Forms of Influence and the Best Bet

March 11, 2014
posted by Bob Bauer

Richard Epstein has written about Citizens United before, and he returns to the subject again in his magisterial treatise on the classical liberal conception of the Constitution. His argument includes a challenge to widely held beliefs about corporate political power and motivation . The Classical Liberal Constitution: The Uncertain Quest for Limited Government (2014) at 458; see also Richard A. Epstein, Citizens United v. FEC: The Constitutional Right that Big Corporations Should Have But Do Not Want,  34 Harv. J.L. & Pub. Pol’y 639, 655-660 (2011). He does not suggest that the regulation of government corruption is at all times unfounded or ill-advised, only that it is misdirected to the sphere of public political speech. The analysis he offers usefully raises again the question: is the debate about political reform overly invested in political campaign activity, while attention is paid intermittently and with little impact to other ways that well-financed interests move policy?  These are questions that have been productively raised by other scholars in the field, notably Sam Issacharoff and Rick Pildes.

The argument advanced on this point is as follows. Corporations devoted to commercial success and protective of their “brands” are disinclined to get mixed up in politics. There is only so much to be gained from overt political campaign activity and much to lose: consumers can strike back at a politics they dislike, as Target and other firms have discovered. In Sam Issacharoff’s formulation, “[F]or most corporations. elections are a precarious and indirect means for advancing their interests. “ On Political Corruption, Harv. L. Rev. 118, 133 (2010).  Their power is more effectively and wisely exercised within a defined and controlled area operations—that is, more precisely than allowed by the no-holds-barred, highly visible confrontations taking place in electoral contests.

Meanwhile, in the campaign world, the corporate speech at the center of the policy debate is nonprofit, political corporate speech—either through special-purpose entities that serves as vehicle for the expression  of wealthy individuals’ ideological or political interests, or through established nonprofits, such as those now banding together across political differences to resist IRS restrictions on their “candidate-related” activities. The constitutional legal developments leading to Citizens United ran on this fuel.

All of this is taking place as business (and union, and other) interest spend heavily as required to influence policy in other ways, none of which seem to have the durable interest of the standard “money in politics” stories about campaign financing.  Lobbying law is a neglected child in the field of political reform, and similarly secondary as a field of study are the standards that govern the officials’ responses—their ethical obligations—in responding to appeals for assistance or to arguments for particular policy outcomes.

It is against this background that the New York Times’ coverage of the Pershing Capital lobbying and public relations campaign against Herbalife carries special interest for followers of the reform debate.  In this case, having staked $1 billion on a collapse of Herbalife,  Mr. Ackman and his associates have been paying for premium consulting and lobbying services to bring adverse regulatory and public attention to the company.  One does not have to care about or resolve the question of motivation: Mr. Ackman may be genuinely troubled by Herbalife’s activities, or determined to protect his$ 1 billion, or acting on both objectives at once. The Times reporting team moves quickly to their larger point that Ackman and Company are  “using every weapon in the arsenal that Washington offers in an attempt to bring ruin” to Herbalife.  In the Times account, the methods being employed are “novel”; but this is not quite right if, as also suggested,  the individual weapons used are already available in “the arsenal that Washington offers”.   The contents of the armory are all familiar and on the market: lobbyists to contact officials, specialists in grassroots lobbying and media “outreach” to mobilize public opinion (or the semblance of it), and the recruitment of validators to speak for the position advocated or against the position opposed.

What is missing here is the campaign contribution, or the independent expenditure, or a hint that either is under consideration.  This is because, as Pildes suggests, “corporations probably are probably able to attain influence more effectively through spending their money on  lobbying specific issues, rather than generally trying to influence election outcomes.” Richard Pildes, How Consequential is Citizens United?, ELECTION LAW BLOG, November 9, 2011,  Campaign cash  still makes its appearance, but not, in a leading role, except that it remains central in the vast majority of conversation, theorizing, writing and reporting about the role of money in politics and the future of reform. Lobbying, along with the related question of the standards of official conduct, lag well behind in these discussions: consider that the first major lobbing law reform came fully two decades after the enactment of the 1974 Watergate-era campaign financing reforms.   Yet for interests with billions at stake and much to spend, lobbying and the other forms of paid advocacy and pressure are still the best bet.






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