How corporations influence the

government
By Gale, Cengage Learning, adapted by Newsela staff on 11.12.17
Word Count 1,214
Level 1170L

A protester holds Adbuster's "Corporate American" flag at George W. Bush's second inauguration in Washington, D.C., January
20, 2005. Photo by: Jonathan McIntosh/Wikimedia

Occupy Wall Street (2011–2012) was a recent political and social movement that protested the
power and greed of American corporations.

Its historical roots can be traced all the way back to the Gilded Age, a period in American history
that lasted from around 1877 to 1901. During that time, wealthy corporations, such as Standard
Oil and Carnegie Steel, used their wealth to influence politics.

According to the authors of the book "The National Experience: A History of the United States,"
most issues of the day during the Gilded Age were "settled around the council tables of
industrialists and financiers rather than in the halls of legislatures and in the meetings of
cabinets.”

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It was a period of widespread corruption, as corporate money infected politics. One of the most
famous examples was New York City's Tammany Hall.

William Tweed And The Tammany Society

Also known as the Tammany Society, Tammany Hall was headquarters to the Democratic Party
in New York State. In 1860 William Tweed (1823–1878) became chairman of the Democratic
Party, then became a state senator in 1868. He and his followers, known as the Tweed Ring,
made sure one of his supporters became governor that same year.

Tweed paid state officials to pass a law the next year giving him near-total control over the
government. In the coming years, he managed to steal an estimated $100 million from the city by
controlling political appointments at both the local and state level, a system called patronage. The
people he appointed would vote according to Tweed's wishes on any given issue, business
regulation or bill, which allowed Tweed to enrich his businesses (he owned several companies in
the city).

Anyone Tweed hired to do work for the government was instructed to cushion the bill with an
additional amount of money. This is known as padding. For example, if a contractor knew the job
would cost $10,000, he would charge the city $11,000. The extra money went directly into the

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pockets of Tweed and his business partners. At first, Tweed instructed the contractors to pad by
10 percent, but eventually, he was approving jobs at amounts up to 85 percent higher than actual
cost. He was eventually caught and sent to prison, where he died.

Donating Money To Political Campaigns

Tweed's corruption was obvious, but not all corporate influence is so clear-cut. There is a fine line
between political support and bribery. For example, one of the ways in which corporations
influence government is through political campaign contributions. Many corporations establish
political action committees (PACs) for the sole purpose of donating money to campaigns. This
lets them get around rules that prohibit corporations from directly donating money to candidates.

Donations pay for campaign advertising and can sway the outcome of elections. Corporate
donors hope that their donations will buy them influence with the winning candidate. Many
politicians who rely on corporate campaign donations take business-friendly positions on policy
questions.

Another way corporations gain influence is through regulatory agencies: the departments of
government that oversee rules on businesses and trade. These agencies set regulations for the
companies that the government hires for various projects. The contracts for government jobs are
often good deals for the corporation, the politicians and the regulators, but not the public.

EPA Is Funded By The Chemical Industry

Take, for example, the chemical industry. Regulating chemicals is the responsibility of the
government agency known as the EPA (Environmental Protection Agency). Before a new
pesticide is sold, the EPA requires studies showing that it is safe. However, these studies are
funded almost entirely by the chemical industry itself. Chemical companies also have
representatives who sit on committees that advise the EPA. In effect, the people who are
supposed to enforce the rules on the chemical industry are being paid by the chemical industry.

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The lines between regulators and corporations is blurred even more by something called the
revolving door. This is when former lawyers, researchers or executives for an industry take jobs
at a government agency overseeing that industry. For example, Clarence Thomas is a U.S.
Supreme Court justice who was once a lawyer for a company called Monsanto. Monsanto makes
and sells genetically modified seeds as well as special chemical fertilizers needed to grow them.
Thomas was a Supreme Court justice in 2001, when the Court ruled in favor of Monsanto in an
important case.

This is just one example of the revolving door concept. It affects every major industry in the
country as there is no regulatory agency that doesn't have at least some staff members who used
to work for the companies they are regulating. This is a direct conflict of interest that creates a
bias in favor of corporations.

Lobbying

Lobbying is attempting to influence or sway a decision or action. A person who lobbies is called a
lobbyist, and an organization that lobbies is called a lobby group. Corporations lobby, but so do
special interest groups, such as trade unions, colleges and the military, as well as groups that
lobby for causes like environmentalism and women's rights.

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Although lobbying is a paid profession, there are volunteer lobbyists as well. People who gather
signatures for a petition, for example, are performing a basic kind of lobbying.

Professional lobbyists do much more. They research issues and legislation, analyze proposals
and regulations, attend congressional hearings and meet with government officials in an effort to
educate them on key issues.

Many lobbyists begin their career working in government, but some go directly into lobbying. The
American League of Lobbyists trains individuals in understanding the legislative process, and
lobbyists must register with the secretary of the Senate and the clerk of the House of
Representatives if they lobby at the federal level. In 2014, there were approximately 100,000
registered lobbyists.

Many Consider Lobbying To Be Corrupt

Lobbying is a highly regulated industry, one that demands disclosure (revealing information) and
transparency (no secrets). Despite these rules, lobbying is a controversial aspect of American
politics, considered by most to be a corrupting influence on politicians and political parties.

The revolving door problem is particularly serious in the case of professional lobbying: many
private lobbyists switch to government jobs, and vice versa.

One well-known example of someone who practices revolving-door politics is Richard Gephardt,
who represented a working-class district of Missouri in Congress for 28 years. A dedicated
supporter of trade and labor unions, Gephardt was considered a friend of workers and their
families. In 2007 he established his own lobbying firm, which had earned more than $6.5 million
by 2010. In other words, he used his time in government to make huge profits.

Another criticism of the lobbying industry's corrupting influence is that it has caused politics to be
dominated by wealthy businesses and big industry. The concerns and needs of regular citizens
are not considered because they cannot afford to lobby. This is seen as an imbalance of power
and one that favors the rich over the poor.

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