THE RISE OF THE CORPORATE SPECIAL INTEREST SYSTEM

Before launching into the statistics of the 80s, it is important to understand the sea-change in American politics that occurred in the 70s. America entered the 70s with a firm commitment to helping the poor, a legacy inherited from Roosevelt's New Deal, Johnson's Great Society, and the social radicalism of the 60s. Several changes in the 70s, however, would give rise to a quite different political culture: the corporate special interest system.

The first change was the 1974 decentralization of power in the House of Representatives, when 22 committees delegated much of their authority to 172 subcommittees.¹ This not only created a mass of competing special interests, but enabled corporations to lobby their particular subcommittees much more directly, secretly and effectively.

The second major change was the 1975 SUN-PAC decision, which essentially legalized corporate political action committees (PACs) and their donations. In 1974, there were 89 corporate PACs; a decade later, this had exploded to 1,682. The result was an enormous shift in political power. In the late 70s, corporate PACs scored a number of victories -- defeating Ralph Nader's proposal for a Consumer Protection Agency, killing a tax hike -- that galvanized the business community as never before. "Success," journalist Hedrick Smith drily noted, "brought more bees after the honey." ² Corporate political activism soared; one lobbyist described the atmosphere in 1980 as "a genuine virtual fervor." ³

In 1992, corporations formed 67 percent of all PACs, and they donated 79 percent of all contributions to political parties. ⁴ Studies show an exceptionally high correlation between PAC donations and the laws passed in their favor. Although the right to petition Congress is a constitutional one, citizens without donations are never granted access to their representatives. One could argue, therefore, that the corporate special interest system is unconstitutional.

In 1994, Republicans took over Congress, claiming to end 40 years of liberal rule. But the 80s were a profoundly conservative era, with corporate lobbyists urging tax cuts, deregulation, business exemptions, re-armament and welfare reduction. Democratic politicians participated in the new system every bit as willingly as Republicans. During the 80s, corporate PACs freely gave to incumbents of both parties, because both accommodated them. Incumbents won the donations 90 percent of the time.⁵ The researchers of one PAC study wrote: "When we began [our] interviews [with lobbyists]... we assumed corporate PACs would have many enemies in Congress -- people who were out to get them and that they in turn wanted to defeat. We regularly asked about this in interviews and were surprised to learn that corporations didn't really feel they had enemies in Congress." The only exception was Senator Howard Metzenbaum -- a Democrat in the old fashioned sense of the word -- whom lobbyists mentioned repeatedly. However, Metzenbaum retired in 1994.⁶

If this comes as a surprise, one should know that the anti-business rhetoric of most Democrats is for public consumption only. According to the above researchers, "One PAC official told us, 'You have [politicians] that will hold rallies right outside this building here, hold news conferences and picket lines periodically, every year,' attacking the company and its policies. However, 'When they go to Congress… they tend to ameliorate their anti-big business or pro-consumer stance.'"⁷

The rise of the corporate special interest system in the 70s was an important precondition for the Reagan Revolution.

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¹ Hedrick Smith, The Power Game: How Washington Works (New York: Ballantine Books, 1988), p. 25.
² Ibid., p. 31.
³ Anonymous quote from a corporate PAC director in Dan Clawson, Alan Neustadtl and Denise Scott, Money Talks: Corporate PACs and Political Influence (New York: HarperCollins, 1992), p. 142.
⁴ Center for Responsive Politics, Washington D.C., 1993.
⁵ Clawson et al., p. 13.
⁶ Ibid., p. 114.
⁷ Ibid.