14 June 2012

I hoisted my colours in yesterday’s post on lobbying. As decision makers in all jurisdictions have been shown to be susceptible to the charms of lobbyists, more of the same will not strengthen public trust in government.  That underpins the OECD expectation that Member states will introduce controls as a pragmatic resolution of the misuse of economic power and a defence against the blandishments of the lobbying industry.  “Pay to play” seems inherently undemocratic.  But only a minority seems to think that way. Although politicians in opposition seem to appreciate the merits, when in Government, there is an almost universal diminution of enthusiasm to regulate.  

The  influence of big business can be corruptive. As with most things, abusive practices are readily identified in the United States.  And Northrop Grumman, in the news this week, is an illustration of institutionalising lobbying.

Northrop Grumman’s business is almost totally dependent on government. Its products are expensive – eg $1.45 trillion for the F-35 project –and as the World’s fourth largest weapons maker, the company’s wellbeing is closely related to decisions of the US Government. Any reduction in the Defence budget impacts on it.

So it needs to have the ear of decision-makers.

That requires someone on the “inside” with access to politicians who make the spending decisions.

Last year, when Republicans won a majority in the House of Representatives, the House Armed Services Committee recruited new professional staff. An appointee was a Northrop Grumman vice president. He left the private sector, where he had a salary of $500,000 or so. His career move was to become a public servant serving the Committee on a $120,000 salary.   Oh and before he resigned, Northrop Grumman made sure he had a bonus of more than $490,000.

Coincidentally, the Chair of the Armed Services Committee receives larger campaign contributions from Northrop Grumman than any other politician. Not surprisingly his activities all favour Northrup Grumman, and the preservation of billion dollar contracts awarded to that firm.

This “reverse revolving door” where lobbyists become government officials has been criticised for its “pernicious affect” on public policy. 

In his Bill of Rights report on a Bill intended to police lobbyists,  the Attorney General has found that controls proposed in the Bill cannot be reasonably justified because of their effect on the freedom of expression.