interests vs one who is justifiably representing their district/state is not always so clear.

1 comment:

  1. Great information to consider here, Nancy. Thank you.

    ReplyDelete