Dollarocracy (16 page)

           
enlighten public thinking . . . one should not postpone more direct political action, while awaiting the gradual change in public opinion to be effected through education and information. Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that such power must be assidously [
sic
] cultivated; and that when necessary, it must be used aggressively and with determination—without embarrassment and without the reluctance which has been so characteristic of American business.

“As unwelcome as it may be to the Chamber,” Powell concluded, “it should consider assuming a broader and more vigorous role in the political arena.”
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Powell was not the first conservative to make a case for development of concerted, long-term strategies for challenging liberal elites. Barry Goldwater had run for the presidency in 1964 as a sworn foe of “the eastern liberal establishment,”
and conservative writer M. Stanton Evans published
The Liberal Establishment: Who Runs America . . . and How
in 1965.
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But Powell, with his legal acumen and combination of corporate and political connections, was able to convince CEOs who dismissed right-wing ideologues.
²⁸
A Democrat who would be appointed to the High Court by a Republican, he did not speak to the corporate class as a partisan. He spoke as a member of the inner circle. And he was convincing—so convincing that, in the words of political scientists, he inspired the most powerful economic players in the nation to unleash “a domestic version of Shock and Awe.”
²⁹

The chamber's members “heard” Powell in a way that it had not heard others preaching that corporations needed to step up when it came to producing propaganda and political outcomes. Barely noted as a political player in 1970, and still inclined at that time toward a bipartisanship that emphasized connections to both major parties, the U.S. Chamber of Commerce would transform itself into a political machine over the next forty years. In the late 1960s, the Chamber of Commerce had named Ralph Nader to its list of “outstanding young men.”
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It convened a series of local meetings around the nation between businesses and consumers to address areas of consumer discontent.
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When a team of Nader's activists produced a widely publicized report in January 1969 critical of how feebly the Federal Trade Commission operated and how subservient it was to business, the chamber and much of the business community responded with “mild admissions of culpability and the need for responsible business practices.”
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Those days and that approach were quickly put in the rearview mirror and forgotten. The time for peaceful negotiation was over; it was war.

Lewis Powell was a learned man who, after receiving his law degree from Washington and Lee University, went on to obtain his master's degree from Harvard Law School. It is doubtful that he was familiar with Edward Ryan's 1873 warning about “the enterprises of the country . . . aggregating vast corporate combinations of unexampled capital, boldly marching, not for economic conquest only, but for political power.”
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But Powell's 1971 memo outlined a plan for exactly the march Ryan anticipated. Indeed, any definition of “irony” should have as its example the fact that precisely a century after Ryan spoke, the U.S. Chamber of Commerce was putting the finishing touches on a program of political and educational engagement designed to realize the
full promise of the Powell memo. The chamber would triple its budget over the next six years as an infrastructure of procorporate think tanks and advocacy groups took shape.
³⁴

Frequently cited as “the inspiration” for the remaking of the foundations of old right-wing families—the Coors, the Olins, the Bradleys, the Scaifes, the Kochs—as new-right political powerhouses, the Powell memo made the case for the recommitment of resources that would usher into existence in 1973 the Heritage Foundation and the American Legislative Exchange Council, which framed the conservative agenda in the form of proposed bills and resolutions at the national and state levels.
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Then came the ramping up of Accuracy in Media, after Richard Mellon Scaife, an heir to the banking fortune associated with his middle name, began to pour money into the group in 1977. The Cato Institute formed in 1977. The Manhattan Institute came into being in 1978. In 1982, the Federalist Society began to take shape as a force for countering a perceived “liberal bias” in the nation's law schools; it would eventually become one of the most potent forces in defining the nation's judiciary, encouraging the rise of members such as Chief Justice John Roberts and Justices Antonin Scalia and Samuel Alito.
³⁶

There was more: the Koch-brothers-funded Citizens for a Sound Economy (which would eventually evolve into the defining force behind the supposedly grassroots Tea Party movement, Americans for Prosperity) swung into operation in 1984. In 1985, Accuracy in Academia, a group that channeled Powell's proposal not just for “educational programs” but also for a relentless assault on academics who did not follow the corporate line, was created. Two years later, the American Tort Reform Association stepped into the fray and began to establish a nationwide network of state-based liability “reform” coalitions that have succeeded in dramatically undermining the constitutionally protected right to petition for the redress of grievances in civil courts. And in 1987, there arrived the Media Research Center, which channeled conservative Bradley, Olin, and Scaife foundation money into the Powell-inspired project of proving “through sound scientific research—that liberal bias in the media does exist and undermines traditional American values” and moving to “neutralize its impact on the American political scene.”
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But the whole point of all these exercises was to reshape the political system so that it would be far less likely to generate policies contrary to the interests of large corporations and wealthy investors. Following the Powell memo, corporate political action committee spending on congressional races increased “nearly fivefold” during the late 1970s and early 1980s.
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But even more importantly, Powell argued that corporate America needed to forcefully enter and dominate the political process—a crucial idea the chamber and its members embraced. In 1971, according to David Vogel, only 175 U.S. corporations had registered lobbyists in Washington, DC. A decade later, there were 2,500. By the mid-1970s, most of the industrial trade associations not already located in Washington had moved there. The key to trade association hires became knowing politics rather than knowing the industry the group represented.
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In the late 1960s, there were about 100 corporate public affairs offices in Washington; by 1978, there were more than 500.
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A whole industry was born of lobbying shops, primarily serving corporate clients, to such an extent that the term K Street came to symbolize an industry in a manner similar to Wall Street or Madison Avenue. Suddenly, Washington and especially Capitol Hill were crawling with tens of thousands of very-well-paid representatives of industry trade associations and specific corporations or the lobbying firms that served them.

Where did corporate America find talented people who could greatly influence members of Congress and maneuver effectively around regulatory agencies? Former government employees—regulatory agency personnel and congressional aides and the like—provided a tried-and-true supply of labor, and there was a longstanding tradition of the “revolving door” already in place. But for the big job of dominating the commanding heights of Congress, corporate America needed middle-of-the-order home-run hitters. Where better to find people who could influence Congress than Congress itself?
In the early 1970s, 3 percent of retiring members became lobbyists; that quickly changed, and by 2012 the figure had grown to the 50 percent range
.
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The annual incomes for these postcongressional jobs generally start at mid six figures and are not infrequently seven figures. The days of stepping down from Congress and taking a college teaching job or just simply retiring were over. “The dirty secret of American politics,” the Roosevelt Institute's Matt Stoller noted, “is that, for most politicians, getting elected is just not that important—what matters is post-election employment.”
⁴²

“Corporate headhunters are sizing up the K Street prospects of the retiring members of the 112th Congress,”
The Hill
reported in 2012, “and they like what they see.” “We are doing a mock draft with some of our clients,” Ivan Adler, a principal at K Street's McCormick Group, said. “As a retiring class goes, this is a valuable class. A lot of these members are marketable and will be welcomed by K Street with open arms.” The going rate for former senators in 2012 was between $800,000 and $1.5 million in annual salary; for ex-House members the range was between $300,000 and $600,000.
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Of course, to be eligible for this lucrative life, members have to prove while in Congress that they are willing to advance industry's agenda. This provides powerful implicit incentives for them to embrace specific priorities and to temper their criticisms of specific interests; if members play their cards right, they can cash in serious chips in their next job. This calculus applies, we regret to say, across lines of partisanship and ideology. Sure, someone as principled as Dennis Kucinich on the antiwar left or Ron Paul on the libertarian right might be immune to the pressures. But liberal partisans who imagine that only conservative corporatists cash in are fooling themselves. When Connecticut liberal Democrat Chris Dodd left the Senate in 2011 after five terms, he was recruited by ten firms before he finally accepted a $1.5 million annual salary to run the motion picture industry lobby in Washington.
⁴⁴

In the process of building up their lobbying armada, corporations and trade associations changed the way members of Congress regarded their own careers and injected the concerns, needs, and dictates of big business into the bone marrow of government, regardless of the party in power, as never before. Politicians did not always need to be pressured to vote against the interests of their constituents; they could simply be encouraged to watch out for themselves—and for the lucrative payouts available at the end of legislative careers. If the whole point of Powell's memo had been to get corporations focused on the work of influencing the people who make up the government, the K Street hiring hall became a key part of the process. Barely a year after the soon-to-be jurist had argued that “business must learn the lesson . . . that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination,” the National Association of Manufacturers responded as directed with an announcement that it was decamping from Manhattan to
Washington: “We have been in New York since before the turn of the century, because we regarded this city as the center of business and industry. But the thing that affects business most today is government. The interrelationship of business with business is no longer so important as the interrelationship of business with government. In the last several years, that has become very apparent to us.”
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This “K Street” carrot has served Dollarocracy well for decades, and in the new post–
Citizens United
era it has taken on a new dimension. Republican governors like Scott Walker in Wisconsin, Rick Snyder in Michigan, and Rick Scott in Florida no longer need to concern themselves with the popularity of a particular policy—say, eliminating collective bargaining rights for workers—as they toss out decades of legal precedent and practice to create a brave new world. They have no incentive to compromise with Democrats or the few remaining “moderates” in their own party. They know that mega–campaign donors—Sheldon Adelson, the Koch brothers, and countless others—will provide unlimited funds for the next election if they place the demands of those donors ahead of the interests of their constituents. Moreover, even if they might lose reelection, politicians of modest means, like Walker, are well aware that they are the new “made men” of Dollarocracy. They can rest assured that they will always be taken care with high six- and seven-figure incomes in the heavily financed world of right-wing think tanks, institutes, and lobbying groups for the rest of their working lives. Serving Big Money never stops paying off big, as Senator Jim DeMint of South Carolina learned when he leapt in late 2012 from the Capitol, where he earned $175,000 a year, to the other side of Capitol Hill, where he would earn more than $1 million annually as the new head of the Heritage Foundation.
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Looking backward, we can easily recognize the outlines of Powell's project and its trajectory. But that was not the case when it mattered. While Powell was busy circulating his memorandum with CEOs and wealthy political donors even as his Supreme Court confirmation hearing approached, he did not bother to share the document with members of the Senate Judiciary Committee or the full Senate. A year after Powell's confirmation, his memorandum was leaked to syndicated columnist Jack Anderson, who wrote a series of articles in which he suggested that the justice “might use his position on the Supreme Court to put his ideas into practice . . . in behalf of business interests.”
⁴⁷

Anderson's suggestion was hardly unreasonable. In the document that Powell had neglected to share with senators was a section that argued: