Priceonomics

Lobbying has never been popular, but it has the legal status of a democratic side effect. If you want your elected politicians and freedom of speech, you have to accept corporations that pay real life Remy Dantons to tweak legislation, influence votes, and lobby for tax breaks. 

From their headquarters on Washington DC’s K Street, lobbyists earn about $3.5 billion in fees every year. That amount grows at around 7-8% per year, and it doesn't include the cash companies and individuals pour into politicians' campaign coffers to make them more responsive to their appeals. In addition, nearly half of all Congressmen now take lobbying jobs. Lobbying is simply a massive, accepted part of democratic life; curmudgeons should have plenty to grumble about for years to come.

But lobbyists' influence is not as inevitable as it seems. For much of America’s history, lobbying was not only looked down upon but even illegal in a number of states. Describing this history in a recent paper, legal scholar Zephyr Teachout writes that until the 1950s, “courts treated paid lobbying as a civic wrong, not a protected First Amendment right.”

Teachout offers the example of the Georgia Constitutional Convention of 1877. Paying people of influence to petition government officials dates back to America’s first Constitutional Convention, yet the Georgian delegates complained that lobbying was out of control. One stated that lobbyists succeeded in extracting taxpayer money from the state like miners digging for coal. Another claimed that $1 million out of Georgia’s $11 million debt was “in the pocket of lobbyists.”

Despite opposition, Georgia passed a law making lobbying punishable by up to 5 years in prison. It did not just address bribes and kickbacks; it banned any attempt to shape bills through personal influence while “employed by a party with interest in the outcome of the legislation.” The First Amendment and free speech protections were not seen as preventing the ban, and other states enacted similar legislation.

Courts also refused to uphold lobbying contracts. If a company or individual hired someone to solicit a lawmaker or government employee on their behalf, the lobbyist had no legal recourse if they did not get paid. The constitution guarantees freedom of speech and the right to appeal to lawmakers, but as Teachout writes, courts regarded lobbying as having no protected legal status because of the incredible potential for corruption and political cynicism if lobbying became an accepted practice. In a 1874 case, an old man sent a lawyer to collect a debt the federal government owed him in return for a commission. Typical of the prevailing opinion, the Supreme Court refused to enforce even this contract, ruling:

If any of the great corporations of the country were to hire adventurers who make market of themselves in this way, to procure the passage of a general law with a view to the promotion of their private interests, the moral sense of every right-minded man would instinctively denounce the employer and employed as steeped in corruption and the employment as infamous… If the instances were numerous, open, and tolerated, they would be regarded as measuring the decay of the public morals and the degeneracy of the times. No prophetic spirit would be needed to foretell the consequences near at hand.

Teachout also writes that courts at the time refused to sanction lobbying because while freedom of speech is a protected right and no court would defend a ban on talking with politicians, those rights are not “vendible.” Just as the constitutional right to vote does not prevent lawmakers from banning vote-buying, selling influence isn’t protected like free speech. In a 1880 Supreme Court case, the justices wrote:

Personal influence is not a vendible article in our system of laws and morals, and the courts of the United States will not lend their aid to the vendor to collect the price of the article.

Despite legal and legislative opposition, lobbying was still prevalent. Not every state made it illegal, nor did the federal government. But until the 1950s, governments had the right to regulate or even ban lobbying as they saw fit, and courts sanctimoniously refused to sanction the practice.

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The turning point in the legitimization of lobbying came in the early to mid 20th century. Massachusetts passed a lobbyist registration law in 1890, and other states followed. As late as 1941, the Supreme Court ruled against a lobbying contract, ruling that “law has given [them] no sanction” and stating that ‘‘Contracts to spread such insidious influences through legislative halls have long been condemned.”

During that time, however, courts increasingly prioritized the sanctity of contracts over public good and morals. Teachout cites legal work showing how 19th century courts looked at the social desirability of otherwise legal contracts before deciding whether to enforce them, but that became a relic of a more patriarchal past. With states registering lobbyists rather than banning them, courts shied away from challenging accepted practice. 

In 1946, Congress passed the Federal Regulation of Lobbying Act to reduce lobbyists’ influence. Ironically, this prompted the idea of a constitutional protection of lobbying. 

The Supreme Court heard two cases regarding the law in the 1950s. In its decision on Congress’s ability to mandate lobbyist disclosures, the justices, Teachout wrote, “do not directly address the constitutionality of lobbying, [but] they strongly hint at a constitutionally protected right.” Although Teachout argues that the court did not address why such a right existed, nor its scope, she concludes that after the cases, “lobbying [was] presumptively protected in the American legal imagination.”

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“The Supreme Court doctrine of lobbying for the last several years is a history of dicta, footnotes, and Constitutional avoidance.” ~Zephyr Teachout

The Supreme Court has still not rigorously investigated whether lobbyists deserve freedom of speech protection. The court has only mentioned it “in passing” (in Teachout’s words) in cases like the Citizens United decision that similarly found a constitutional right for corporations to pour money into political expenditures like campaign attack ads. 

Teachout disagrees with the First Amendment defense of lobbying, and her article is an attempt to strengthen the case against lobbying as several cases wending their way through the courts suggest that the Supreme Court may soon hear arguments on lobbying’s constitutional status. It's ammunition her side of the argument will need: just today, in a 5-4 decision, the Supreme Court struck down limitations on the amount of money individuals can give to political campaigns each election cycle. As in Citizens United, the logic was that it violated free speech.

If the Supreme Court did rule that lobbying was not constitutionally protected free speech, it would not flush out K Street. It would simply empower state and federal legislatures to regulate lobbying as they see fit. That could mean disclosure requirements as light as those of current law; it could mean a tax on lobbying; or it could mean banning the practice outright.

Any Congressional debate about strong restrictions or bans on lobbying would be the lobbying event of the century. But at least lobbyists would have to do battle with populist rage without enjoying constitutional protection.

This post was written by Alex Mayyasi. Follow him on Twitter here or Google PlusTo get occasional notifications when we write blog posts, sign up for our email list. The paper cited here is "The Forgotten Law of Lobbying" by Zephyr Teachout in the March 2014 issue of The Election Law Journal.


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