A Discussion on the Extent of Corporate Influence on Government

The last few decades have seen an increasingly polarized political landscape, and things have

gone steeply downhill for at least a couple decades in that regard. Hardly anybody trusts the government

anymore. This dissatisfaction in Congress particularly is widespread and bipartisan. A Gallup poll

conducted in September 2021 found that 25% of Americans have no confidence at all in Congress. The

first time this figure went above 15% since Gallup started keeping track in 1997 was in 2009, and it has

only risen since then. Other questions show that Americans consistently believe Congress is corrupt and

more focused on appeasing special interest groups than serving their constituents. Congressional

corruption, especially that involving corporations and political action committees (PACs), is often touted

as the harbinger of the end of the Republic. So, is it truly Armageddon for the good old USA, or is

corporate influence another boogeyman that both sides can throw at the other?

Lobbying

Let’s look at a few sources of corruption. Lobbying is something that’s often misunderstood, so

we’ll start with that. Lobbying is not bribery. There is a fine, often-murky line between the two, but one is

extremely illegal while the other is protected under the constitution. Bribery is the exchange of money or

gifts in return for political favors. Lobbying is the right to influence a public official on an issue, and it is

guaranteed to anyone. This takes several forms. Individuals can lobby a public official by writing an

email to explain your stance on an issue. Individuals can also become members of public interest groups

that include a political action committee (PAC) that lobbies the government. For example, if you were a

private pilot who wants to see legislation passed that supports your livelihood or passion, you could join

the Aircraft Owners and Pilots Association (AOPA), with the understanding that they will have your back

and influence officials favorably in Washington. Corporations can also lobby the government, and this is

where things get a bit iffy.

 A corporation has access to resources that an individual, and even a public interest group, will

never have. This is troubling because corporations will only ever desire more profit, and this lust for

profit often comes into conflict with the public good that government is meant to protect. Corporations

will hire or create lobbying firms, and these firms exist solely to build relationships with public officials

in order to influence them. They provide congress members and their advisors with information (research,

studies, constituent desires) that is favorable to the corporation. They can also invite officials to fancy

dinners and golfing resorts as business meetings, something that seems to border on bribery, and certainly

something that an ordinary voter would never be able to achieve.

One troubling aspect of lobbying is the potential for corporations and PACs to create “shadow

groups.” These are research groups created and funded by the corporations in order to publish studies that

are favorable to the corporation’s agenda. One recent example of this is when Exxon Mobile executive

Keith McCoy was caught, on camera, confessing many of the dirty deeds that his company has engaged

in for decades (Tabuchi). One of those things was the creation of shadow groups to publish studies

contradicting the overwhelming evidence that climate change is occurring, and that the combustion of

fossil fuels is responsible for it. He’s quoted as follows:

“Did we aggressively fight against some of the science? Yes. Did we join some of these

shadow groups to work against some of the early efforts? Yes, that’s true. But there’s

nothing illegal about that. We were looking out for our investments; we were looking out

for shareholders.”

It’s true that there’s nothing illegal about literally creating research to convince politicians to go along

with your agenda, and that’s concerning, especially when so many congressional advisors are

inexperienced, drowning in work, and may not be wise enough or have the resources to dig into the

volumes of information they are given from lobbyist groups

 . So, that’s lobbying, but the question still remains of how much influence this lobbying has over

policy choices. One area in which the actual effects of lobbying can be tested is in the awarding of federal

contracts to private companies. One study examined the relationship between lobbying dollars spent by a

corporation and the value of contracts awarded to it. As it turns out, there is very little association

between resources dedicated to lobbying Congress and the value of contracts received. However, there is

a very strong association between lobbying the executive bureaucracy (the agencies that make the final

decision on contract procurement) and the return in value of contracts. The study finds that for every

dollar spent lobbying the bureaucracy, a corporation can expect an increase of $900 in contracts (Dusso

et. al. 13). The study initially finds a figure of $300 for every dollar spent lobbying Congress, but this is

largely negated by the control of geographic location of the corporation; congress members will exert

influence on the procurement process if the contract in concern would benefit his or her constituents. This

is expected. This study demonstrates that, at least in the contracting process, lobbying has little effect on

Congress. However, the bureaucracy is highly receptive to lobbying. By federal law, agencies are

supposed to award contracts based entirely upon the merits of the contract—who can do the job the best

(Dusso et. al. 6). The fact that lobbying for contracts has such a return on investment may show an

oversized influence. It may also indicate that businesses that devote less money to lobbying, or who do

not have a previous business relationship with agencies, are not being given fair consideration. This

should be concerning, especially since the executive bureaucracy cannot be held accountable by the

people. This brings up a larger issue of executive power that will have to be explored another time.

Another way that lobbying has been consistently demonstrated to benefit corporations is in

taxation. Specifically, lobbying as a means of tax avoidance appears to be quite effective and this has

been found by a growing number of studies. One 2010 study found that a $1 contribution lowers taxes

paid by $6.65 (Romero 3). That’s a hell of a return. I would argue that this link is one of the more obvious

examples of corruption. Taxation should be decided without any input from corporations, and the fact that

they have any influence is quite telling.

Campaign Spending
Another major target of criticism is campaign finance: many people believe that corporations can

buy out politicians just by funding their campaigns. There is a relatively low maximum campaign

contribution limit set by the FEC precisely to protect against that. There is also mandatory disclosure laws

that make it difficult and illegal to do things under the table. However, that doesn’t mean everything is

above-the-table.

One study (Milyo) looked at the stock market share price of corporations that contributed to a

congress member’s election, and how that price was altered by political events concerning that congress

person. Since the share price is in part a representation of the present and future value of a company, it

would be expected that when a candidate that a corporation contributed to performed negatively, the share

value of that corporation would fall. However, the study found little correlation (Milyo 27). The only

change in share performance they found was when political events benefited the firms’ home states,

which is expected. What about corporate funding that contributes indirectly to an election?

There has been much debate about the Citizens United Supreme Court case in 2010, in which it

was decided that corporations are allowed to make unlimited individual expenditures relating to an

election, as an extension of the right to free speech. Corporations are still only allowed to donate so much

money to a campaign directly, but they can spend as much money as they want to influence an election,

such as buying advertisements or making films (as it was in the Citizens United case). This dramatically

expanded the options for corporations to spend money politically, as previously they were required to

conduct this influence through typical PACs, subject to contribution and acceptance limits. Individual

expenditures did skyrocket between the 2008 and 2012 election cycles, the elections immediately before

and after the Citizens United Ruling, increasing a massive 594% (Hansen et. al. 543).

Surely this is because the corporatocracy finally reigns supreme, now that they can dedicate their

entire coffers to purchasing politicians to legislate lower taxes and deregulation at the expense of the

public, right? Not exactly. Over 60% of Super-PAC (individual-expenditure only PACs) donations during
this time came from individuals, not corporations. In looking at the 100 largest organizations that donated

to Super-PACs during the 2013-14 election cycle, they found only two were fortune-500 companies, and

twenty-one of the top contributors were labor unions. (Hansen et. al. 543) These results show that the

doomsday-heralding outcry that is still perpetuated to this day isn’t nearly as bleak. Individual actors may

still have influence over elections, such as the Koch brothers founding their own super-PAC that spent

over $30 million in the 2012 election. But the idea that corporations now have an iron grip on democracy

just isn’t substantiated. If individual expenditures were a golden opportunity to buy out the Republic, then

companies would leap at the chance.

A counter to the above information is that corporate influence on committees is often overlooked.

Committees are where legislation is written, they are far less public and transparent than roll-call voting,

and they allow corporations more focused efforts on more influential members of Congress. One study by

Grimmer and Powell investigated the relationship between committee behavior and campaign

contributions, arguing that committees would be an easier avenue of influence. This appears to be true, as

corporate PAC contributions and lobbying dropped off sharply after a congress member was exiled from

a committee, a process in which the least-senior congress member is removed from a committee after and

election, when his or her party becomes the minority party. So, while public roll-call votes have been

shown to be relatively free of corruption, a potentially more vulnerable target is committee members. By-

and-large, though, most studies indicate campaign contributions cannot affect policy on a consistent basis.
CDC and Coca-Cola: Conflicts of Interest

The final vector of corruption discussed in this commentary involves a case study on interactions

between Center for Disease Control and Prevention (CDC)—the US government agency that exists to

promote health and well-being—and Coca-Cola, a massive corporation that is probably partially

responsible for the rampant obesity epidemic and countless cases of diabetes. This is particularly relevant,

as the CDC has been under a lot of pressure and scrutiny with the Coronavirus pandemic that began in

2020. Among the more damning evidence of corruption within the CDC was the 2016 event in which

Bowman, the head of the CDC’s division for Heart Disease and Stroke Prevention, had emails leaked in

which she advised a Coca-Cola executive on how to persuade the director-general of the World Health

Organization to stop promoting sugar taxes to fight obesity and diabetes. Another example is that Brenda

Fitzgerald, appointed the head of the CDC in 2017, had previously accepted a $1 million-dollar donation

from Coca-Cola for research on childhood obesity as the commissioner of the Georgia Department of

Public Health.

A case study (Hessari et. al.) used Freedom of Information Act (FOIA) requests to examine

documents and emails involving Coca-Cola and the CDC. Some pages returned showed a relationship

forming between CDC officials and Coca-Cola executives, including a night out on the town. Another

email involves a CDC official mentioning to a Coca-Cola executive that her coworker is seeking a job

with Coca-Cola and that she would be a great asset due to her knowledge of government (Hessari et. al.

80). These obvious conflicts of interest perhaps can’t be pointed to as concrete examples of corruption,

but it appears the door is certainly open for a below-the-table relationship to form between members of

government agencies and corporations that present apparent threats to everything that the agency stands

for.

The study also seemed to uncover a lack of transparency, as only 3 FOIA requests returned any

pages, and within those, over a hundred pages were withheld to protect privileged or confidential

information. The rest of the requests were either rejected for being too broad or were still pending.
Furthermore, the CDC refused to supply records that were uncovered later by submitting FOIA requests

to adjacent agencies (Hessari et. al. 80). These findings in a single case study are concerning, and one has

to wonder how widespread this sort of conflict of interest is across the whole of the bureaucracy.

Conclusion

From the above exploration of corruption in government, it seems clear that while there are

certainly areas in which corruption can influence the course of policy, corporate influence is not yet the

doom of American government that many people make it out to be, and somehow eliminating it would

not be the silver bullet that fixes everything. The reality is, there is no single problem that, if fixed, will

get us out of this, and there never has been. The elimination of federalism, the atrophy of Congress, the

sheer scope of the executive bureaucracy, corporate influence, public apathy, social media monopoly,

failing institutions, and theatrical activism are just some of the things that contribute to this mire that we

find ourselves in. Don’t ever let anyone tell you it’s as easy as changing campaign finance laws, or

banning corporate lobbying, or x or y or z. We’ve been in decline for a long time, in some dimensions

since the ratification of the Constitution, and it’s going to take a lot more than a four-year presidency of

some guy that talks nice to bring us back to the heights we reached at various points throughout history.
 Works Cited

Dusso, Aaron, Thomas T. Holyoke, and Henrik Schatzinger. “The Influence of Corporate Lobbying on

Federal Contracting.” Social Science Quarterly, vol. 100, no. 5, 2019, pp. 1793-1809.

Gallup. (2021, October 6). Congress and the Public. Gallup.com. Retrieved November 5, 2021, from

https://news.gallup.com/poll/1600/congress-public.aspx.

Hansen, Wendy L., Michael S. Rocca, and Brittany Leigh Ortiz. ”The Effects of Citizens United on

Corporate Spending in the 2012 Presidential Election.” Journal of Politics, vol. 77, no. 2, 2015,

pp. 535-545.

Hessari, Nason M., Gary Ruskin, Martin McKee, and David Stuckler. “Public Meets Private: Conversations

Between Coca-Cola and the CDC.” The Milbank Quarterly, vol. 97, no. 1, 2019, pp. 74-90.

Milyo, Jeffrey. “Corporate Influence and Political Corruption: Lessons from Stock Market Reactions to

Political Events.” The Independent Review, vol. 19, no. 1, 2014, pp. 19-36.

Powell, Eleanor N., and Justin Grimmer. “Money in Exile: Campaign Contributions and Committee

Access.” Journal of Politics, vol. 78, no. 4, 2016, pp. 974-988.

Tabuchi, H. (2021, June 30). In video, Exxon lobbyist describes efforts to undercut climate action. The

New York Times. Retrieved November 5, 2021, from

https://www.nytimes.com/2021/06/30/climate/exxon-greenpeace-lobbyist-video.html.