Big Business’s Role in Making Legislation


Ugly Facts We Always Knew…

BP Continues to be a major player in manipulating the laws that regulate how they pay for their cleanup and who gets paid what… We constantly hear corporate mouthpieces, and the politicians they support, complain about burdensome legislation and regulations standing in the way of social and economic advancement (e.g., higher profits). Indeed, the regulation bogeyman is second only to the civil jury in terms of sending CEOs, corporate lobbyists, and business-friendly politicians into a collective state of frothing hysteria.

But there is a great irony in this constant corporate carping about burdensome laws and regulations – many of these laws and regulations are drafted by business. As a recent article in Bloomberg Businessweek highlights, there is a market, called the “American Legislative Exchange Council” or “ALEC,” where businesses can get pre-written legislation or regulation that suits their needs, much like you or I would go to Walmart to buy shampoo or batteries. Need a bill that makes it harder for your competitor to break into the market? Aisle 6, right between the tort reform and tax breaks. Once in possession of this draft legislation, a company and its lobbyists can shop it to sympathetic legislators. The legislator slaps his or her name on the bottom and that, folks, is how a bill becomes a law in a state near you.

The Bloomberg article (aptly entitled “Pssst… Wanna Buy a Law“) opens with a perfect example of this supermarket approach to lawmaking. Lafayette is a decent sized town in southern Louisiana. Its mayor (a Republican) rightly believed that, in order to compete with larger markets, Lafayette’s businesses and residents needed to be able to access the internet via fiber optic cable rather than the old copper wire. Laying new cable is expensive, especially in places like a bayou, and it did not make business sense for any private company to spend the money to install cable for a relatively small population. So, the mayor decided the town would pay for it, just like any other infrastructure improvement.

The large telecommunications companies that were currently serving Lafayette with copper wire, of course, did not want to lose customers. Thus, instead of employing free market solutions like lowering rates or providing better service, these large companies did what any good business would do – they used their clout and size to prevent Lafayette from laying the cable. They prevailed upon a legislator from another part of the state to push through legislation that placed all sorts of conditions on a municipality’s ability to pay for telecommunications upgrades. The upshot of the law is that it is now virtually impossible for municipalities in Louisiana to provide their residents with better internet access – the very definition of the reviled, burdensome legislation standing in the way of social and economic advancement – and the telecom companies get to maintain the status quo. . . and keep those fat profits at the expense of the residents of Lafayette (and a town near you perhaps).

The law that was passed in Louisiana is almost identical to a piece of model legislation on ALEC’s shelves. ALEC is a “nonprofit” based in DC that puts together model legislation for legislators to take back to their states. It just so happens that some of its major contributors, sponsors, and members are companies like ExxonMobil, Altria, BP America, BlueCross and BlueShield, AT&T, Pfizer, Bayer, GlaxoSmithKline, Johnson & Johnson and Reynolds America, as well as hundreds of state legislators, many of whom have gone on to become prominent on the national political stage. But getting ALEC, or one of its Board Members, to give you a list of all of the contributing corporate members contributing fat checks to be part of this exclusive club is about as likely as getting the code to launch a nuclear strike on a foreign country. There are currently about 300 members, including corporations, “think tanks” and trade groups.

As the Bloomberg piece quite vividly describes it, ALEC is essentially a legislation laundry. A company or trade group, like the U.S. Chamber of Commerce (advocating limits on jury awards, for example) can drop off favorable legislative goals and return to pick up a draft bill that has been “vetted” and stamped with the approval of a supposedly “nonpartisan nonprofit” group of state legislators. Currently available from ALEC’s legislative warehouse of hundreds of draft bills: a bill that would limit an individual’s ability to collect from the parent company whose subsidiary caused asbestos-related disease, a bill that would prevent cities from requiring that restaurants post ingredients and health information, a voter registration bill (making it harder for many to vote – guess who that favors), a bill to prevent states from enforcing the new federal health insurance mandate, and, of course, the bill that makes it hard for municipalities to pay for telecommunications upgrades. And, not surprisingly, there are bills to lower taxes for big business, including helping Big Tobacco avoid taxes. If the reader sees a trend in the focus of the bills, one would be correct: MONEY, and lots of it.

In the end, big business has a point. There are indeed unnecessarily burdensome laws that stand in the way of “economic progress”. Those laws ought to be done away with, and we should be constantly looking for ways to simplify and thin out the code books. But before that conversation can occur in any meaningful way, Big Business must be willing to acknowledge its role in putting those laws on the books in the first place. And, Big Business should acknowledge that its quest to stoke the profit machine, while not a bad thing in and of itself, should not always assume priority over the safety or best interests of our communities, like Lafayette, Louisiana.