Lerbinger O. Corporate Public Affairs. Interacting with Interest Groups, Media, and Government

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Governmental Strategies

Governmentalstrategiesbeginwhenanissueatthepublicinvolvement

stage begins to interest lawmakers and regulators. If they place the issue

on their agenda, the issue advances to the legislative stage. Here public af-

fairs professionals seek to influence key persons in the legislative and ex-

ecutive branches of government through direct contact and indirectly

through the mobilization of interest groups and citizens to put pressure

on senators, members of Congress, and various government officials. The

goal usually is to discourage unwanted government action or, if govern-

ment does take action, to obtain as favorable an outcome as possible.

When a corporation is interested in the enactment of certain legislation,

however, it will use legislative strategies to promote its own views.

Most laws are embellished by regulations that are promulgated by

various government agencies and many of them are later challenged in

court. For this reason, the regulation and litigation stage has been added

to the issue life cycle. Chapters 9 and 10 on lobbying encompass both

legislatures and regulatory agencies; chapter 12 discusses the growing

subject of litigation communication.

FORCES IN THE GOVERNMENT ARENA

Legislative communication and litigation communication are of vital

importance because they address government, a major force in a corpo

ration’s sociopolitical environment. They also recognize the previously

discussed influence of interest groups, as well as the fundamental role of

public opinion.

Increasingly, legislative communication resembles political campaign

ing, as corporations realize that one-on-one contact with members of

Congress is inadequate. Lawmakers must be assured their actions will

223

not alienate their constituents. Therefore, corporations use public opin

ion polls to measure public acceptance, form coalitions with other inter

est groups, and attempt to gain media support for their position.

Government

Businesses operate within the parameters of what government allows.

Government regulations can define what products or services are legal,

as the banning of alcoholic beverages during the prohibition era demon

strates. Regulations can specify the distribution channels through

which a product may be sold, as with the distribution of prescription

drugs through licensed pharmacists. Regulations can also restrict how a

product may be advertised, such as banning cigarette ads on television.

Not surprisingly, one of the favorite charts in business-government

books shows the precipitous rise in the number of regulations during

the 1960s and 1970s. Murray L. Weidenbaum’s book, Business, Govern-

ment, and the Public, shows a mildly rising curve in the number of fed-

eral consumer protection laws passed between 1890 and 1972. The

curve rises sharply, however, in the mid-1960s and the author notes

that legislation shows little sign of diminishing.

Furthermore, some of

the newer regulations are across the board and apply to all industries

(e.g., regulations on the environment, affirmative action, and occupa-

tional health and safety). Traditional regulations were industry specific

and therefore relatively more acceptable because regulators might actu-

ally understand how a regulation would impact a particular industry.

Although corporations emphasize the onerous aspects of govern-

ment regulations in their public statements, many are equally inter-

ested in these other functions of government:

• Promoter of business (e.g., tax credits, tariffs, subsidies).

• Guarantor of business (e.g., the Chrysler & Lockheed “bailouts”).

• Buyers of goods and services from the private sector.

• Manager of the economy through monetary and fiscal policy.

• Owner of enterprises (e.g., the Tennessee Valley Authority).

• Planner of economic growth and prosperity.

Some of these functions hold the promise of government contracts,

subsidies, and loan guarantees. With a worldwide movement toward

marketplace economies, public ownership of enterprises can be con

verted into business potential through the process of outsourcing and

privatization. Besides maintaining a stable and growing economy, busi

ness and the public expect government to strengthen the country’s in

frastructure, which now focuses not only on better roads, but the

building of an information infrastructure. The subject of what “public

goods” the government should provide will always remain highly

controversial.

224 I PART IV

Interest Groups

Interest groups exert enormous power in legislative and regulatory de

cision making because all of them are potential lobbyists. (Their role in

originating and disseminating issues has already been discussed in the

introduction to Part II.) Jonathan Rauch, national correspondent for the

National Journal, believes the reason for the inability of Congress and

the White House to achieve their sometimes lofty goals is that real con

trol lies with these pivotal groups.

As economist Mancur Olson wrote, the more parochial a lobby is, the

more likely it is to form and thrive. Rauch further explains, “Lobbies ex

ist to secure some favorable measures for themselves. Each group cares

much more about keeping its little piece of the pie than anyone else cares

about taking it away.”

These lobbies can be beaten only by mobilizing

broad public opinion against them, but that happens only in response to

a crisis or when a bipartisan elite spends months or years seeking to do

so. Sometimes, however, a corporation can form a coalition with some

interest groups, recognizing that some normally opposed to business

might join it in support of specific issues.

Public Opinion

Public opinion comprises what is on the minds of the general public, and

a variety of writers have recognized its importance. Public relations

counselor Edward L. Bernays wrote in his classic, Crystallizing Public

Opinion:

Perhaps the most significant social, political and industrial fact about the

present century is the increased attention that is paid to public opinion, not

only by individuals, groups or movements that are dependent on public

support for their success, but also by men and organizations which until

very recently stood aloof from the general public and were able to say, “The

public be damned.”

Public opinion surveys serve several purposes related to public af

fairs: They are a useful way of monitoring what issues Americans are

concerned about, what their stand is on specific issues, and what their

mood is; for example, whether the country is on the right track. Many

pertinent survey findings are reported in subsequent chapters.

Leo Bogart, former vice president of marketing planning and research

at the Bureau of Advertising, said, in a Harvard Business Review article, the

main purpose of opinion research is to “inform management on the gen

eral climate of opinion, to point out public relations issues with which the

company may be faced.”

And Robert O. Carlson, a former opinion re

searcher for the then Standard Oil Company of New Jersey, said large cor

porations wanted to “evaluate their place in the public’s mind.”

GOVERNMENTAL STRATEGIES I 225

Illustrating Carlson’s concern about how big business is viewed by

Americans, a 2000 Gallup poll found 65% of the American public thinks

big government is the “biggest threat to the country in the future”; in

contrast only 22% named big business and 7% named big labor as

threats.

The American people appear not to have a lot of confidence in

government. A Gallup poll in 2000 found that only 7% said they had a

great deal of confidence and another 17% said they had quite a lot of

confidence in Congress. Confidence in the presidency was somewhat

higher, with 15% having a great deal of confidence and 27% quite a lot of

confidence.

Surveys also anticipate trends. The American Management Associa

tion’s survey, “Business and Society: 1976–2000”—which was con

ducted during the early phase of growth of public affairs—found 68% of

the respondents agreed with the statement: “We have reason to be con

cerned whether the corporation as we know it … will survive into the

next century.… The corporation itself must change, consciously evolv-

ing into an institution adapted to the new environment.” The AMA

report concluded: “There is a fundamental change coming in the rela-

tionships between American business and the society it serves.”

ACTIVITIES OF LEGISLATIVE COMMUNICATION

The first two chapters on governmental communication introduce lob-

bying techniques to the arsenal of communication tools used in the life

cycle of an issue. Lobbying can be direct or indirect—the latter is now

usually called grassroots lobbying. Direct lobbying, discussed in chapter

9, refers to communication with legislators or administrative officials

who affect a pending vote or decision on public policy. Hedrick Smith

calls this “old breed” or “retail” lobbying, characterized by one-on-one

contact.

In contrast, Smith characterizes grassroots lobbying, discussed in

chapter 10, as the “new breed” or “wholesale” lobbying. Back-home

pressure is built up by activating natural constituencies and state-level

political networks. The idea is to build on a politician’s motivation to get

reelected by creating public opinion favorable to one’s interests and mo

tivating the “folks back home” to communicate with their legislators

and other government officials.

Both types of lobbying can be reinforced with what political scientist

Edwin Epstein calls electoral activities—activities that “center around

the selection and support of candidates or of issues that come before the

public.”

The aim of these electoral activities, discussed in chapter 11, is

to influence public voting behavior so political players favorable to one’s

position are elected.

Finally, strategies for dealing with the judicial branch of government

must be considered. The life cycle of an issue no longer ends with legisla

tion but extends to a fourth stage: litigation. After laws are passed, rele

226 I PART IV

vant government agencies promulgate and enforce regulations.

Chapter 12 reviews the increasingly important subject of litigation

communication.

The first three chapters in Part IV draw heavily on interpersonal com

munication techniques, discussed in Part II in dealing with opinion

leader communications. Because public support is required in most situ

ations, techniques of strategic media relations and advocacy advertising

discussed in Part III are also applied, usually as part of grassroots

lobbying.

ENDNOTES

1. Murray L. Weidenbaum, Business, Government, and the Public (Englewood

Cliffs, NJ: Prentice-Hall, 1977), pp. 33–35.

2. See Rogene A. Buchholz, Business Environment and Public Policy: Implications

for Management, 5th edition (Englewood Cliffs, NJ: Prentice-Hall, 1995), pp.

142–157.

3. Jonathan Rauch, “Demosclerosis Returns,” Wall Street Journal, April 14,

1998, p. A22.

4. Ibid.

5. Edward L. Bernays, Crystallizing Public Opinion (New York: Liveright, 1923),

p. 34.

6. Leo Bogart, “Use of Opinion Research,” Harvard Business Review, Vol. 29, No.

2, 1951, p. 121.

7. Robert O. Carlson, “The Use of Public Relations Research by Large Corpora-

tions,” Public Opinion Quarterly, Vol. 21, No. 3, Fall 1957, p. 341.

8. Roper Center at University of Connecticut, Public Opinion Online, October 25,

2000, Accession Number 0374111, Question 015.

9. Guido H. Stempel, III, Media and Politics in America: A Reference Handbook

(Santa Barbara, Calif.: ABC-Clio, 2003), p. 47.

10. John L. Paluszek, Business & Society 1976–2000 (New York: AMACOM,

1976), p. 1.

11. Hedrick Smith, The Power Game: How Washington Works (New York:

Ballantine, 1988), p. 230.

12. Edwin M. Epstein, The Corporation in American Politics (Englewood Cliffs, NJ:

Prentice-Hall, 1969), p. 67.

13. Raymond P. Ewing recognizes this stage in “Issues Management: Managing

Trends Through the Issues Life Cycle,” in The Handbook of Strategic Public Re

lations & Integrated Communications, ed. Carke L. Caywood (New York:

McGraw-Hill, 1997), p. 183.

GOVERNMENTAL STRATEGIES I 227

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Chapter 9

Direct Lobbying

The right to lobby is guaranteed by the First Amendment of the Consti-

tution, which states, “Congress shall make no law … abridging the free-

dom of speech or of the press; or the right of the people peaceably to

assemble and to petition the government for redress of grievances.” Peo-

ple can also make demands and advocate specific public policy. One-

on-one contact with lawmakers or governmental officials is called di-

rect lobbying and today is routinely conducted by paid professionals

who represent corporations, trade associations, and other interest

groups. Although lobbyists come in all political persuasions, many are

lobbyists for hire by those who can afford them.

Millions of dollars in lobbying fees and political contributions were

spent by industry and opposing groups in the summer of 2003 to influ-

ence the FCC’s ruling to relax limits on media ownership. The Center for

Responsive Politics reported that media companies spent more than $82

million on federal lobbying efforts between 1999 and 2002 and another

$26 million on political contributions. The biggest spenders were the

most famous names in broadcasting: AOL Time Warner spent $15.77

million on lobbying and $6.2 million in political contributions; Disney

spent $16 million on lobbying and $2.8 million on contributions; the

Hearst Corporation spent $394,000 on lobbying and contributed

$180,000 to candidates and PACs. Lobbying intensified in the months

leading up to the vote and Clear Channel, owner of more than 1,200 ra

dio stations and 36 television stations, which barely had a presence in

Washington 2 years earlier, hired four additional lobbying firms and set

up its own Washington office.

The use of professionals has evolved because of a highly specialized

society that requires representation by interest groups as well as indi

vidual citizens. As the eminent political scientist V. O. Key, Jr. stated,

“The study of politics must rest on an analysis of the objectives and

229

composition of the interest groups within a society.”

Whether the in

fluence of pressure groups has gone too far, however, is subject to much

debate. Many believe we now live in an era of single interest groups that

neglect the good of society as a whole.

THE LOBBYING BUSINESS

By all measures, the lobbying industry has been growing rapidly and is

commensurate with the growing role of government in business affairs.

Nearly $2 billion was spent for Washington lobbying in 2003. Health care

issues accounted for the single biggest share, about $297 million, partly

because Congress was considering Medicare prescription drug coverage.

Finance and insurance lobbying was next, with at least $259 million spent;

and lobbying on communications and technology issues third, with about

$248 million.

The New York Times reported, “Lobbying has turned into a

well-ordered global business, with the influence game taking on a decid-

edly corporate look.”

As of March 2004, the number of registered lobby-

ists was about 25,000, up from the 14,946 registered on September 30,

1997.

In all there were more than 38 registered lobbyists and $2.7 million

in lobbying expenditures for every member of Congress.

Official figures include only those who register under the require-

ments of the law. Under the old Federal Regulation of Lobbying Act of

1946, anyone who solicited or accepted contributions for lobbying pur-

poses had to keep accounts, present receipts and statements to the Clerk

of the U.S. House of Representatives, and register with the Clerk of the

House and the Secretary of the Senate. The new Lobbying Disclosure Act

of 1995 law—and the Lobbying Disclosure Technical Amendments Act

of 1997—provides more information about interest groups’ activities

and more accuracy in reporting their spending.

Grassroots lobbying

groups, however, are not required to register.

Unofficially, the number

of lobbyists is much higher than official figures because many fall out

side the legal requirements or simply do not register. Ken Silverstein, in a

blistering book on Beltway lobbying, Washington on $10 Million a Day:

How Lobbyists Plunder the Nation, places the actual figure between

40,000 and 80,000, roughly 75 for each member of Congress, even at

the lower figure.

Washington correspondents Michael Kilian and Arnold Sawislak said

that lobbying was the fourth largest DC industry—after government,

printing, and tourism.

Because they play a large legislative role, lobbyists

are often called the third House of Congress. They are also known as the

fifthbranchofgovernment(afterthemedia,whichservesasthefourth).

Who Hires Lobbyists?

Industries most affected by government regulation, especially by im

pending legislation, are most likely to be active in lobbying. In 2000 the

top five spenders by industry group were:

230 I CHAPTER 9

1. Finance, insurance, and real estate, $201 million.

2. Health, $209 million.

3. Communications and electronics, $201 million.

4. Energy and natural resources, $159 million.

5. Transportation, $138 million.

Finance, insurance, and real estate lead (also the perennial leader in

campaign contributions), because over the last 20 years lawmakers

have debated dozens of proposals that would allow banks, securities

firms, and insurers to enter each other’s line of business. For example,

banks, which were the leading proponents of the legislation, would be

permitted to offer checking accounts, insurance, and stocks under one

roof. Banking deregulation—named bank modernization to seem more

appealing—finally succeeded in 1999, thanks to a bipartisan push for

banking overhaul measures.

The communications and electronics industry group was the third

biggest spender. The motivations of this industry are clearly revealed by

Microsoft’s increasing presence on the lobbying scene (see Box 9.1) and

increased campaign contributions. Its total soft money, PAC and indi-

vidual contributions to federal parties and candidates, jumped between

1993 and 2000, as shown here:

• 1993–94, $109,134.

• 1995–96, $256,634.

• 1997–98, $1,407,271.

• 1993–87 (total), $1,773,039.

• 1999–00, $2,226,387.

Who Are the Lobbyists?

Most lobbyists are ex-Hill people, ex-government workers, lawyers,

and public relations practitioners. For example, in 2003 General Electric,

Comcast, Citigroup, and many other Fortune 500 companies hired Bush

administration officials and former Republican congressional advisers

for top lobbying posts. A Republican National Committee official told a

group of Republican lobbyists that 33 of 36 top-level Washington posi

tions he was monitoring went to Republicans.

The Center for Responsive Politics identified 138 former members of

Congress who turned up as registered lobbyists during 1998. One of

them, former representative Bill Paxon (R-N.Y.), who headed the Na

tional Republican Congressional Committee, joined the law firm Akin,

Gump, Strauss, Hauer & Feld for $1 million a year.

Lobbyists are em

ployed in the Washington offices of corporations, trade associations,

national business groups, law firms, public relations firms, political

consulting firms, research institutes, and think tanks. However, a hand

ful of huge firms dominate Washington’s lobbying business. These

DIRECT LOBBYING I 231