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Public Policy Process

1.
2.
3.
4.
5.

Policy Issues
Policy Agenda
Legislation
Regulatory agencies
Policy Evaluation

Policy Issues:
Problems that exist in society
Social
Economic
Political
Technological

Policy Agenda:
Choosing which issues to focus on
Visibility
Powerful stakeholders
Important to reelection

Legislation:
Addressing the Agenda
Set parameters
Establish regulatory
agencies
Set timeframe

Regulatory Agencies:
Implement Policies
Specific rules
Penalties
Judgment
Enforcement

Policy Evaluation:
Judicial Review of Policies
Interpret laws
Order compliance

Implications of the Policy


Process Model
1.

2.

Business can bring influence at


any point in the process.
The earlier the influence is in
the process, the greater impact
and likelihood of success, and
the lower the costs will be.

Factors Affecting Current


Business/Political Relationship
Rise in Special Interest Groups

Decline in Voting
Diffusion of Power in Government
Reforms in Congress
The decline of party power
Increased complexity in government

Business involvement
in politics

Lobbying
The electoral process

Lobbying:
Advocating a viewpoint to
government.

A lobbyist engages in persuasion


and gives two types of information:
technical information.
political information.

Lobbyists are loosely regulated.


A key issue in lobbying is the
imbalance of access and power.
.

The Abramoff Scandals


Opening Case
Rep. Tom DeLay (R-Texas) pressured lobbyists to support his
candidates and causes and rewarded the lobbyist through
the use of Congressional earmarks.
Jack Abramoff was a lobbyist whose style was to lavish
attention and favors on lawmakers.
Bob Ney (R-Ohio) accepted gifts and trips and then did
legislative favors at Abramoffs request.
Randy Duke Cunningham (R-California) was corrupt to an
unprecedented degree. He even had a bribe menu.
Corporations dominate the political area with huge
expenditures for lobbying and campaign donations. The
recent spate of Washington scandals teach that the area in
which business must pursue its political goals can be highly
compromising.
9-3

Paths of Pressure

McGraw-Hill/Irwin

9-12

2006 The McGraw-Hill Companies, Inc. All rights reserved.

Tension Over Corporate Political


Expression

Debate is perennial over whether too much


corporate money enters politics.
Beginning with the 1907 Tillman Act, efforts
to eliminate it have been unsuccessful.
More progress has not been made due to
the tension between two strong values in
the American political system:
Freedom of speech
Political equality

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc. All rights reserved.

Efforts to Limit Corporate Influence

In 1907 progressive reformers pass the Tillman


Act, making it a crime for banks and corporations
to directly contribute to candidates in federal
elections, and this is still the law today.
After 1907 the spirit of the Tillman Act was quickly
and continuously violated.
Democrats angry at Nixon passed the Federal
Election Campaign Act (FECA) in 1971 to stiffen
disclosure requirements on campaign contributions
and expenditures.
In reaction to Watergate, Congress extensively
amended the FECA in 1974.
In 2002 in reaction to Enron and other scandals
the Bipartisan Campaign Reform Act was
passed.

Citizens United (2010)

The government may not suppress


political speech based on the speakers
corporate identity. No sufficient
governmental interest justifies limits on
the political speech of for-profit
corporations.
Overruling Austin invalidates BCRA
Section 203 and also 2 U.S.C 441bs
prohibition on the use of [corporate]
treasury funds.

Citizens United (2010)

We now conclude that independent


expenditures, including those made
by corporations, do not give rise to
corruption or the appearance of
corruption.

Citizens United (2010)

That the Court in NRWC did say


there is a sufficient governmental
interest in ensuring that substantial
aggregations of wealth amassed by
corporations would not be used to
incur political debts from legislators
has little relevance here.

Citizens United (2010)

The fact that speakers may have


influence over or access to elected
officials does not mean that these
officials are corrupt.
The appearance of influence or a
access, furthermore, will not cause
the electorate to lose faith in our
democracy.

Citizens United: Dissent

The Court today rejects a century of


history when it treats the distinction
between corporate and individual
campaign spending as an invidious
novelty born of Austin
The conceit that corporations must be
treated identically to natural persons
in the political sphere is not only
inaccurate but also inadequate to
justify this case.

Citizens United Dissent

Although they make enormous


contributions to our society,
corporations are not actually
members of it. They cannot vote or
run for office. Because they may be
managed and controlled by
nonresidents, their interests may
conflict in fundamental respects with
the interests of eligible voters.

Citizens United Dissent

The financial resources, legal structure,


and instrumental orientation of
corporations raise legitimate concerns
about their role in the electoral process.
Our lawmakers have a compelling
constitutional basis, if not also a
democratic duty, to take measures
designed to guard against the potentially
deletorious effects of corporate spending
in local and national races.

How PACs Work

To start a PAC, a corporation


must set up an account for
contributions.
Corporate PACs get their funds
primarily from contributions by
employees.
The money in a PAC is disbursed
to candidates based on decisions
made by PAC officers, who must
be corporate employees.
There are no dollar limits on the
overall amounts that PACs may
raise and spend.

Political action
committee
A political
committee carrying
a companys name
formed to make
campaign
contributions.

Soft Money and Issue Advertising

In 1979 Congress amended the FECA to


encourage support for state and local political
parties by suspending limits and prohibitions
on contributions to them.
These contributions came to be known as
soft money.

Although corporations are barred from


contributing to federal campaigns, they may
now give unlimited soft money contributions
to national party committees.
In 1996 the Supreme Court held that soft
money could be used for issue advertising.

Reform Legislation in 2002

Senators John McCain (R-Arizona) and Russell


Feingold (D-Wisconsin) pushed through a bill that was
enacted as the Bipartisan Campaign Reform Act
of 2002 (BCRA).
National parties are prohibited from raising or spending
soft money.
Corporations can give unlimited amounts of soft money
to advocacy groups for electioneering activity, with
restrictions during blackout periods.
Contribution limits for individuals are raised.
New disclosure requirements for contributions and
expenditures are introduced and penalties for violating
the law are increased.

The main purpose of the new law is to end the use of


corporate soft money for issue ads run just before
elections.

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc. All rights reserved.

Testing the New Law

The 2004 election cycle was the first under BCRA


rules. The new law did not stop the rise in overall
spending.
Hard money contributions went way up.
New advocacy groups (527) formed to take in the
soft money that corporations, unions, and individuals
could no longer give to parties.
Independent expenditures for and against
candidates increased.

So far, the new restrictions of the BCRA have


worked to cut the flow of unregulated soft money
into federal elections, but overall growth of
campaign giving and spending has not been
slowed.

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc. All rights reserved.

The Influence Process

If lawmakers or regulators accept money as a


condition for official action, they commit a
crime.
This does not mean that contributions
associated with lobbying are given for
ideological reasons with no expectation of a
return. There is a high correlation between
contribution and action.
There are other influences on representatives
apart from money, including party loyalty,
ideological disposition, and the opinions of
voters back home.

McGraw-Hill/Irwin

2006 The McGraw-Hill Companies, Inc. All rights reserved.