Money speaks louder than words in politics, and many corporations in the U.S have used it as a tool to influence public policy in their favor. At the end of the day, the driving force for businesses is their ROI and a pay by play business model has generated positive results on Capitol Hill. Research done by OpenTheBooks in 2019 showed that Fortune 100 companies spent $2 billion lobbying on Capitol Hill and received $3.2 billion as federal grants in return. These grants and subsidies that large corporations use to exert greater influence on the economy are funded by none other than the common American taxpayer. These politics have been going on for ages.
For every dollar spent by a public-interest group or union on lobbying, big businesses spend $34.
Politics and Power: A Disruption To Democracy
In politics, lobbying is the name of the game and big businesses play this game better than anyone. Large corporations have an upward of 100 lobbyists representing them in almost every facet of society. For every dollar spent by a public-interest group or union on lobbying, big businesses spend $34. This has led to a massive disruption of democracy in politics where lobbying overseas innovation.
Looking back to prior years, big business lobbying was nowhere near the beast it is today. Corporate political influence took a turn in the 60s and 70s when Congress passed regulations that would impact environmental and consumer safety concerns. At this time, corporations with lobbyists lacked the influence to do anything about it. With a declining economy, the political influence of big business was born. What started out as a business vs. government fight has now evolved to become more sophisticated- using money to guide public policy in your favor.
Corporate Cash In Politics
When a presidential candidates that a corporation was lobbying for their company, stock rises at 0.05% at a minimum. This roughly translates to $500,000 in cash for the average Fortune 100 company. For a large company, a small stock bump and $500K is far from significant, which leaves many wondering why companies spend so much on political campaigns. While the direct monetary result may not be much, political campaigns benefit big businesses in many other ways. For one, getting approval on federal grants comes with fewer hurdles. Secondly, campaign contributions send the message to investors that the company is willing to fight against any regulation that may have a negative impact on them. Thirdly, and probably the most subtle, is playing the politics by using the money to sway decisions in their favor.
Peddling Influence Into Action
Large corporations in the U.S have spent billions of dollars on political campaigns for many years. While some donations are made directly to the Democratic or Republican party, others can be made to Super PACS in the form of ‘dark money.’ These donations are made to hide the identity of the large corporations, hiding the politics behind the move, and serve the sole purpose of influencing decisions.
In 2009, General Electric spent $134 million on lobbyists, a decision that had a direct implication on their taxes. The company used a number of deductions and paid no taxes to the government in 2010. Telecom giant, Comcast spent $86 million on lobbying activities and were able to get a swift approval on their $45 billion takeover of Time Warner Cable. Silicon Valley behemoths are relatively new to the lobbying game but have used their big money to gain political influence in recent years. Google, Facebook, Apple, Microsoft and Amazon have spent billions of dollars on political campaigns. It’s also worth noting that many tech execs have been involved in politics and held senior government positions and vice versa.
Can We Beat The Politics?
It’s no secret that Fortune 100 companies have been playing politics and have spent millions in lobbying, to shape government decisions in their favor. However, if there’s anything that the past few years have shown us, it’s that change is on the horizon. With the increased awareness of fake news, failure of companies to abide by regulations and tax avoidance, it’s only a matter of time before large corporations are forced to face the consequences of their monetary political influence.
Author Divya Prem