Chapter 12: Gov Stakeholder

Question 1

The focus of this chapter is

Answer 1

how we impact the government

Question 2

Political involvement

Answer 2

participation in the formulation and execution of public policy at various levels of government

Question 3

Two major approaches to corporate political activity

Answer 3

Lobbying

Political Spending

Question 4

Lobbying (self-interested)

Answer 4

the process of influencing public officials to promote or secure the passage or defeat of legislation

Question 5

Lobbying in 2016 presidential election

Answer 5

Trans-pacific partnership (encourages fossil fuel production)
Puerto Rico (restructure debt)
Criminal Justice Reform (reduce minimum sentence for drugs offenders)
Mega Mergers (bring up antitrust issues)
Environmental Regulation (waters of the U.S., Clean Power plan and tougher ozone standards)

Question 6

Organizational Levels of Lobbying

Answer 6

Umbrella Trade Associations
Sectoral Trade Associations and Coalitions
Company Lobbying

Question 7

What amendment is the reason that companies are allowed to petition the government

Answer 7

First Amendment

Question 8

Umbrella Trade Associations (broad representation)

Answer 8

Represent the collective business interests of the United States. (ex. Chamber of Commerce, National Association of Manufacturers, Business Roundtable, National Federation of Independent Businesses, State/City Chambers of Commerce)

Question 9

Sectoral Trade Associations and Coalitions (midrange representation)

Answer 9

Composed of many firms in a given industry or line of business. (ex. National Automobile Dealers Association, National Association of Home Builders, National Association of Realtors, American Petroleum Institute American Trucking Association, National Association of Medical Equipment Suppliers, Tobacco Institute, Health Benefits Coalition, U.S. Telecom Association)

Question 10

Company Lobbying (narrow/specific representation)

Answer 10

Where companies lobby on their own behalf. (ex. Washington and State Capital Offices, Law Firms Specializing in Lobbying, Public Affairs Specialists, Political Action Committees, Grassroots Lobbying, Company-Based Coalitions, Former Government Officials)

Question 11

Lobbyists (influence peddlers) are

Answer 11

lawyers, government affairs specialists, public relations consultants, or public affairs consultants

Question 12

Revolving door lobbyists (former government official)

Answer 12

Former congressional staff members or former members of Congress. Former presidential staff assistants or other highly placed government officials.

Question 13

Stealth (Shadow) Lobbying

Answer 13

To be formally considered a lobbyist, an ex legislator must be engaged in lobbying activities 20 percent or more of his or her time for an individual client. By spreading services among many clients, or by providing “strategic advice” rather than “lobbying services,” any ex-lawmaker can effectively evade the ban.

Question 14

What Business Lobbyists Do for their clients

Answer 14

Get access to key legislators (connections)
Monitor legislation
Establish communication channels with regulatory bodies
Protect firms against surprise legislation
Draft Legislation, sick ad campaigns, direct mail camp.
Provide issue papers on anticipated effects of legislative activity
Communicate sentiments of association or company on key issues
Influence outcome of legislation (promote helpful legislation, defeat harmful legislation)
Assist companies in coalition building (common issues)
Help members of congress get reelected
Organize grassroots efforts

Question 15

Grassroots lobbying

Answer 15

The process of mobilizing the “grassroots” - individual citizens who might be most directly affected by legislative activity - to political action

Question 16

Cyberadvocacy

Answer 16

computer-based form of grassroots campaigning

Question 17

Astroturf Lobbying

Answer 17

Some organizations and trade groups have created fake groups that appear to be grassroots but are largely created and funded by an organization or trade association. Phony efforts that give the impression of a genuine public groundswell but are actually orchestrated and funded by professional organizations.

Question 18

Coalition (political involvement in public policy process)

Answer 18

A coalition forms when distinct groups or parties realize they have something in common that might warrant their joining forces, at least temporarily, for joint action. (Ex. FlyersRights.org)

Question 19

Political Action Committee

Answer 19

Committees that are organized to raise and spend money for political candidates, ballot initiatives, and proposed legislation

Question 20

Federal Election Campaign Act

Answer 20

Prohibits corporations from making direct contributions to candidates

Question 21

Connected PAC (separate segregated fund)

Answer 21

Associated with a specific group or organization and can only raise money from that group. The FEC permits the company or organization sponsoring the PAC to absorb the cost of soliciting contributions, as well as administrative overhead

Question 22

Nonconnected PAC

Answer 22

Can accept funds from any individual or organization, as well as from a connected PAC - as long as those contributions are legal. Typically formed around a specific issue or by specific political leaders

Question 23

Leadership PAC

Answer 23

Nonconnected PACs formed by political leaders to support other candidates for office

Question 24

Super PACs (Independent Expenditure Only Committees)

Answer 24

Resulted from judicial decisions. May raise unlimited amounts of money to support or oppose political candidates.

Question 25

Citizens United v FEC

Answer 25

Corporations and labor unions could use the funds from their treasuries to support or oppose political candidates as long as spending is independent, that is, not coordinated with a candidate

Question 26

Speechnow v FEC

Answer 26

clarified the implementation of citizens united by ruling that any government restrictions on the amount corporations can spend would be unconstitutional.

Question 27

FEC stands for

Answer 27

Federal Elections Commission

Question 28

Arguments FOR political spending

Answer 28

First Amendment (right to free speech for not only individuals but groups as well)

Question 29

Arguments AGAINST political spending

Answer 29

Corporations have access to large amounts of money and that creates a serious imbalance of power.
The possibility of agency problems as managers may promote their own interests rather than the shareholder’s/stakeholder’s interests when promoting candidate issues.

Question 30

The Golden Rule of Politics

Answer 30

Sums up the concerns of those who argue against corporate spending: “He who has the gold, rules.”

Question 31

Top ten PAC’s (try to act in a nonpartisan manner about a specific issue)

Answer 31

Honeywell International, AT&T, Lockheed Martin, National Beer Wholesalers, National Association of Realtors, Northrup Grumman, Credit Union National Association, Blue Cross/Blue Shield, International Brotherhood of Electrical Workers, American Bankers Association.

Question 32

Agency Issues

Answer 32

Donating to trade associations who then have political agendas that don’t align with the company that donated

Question 33

Purpose of Political Strategy

Answer 33

To secure a position of advantage regarding a given regulation or piece of legislation, to gain control of an idea or a movement and deflect it from the firm, or to deal with a local community group on an issue of importance.

Question 34

Three Types (reasons) of Corporate Strategies that companies use to interact with decision-makers in the political arena

Answer 34

Information Strategy
Financial Incentives Strategy
Constituency Building Strategy

Question 35

Information Strategy

Answer 35

Providing information to policymakers through activities such as lobbying, research projects, position papers, and being an expert witness

Question 36

Financial Incentives Strategy

Answer 36

Making direct financial contributions, providing desired services, reimbursing travel, or paying fees to policymakers

Question 37

Constituency Building Strategy

Answer 37

Mobilizing grassroots or business cohort to work together through public relations, political education, press conferences, and advertising