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 Abramoff’s 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
speaker’s 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 441b’s
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 company’s 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.