Climate Protagonists? Strategic Misrepresentation and Corporate Resistance to Climate Legislation.

AuthorRocchi, Catherine

Table of Contents Introduction: Climate Change and Corporate Lobbying I. Literature Review: Analyses of Climate Lobbying II. USCAP: A Case Study on Strategic Misrepresentation III. Opportunities for Reform A. Constraints on Regulatory Responses B. Mandatory Disclosures of Political Activity C. CSR Needs CPR: Voluntary Disclosures of Political Activity D. "Leveling Up" Lobbying Conclusion Introduction:

Climate Change and Corporate Lobbying

Did we join some of these "shadow groups" to work against some of the early efforts [at climate action]? Yes, that's true. But there's nothing--there's nothing illegal about that. --Keith McCoy, lobbyist for ExxonMobil (1)

Halting climate change calls for a clean-energy transition: a shift away from fossil fuels and toward renewable energy. (2) Industrialized nations suffer from a carbon lock-in that favors fossil fuels and hinders emerging green technology. (3) The market, left to its own devices, will not resolve the persistent and interlocking technological, institutional, and social forces that delay the energy transition. (4) U.S. presidents can take important climate-change mitigation steps through executive action, (5) but lasting change requires congressional legislation.

Political resistance from the fossil fuel industry has been a principal reason for the failure of climate legislation in the United States. (6) Both the right and the left call for less corporate involvement in policy decisions. (7) Yet firms exercise political influence in myriad ways: by "supporting think tanks, creating front groups, funding Political Action Committees (PACs) and super PACs, financing foundations, ... serving on advisory committees to government, and placing executives in administration roles." (8) Crucially, firms also use industry organizations (also called trade associations or business associations) to influence politics. (9) The American Petroleum Institute, for example, is a coalition that represents business interests across the oil and gas industry. (10) The U.S. Chamber of Commerce and the National Association of Manufacturers (NAM) represent such interests across broader swaths of the business community. (11)

Federal law grants firms and industry organizations wide latitude in exercising political influence. In Citizens United v. FEC, the Supreme Court held in a 5-4 decision that restricting corporate independent expenditures violates the First Amendment right to free speech. (12) Eight Justices agreed that the advent of the internet would render corporate political spending transparent and allow the public to "give proper weight to different speakers and messages." (13) Yet corporate donors are not required to disclose their political expenditures so long as they donate through a 501(c)(4) "social welfare" organization, such as a PAC, that engages in "issue advocacy" rather than "express advocacy" for a particular candidate. (14) While individual mega-donors are the most visible beneficiaries of the Citizens United decision, (15) firms may also give, and have given, massive quantities of unreported "dark money" to influence elections. (16)

While Citizens United suggested that the First Amendment likewise protects an individual's right to lobby, (17) lobbying expenditures are subject to some scrutiny under the Lobbying Disclosure Act of 1995, later amended by the Honest Leadership and Open Government Act of 2007 (HLOGA). (18) Under HLOGA, professional lobbyists must file quarterly reports describing their activities--including the amount spent on lobbying, the general issues lobbied, and the names of the lobbyists--with the Clerk of the House and the Secretary of the Senate. (19) OpenSecrets, a 501(c)(3) nonprofit organization, standardizes this data and makes it searchable by the public. (20)

HLOGA disclosures have a limited scope. The law defines lobbying as "any oral or written communication (including an electronic communication) to a covered executive branch official or a covered legislative branch official that is made on behalf of a client" concerning federal legislation, executive action, or a Senate-confirmed position. (21) Lobbyists contact legislators, monitor congressional hearings, and work to build political coalitions, among other things. (22) More resource-intensive tasks might include testifying in Congress, cultivating media relationships, attending political fundraisers, and drafting legislation. (23) HLOGA requires disclosure only of direct lobbying--not lobbying-adjacent activities like grassroots mobilization, media relations, and public relations. (24) Nevertheless, HLOGA-mandated disclosures have provided enough quantitative data for various studies that examine the impact of industry lobbying on climate legislation. (25)

Corporate engagement in politics is not a new revelation. This Note, however, is the first to weave together political-science literature and legal doctrine into a comprehensive picture of an insidious and widespread lobbying phenomenon: the duplicitous advocacy by firms both for and against climate legislation, enabled by opaque membership in trade associations. This Note identifies the legal roots of strategic misrepresentation, illustrates its impact on our federal government's capacity to act on climate change, and offers a menu of solutions that would allow Congress to protect itself from deceit. Upending the assumption that accommodating industry preferences is key to successful climate legislation, (26) this Note highlights the way in which the same firms that designed a climate bill caused that bill to languish in Congress. This reading of the legislative debacle in 2009-2010 is both informative and actionable. A unified Congress and the Biden Administration have a unique political window to take decisive action against climate change. Permitting strategic misrepresentation to continue unchecked could prove fatal to these efforts and other policy campaigns.

Part I of this Note reviews political-science literature to contextualize the problem of strategic misrepresentation. The shortcomings in this body of scholarship, I argue, arise from the public's inability to account for the lobbying resources that firms funnel through industry organizations. A lack of transparency makes it difficult to hold individual firms accountable for their political actions. Part II analyzes the lobbying activity of U.S. Climate Action Partnership (USCAP) member firms against cap-and-trade legislation in 2009-2010, demonstrating how many firms exploit legal loopholes to strategically misrepresent their interest in climate legislation. Firms use gaps in federal lobbying regulation to (1) overstate their support for politically feasible outcomes; (2) trade support for access; (3) shape policy-feedback effects; and (4) lobby through larger collectives in a manner that is untraceable and free from reputational risks. In the climate context, strategic misrepresentation enables firms to simultaneously weaken proposed regulations, delay legislation, and secure new allies in their efforts to expand oil and gas development. Part III proposes ways to reform our federal lobbying regime to block strategic misrepresentation and advance climate. Recent First Amendment jurisprudence threatens the strengthened disclosure requirements that could otherwise circumvent strategic misrepresentation. While voluntary disclosures and third-party rating systems may act as stopgap measures, lawmakers also have an opportunity to wean Congress from industry information altogether.

  1. Literature Review: Analyses of Climate Lobbying

    According to well-established governing-network theory, public opinion has little influence over policy decisions. (27) Rather, organizations drive public policy through lobbying. (28) Indeed, some studies suggest that lobbying affects policy outcomes more than political campaign contributions. (29) Many firms avoid donating to political campaigns, a dangerous game that renders them vulnerable to consumer reprisals. (30) Rather, Heather Gerken writes, "corporations do much better by investing their resources in lobbying, where their influence is both outsized and hidden from view. That's where the smart corporate money goes." (31) HLOGA data also suggests that firms prioritize lobbying over other political activities. Companies typically spend five times more on lobbying than on PAC contributions in any given year. (32)

    The most effective lobbying efforts share two characteristics. First, many firms hire expensive "revolving door" lobbyists--those individuals who previously served as agency officials, congressional chiefs of staff, or even members of the Senate or House of Representatives. (33) Revolving door lobbyists often have longstanding relationships with key decision-makers, some of whom were once lobbyists themselves. (34)

    Second, the most effective lobbyists saturate the "intellectual environment" of policymakers and their staff. (35) By shaping legislators' perceptions of an issue, lobbyists ensure that when policymakers are asked to make a decision, "certain arguments and frames will come to mind quicker than others, and certain ideas and solutions will have been pre-legitimated by a wide range of trusted experts." (36) At the extreme end of intellectual saturation, some lobbyists provide decisionmakers with prepackaged legislation. (37) These "legislative subsidies" ensure that bills favorable to industry receive more attention and move rapidly through the policymaking process. (38) Gerken and Tausanovitch call this phenomenon the "fast food" option. (39) The temptation to adopt "McLegislation" from interest groups is even stronger for climate change and other complex regulatory issues for which publicly available information is difficult to digest. (40) Fast-food legislative subsidies encourage legislators to work on behalf of interests that can afford teams of professional lobbyists. (41)

    Which interests best achieve...

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