Wednesday, April 4, 2007
WHAT'S NEW IN PUBLIC AFFAIRS
Three months after the Democrats took control of Congress and promised to run the most ethical chambers in history, confusion abounds about the hodgepodge of lobbying and gift laws, there's talk of requiring disclosure of grassroots activities and debate about what constitutes an earmark. In the meantime, the pressure to raise campaign funds has intensified with Congressional and presidential fundraising at a fever pitch and significant decreases in contributions to the major GOP committees and increases in corporate PAC contributions to Democrats. Looking to the classroom, what can we expect of our future business leaders? One-third of master of business administration programs now require classes related to ethics, sustainability and corporate social responsibility and a new survey reports that just 35 percent of college graduates see the benefit of a global economy. These stories and more in this edition of the Public Affairs News Monitor.
HEADLINES AT A GLANCE
"Shifting Ground"
"Can Business Ethics Be Taught?"
"Turf Battle"
"Members Find Earmark Reform Necessary, But Messy Process"
"Republicans Fear 2008 Meltdown"
"Lawmakers Join Hunt to Bag Big Donors Early"
"Undercover Campaigning on the Web"
"As Globalization's Benefits Grow, So Do Its Skeptics"
"Exec Pay Anger Spurs Disclosure Rules, Shareholder Input, but Not Salary Caps"
"Labor's New Muscle"
UPCOMING CONFERENCES
Association PAC Roundtable
April 12, 2007 - Washington, DC
Limited space available. Registrations accepted on a first come, first served basis.
This hands-on idea-sharing forum offers you a unique opportunity to exchange successful solicitation strategies with fellow PAC professionals, discuss effective communications, identify potential pitfalls, benchmark your PAC's performance and address strategies for success.
2007 Annual Membership Dinner, Spring Board Meeting, & National Public Affairs Issues Forum
April 23-24, 2007 - Washington, DC
Two Board meetings are held annually - one in Washington, D.C., each April and one in the western United States each October. The April meeting is a one-day forum that gives senior executives the opportunity to hear nationally renowned speakers address emerging issues. Online registration is not available for this meeting. Please follow the link below for detailed information.
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INFORMATION, INC.
Public Affairs News Monitor may be reproduced in hard copy form or electronically for internal circulation to Public Affairs Council member companies and associations.
"Shifting Ground"
National Journal (03/31/07) Vol. 39, No. 13, P. 22; Carney, Eliza Newlin; Vaida, Bara
When Democrats assumed control of Congress earlier this year, they promised to clean up Washington by running the most ethical Congress in history. But three months later, the pressure on lobbyists to raise campaign money for lawmakers may have actually intensified. Meanwhile, lobbyists face a hodgepodge of confusing rules, some approved and some pending. Much of the confusion stems from the Senate's decision to incorporate new ethics rules for its chamber into a broader bill that also aims to rein in lobbyists by amending the Lobbying Disclosure Act. The Senate bill has been stalled in the House, which in January passed legislation making it illegal for lawmakers to accept gifts and meals from lobbyists. The potential rule changes come amid major shifts within the lobbying industry itself. Grassroots lobbying has mushroomed over the past decade and is becoming an increasingly sophisticated and central aspect of the influence game. Some lobbyists are critical of lawmakers' approach, noting that the rules do nothing to stop lawmakers from aggressively pursuing private campaign contributions. As a result, lobbyists are receiving more fundraiser invitations and finding that these are the only events at which they can speak to lawmakers about issues of interest. "The ethics rules, which now ban most meals and gifts to members and staff, clearly will have the effect of driving social exchanges into fundraising," says Penelope Farthing, a partner at Patton Boggs. Former Rep. Tom Downey (D-N.Y.), now chairman of the Downey McGrath Group lobbying firm, does not foresee any real reform until lawmakers address campaign contributions, calling campaign money "the centerpiece of what allows the culture of corruption to exist." (www.nationaljournal.com)
"Can Business Ethics Be Taught?"
Christian Science Monitor (03/21/07) P. 13; MacDonald, G. Jeffrey
Business schools are increasingly emphasizing ethics and social responsibility in their curriculums, eager to graduate young executives who have a firm grounding in principled behavior and are thus unlikely to participate in another scandal such as the Enron or WorldCom collapses. A survey from the Journal of Business Ethics indicates that one-third of master of business administration programs now require classes related to ethics, sustainability, and corporate social responsibility, and that stand-alone ethics courses have increased by 500 percent since 1988. However, despite the surge in ethics-based curriculum, some consultants are concerned that business schools are not the most effective environments in which to instill ethical values. Although an academic approach to ethics can be a good start to a career of ethical behavior, executives need to see good behavior modeled regularly in a business environment if they are to truly internalize it. In addition, most consultants say that a business culture that emphasizes ethical standards is the only way to ensure that executive behavior on the job matches what academics consider to be ethically appropriate. On-the-job ethical training can be one method of highlighting the importance of ethics to a company's culture.(www.csmonitor.com)
"Turf Battle"
National Journal (03/31/07) Vol. 39, No. 13, P. 34; Caruso, Lisa
Underlying the debate over lobbying reform legislation is the issue of whether activities intended to motivate grassroots political involvement is the same as lobbying. Interest groups of every political persuasion say they depend on their grassroots networks to influence decisions in Washington. The ethics reform bill to be introduced by House Democrats as early as mid-April is expected to include a provision requiring disclosures of grassroots campaign expenditures, but it remains to be seen which groups would be forced to comply. A coalition comprising the Campaign Legal Center, Common Cause, Democracy 21, the League of Women Voters, Public Citizen, U.S. PIRG, and the Sierra Club supports a provision that would require disclosure only of paid communications related to grassroots campaigns and only by lobbying firms tapped for grassroots campaigning. This is much narrower than the original Senate bill, which would have mandated disclosures from advocacy groups, lobbying firms, and others that engage in grassroots campaigns. One coalition member, OMB Watch, believes House lawmakers should require firms that run grassroots campaigns to register as lobbyists and adhere to a spending limit. Meanwhile, conservative groups such as National Right to Life and Focus on the Family do not think spending on grassroots action should be disclosed, asserting that it violates First Amendment rights.(www.nationaljournal.com)
"Members Find Earmark Reform Necessary, But Messy Process"
The Hill (03/27/07) Vol. 14, No. 38, P. 3; Kucinich, Jackie
The latest package of ethics rules continues to spark debate in Congress, particularly regarding what it means to have a legal and ethical earmark. House Speaker Rep. Nancy Pelosi (D-Calif.) hopes that a decision on earmark definitions can be reached soon, but she is forbidden by congressional rules to interfere in the ethics committee's process. In 2006, Republicans passed legislation requiring members to assign their names to earmark legislation, but Democrats hope to require legislators to also certify that they and their spouses do not have a vested interest in the earmark. However, the Democrats' proposal sparked a language debate, and members requested clarification of the term "earmark" from the ethics committee. Under Democratic rules, an earmark is a member-related project that is centered on a specific area and "falls outside of a formula-driven or competitive award process." Citizens Against Government Waste President Thomas A. Schatz acknowledged that while earmarks are unlikely to be affected much by the legislation, the new provisions are a good start for broader reform.(www.hillnews.com)
"Republicans Fear 2008 Meltdown"
The Politico (03/29/07); VandeHei, Jim; Allen, Mike; Martin, Jonathan
Republicans are worried about their chances of winning in the 2008 elections, as the Iraq war and President Bush's low approval ratings have badly damaged the GOP brand. Rep. Shelley Moore Capito (R-W.Va.) says Republicans are unsure how to improve the party's electoral outlook. Capito questions, "Do you positively brand yourself, or do you negatively brand the other side?" Swing voters are massively swinging away from Republicans, as evidenced by a recent Pew Research Center survey in which 50 percent of respondents labeled themselves Democrats, and 35 percent called themselves Republicans. The troubles appear to be hindering the GOP's fundraising efforts, with the Republican National Committee, the National Republican Senatorial Committee, and the National Republican Congressional Committee reporting a decline in fundraising during the first two months of the year to $30 million from $40 million during the corresponding period in 2005. Meanwhile, Political Money Line reports that corporate PACs gave almost 60 percent of their money to Democrats in the first two months this year, a striking shift away from Republicans, who had snagged about two-thirds of corporate PAC money over the previous four years. Overall GOP fundraising for the three major campaign committees was also down during January and February. The RNC, National Republican Senatorial Committee and National Republican Congressional Committee raised a combined $30 million this year, compared with $40 million during the same period in 2005 and $38 million in 2003. Another factor making 2008 a very tough year for Republicans is that in the Senate the party is defending more seats than the Democrats -- 21 Republican seats are up this cycle, while only 12 Democrats are seeking reelection. At the same time, House Republicans are having trouble landing the strongest candidates in key House races. (www.politico.com)
"Lawmakers Join Hunt to Bag Big Donors Early"
Wall Street Journal Online (03/28/07); Cohen, Laurie P.
Campaign fund-raising is already at a fever pitch as a large number of presidential and congressional candidates compete for money from big donors. High-stakes races in the Senate fuel the competition, as Democrats attempt to expand their control and Republicans strive to regain the majority; Republicans are also planning to recapture the House. Each election, federal law limits donors from contributing more than $2,300 per candidate, $42,700 for all candidates, and an extra $65,500 to political action groups. These legal caps, as well as donors' tendency to contribute near the beginning of the campaign cycle, prompt many congressional candidates to seek money now, even if their terms are not up until 2010 or 2012. Still, not many donors reach the federal total giving limits; only 25,833 gave $10,000 or more in 2004. However, congressional staffers expect 2007 to be a record-breaking year, perhaps because of the rising involvement of Wall Street and hedge-fund professionals. As big contributors juggle allocating their donations to both presidential and congressional candidates, some choose to give to multiple presidential candidates. Most fund-raising occurs in hotels and private homes in Washington, New York, Hollywood, and Palm Beach. (www.wsj.com)
"Undercover Campaigning on the Web"
Los Angeles Times (03/21/07) P. A11; Morain, Dan
The popularity of the anonymously created YouTube video clips featuring Hillary Clinton and Barack Obama suggests that the clips will likely be succeeded by many more political spots. In 2006, the FEC decided that most Internet discourse should remain "free from campaign finance regulation." YouTube, therefore, can protect its users' confidentiality, meaning a subpoena would be needed to unveil clip creators; Clinton and Obama each deny involvement with the others' ad, which together have been viewed about 1.5 million times. While candidates must divulge who produced their TV and radio spots--and the ads' price tags--political activity on the Internet goes unregulated, except for paid web-site advertising and fundraising, which do require disclosure. This link between payment and disclosure stems from efforts to prevent corruption; however, such fears may be less pressing with inexpensive Internet advertising. Still, disclosure allows voters to assess the source's agenda and credibility. Some worry that there are interested global parties who will attempt to influence the election "without leaving fingerprints," says Carol Darr of George Washington University's Institute for Politics, Democracy & the Internet. Others reply that Internet videos are merely another type of free speech, and predict that America is entering a new political era, one where campaigning shifts out of campaign headquarters.(www.latimes.com)
"As Globalization's Benefits Grow, So Do Its Skeptics"
Wall Street Journal (03/29/07); Wessel, David
Americans are increasingly voicing their opposition to globalization, even as it seeks to boost living standards across the world. While some observers say Democrats are fighting against trade pacts with Panama, Peru, and Columbia simply because President Bush supports them, others note that partisan politics is playing only a small role. Free trade has traditionally been unpopular, but was always sold as a way to achieve a foreign-policy end. "Today," says Douglas Irwin, a Dartmouth College trade historian, "there is no major foreign-policy reason to be for trade." Not only are Americans wary of foreigners since the Sept. 11 terrorist attacks, but they are also worried that increased globalization will put their jobs on the line, especially since technology makes it easy for companies to move jobs overseas to lower-wage workers. Among college graduates recently polled by Wall Street Journal/NBC News, just 35 percent see the benefits of a global economy. (www.wsj.com)
"Exec Pay Anger Spurs Disclosure Rules, Shareholder Input, but Not Salary Caps"
Investor's Business Daily (03/28/07); Steverman, Ben
The House Financial Services Committee has voted to give shareholders of public companies a nonbinding advisory vote on executive compensation. Voting would occur once per year and whenever a firm is bought or sold and executives receive "golden parachute" packages. However, lawmakers have, at least for now, stopped short on dictating what pay packages should include. Advocates of advisory votes on pay packages point to their success in the United Kingdom, where "pay is tied much more strictly to the real performance of the company," said Yale University Millstein Center for Corporate Governance fellow Stephen Davis during congressional testimony in March. While British shareholders seldom reject pay packages, boards are structuring packages differently and consulting with shareholders more often. Critics of the bill worry that shareholders are being given a chance to vote on things they know little about. "Corporations were never designed to be democracies," says John Castellani of the Business Roundtable. "While shareholders own corporations, they don't run (them)." Critics also fear disruptions to board operations as directors focus more on politics and less on running a company.(www.investors.com)
"Labor's New Muscle"
National Journal (03/24/07) Vol. 39, No. 12, P. 52; Rosenberg, Alyssa
As labor unions enthusiastically draw on the Democratic Congress to achieve legislative goals, experts wonder whether the unions will collaborate with the business community on big issues, or whether the antagonistic relationship between the two sides will persist. The Divided We Fail partnership among the Service Employees International Union, the Business Roundtable, and AARP is one example of an effort by labor to work more collaboratively with the business community on some issues. The coalition members have agreed on a statement of principles on health care reform and have begun a series of meetings with House and Senate leaders and White House officials. Meanwhile, conflict between labor and business is evident in the fight over the Employee Free Choice Act (EFCA), which was passed by the House but is up for debate in the Senate. The business community actively strives to defeat the legislation, which would accelerate the formation and development of new unions. AFL-CIO and Change to Win are lobbying extensively in support of the bill, taking such measures as hiring extra lobbyists, getting unions more involved in the lobbying process, and arranging meetings between labor leaders and congressional representatives. Mark Anderson, Executive Vice President of the Wessel Group and a former executive in the AFL-CIO, believes cooperation may occur "in small steps," but the basic disagreements between business and labor will remain. (http://www.nationaljournal.com/)
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