Public Policy Process 1. Policy Issues 2. Policy Agenda 3. Legislation 4. Regulatory agencies 5. Policy Evaluation

Policy Issues: Problems that exist in society Social Social Economic Economic Political Political Technological Technological

Policy Agenda: Choosing which issues to focus on Visibility Visibility Powerful stakeholders Powerful stakeholders Important to reelection Important to reelection

Legislation : Addressing the Agenda Set parameters Set parameters Establish regulatory agencies Establish regulatory agencies Set timeframe Set timeframe

Regulatory Agencies: Implement Policies Specific rules Specific rules Penalties Penalties Judgment Judgment Enforcement Enforcement

Policy Evaluation: Judicial Review of Policies Interpret laws Interpret laws Order compliance Order compliance

Implications of the Policy Process Model 1. Business can bring influence at any point in the process. 2. 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 GroupsRise in Special Interest Groups Decline in VotingDecline in Voting Diffusion of Power in GovernmentDiffusion of Power in Government  Reforms in Congress  The decline of party power  Increased complexity in government

Business involvement in politics Lobbying Lobbying The electoral process The electoral process

Lobbying: Lobbying: Advocating a viewpoint to government. A lobbyist engages in persuasion and gives two types of information: A lobbyist engages in persuasion and gives two types of information: technical information.technical information. political information.political information. Lobbyists are loosely regulated. Lobbyists are loosely regulated. A key issue in lobbying is the imbalance of access and power. 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© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 9-12

Tension Over Corporate Political Expression Debate is perennial over whether too much corporate money enters politics. Debate is perennial over whether too much corporate money enters politics. Beginning with the 1907 Tillman Act, efforts to eliminate it have been unsuccessful. 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: More progress has not been made due to the tension between two strong values in the American political system: Freedom of speechFreedom of speech Political equalityPolitical 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, and this is still the law today. 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. 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. 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 In reaction to Watergate, Congress extensively amended the FECA in Bipartisan Campaign Reform Act was passed. 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. 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. 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. 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. 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 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. 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 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. 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. 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. 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. To start a PAC, a corporation must set up an account for contributions. Corporate PACs get their funds primarily from contributions by employees. 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. 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. 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. In 1979 Congress amended the FECA to encourage support for state and local political parties by suspending limits and prohibitions on contributions to them. soft money.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. 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. 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). 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.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.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.Contribution limits for individuals are raised. New disclosure requirements for contributions and expenditures are introduced and penalties for violating the law are increased.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. 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. 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.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.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.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. 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. 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. 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. 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.