Lobbyists are buying our government out from under us

Lobbyists! You’ve probably heard of them before — they’re a go-to villain in modern politics. But what, exactly, are lobbyists? And are they really buying our government out from under us?

Well, yes. Yes they are. Here are 5 ways lobbyists are corrupting our government.

Lobbyists! You’ve probably heard of them before — they’re a go-to villain in modern politics. But what, exactly, are lobbyists? And are they really buying our government out from under us?

Well, yes. Yes they are. Here are 5 ways lobbyists are corrupting our government.

1. Lobbyists raise gobs of money for elected officials

The average senator has to pull in more than $14,000 dollars every single day, just to stay in office. One of the easiest ways to raise that kind of cash is to turn to lobbyists, who make big donations and organize swanky fundraisers for elected officials in order to buy influence for their clients.

“You can’t take a congressman to lunch for $25 and buy him a steak. But you can take him to a fundraising lunch and not only buy him that steak, but give him $25,000 extra and call it a fundraiser.” – Former lobbyist Jack Abramoff

Here’s how it works. Let’s say you’re a big bank. You want to buy influence with a senator on the banking committee so he’ll vote your way on an upcoming bill. The easiest way would be to just give $100,000 directly to the senator’s reelection campaign. But alas, that would be illegal — federal law prohibits companies from making direct donations to candidates. So instead, you hire a lobbying firm.

Here’s where things get corrupt. That lobbying firm can legally organize a  swanky fundraiser that brings in $100,000 for the senator’s reelection campaign. At the fundraiser, your lobbyist just happens to have a friendly chat about your feelings on banking policy with the senator’s staff.

At the end of the day, the senator is still up $100,000, he still knows exactly where the money came from, and he knows  which way to vote if he wants the money to keep flowing. But this time, nobody’s broken any laws!

This strategy works ridiculously well: one recent study found that a company receives $220 in tax savings for every dollar spent lobbying. That’s a 22,000%return on investment. And it works on both sides of the aisle — top lobbying firms raise big money for Republicans and Democrats at the same time.

2. Lobbyists write laws themselves

In many cases, lobbyists write our laws — literally.

For an example, look at the 2014 omnibus budget deal.  Congress used the deal to secretly put taxpayers back on the hook for bank bailouts. That’s right – in 2014, our representatives  repealed a law that prevented the American people from bailing out big banks that engage in risky derivatives trading. Sorry to be the bearer of bad news.

The New York Times reports that 70 of the 85 lines in the language that killed the derivatives bill came from a piece of model legislation drafted by Citigroup lobbyists. Yes, that Citigroup –  the bank that played a major role in the 2008 crisis and also received billions of federal stimulus dollars.

The same report also revealed that “two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word.” You can even view the original documents and see how Citigroup’s lobbyists redrafted the House bill, striking out ideas they didn’t like and replacing them with ones they did. Citigroup quite literally wrote its own rules.

The members of Congress who originally backed the Citigroup-authored bill received massive amounts of money from Wall Street — likely channeled through, you guessed it, swanky fundraisers.

To be clear, this isn’t just a problem with big banks. The exact same thing happens all the time on nearly every issue. Just last week, we reported on how lobbyists for the chemical industry may have authored entire portions of a bill that shuts down state-based efforts to crack down on toxic chemicals.

3. Lobbyists effectively bribe members of Congress with lucrative job offers… to become lobbyists3

Lobbyists routinely offer members of Congress and their staffers lucrative jobs at their firms or their clients’ companies. These negotiations often take place while our representatives are still in office and, ostensibly, working for us, the American people. With multi-million-dollar future salaries on the line, most members of Congress are more than willing to protect the best interests of the lobbyists who will one day be their employers.

“I would say to [the Member], ‘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. And what does that mean? Every request from our office, every request of our clients, everything that we want, they’re gonna do.” – Former lobbyist Jack Abramoff

The phenomenon of members of Congress heading off to work for lobbying firms and their clients is know as “the revolving door.” And it’s become shockingly common: in the 1970s, less than 5% of retiring legislators went on to become lobbyists. Now, half of retiring senators and a third of retiring house members do.

4. Politicians who walk through the revolving door are in for a massive raise4

It’s hard to overemphasize how tempting a revolving door gig can be. Congressmen who go on to become lobbyists get, on average, a 1,452% raise. Small wonder they’re willing to throw a few votes the lobbyists’ way with that kind of money on the line.

5. And that’s just the lobbyists we know aboutDependent

Thanks to loopholes in how federal law defines lobbyists, many elected officials go on to take what are effectively revolving door lobbying jobs without ever having to officially register as lobbyists. These “shadow lobbyists,” like former Sen. Tom Daschle (D-SD) and Rep. Newt Gingrich (R-GA), are lobbyists in everything but name, and they’re certainly paid just as well as the real thing. Researchers estimate that there’s actually twice as much lobbying as what’s publicly disclosed — making the business of influencing politicians a $7 billion industry.

So, why don’t we just ban lobbying all together? Well, constitutionally, we can’t — and we shouldn’t have to.

Lobbying isn’t inherently evil. After all, a lobbyist is just a professional person hired to represent their client’s interests to an elected official. All kinds of groups, from major businesses to unions to nonprofits, pay for lobbyists.

The act of lobbying itself — that is, simply advocating a position to an elected official — is not the problem, and it’s actually protected by the First Amendment. Individuals and groups have every right to express their opinions to Congress about how proposed legislation might affect them and to try to convince lawmakers to take their side. The problem is that lobbyists routinely use money, favors, gifts, or lucrative job offers to do the convincing for them.

You can lobby, and you can donate to a politician. But you shouldn’t be allowed to do both.

Luckily, that’s something we can fix with a single law. The unseemly and terrible behavior we’ve covered in this piece may be legal now, but it doesn’t have to be. Reforms to ban lobbyists from coordinating fundraising, close the revolving door, and end “shadow lobbying” have already been proposed at the federal level, and they’re currently picking up momentum in cities and states around the country. As the anti-corruption movement grows, we get closer and closer to ending lobbyist corruption for good.

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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