Priceonomics

This article was written by Alex Mayyasi, a Priceonomics staff writer


Wouldn’t it be nice if lobbying were illegal?

It’s a tempting thought. But it seems impossible. Lobbying is a multi-billion dollar industry and an accepted—if hated—part of American politics. American courts have ruled that lobbying is constitutionally protected free speech, and lawyers and laymen alike generally accept this. 

The same is true of more indirect lobbying, like the Citizens United Supreme Court ruling that allows businesses to spend unlimited sums of money on Super Pacs and advertisements for or against a candidate.

Yet from America’s founding through much of the 19th century, the legal system treated lobbying as a corrupt and illegitimate activity. Lobbying still happened, but a number of states made lobbying a criminal offense, and the federal government banned some forms of lobbying. This all happened without legal challenge, as the courts viewed lobbying as incompatible with the rights and responsibilities of citizenship. 

This forgotten history of lobbying in America has been documented by Zephyr Teachout, an Elizabeth Warren-style academic turned activist-politician who believes that Americans—and American legal minds—have forgotten the long American tradition of treating lobbying as a violation of a citizen’s responsibility to represent only him or herself in the political process.

So how did we go from treating lobbying as illegitimate or illegal to protected free speech?

***

In 1785, the King of France gave Benjamin Franklin a diamond-encrusted snuffbox.

The gift was not a comment on Franklin’s rumored inclination toward drug use. It was a customary parting gift. Franklin had represented America as a diplomat in France, and in royal Europe, a rich gift was a sign of respect. 

In the uncouth, young nation of America, though, the gift was seen as dangerous. According to the Articles of Confederation, Congress had to approve any gift from a foreign official.

“At the level of basic human intercourse, Franklin owed something to the king after receiving such a gift,” Zephyr Teachout writes. “These subtle sympathies threatened to corrupt Franklin because they could interfere with his responsibility to put the country's interest first in his diplomatic judgments.” 

Teachout opens her book Corruption in America with this incident in order to show how differently early Americans treated lobbying. And the contrast is stunning.

Over the past two decades, the Supreme Court has sanctioned any lobbying that is not explicit, quid pro quo bribery. 

A 1999 Supreme Court case, for example, overturned a federal law that banned officials from receiving gifts. A farmer’s association had given the Secretary of Agriculture sports tickets, luggage, and free meals—all delivered by hiring the Secretary’s college roommate as a lobbyist—and then benefited from policies made by the Secretary. Yet the court sanctioned the act. Justice Scalia wrote that banning all gifts would lead to “absurdities,” and he could not imagine banning an organization from organizing a free lunch for a policymaker.  

Similarly, in the Citizens United case, Justice Anthony Kennedy, writing the majority’s opinion, noted that “Ingratiation and access… are not corruption.”

This logic and these conclusions, Teachout contends, are a complete break from the reasoning of judges in 18th and 19th century America. 

For 100 years, judges so believed that using personal influence to ingratiate and gain access to lawmakers led to corruption that they refused to enforce lobbying contracts. Teachout cites a 19th century legal textbook that stated that “what are known as ‘lobbying contracts’. . . [which are] any agreements to render services in procuring legislative action… by personal solicitation of the legislators or other objectionable means, is contrary to the plainest principles of public policy, and is void.” For decades, when business failed to pay lobbyists, America’s courts considered their employment unlawful and refused to make the businesses pay their lobbyists’ fees.  

Judges also did not object when legislators banned lobbying. In 1877, Georgian legislators wrote “Lobbying is declared to be a crime” into the state constitution. A number of state legislatures took similar action—for a time, lobbying was a felony in California—and in 1852, Congress passed a law banning anyone “employed as an agent to prosecute any claim pending before Congress” from being present during legislative sessions. 

In 1999, Scalia considered it absurd that lawmakers should not be allowed to accept any gifts—he pointed out that this meant the president could not accept a jersey from the Patriots if they won the Super Bowl. But early Americans considered the dangers of gift-giving so alarming that they endured those absurdities—like forcing Benjamin Franklin, a retiring diplomat, to ask Congress to vote on whether he could keep his parting gift from the leader of France. 

In another absurd example, in 1866, an old, infirm man who was owed money by the federal government hired a lawyer to appeal to Congress for his money. When the man’s son refused to pay the lawyer, the lawyer sued. “One could hardly imagine a more sympathetic context for enforcing a lobby contract,” Teachout writes. “If there was any right to petition the government, ought it not extend to the aged, who might need to hire someone on their behalf?”

Yet the court still refused to uphold the contract, as the judge said that doing so would sanction a corrupt practice. “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,” he wrote, “the moral sense of every right-minded man would instinctively denounce the employer and employed as steeped in corruption.”

Legal scholars today would likely look askance at this logic. The First Amendment, which protects free speech, guarantees the right to "to petition the Government for a redress of grievances." Hiring a lobbyist for help doing so is considered constitutionally protected. 

Legal thought in the 19th century, Teachout notes, had no problem with individuals hiring a lawyer to write reports and present them to congressional committees. But it viewed hiring lobbyists to argue someone else’s views (especially in contexts outside of formal government settings), and to use their personal influence on someone else’s behalf, as a betrayal of civic virtue. 

As one judge wrote, a lobbyist is “induced to use his influence for the money he is to obtain; when, as a patriot and a citizen, he should only act for the good of his country.” 

Everyone has the right to petition the government. But it was seen like the right to vote—something that could not be sold. 

Lobbying still happened, and it was never wholesale banned. But for 100 years, it was commonly seen as corrupt and illegitimate, and the courts refused to sanction it. 

So what changed?

***

The First Amendment—and the perceived right to lobby—is not the only Constitutional Amendment whose meaning has changed dramatically over time. 

Although it seems like established canon today that the Second Amendment guarantees the right to own a gun, this idea is a recent development. As recently as 1990, the conservative former Chief Justice Warren Burger denounced the idea that the Second Amendment offers an “unfettered individual right to a gun” as a “fraud on the American public.” Describing the Second Amendment as a “gun control amendment,” New Yorker writer Adam Gopnik writes that legal thought had long focused on the phrase “well regulated” in “a well regulated Militia.”

Journalists and historians chronicling the recent change in the interpretation of the Second Amendment seem to agree on the story: The National Rifle Association and like-minded allies funded and cultivated a revisionist movement in legal thought that found its triumphant expression in 2008, when Justice Scalia struck down Washington D.C.’s ban on handguns. 

This was the first articulation of this logic; previously, as Justice John Paul Stevens wrote, the amendment was always understood as allowing the regulation of the private use of firearms—as long as it didn’t interfere with the upkeep of a regulated militia. 

According to Teachout, our understanding of lobbying and the First Amendment underwent a similar, if longer and less consciously orchestrated, revisionary process. One of the first blows came in 1890, when Massachusetts passed a law requiring that lobbyists register with the government. Several states followed, which gave the sense that lobbyists were accepted professionals, rather than rogues improperly selling their personal influence. 

A second development was the court’s increasing inclination to honor and protect all contracts. In the past, courts had given more consideration to whether the contracts served public interests, which was the justification for refusing to enforce lobbying contracts.

The idea that lobbying was a legitimate enterprise and protected by the First Amendment slowly gained a legal foundation. Yet it’s striking that as late as 1941, the Supreme Court debated and ruled on a case involving lobbying without invoking the First Amendment and free speech.

***

Although the court’s denouncements of lobbying matched the public’s disdain in the 18th century, with some legislatures even banning the practice, it’s not like that period was a lost golden age. 

Even as judges condemned lobbying with fire and brimstone rhetoric, the term ‘lobbying’ gained prominence in the early 1800s as railroad companies sought contracts and land from legislators. But lobbyists often did not need to ingratiate and subtly influence; they simply bribed outright. 

The letters of the railroad baron Leland Stanford, who later served as governor and senator of California, are full of embarrassingly frank details about bribes, kickbacks, and monopolies. During the golden age of vote buying in New York, Tammany Hall politician George W. Plunkitt famously explained the difference between “honest and dishonest graft.” In 1877, when the Georgia legislature banned lobbying, they did so after it came to light that lawmakers had sold 35 million acres of land to a business conglomerate for a scandalously low price. All but one of the lawmakers had been given shares in the business venture. 

When Georgians discovered the scale of the corrupt land sale, they literally set fire to the documents used by the government to grant the land in a giant bonfire presided over by the Speaker of the House and President of the Senate. It was like they were ceremoniously burning the possessions of a boyfriend or girlfriend who had scorned them. 

It’s hard to say whether America has become more or less corrupt since then. Researchers who study the topic note that most hard data comes from subjective surveys, which are recently initiated and simply ask people about their perceptions of corruption. America does fairly well in these surveys, ranking 16th in the world as of 2015. But explicit bribery still exists: Between 1990 and 2002, 10,000 officials were convicted for corrupt acts. 

The corruption that dominates headlines today, however, is mostly the legal kind: Bank regulators who act feckless so they can move onto plush banking jobs; Super Pacs that receive millions of dollars from companies that want access and influence; and lobbyists who take out lawmakers for expensive lunches. 

The result is the cynical political culture that 19th century judges worried about when they refused to sanction even lobbying that seemed above board. Nearly half of all members of Congress now take lobbying jobs when they leave office. Congressmen have written that serving on a congressional committee is now “mainly valuable as part of the interview process for a far more lucrative job as a K Street lobbyist” and that it has “become routine to see members of Congress drop their seat in Congress like a hot rock when a particularly lush vacancy opens up.” 

Since 2014, as journalist Ezra Klein points out, businesses have spent more money lobbying Congress than taxpayers have spent funding Congress. 

We have traded an era in which bribery was widespread but provoked outrage and consequences when it was discovered for an age in which corruption is condemned but seen as inevitable, legal, and even constitutional. 

Our next post looks at the organization raffling off a swank house amongst the housing scarcity of San Francisco. To get notified when we post it   join our email list.

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Published Apr 15, 2016


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