The Blue Way by Daniel de Faro Adamson & Joe Andrew

Author:Daniel de Faro Adamson & Joe Andrew
Language: eng
Format: epub
Publisher: Simon and Schuster
Published: 2007-07-15T00:00:00+00:00

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Myth: Smart shareholders don’t interfere with a company’s “government affairs” decisions.

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Much of the drama in HBO’s acclaimed series The Sopranos centers around the flimsy wall that separates Tony Soprano’s Mafia family from his nuclear family. Tony’s wife and kids know how he makes his money, but by unspoken agreement, they don’t look too closely at Tony’s job or ask the wrong sorts of questions. Until very recently, most investors have had a similar approach to corporate lobbying expenditures and other political contributions. They recognize that companies are paying for access to politicians, which can result in highly profitable legislative or regulatory decisions.

As a result, they tend to shy away from demanding explicit, transparent accounting of political spending at the companies they own. When an uncommonly bold shareholder does inquire what benefit a company gets from its political donations, company bosses generally deflect the question with bland language about the importance of “supporting the electoral process” and “participation in the legislative/regulatory process.” 17 This thinly conceals the same sort of incredulity expressed by Tony Soprano: “I have to spell this out for you?”

Of course, not all corporate political spending is inherently shady. As any environmental or consumer rights advocate will tell you, it takes money just to make an honest political case—to hire an expert staff, travel to Washington, research and publish advocacy materials and disseminate them on Capitol Hill, stay on top of press coverage, and so on. Business leaders have an honest case to make in Washington on issues that affect their industries. They also have the right to fund political advocacy groups that promote a particular vision for the American economy and government. Unless their political spending is transparent, however, we have no way to know when it has descended to the level of bribery—and shareholders have no way to judge whether it is a genuinely profitable use of their investment dollars.

The Jack Abramoff circus should have destroyed any illusion that corporations, lobbyists, and politicians can be trusted to draw the line between honest advocacy and bribery. The full extent of Congress’s corruption at the height of Republican control remains astonishing. Under the guise of fact-finding missions or charity fund-raisers, corporations handed out free junkets to legislators. A recent Center for Public Integrity report found that between January 2000 and June 2005, “members of Congress and their aides took at least 23,000 trips—valued at almost $50 million—financed by private sponsors, many of them corporations, trade associations and nonprofit groups with business on Capitol Hill.” 18 These included “at least 200 trips to Paris, 150 to Hawaii and 140 to Italy,” those well-known “fact-finding” hot spots. Without any real excuse to veil their bribes, lobbyists showered members of Congress with gifts and perquisites such as skybox seats at NCAA tournament games, luxury hotel stays, and complimentary meals at swanky Washington restaurants. This shows the real consequences of keeping political money in the shadows.

Transparency is the single most important factor in keeping business and government honest.

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