Wall Street WARZONE

Lobbyists Rule, Reform a Joke, Democracy Dead: “Washington’s Biggest Business” is Delivering Mega-Billion Payoffs to Wall Street, CEOs & Forbes 400

by Paul B Farrell, JD, PhD
| | 7/30/2010

Wall Street is single largest lobbyist and donor to politicians and their election campaigns. Lobbyists operate in the shadows, yet are arguably the most powerful force in America’s pseudo-democracy today, far more powerful than our elected officials and certainly more powerful than the voting public. They work behind the scenes as conduits for big money seeking big favors, what are often called “bag men” peddling money for influence through campaign donations to Senators, Congressmen and presidential candidates, to secure favorable legislative, regulatory policies, and most of all, huge tax benefits and grants of cash from the federal budget now dispensing about $3 trillion annually to the favored elite.

Lobbyists are hired guns, influence peddlers. Their allegiance is to whomever’s paying their fees—a foreign dictator, an Indian casino, farm conglomerate, oil giant, even a small town in Middle America. And yes, lobbyists often push the agenda of one or the other political party. But in every case, lobbyists are paid to get specific government favors, money or tax benefits for a specific “client.” Their focus is narrow, their goals selfish. They are not voters, not patriots and they’re definitely not acting for the common good, in “best interests of the country.” In fact, the “special interests” of a lobbyist’s clients are usually not in best interests of America.

How bad is it? In “Congressional Revolving Doors: The Journey from Congress to K Street,” Public Citizen (LobbyingInfo.org) wrote: “The revolving door on the journey from Capitol Hill to the lucrative world of federal lobbying is spinning at a rapid rate. Congress is no longer a mere destination for those seeking a seat in one of the world’s most famous legislative bodies. For many lawmakers, it has become a way station to wealth, a necessary period of job training and network building so that after leaving their public service jobs they can sell their influence to those with deep pockets … Lobbying is the top career choice for departing members of Congress.”

Lobbying is now “Washington’s Biggest Business”

Lobbying is actually quite new in American history. A couple years ago the Washington Post ran a revealing 25-part special series: “Citizen K Street: The Life & Career of Gerald S. J. Cassidy: How Lobbying Became Washington’s Biggest Business.” Cassidy is the founder and owner of “the most lucrative lobbying firm in Washington … a godfather of the influence business.” The series later became Robert Kaiser’s brilliant: So Damn Much Money: The Triumph of Lobbying & the Corrosion of American Government.

Cassidy’s “innovation was the first modern ‘earmarked appropriations,’ federal funds directed by Congress to private institutions when no federal agency had proposed spending the money. Over the subsequent three decades, the government dispensed billions of dollars in ‘earmarks,’ and lobbying for such appropriations became a booming Washington industry.” The Post concluded that Cassidy has profited handsomely along the way: He “helped invent the new Washington, which had made him seriously rich. His personal fortune exceeded $125 million.”

Politicians and lobbyists—mutual back-scratching society

Lobbyists have to work closely with the politicians—to get the votes they need, and the big perks for the big money they represent. So both benefit from these chummy relationships as we see in a New York Times story, “Big Money Still Learning to Lobby: On a cold evening in late January 2007, Senator Charles E. Schumer invited a who’s who of hedge funds to dinner at Bottega del Vino on the Upper East Side of Manhattan. More than $100 billion worth of wealth sat around the table … Mr. Schumer, the New York Democrat, had some simple advice for the billionaires in his midst: If you want Washington to work with you, you had better work better with one another.”

And presumably, work closely with Schumer, a member of various Senate committees, including Banking and Finance, and chair of the Economic Policy Subcommittee. The Times continued: “Now, united by a desire to avoid stringent regulation and a healthy sense of competition—there are three hedge fund lobbying groups—the industry seems resigned to no longer being a wallflower and looks set to join the dance with Congress. So far the industry’s efforts have witnessed remarkable results.

More than two years after the Securities and Exchange Commission required that funds register with the agency—a move overturned by a federal appeals court last summer—the Treasury Department, the Federal Reserve, Congress and the SEC seem to agree: hedge funds are as regulated today as they should be.” The Times quoted David Tittsworth, head of the Investment Adviser Association, commenting that hedge funds have been “extraordinarily effective in lobbying … The hedge fund industry—whoever they are and whoever is representing them—has been successful in fighting a centralized and comprehensive regulatory scheme.” So, their veil of secrecy remains protected, thanks to lobbyists brokering a deal between members of Congress and these financial power-players.

Lobbyists outnumber elected officials by huge margin

Lobbyists power exists at the state level too. In a 2006 Barron’s magazine article citing data from The Center for Public Integrity, we learned that: “The number of lobbyists and the amount spent on lobbying has swelled over the years … New York State had 3,842 lobbyists, 18 for each elected legislator. Colorado, Florida, Illinois and Ohio each had 10 per legislator,” a total of about 40,000 state lobbyists. In addition, Washington lobbyists doubled since 2000 to about 35,000. That’s a ratio in excess of 65:1—sixty-five lobbyists per elected official, a total of 435 Congressional representatives, 100 Senators, one President and one Vice President.

And things are getting worse according to another Washington Post report, “The Road to Riches Is Called K Street,” quoting one of America’s elected-officials-turned-lobbyist: “There’s unlimited business out there for us,” said Robert L. Livingston, a Republican and former chairman of the House Appropriations Committee, now president of a thriving lobbying firm, “companies need lobbying help.” Get it! They focus on helping businesses, not the public. “Lobbying firms can’t hire people fast enough,” says The Post. “Starting salaries have risen to about $300,000 a year for the best-connected aides [which is luring] nearly half of all lawmakers who return to the private sector when they leave Congress, according to a forthcoming study by Public Citizen’s Congress Watch.”

Unfortunately, this is not good news according to the critics. The story goes on to say: “Political historians don’t see these as positive developments for democracy. ‘We’ve got a problem here,’ said Allan Cigler, a political scientist at the University of Kansas. ‘The growth of lobbying makes it even worse than it already is in the balance between those with resources and those without resources’.” And you thought your vote counted … now that is irrational!

FirstPubDate: Mar’07

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