Tag: political action committee

How Enron Captured the Government

The WaPo has the details on an interesting poli-sci study. Two professors looked at over 250,000 e-mails from Enron, the failed energy giant and supposed poster child for campaign finance reform. Enron has often been cited as the fate that await our government in the wake of Citizens United. Enron donated millions to politicians, was a powerful lobby and had friends in high places. Surely that was why they were allowed to get away with so much awfulness for so long, right?

Not so fast:

When we think of lobbying, we typically think of Congress. But Enron devoted substantial effort to lobbying bureaucrats as well. Judging from the content of its e-mails, it was quite concerned with making compelling arguments to regulators. Enron’s employees e-mailed as if the company’s primary advantage in lobbying was its ostensible wealth of information about energy policy, not its campaign contributions.

To be sure, in some instances, Enron executives explicitly connected their campaign contributions with policy goals. In one such e-mail, an Enron executive notes that “Nick Lampson called and asked for a contribution. I committed to one without knowing about his vote on PNTR [Permanent Normal Trade Relations with China]. I will keep my word by making an individual contribution but will also communicate to him that in my capacity as Enron PAC chair i cannot authorize the PAC to make a contribution as a result of that vote.”

Yet even in this case, the contribution is a reaction to a request rather than a proactive attempt to win support. What’s more, the head of Enron’s Political Action Committee committed to a donation without knowing a home-state Member’s vote on one of Enron’s legislative priorities—and wound up making a personal donation anyhow. That’s not much of a quid pro quo.

A study based entirely on e-mails is limited. Doubtless, a huge amount of political influencing is carried out in person or on the phone. So I would be cautious about reading too much into this.

Nevertheless, the study is consistent for what has been found before. Enron made lots of political contributions, yes. But those contributions were the kind of sacrificial offering that all successful businesses have to make to Washington in order to keep regulators and legislators off their backs. We have seen this over and over again: companies that don’t want to play the Washington game — Microsoft, Apple, Paypal, etc. — are bullied until they do play it. They are buying influence. But they are also engaging in self-defense against a government that expects them to play ball once they’ve reached a certain level of success.

When it comes to affecting policy, however, their real efforts are being directed not against legislators but against the bureaucrats who actually write the laws (like the hundreds of regulations left unwritten by Obamacare and Dodd-Frank). This is what we call regulatory capture: powerful businesses making sure that even honest attempts to rein in their industry are blunted … at least for them.

I hate to keep beating a dead horse … actually, that horse ain’t dead at all … I hate to keep beating a live horse but this is what happens when you make government big and powerful and when you makes laws so complex that only a handful of people understand them. From Michael Tanner’s recent must-read:

You can decry the influence of lobbyists and money on politics all you want, but those who are taxed, regulated, paid, hired, or controlled by the government are naturally going to try to influence how they are taxed, regulated, paid, hired, and controlled. Nor should it be a surprise if these interests try to rig the game in their favor by, say, securing special tax treatment for themselves or encouraging greater regulation of their competitors.

You want powerful businesses and lobbyists to stop controlling our government? Stop making it worth their while.

Democrat Super PACs and Self-Loathing

What are liberals to do?  The Citizens United decision by SCOTUS is almost as infuriating to progressives as Bush v Gore.  Almost.  They’re convinced that the deck is permanently stacked against them because The Rich, Inc is somehow able to buy elections and cancel out their votes.  As we all know, only the government should be able to buy votes and only through entitlements and free cell phones, but that’s not what I’m interested in right now.

Not content after ruthlessly demagoguing against job creators to the point that they’re a virtual hunted minority, driving them to renounce their citizenship to flee punitive taxation, and trying to strip them of their First Amendment rights to support the candidates that they prefer; Democrats are turning their anger inward in a rare display of acknowledgement of their own hypocrisy.

In 2010, conservative outside groups held a three-to-one advantage in spending on House races and a slightly more than two-to-one advantage in Senate races, according to the Center for Responsive Politics. The formation of the Democratic super PACs and their coordination with traditional liberal groups — labor, environmental and women’s groups — helped cut that advantage to less than two-to-one in both House and Senate races in 2012, according to Federal Election Commission data.

No mention of all of those strange foreign donations that bypassed credit card verification on the Obama campaign’s website though.  If only there were some way to turn that on and off.  But I’m being unfair.  This is about Super PAC’s.  

I don’t really expect the Democrats to quit using money from Super PACs.  No political party practices what it preaches when it comes to ethics and hundreds of millions of dollars.  It’s just delightful to see them actually acting like they feel guilty, for once, about something that helped them win an election.  I wonder if we’ll see similar chest-thumping about the possibility that some fraudulent voters may have gotten counted thanks to their bitter opposition to Voter ID?

Nah.  The playing field just has to be leveled, after all.