After months of political squabbling and popular anger over executive compensation and bonuses paid out by companies getting bailout money, you'd think the fires would slowly die. (That, or struggling banks and corporations would learn a few lessons about PR.) But a new story could fan the flames, deserved or not: The Washington Post reports that major recipients of bailout money spent $10 million lobbying the government in the first quarter of 2009, and some of that money went to the fight against executive pay caps and more stringent financial regulations.
The Post's Dan Eggen says companies that collectively accepted $150 billion in TARP funds have spent about $22 million on lobbying since the government began its handouts last fall. Topping the list of offenders for the first three months of 2009, though, were General Motors, which spent roughly $2.8 million, along with Citigroup and J.P. Morgan Chase, each of which spent about $1.3 million.
This sort of news, as the Post rightly points out, is sure to leave a bad taste in people's mouths. As William Patterson, executive director of CtW Investment Group, which is linked to a grouping of labor unions, told the paper: "Taxpayers are subsidizing a legislative agenda that is inimical to their interests and offensive to what the whole TARP program is about. It's business as usual with taxpayers picking up the bill."
Patterson is at least partly on point. In the last three months of 2008, for instance, collapsing automakers Chrysler and GM spent millions lobbying the House and Senate on issues ranging from vehicles emissions and safety regulations to climate change. It's hard to feel, in these cases, that corporate interests are in line with the public good. But, as in a great deal of the public debate that has surrounded the bailouts and the stimulus, when the actual amounts at issue are put in to perspective, it's clear that these stories are being overblown. Eggen did concede, towards the end of his article, that many of the firms spent less on lobbying during the first three months of 2009 than they did during the same period in 2008. But he didn't provide some key perspective about the sums being spent, which pale in comparison to the amount of money the government has given out.
Based on data in a Post graphic, it appears that out of all the firms involved, the one that spent the largest percentage of its aid package on lobbying in the first quarter of 2009 was American Express, which devoted a sum equivalent to a whopping .024 percent of the money it got from the Feds to lobbying. General Motors, which topped the list in terms of cold cash, got $13.4 billion in government assistance and spent just .021 percent of that on lobbying. (The companies say they're not actually using TARP money for lobbying purposes, but it's impossible to verify that because of the way companies move funds internally -- and, of course, they might have just cut their lobbying expenses if not for the infusion provided by the government.)
Of course, this doesn't mean that people don't have a right to feel uncomfortable about the fact that taxpayer dollars, in whatever percentages, are being used to lobby the government for corporate interests. It's just important to maintain perspective. The real issue here might be an irony that the Post pointed to in an earlier article. Some analysts believe that we could start seeing a feedback cycle: The more the government gets involved in the private sector, the more the private sector will feel it needs to lobby to protect its interests.