THE CORPORATE THRUST IN AMERICAN POLITICS
Salomon, David & Bernstein, Jules
Since the late '60s American business has consolidated its organizational structure so as to vastly increase its political and economic power. A recent Fortune magazine article, entitled...
...At the push of a Telex button, hundreds of executives are on the phone to their congressmen...
...As the Roundtable stated in its summary of Purpose and Challenge: Fiscal and monetary policies of the federal government have been blamed for demand inflation and, undoubtedly, must accept their share of the blame as well as require constructive action...
...2) CONGLOMERATION: The tendency of companies with large cash reserves to absorb other firms is particularly damaging for two reasons...
...Such coalitions offer two major attractions...
...In concert, they are the overriding force in the American economy...
...Let's he careful . . . but if we haven't done our job by now .. . but we have, we've got the votes and we know it...
...The ultraright has entered the PAC arena in a major way and now controls more than $6.5 million in PAC funds...
...III AT THE CORE of any effort to shape public opinion is the effort to shape social ideology...
...1) RUNAWAY SHOPS: Regional redistribution of capital has not only depleted the industrial base of the northeast but now is a potent political threat in the hands of big business...
...Moreover, an analysis of its board of trustees reveals a 75 percent overlap with Business Roundtable membership...
...Marks of Sharon, Pennsylvania .. . ask Ferguson of General Foods to call Kirby of Westinghouse about Marks...
...As the right-wing journalist Irving Kristol has written: "Corporations are highly vulnerable to criticism of their governing structure since there is no political theory to legitimize it...
...he or she is nearly rightless until 5:00 p.m., Monday through Friday...
...We really think we do...
...Gaydos of Pennsylvania . . . ask Alcoa if they'll do it, John Harper was very enthusiastic about this one...
...Second, increased economic concentration has led to takeovers of tremendous social importance...
...It maintains a resident faculty of more than 20 scholars, and scores of associated scholars throughout the nation...
...Recently, management theorists have recognized the Achilles heel of corporate America...
...First, they permit the business community to share expenses for lobbying efforts...
...We need a broadly based Corporate Reform Movement...
...q 357...
...These include the nation's three largest PACs: Ronald Reagan's Citizens for the Republic ($2.1 million), National Conservative PAC ($2 million), and the Committee for Survival of a Free Congress ($1.5 million...
...The Roundtable, for example, has been pivotal in shaping anti-inflation policy...
...Thus, as an aftermath of this capital relocation, many cities are at the mercy of the large financial institutions...
...This power position makes Roundtable opinion indispensable to government officials and politicians...
...They have survived by playing group against group— consumers versus workers, minority-group members versus whites, and women versus men...
...As the principal purchasers of industrial construction, Roundtable members have the economic muscle to make this goal seem realizable...
...In a recent book, Freedom Inside the Organization: Bringing Civil Liberties to the Workplace, David Ewing comments: "Once a U.S...
...Other corporate giants, such as GE and Westinghouse, continue to move their operations South and Southwest...
...Indeed, the Roundtable is composed largely of CEOs drawn from and limited to the 500 largest companies...
...The Roundtable's concern with inflation has also taken the form of direct "economic organizing...
...The American Enterprise Institute, founded in the early '70s, has become a predominant focus in American policy study...
...Corporate America understands that the prominent scholars of any period shape the ideas of intellectuals, media people, and policy-makers...
...Since its founding in 1972 it has actively sought to destroy the American building trades unions, sounding its battle cry against "the inflationary impact" of wages in the construction industry...
...And while business has always heavily funded the academic world, one recent development demonstrates a new aspect of this trend...
...The 1975 election laws permitted enterprises to solicit management for funds and then to donate up to $5,000 to a political candidate...
...Over 100 organizations lobbied against situs picketing, 400 against consumer protection, and 600 against labor law reform...
...AT&T alone controlled nearly $100 billion in assets, with Exxon and GM second and third at $38.5 billion and $26.7 billion respectively...
...Furthermore, the Policy Committee of the Roundtable is drawn largely from Fortune One Hundred companies...
...Emphasis added.] The organization of the Roundtable and its success demonstrate the reason for our new political climate...
...Thus 80 percent of the town's tax base was eroded overnight and hundreds of families were left without income...
...This board virtually dictates city policy in the name of "fiscal conservation...
...But the part of the total problem here considered is the cost of labor which is again threatening to rise precipitously...
...The poor and the oppressed have been depicted as the cause of society's ills, rather than the victims...
...Bristol-Myers is close to Delaney, let Bill Greif handle that...
...Gore of Tennessee . . . Carrier Corp...
...CORPORATE REFORM: The growth of corporate power has been accompanied by a massive occupation of the political system, and this is undermining the democratic process as we have known it...
...Indeed, the growth of the "corporate-image" business testifies to a growing corporate insecurity, sensing that legitimation cannot keep pace with expansion of power...
...With a massive fund-raising drive to gain $60 million, the AEI is planning to endow "Chairs of Free Enterprise" in prestigious universities across the country...
...Roundtable members dominated Nixon's Wage and Price Board, while Carter sought and secured initial compliance with his guidelines from Roundtable Executive Committee members AT&T and GM (the Executive Committee is the inner sanctum of the Policy Committee...
...Ewing's work dramatizes the total lack of protection for workers who refuse to pollute and spy or who "blow-thewhistle" on illegal practices...
...Yet, the sine qua non of the direct lobbying approach is the Business Roundtable, which Business Week has called "the most powerful lobby in Washington...
...Recently, runaway shops have emerged as a union-busting tactic—e.g., the Northeast textile industry...
...well, Delaney's a character still he was helpful as chairman of the Rules Commitee...
...citizen steps through the plant or office door at 9:00 a.m...
...The SEC's chief enforcement officer, Stanley Sporkin, recently declared: Whatever else these [illegal] payments may indicate about corporations and their managements, one thing is certainly clear: many corporate leaders have failed in their duties as stewards of public corporations...
...In the last case, Business Week (11/ 22 / 78) reported that $5 million was spent by such groups (not to mention the $2 million spent by the National Right to Work Committee...
...In a recent interview he stated: It's very important to look at conglomerate mergers...
...They are (1) runaway shops, and (2) increased concentration through conglomeration...
...They produce studies on government regulations, economic, retirement, labor, health, legal, energy, foreign, and defense policy, and they make legislative analyses...
...Now the erosion of urban tax bases has led to near-bankruptcy in Newark, Cleveland, and New York...
...The result is a net decrease in employment on the one 356 hand and increased concentrations of economic power on the other...
...Today there are more than 1,000 PACs compared to 139 in 1974...
...Its Washington office distributes 100,000 Action bulletins during key legislative battles that, The Nation recently reported, reach an estimated 7 million people...
...In order to exploit this idea, trade associations have established "direct-contact" networks in every state and congressional district...
...II THE EXPANSION of corporate power presents issues of immediate concern in, at least, two other areas...
...The result, modeled on New York's "Big Mac" (Municipal Assistance Corporation), creates what amounts to a city board of trustees...
...The total net worth of corporate, trade association and right-wing PACs is $54 million, in contrast to $13 million for labor...
...A recent Fortune magazine article, entitled "Business is Learning How to Win in Washington," detailing many such changes, opens with a conversation between two lobbyists for the Business Roundtable on how to defeat the Consumer Protection bill: Just a few blocks from the White House, in Room 811 of one of Washington's least memorable office buildings, this conversation is going on between two men, one of whom is holding a list of congressmen in his hand: "Henry Gonzalez of San Antonio . . . should we use Sears...
...First, the use of cash reserves to buy existing capital removes investment funds from circulation...
...Unlike older breeds of corporate lobbyists, congressmen know that these individuals often control corporate policy...
...Labor, government, and consumers have been singled out as the root causes of inflation, and wages, regulation, and social services have been the most visible targets...
...Runaway unit labor costs will make economic stability impossible...
...We have problems with Jake Pickle on this, I'm not sure we can get him . . . OK, let's ask Sears about Gonzalez...
...Inflation has become the new, sophisticated cleaver for promoting such divisions...
...Fortune also reported a growing trend toward political cooperation among business groups to defeat proconsumer and prolabor legislation...
...Delaney of Long Island...
...The announcement of GM's Southern strategy has dramatized that no industry, no matter how heavily unionized, is immune from such threats...
...They've increased steadily since 1972...
...It has organized 55 local "construction user groups" to "encourage" contractor trade associations to go non-union...
...The AEI has more than 500 centers for Public Policy Research around the country...
...While the rights of lower-level employees are being denied, this same rationale is used to shelter top executives from personal responsibility for corporate misconduct...
...Second, such coalitions establish huge umbrella organizations, which can draw on extensive grass-roots networks, skilled lobbyists, and the clout of prominent corporate Chief Executive Officers (CEO...
...Only after strong UAW protest did GM discontinue its policy...
...Whether such a movement emerges may significantly influence the course of American politics...
...By 1976, these may include assets valued at more than $5.5 billion, a 300% increase since 1972...
...Its central focus should be the enactment of a Corporate Reform Act, which subjects corporations to federal regulations similar to those imposed on unions 20 years ago under the Landrum-Griffin Act...
...In fact, the Construction Users' Anti-Inflation Roundtable, one of three groups from which the Roundtable was formed, has been organizing these chapters since 1969...
...and TR W . . . do we really have a chance with Gore...
...Ask Lloyd Hand of TRW...
...Hatfield of Continental could do it but I hate to ask him...
...Senator Kennedy, chairman of the Senate Committee on Anti-Trust and Monopoly, has been an outspoken critic of this trend...
...The Roundtable's influence stems from the concentrated economic power of its Fortune Five Hundred members...
...Despite claims that it "does not itself take positions on policy issues," its faculty is top-heavy with conservative analysts—including Paul McCracken, Hubert Stein, Laurence Silberman, Robert Griffin and Milton Friedman...
...Recently, Lykes Corporation closed down a 4,200-worker steel plant in Campbell, Ohio, giving only a few days notice...
...After the resolution of the Sun Oil case, which clarified how executives may be solicited, the use of PACs by corporations has skyrocketed...
...Experts anticipate huge increases in probusiness PACs...
...While corporate power has had serious external political effects, it has also undermined internal corporate politics...
...The Associated General Contractors organization has 113 "legislative network chapters" around the country, while the Chamber has 2,200 "Congressional 355 Action Committees...
...There now are no legal restrictions on such practices...
...The secret weapon of this new corporate campaign is the corporate Political Action Committee (PAC...
...each with assets well in excess of $1 billion and sales of more than $2.5 billion...
...Perhaps central to the new business strategy is direct lobbying by businessmen and especially CEOs, who have become the new political power brokers...
...In 1977 the Fortune Five Hundred accounted for 55 percent of the American GNP with $1.1 trillion in sales...
...Such corporate giants as AT&T, Exxon, IBM, and General Motors, each could muster huge organizational resources on their own...
...Yet the truth is that the corporations have no legitimate constituency...
...I am tired of hearing that all of this corporate bribery, foreign and domestic, has been done in recognition of the reality of the business value and in the name of furthering corporate business...
...Doors open quickly when such powerful figures come "a-calling" on the hill...
...Economic power is now so concentrated that it can be converted into unprecedented political power and increased economic control...
...The bottom line of this ethic has been an epidemic of misconduct and crime by corporate executives...
...The staggering potential for conglomeration is suggested by the fact that Exxon could use just its cash and liquid assets to acquire, for instance, J. C. Penny, DuPont, Goodyear, and Anheuser Busch...
Vol. 27 • July 1980 • No. 3
