PIGS AT THE TROUGH
Counts as a Conflict of Interest to Congress?
We all know that those who play important
roles in the economy can communicate either directly or through lobbies with those in Congress.[i] In what follows, I will be relying upon the New York Times best seller
by Arianna Huffingtons, Pigs at the Trough (Crown Publishers, NY, 2003) to present some typical facts and their results.
Most of the self-serving action by business is through lobbyists (the Business Roundtable is an equally important policy shaper). Some lobbyists, such as Ed Gillespie,
have direct and easy access to the oval office.
A SAMPLE OF GILLESPIES CLIENTS AND HIS ACTIONS:
1. Enron: Hired
Gillespie's firm for around $700,000 concerning energy plans. Dick Cheney and
the staff of his Energy Task Force had at least six meetings with Enron representatives.
2. National Association of Realtors: Gillespie persuaded Treasury Secretary Paul O'Neill to postpone a proposal that would have allowed banks
into the real estate brokerage business.
In March of 2002, the higher fuel efficiency standards were yanked out of the Bushs energy bill.
4. American for Better Education: The phony grassroots organization (ran by Gillespie's Washington Office) raised over $1 million to lobby
for Bushs education bill.
Energy Project: A coalition of Gillespie's clients used to lobby for Bushs energy
bill that passed the House in August of 2001. It contained about $33 billion
of tax breaks for the energy industry (83).
There are hundreds of firms whose business is the manipulation
of government legislation for the sake of their clients best interests as measured by profits.
Gillespie is one of 4 that Arianna uses to make her point about how the actions of lobbyists are not in the publics
interest at all.
Arianna then goes on to describe how these lobbying firms
hire Senators and Congressmen family members, former Congressmen, collogues, former generals, and high-ranking bureaucrats. She lists 5 sons, 2 wives, and one aunt (95).
Former Montana Governor, Marc Racicot has two hats: one as a lobbyist,
the other as Chairman of the Republican National Committee (86).
In 2 years, between 97
and 99 Phillip Morris spent $54,216,000 on lobbying, and the big four tobacco companies spent in 1998, $365,000,000. This amounts to 81 dollars for each of the persons who died early from the effects
of tobacco in this country, and if we assume the average early retirement at 3 years, that would amount to $27 for each year
retired to the grave. Other big contributors include Bell Atlantic which
spent $49.6 million in 1996.
contributions yield benefits. General Electric spent $23.3 million to have among
other things Washington pressure the EPA from fining GE for polluting the Hudson River.
Lobbyist Gillespie persuaded, on behalf of the steel industry, that there should be a tariff on imported steel, contrary
to early free-trade proposals. A look at the legislation exposes its venal foundation. Newt Gingrich et al passed the Private Securities Litigation Reform Act, which in
among other things protected auditing companies from shareholder lawsuits. With
a stroke of the pen, Congress made it easier for corporate thieves to plunder public companies without fear of being sued
(110). Business wants more freedom to fleece the public, and their contributions
have paid off. Each business-like a feudal statehas its own ax to grind, and
the system of contributions and lobbying is the motor that turns the grinding stone.
would suppose that the logic which resulted in the regulations, many of which had their birth during the administrations of
the two Roosevelts, would still be understood to be sound. And one would suppose
that the S&L collapse, costing this nation over $350 billion, would remind the politicians how sound that old logic was
and is. This wave of deregulation in a series of abuses, such as gouging of the
State of California during its orchestrated power shortage, continues. Another
type of headline maker has been the failed companies who seemed financial sound right up to their bankruptcy. WorldCom's crisis
alone cost telecom investors $180 billion, while the investors in Enron lost $80 billion.
By the fall of 2002, the scandals surrounding Enron, Adelphia, Global Crossing, Quest, Kmart, Tyco, Citigroup, and
WorldCom had lead to a collective loss of almost $700 billion in shareholder value sine the share were at their peak (175). The errors in accounting that has resulted in a lack of confidence in the corporate
reports similar to the scandal riddle 20s.
something very troubling by all this. First those who by there office are commissioned
to promote the public weal, they arent. Second, it isnt how well the vehicle
runs, but how well it could. And third is the assumption that letting things
in the business realm take care of themselves is the best solution.[ii] To this Franklin D. Roosevelts statement in his Second Inaugural Address, 1937,
is a fitting reply: Old truths have been relearned; untruths have been unlearned. We have always know7 that heedless self-interest was bad morals; we know now that
it is bad economics. Out of the collapse of prosperity whose builders boasted
their practicality has come the conviction that in the long run economic morality pays.
Congress for the immediate reward of contributions scuffs at this old lesson, and they will continue to scuff until
the electorate empowers a political party that has a high standard of service. This
standard will be fulfilled when we learn the wisdom of Plato; namely, that the brightest and best educated ought to run government.
[i] For the sake of simplicity, I will often include the presidents office
within the meaning of Congress. The two work together within their political
party; thus, a distinction would only slow your reading and not promote understanding.
[ii] The argument runs as follows: Allow
all but the most egregious business practices. Forces of the market place will
create limits. The alternative of government intervening and establishing limits
will cause even more harm both to business and the public.