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Corporate welfare: Talking less government but reaping enormous profits

COMMENTARY | August 04, 2005

Morton Mintz asks, if conservatives want government to leave them alone, then why are they investing in, and getting, such enormous windfalls from Washington?

By Morton Mintz



Grover Norquist, who has led Americans for Tax Reform since 1985, is "the single most effective conservative activist in the country," in the judgment of Newt Gingrich. John Cassidy, who interviewed the former House Speaker for a profile of the activist in The New Yorker's Aug. 1 issue, summed up what he described as "Norquist's theory of American politics." It is, he wrote, "disarmingly simple: liberals want something from the government; conservatives want the government to leave them alone." Simple the theory certainly is; but reporters should at least be willing to probe how Norquist--and others in the army of corporate-welfare conservatives in Washington--actually apply it. If they asked a few questions, reporters might likely find that the actions of these conservatives run contrary to their oft-stated philosophy.


Energy firms get $14.5 billion to be left alone

Let's begin with the energy bill, which Congress sent to the president on July 30, and which provides $14.5 billion in tax breaks. Energy corporations wanted those tax breaks. To get government to legislate them, they invested millions of dollars in lobbying, and, according to the Center for Responsive Politics, "contributed $50.6 million in individual and PAC donations during the 2004 election cycle, 75 percent to Republicans." By contrast, environmental interests, which seek cleaner air, earth, and water for everyone, not tax breaks for energy producers, contributed less than one-twenty-fifth as much--"$1.9 million, 88 percent to Democrats."


Starting with the 1990 election cycle, energy corporations have invested more than $182 million in campaign contributions. Large though this sum may seem, it is but a tiny fraction of the $7.64 billion in profits that just one of those corporations, ExxonMobil, earned in the second quarter of 2005. Although Exxon Mobil is the world's largest publicly-traded oil company, it is also, under an 1886 Supreme Court proclamation that equated corporations with human beings, a "person."


First question: Is ExxonMobil a "conservative" who wants to be let alone by the government? Or a "liberal" wanting something from the government?


Rep. Edward Markey (D-Mass.) described the energy bill as "politically and morally wrong," because it is "packed with royalty relief, tax breaks, loan guarantees for the wealthiest energy companies in America even as they are reporting the largest quarterly profits" in U.S. history.


Since conservatives, in Norquist's view, don't want anything from government, would he say that  Markey is, therefore, a conservative (a label never before applied to him), and that the energy companies are of a dreaded species, the liberal?


Most of the legislators whose support was cultivated with millions of energy-sector lobbying and campaign-contribution dollars are Republicans.


Did these Republicans vote for passage because they are conservatives--again as defined by Norquist?


President Bush and Vice President Dick Cheney, both former oil men with close ties to the oil industry, strongly supported the $14.5 billion in tax breaks.


Did they do this because they are conservatives?


The energy industry wanted (and is getting) something from government.


Shouldn't Norquist and his ideological allies criticize it for acting the way he says liberals act?


"Until 1999," Cassidy reports in The New Yorker, "Norquist himself lobbied Congress and the executive branch on behalf of business interests. According to the Center for Responsive Politics, he was either a lobbyist or a consultant for Microsoft, Seagram, the Distilled Spirits Council, and the Interactive Gaming Council. He also registered as a lobbyist for UNITA [then an Angolan political faction that was largely a military force and that had been fighting a civil war since 1975] and for the Seychelles, whose leader, France Albert Rene, was a self-styled leftist. Today, Norquist is no longer officially a lobbyist," but Americans for Tax Reform "still receives a lot of cash from corporations that stand to benefit from the policies it advocates."


Was lobbyist Norquist a conservative representing conservative clients wanting to be left alone by government?


Do corporate funders of non-lobbyist Norquist's organization--conservatives, in his book--contribute to it to assure that they will get nothing from government?


Stay away from us, but come fly with us

It's illegal for lobbyists to pay the travel bills of members of Congress. To make the illegal legal, lobbyists pass travel money through charitable nonprofits.  That's how they locked up about $4 million in tabs for more than 800 congressional trips, an investigation by the Center for Public Integrity found.


Are these lobbyists laundering money provided by conservative clients to fund lawmakers because those clients want nothing from Congress? Or are they just being good liberals and providing humanitarian aid to needy, travel-starved legislators?


Writing about the Center's investigation in The Washington Spectator for July 15, the CPI's executive director, Roberta Baskin, cited a number of findings that should suggest to reporters that there are quite a few self-professed conservatives who are cozying up to that same government they claim to disdain.


"Some 14,000 registered lobbyists influence the legislation and policies put forth by Congress, the White House and more than 200 federal agencies." (An additional 16,000 who qualify as lobbyists under the standard set by the Senate office of Public Records don't register.)


"In 2004, lobbyists reported spending more than $2.1 billion."


"[A]lmost 250 former members of Congress and federal agency heads are currently registered to lobby their old colleagues. So far, Center researchers have identified 2,200 former government officials who have spun through the revolving door."


"...16 firms have more lobbyists than the Senate has senators."


"...82 companies [are] represented by four or more former members of Congress."


Did 14,000 lobbyists spend more than $2.1 billion in a single year on behalf of employers who were conservatives wanting nothing from the government?


Did the 82 companies each retain four or more former House members or senators to assure that they would get nothing from the government?


Lockheed martin: a Norquistian liberal?

"Since 1998," Baskin wrote, Lockheed Martin "has received more than $94 billion in defense contracts while spending a comparatively little $55 million in lobbying. That's more than a thousand percent return on its investment."


Did Lockheed Martin not want something from the government, in the form of defense contracts worth $94 billion? Or is it a liberal?


Big pharma: welcoming government on its back

And then there is the pharmaceutical industry.  It would certainly be worthwhile to ask Norquist and other like-minded conservatives whether that particular industry wants government to leave it alone. To explore this point, it's worth quoting at some length from Baskin's article:


"If you were to take a snapshot of the past seven years," Baskin continued, "you would find that the pharmaceutical and health products industry had spent more influencing the federal government than any other. From 1998 to 2004, the industry spent more than $681 million on federal lobbying. It employed more than 3,000 lobbyists, a third of whom were former government officials.


"In 2003 alone, the industry spent nearly $116 million lobbying the government. That was the year that Congress passed, and President George W. Bush signed, the Medicare Modernization Act of 2003, which created a taxpayer-funded prescription drug benefit for senior citizens.


"By adding the benefit to Medicare, the government program that provides health insurance to some 41 million people, the industry found a reliable purchaser for its products. Thanks to a provision in the law (for which the pharmaceutical industry lobbied), government programs like Medicare are barred from negotiating with companies for lower prices.


"By its own admission, during the run-up to the 2003 Medicare legislation, an important industry trade group, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, organized more than 800 state and local allies and more than 40 national organizations to support a federal legislative agenda helpful to the drug industry; arranged 50 district meetings with key members of Congress; recruited more than 35 prominent academics to discuss the importance of intellectual property protection in the pharmaceutical field; organized more than 10 issue briefings by research organizations; and hosted fly-in educational visits to Capitol Hill by allies and PhRMA researchers."


Baskin went on to observe that the industry's "onslaught was obviously successful, and considering the value that the prescription drug benefit may ultimately add to drug makers' bottom lines, a modest investment with the potential for maximum returns. According to a study done in October 2003 by Boston University professors Alan Sager and Deborah Socolar, 61 percent of Medicare prescription-drug spending will become profit for drug companies. The study predicted that over the next eight years drug makers will receive $139 billion in increased profits."


Who could be more conservative--more ardent in wanting to be left alone by government--than pharmaceutical manufacturers who will be made $139 billion richer, thanks to a new federal program that a true Norquistian conservative should disdain?


It's a disarmingly simple question, as are most of the questions above and these two final ones:


What is it, exactly, that the country's "single most effective conservative activist" strives so hard to conserve? Could it be the opportunity of wealthy and politically powerful corporations to become even wealthier and better equipped to influence the government?


Reporters who would ask such questions of Grover Norquist and other self-proclaimed anti-government conservatives should look forward to having a fun time. They just might find that Greta Garbo really wanted to be left alone, but not so Norquist and his allies.

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