Winter Reading: Zephyr Teachout's "The Forgotten Law of Lobbying"

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Wed, 02/05/2014 - 04:53

Book Reviews

The draft of Fordham Law professor Zephyr Teachout's new essay, "<a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2383317" target="”_blank”">The
Forgotten Law of Lobbying</a>," which will appear in Election Law
Journal, looks at the history of how American courts have viewed
lobbying. This history provides a valuable perspective on lobbying,
making it more clear what it is about lobbyists that attracts bad feelings. 
 
After all, when looked at in terms of First Amendment free speech
and the redress of grievances, as recent court decisions have,
lobbyists should be lionized as elves hard at work to make our
democracy work. But, as Teachout shows, lobbyists were not seen in
terms of the First Amendment until recently. And they were also seen
not as elves, but as people corrupting our democratic system.

Should Personal Access Be for Sale? 
Before the First Amendment became the principal issue discussed with
respect to lobbying, the principal issue was the sale of personal
access and influence. What one is selling is a relationship, an
ongoing reciprocal relationship, in which a government official
gives special access and engages in conduct in return for past
personal acts and the implied promise of future acts. These acts may
or may not include the exchange of money and goods, but they are
unlikely to be quid pro quo exchanges in the simplistic manner in
which the current U.S. Supreme Court conceives of corrupt
relationships. 
 
As I discussed in <a href="http://www.cityethics.org/content/summer-reading-what-money-cant-buy-i&…; target="”_blank”">my

review</a> of Michael Sandel's book <a href="http://books.google.com/books?id=06-54FCTQ9AC" target="”_blank”">What Money Can't Buy: The Moral Limits of
Markets</a> (Farrar Straus, 2012)(not referenced by
Teachout), a market approach comes with certain norms, which may not
be appropriate to government. A market approach places a monetary
value on goods and assumes that the principal way of handling these
goods is exchange. Like one's vote, personal influence on government
officials is something people have believed should not be bought and
sold. And yet it is the degree of personal influence that determines the monetary value of a lobbyist. That is why so many of
them are former officials, and sometimes even current officials and
party leaders. 
 
Sandel explains that a market for government access or favors
degrades government "by treating it as a source of private gain
rather than as an instrument of the public good." This is not just
an observation about the difference between free markets and
government, but the central concept in government ethics. What may
first appear as a goody-goody way of looking at lobbying (personal
influence should not be sold) actually gets to the essence of why
lobbying regulation is more central to government ethics than many
people think. The failure to recognize this is one of the reasons
that most local governments have no lobbying rules in their ethics
codes. 
 
Void As Against Public Policy 
Until the middle of the twentieth century, it was common for courts
to refuse to enforce lobbying contracts on the basis of public
policy (it was principally via contract cases that lobbying came
before the courts). In <a href="http://scholar.google.com/scholar_case?case=18056417869252554153&hl=en&…; target="”_blank”">Tool

Co. v. Norris</a>, 69 U.S. 45, 56 (1864), the U.S. Supreme Court
declared, "all agreements for pecuniary considerations to
control the business operations of the Government, or the regular
administration of justice, or the appointments to
public offices, or the ordinary course of legislation, are void as
against public policy, without reference to the question, whether
improper means are contemplated or used in their execution." 
 
What changed over the last 150 years? Not the growing sanctity of
the First Amendment, not for a long time. The right to petition the
government was personal and not for sale, like the right to vote.
The U.S. Supreme Court in <a href="http://supreme.justia.com/cases/federal/us/103/261/" target="”_blank”">Oscayan
v. Arms Co.</a>, 103 U.S. 261, 273 (1880) declared, "personal
influence ... is not a vendible article in our system of laws and
morals." Teachout says that courts' change in outlook derived from
the growing sanctity of contracts (contracts began to be enforced
presumptively, without a consideration of their civic impact unless
illegal acts were expressly contemplated in the contract), as well
as from the growing professionalization of lobbyists. In addition,
debates about bribery and corruption moved from civil law to
criminal law. I would add that lobbying contracts tended no longer
to have contingency fees, which were a big problem in the nineteenth
century. 
 
A distinction was made between presenting one's views in a public
forum and presenting them privately or secretly. This is one
argument for lobbying disclosure rules, but most disclosure falls
far short of making private influence public in nature. In any
event, as Teachout notes, citing the U.S. Supreme Court's decision
in <a href="http://supreme.justia.com/cases/federal/us/88/441/case.html" target="”_blank”">Trist

v. Child</a>, 88 U.S. 441, 452 (1874), there is "no clear way to
regularly distinguish between secret, inappropriate lobbying and
appropriate paid lobbying." Teachout says that the issue of secrecy
came to replace the issue of personal influence as the "core danger"
of lobbying. But as late as 1941, the U.S. Supreme Court considered
it legitimate to differentiate between lobbying and other business
expenses when it came to tax deductions for businesses, referring to
lobbying as a "family of contracts to which the law has given no
sanction" (<a href="http://supreme.justia.com/cases/federal/us/314/326/" target="”_blank”">Textile
Mills Sec. Corp. v. C.I.R.</a>., 314 U.S. 326, 339 (1941)). 
 
A related distinction used to be made between the use of personal
influence to shape official action, and lawyering behavior that was
considered more legitimate and professional. The most important sign
that personal influence is at play is private communication, in
person or otherwise, with officials or their aides. No one objects
to public testimony to a committee or to the entire legislature, but
communications with an individual committee member or aide is
different. 
 
This distinction was even employed in cases involving lobbyists
hired by local governments to influence state decisions. In Colusa
v. Welch, 122 Cal. 428, 430 (1898), the Colusa County Board of
Supervisors employed counsel "to secure, by means of personal
solicitation and by means of private interview with members of the
legislature of California, and by means of lobbying, the defeat of
the bill." According to Teachout, "the Court said it was permissible
for a client to employ counsel to influence the legislature by open
and public presentation of facts, arguments, and appeals to reason,
but not to secretly approach the members of such a body with a view
to influence their action at a time and in a manner that do not
allow the presentation of opposite views." 
 
Teachout argues that the existence of these cases "makes the claim
that there is an original 'lobbying protection' principle in the
Constitution very difficult to make." 
 
Criminalization of Lobbying for Private Bills 
In 1877, Georgia's draft constitution included a provision
criminalizing lobbying, at least those aspects of lobbying that
involved personal access sold to those with a financial interest in
the matter. The provision's proponents argued that lobbying was
corrupting the state government and costing the state millions of
dollars a year, especially with respect to private bills. Teachout
writes, "The representative body had become a set of auctions for
public resources, to be sold to private individuals." 
 
Local Lobbying 
In fact, most lobbying at the local level deals with the local
equivalent of private bills, that is, contracts, grants, land use
planning and permits, and business regulation. Lobbying at the local
level is mostly about direct financial benefits to individuals and
entities. The U.S. Supreme Court set forth the costs of lobbying
with respect to contracts in <a href="http://supreme.justia.com/cases/federal/us/103/261/" target="”_blank”">Oscayan
v. Arms Co.</a>., 103 US 261, 276 (1880): "[W]here, instead
of placing before the officers of the government the information
which should properly guide their judgments, personal influence is
the means used to secure the sales, and is allowed to prevail, the
public good is lost sight of, unnecessary expenditures are incurred,
and, generally, defective supplies are obtained, producing
inefficiency in the public service." 
 
Consider this local government scenario. A developer hires a former
zoning board member, and current officer of the majority party's
local committee, to lobby the zoning board and council with respect
to land use changes she is seeking. None of the nearby residents can
afford to hiring a lobbyist. They could, of course, join together
and hire a former council member to lobby for them. But in most
jurisdictions, they won't even know about the developer's lobbying
and, even if they do, they are unlikely to think about getting
together to do this, or even know whom to hire. This would mean that personal access may be a principal determinant of the result. 
 
But let's say the neighbors are more sophisticated and join together in a neighborhood
association to hire another lobbyist. Even though there might
now be a level playing field in terms of lobbying, a market in
lobbying has been created which will move the battle over the
development from public meetings to private communications, and skew
even public discussions through the use of sophisticated promotion
and fake grass roots groups. The secret expenditure of money in such
a matter corrupts the system even if there is a level playing field. 
 
How Else Lobbying Corrupts 
Although today, most talk about corruption and rights involves
individual lobbyists, the problems are societal
rather than individual. Personal, reciprocal relationships, and
private meetings, between officials and lobbyists allow undetectable
bribery. After all, since a lobbyist's goal is to influence officials
(or, in pay to play, not to lose current benefits), anything a
lobbyist gives, directly or indirectly, before or after, to benefit
an official is intended to influence or reward the official for
past, present, or future acts. More goes on in lobbying than
relationships, but it is the relationships that count the most. In
ongoing reciprocal relationships, immediate quid pro quo is
meaningless and, therefore, it is hard to tell the difference
between lobbying and bribery. Whether or not any particular lobbyist
is doing anything criminal or unethical, lobbying is a powerful
enabler of systemic corruption. 
 
But it isn't just our political system and government officials that
are corrupted by lobbying. Lobbyists too are corrupted. This was a
concern of the U.S. Supreme Court in its decision in <a href="http://supreme.justia.com/cases/federal/us/57/314/case.html" target="”_blank”">Marshall

v. Baltimore Ohio Railroad Co.</a>, 57 U.S. 314 (1853). The court
found that lobbyists are “demoralized" (defined, in this context, by
Teachout as "rid of morals") by the lure of profit: "He is
soon brought to believe that any means which will produce so
beneficial a result to himself are ‘proper means....'" The court
referred to lobbyists as "speculators in legislation." 
 
Lobbyists are also corrupted in their role as citizens. According to
Teachout, a lobbyist has "a distinct relationship to what he
himself might believe. He is selling his own citizenship, or one of
the obligations of his own citizenship, for a fee. In this sense,
agreeing to work, for pay, on political issues is more akin to
selling the personal right to vote than selling legal skills." This
is not only true with respect to political issues. It can also be
true with respect to the means by which a client chooses to seek
financial benefits from a local government. See <a href="http://www.cityethics.org/content/interesting-city-lobbyistcounty-elect…; target="”_blank”">a
recent blog post</a> where I quote this part of Teachout's essay
with respect to a particular matter involving a lobbyist's conflict. 
 
Lobbyist Registration 
The first lobbying registration law was passed in Massachusetts in
1890. Soon other states followed. Registration started the relative
legitimization of lobbying, which included recasting contracts in
terms of professional services rather than personal influence. 
 
But it was the 1946 federal law requiring lobbyist disclosure that
led to Supreme Court decisions that, while avoiding First Amendment
issues, implied that lobbyists had a right to lobby. See <a href="http://supreme.justia.com/cases/federal/us/345/41/" target="”_blank”">United
States v. Rumely</a>, 345 U.S. 41 (1953), and <a href="http://supreme.justia.com/cases/federal/us/347/612/case.html" target="”_blank”">United

States v. Harriss</a>, 347 US 612 (1954). 
 
Recent vs. Old Lobbying Cases 
Although it is now assumed by courts that there is First Amendment
protection of lobbying (without any serious analysis of this), some
restrictions on lobbying, beyond registration, have been upheld. But
the circuits differ in their views. I will deal with the recent
cases soon in <a href="http://www.cityethics.org/content/winter-reading-rick-hasens-lobbying-r…; target="”_blank”">a post about an essay by Rick Hasen</a>. 
 
Teachout believes that the old cases on lobbying allow for a
separation of paid lobbying cases from the usual political speech
analysis. For example, she believes that some of the logic of
campaign finance cases does not apply to lobbying cases. Most
interesting is her recognition that the Citizens United decision was
based on the "right to hear," to maximize political information in
the public sphere, not on the maximization of political information
in government. 
 
"The sale of personal influence is not part of an open market of any
kind, but part of a closed market that is only available to office
holders by virtue of their official role. Members of government have
a different relationship to knowledge in the first place, and it
would have to be grounded in a right to receive information in a
personal, private forum from paid influencers, because they
undoubtedly have a right to receive information from any unpaid
influencers, and all forms of information that are not accompanied
by a lobbyist." 
 
Nor, Teachout continues, is a courtroom analogy appropriate, because
there is no guarantee that anyone will show up to present the case
of "the other side" of the issue. One reason is that no one else
may know what is going on, or interest in the matter, from "the other side" is too diffuse (e.g., all renters). 
 
Also, she believes that the right to seek redress of grievances does
not include every form this takes, nor every form of delivery. The
delivery of a petition, the provision of testimony before a public
body, these are clearly included. But there is no right to a
personal audience with a representative, for example, and similarly,
there should be no right to pay someone to use her personal
influence through personal meetings or personal communications. I
agree. To the extent this is allowed, it may be regulated in a
reasonable manner. 
 
Legislative Experiments 
Teachout notes that, in the old cases, the judges refused to enforce
contracts they found to be possibly corrupt. In the new cases, the
judges have refused to allow laws that regulate lobbyists. She
concludes that the best thing would be for judges to stop refusing,
one way or the other, and allow different jurisdictions to
experiment with different lobbying regulations (or none at all)
without the courts' interference. 
 
Robert Wechsler 
Director of Research-Retired, City Ethics 
 
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Winter Reading: Zephyr Teachout's "The Forgotten Law of Lobbying"

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